Skip to main content

Full text of "Annual report of the Secretary of the Treasury on the state of the finances for the year .."

See other formats


a J 



LIBRARY 

FEB 16 1978 

ROOM 5004 
TREASURY DEPAftTMEF 






LIBRARY, 

FEB 16 1978 

ROOM 5004 
TREASURY DEPARTMEN 



Ha 



ANNUAL REPORT OF THE 
SECRETARY OF THE TREASURY 

ON 

THE STATE OF THE 
FINANCES 

FOR THE FISCAL YEAR 
ENDED JUNE 30 



934 







UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1935 



For sale by the Superintendent of Documents, Washington. D. C. Price 50 cents (Paper cover) 



Treasury Department 

Document No. 3065 

Secretary 



CONTENTS 



Page 

Budget results 1 

Receipts 1 

Income taxes 3 

Miscellaneous internal revenue 3 

Agricultural adjustment taxes 4 

Customs 4 

Miscellaneous receipts 4 

Expenditures 4 

The public debt 7 

Refunding the Fourth Liberty Loan 9 

Cumulative sinking fund 10 

Indirect obligations of the United States 11 

General Fund of the Treasury 11 

Emergency legislation 13 

Revenue legislation 16 

Liquor Taxing Act of 1934 16 

Revenue Act of 1934 16 

Extension of agricultural adjustment legislation 17 

Silver Purchase Act of 1934 19 

National Firearms Act 19 

Estimates of receipts and expenditures 19 

Fiscal year 1935 23 

Income tax receipts 23 

Miscellaneous internal revenue 24 

Customs receipts 24 

Agricultural adjustment taxes 25 

Fiscal year 1936 25 

Income tax receipts 25 

Miscellaneous internal revenue 26 

Customs receipts 26 

Agricultural adjustment taxes 26 

Monetary developments _ _ 27 

Gold 27 

Silver 29 

Silver certificates 29 

Federal Deposit Insurance Corporation 30 

Bureau of Internal Revenue 31 

Back taxes on incomes 32 

Alcohol tax administration 33 

Construction activities of the Treasury 33 

Building program in the District of Columbia 34 

Status of work under the several building programs 34 

The original public building program 34 

Program under the Public Works Administration 35 

Bureau of Customs 35 

Nonfiscal activities 36 

Coast Guard 36 

Public Health Service 37 

Bureau of Narcotics 38 

Organization changes 39 

ADMINISTRATIVE REPORTS OF BUREAUS AND DIVISIONS 

Accounts and Deposits, Office of the Commissioner of 45 

Daily statement of the United States Treasury 45 

Combined statements of assets and liabilities of governmental cor- 
porations and credit agencies 45 

Statement of the Public Debt of the United States 45 

Contingent liabilities of the United States 45 

in 



IV CONTENTS 

Accounts and Deposits, Office of the Commissioner of — Continued. Page 

Treasury accounting system 46 

Obligations of foreign governments 46 

Payments due July 1 to December 31, 1933 46 

Payments due January 1 to June 30, 1934 47 

Receipts from Germany 49 

Army costs 49 

Mixed claims, United States and Germany 49 

Annuities under moratorium agreement 50 

Treasury administration of alien and mixed claims 50 

Mixed Claims Commission: Claims against Germany 51 

War Claims Arbiter 54 

Claims of German nationals 54 

Claims of Austrian and Hungarian nationals 54 

German special-deposit account 54 

Tripartite Claims Commission 55 

Claims against Austria 55 

Claims against Hungary 55 

Railroad obligations 55 

Section 204 56 

Section 207 56 

Sections 209 and 212 56 

Section 210 56 

Securities owned by the United States Government 57 

Trust funds invested by the Treasury 58 

Adjusted service certificate fund 58 

Civil service retirement and disability fund 59 

Foreign service retirement and disability fund 60 

Canal Zone retirement and disability fund 61 

District of Columbia teachers' retirement fund 62 

Longshoremen's and harbor workers' compensation fund 63 

Library of Congress trust fund 64 

United States Government life insurance fund 67 

National Institute of Health gift fund 67 

Alien property trust fund 68 

General railroad contingent fund 69 

Special funds 70 

Colorado River Dam fund 70 

Advances to reclamation fund 71 

Division of Bookkeeping and Warrants 71 

Division of Deposits 72 

Section of Surety Bonds 73 

Division of Disbursement 73 

Appointments, Division of 75 

Number of employees 75 

Retirement of employees 75 

Budget and Improvement Committee 75 

Coast Guard 76 

Protection to navigation 77 

Enforcement of customs and other laws 78 

Communications 78 

Eq uipment. 79 

The academy, stations, bases, repair depot, engine school, repair 

base, etc 81 

Engineering competition 82 

Personnel 82 

Awards of life-saving medals 83 

Appropriations and expenditures 83 

Comptroller of the Currency 83 

Changes in the condition of national banks 83 

Reopening and reorganization of national banks 85 

Summary of changes in membership in the national banking system. 86 



CONTENTS V 

Page 

Customs, Bureau of 87 

Receipts 87 

Volume of business 88 

Antidumping 89 

Countervailing duties 90 

Smuggling 90 

Miscellaneous provisions of the tariff act 91 

Investigative unit 91 

Engraving and Printing, Bureau of 93 

Enrollment and Disbarment of Attorneys and Agents, Committee on 95 

Financial and Economic Research, Section of 96 

Internal Revenue, Bureau of 97 

General 97 

Internal-revenue collections 97 

Refunds 97 

Additional assessments 98 

Cost of administration 99 

Income Tax Unit 99 

Additional revenue 100 

Final notices of deficiency (60-or 90-day letters) 101 

Claims and overassessments 101 

Returns on hand 102 

Audit in Washington 102 

Audit in the field 103 

The technical staff 103 

Miscellaneous Tax Unit 103 

Estate Tax Division 103 

Sales Tax Division 105 

Tobacco Division 107 

Processing Tax Division 107 

Silver Tax Division 109 

Alcohol Tax Unit 109 

Accounts and Collections Unit 110 

Collectors' Personnel, Equipment, and Space Division 112 

Disbursement Accounting Division 112 

Office of the General Counsel 113 

General Counsel's Committee 113 

Civil Division 113 

Interpretative Division 114 

Review Division 114 

Appeals Division 115 

Penal Division 115 

Administrative Division 116 

Compromise Section 116 

Intelligence Unit 117 

Legal Division 118 

Mint, Bureau of 119 

Institutions of the Mint Service 119 

Gold operations 119 

Silver operations 120 

Coinage 120 

Bullion deposit transactions 121 

Refineries 121 

Commemorative coins 121 

Gold and silver in the United States 121 

Appropriations, expenses, and income 122 

Narcotics, Bureau of 123 

Enforcement activities 123 

Extent and trend of narcotic traffic 124 



VI CONTENTS 

Page 

Procurement Division 125 

Branch of Supply 125 

Public Works Branch 127 

Building activities 127 

Original public building program 127 

Program under the Public Works Administrator 128 

Control, administration, and repair of Federal buildings 128 

Relief program 129 

Emergency construction program 129 

Private architectural services 130 

Total expenditures 130 

Public Debt Service 131 

Division of Loans and Currency 131 

Register of the Treasury 134 

Division of Public Debt Accounts and Audit 136 

Division of Paper Custody 136 

Destruction Comznittee 137 

Public Health Service 139 

Division of Sanitary Reports and Statistics 139 

Division of Foreign and Insular Quarantine and Immigration 139 

Division of Domestic Quarantine 140 

Division of Scientific Research 141 

Division of Marine Hospitals and Relief 144 

Division of Venereal Diseases 144 

Division of Mental Hygiene 146 

Division of Personnel and Accounts 146 

Public Works of Art Project 148 

Secret Service Division 148 

Supply, Division of 149 

Expenditures from various appropriations 149 

Stationery supplies 151 

Printing and binding 151 

Department advertising 153 

Engraving work 153 

Treasurer of the United States 153 

War Finance Corporation 156 

EXHIBITS 

THE PUBLIC DEBT 

Issues and redemptions of bonds, notes, and certificates of indebtedness 

Exhibit 1. Allotments on exchange subscriptions, Treasury bonds of 

1943-45 (from press release, Dec. 5, 1933, revised) 161 

Exhibit 2. Offering of certificates of indebtedness, series TD-1934 (2% 

percent) 161 

Exhibit 3. Subscriptions and allotments, certificates of indebtedness, series 

TD-1934 (from press releases, Dec. 8, 12, and 16, 1933) 162 

Exhibit 4. Offering of Treasury notes, series C-1935 (2}i percent), and 

certificates of indebtedness, series TS-1934 (V/2 percent) 163 

Exhibit 5. Subscriptions and allotments, Treasury notes, series C-1935, 

and certificates of indebtedness, series TS-1934 (from press releases, Jan. 

26 and Feb. 2, 1934) 165 

Exhibit 6. Offering of Treasury notes, series D-1935 (2% percent), and 

series C-1937 (3 percent) 165 

Exhibit 7. Subscriptions and allotments, Treasury notes, series D-1935 

and series C-1937 (from press releases, Feb. 14, 16, and 21, 1934, revised) - 166 

Exhibit 8. Offering of Treasury notes, series C-1938 (3 percent) 166 

Exhibit 9. Subscriptions and allotments, Treasury notes, series C-1938 

(from press releases, Mar. 10 and 15, 1934) 167 

Exhibit 10. Offering of Treasury bonds, 1944-46 (3% percent) 168 

Exhibit 11. Subscriptions and allotments, Treasury bonds of 1944-46 

(from press releases, Apr. 9, 10, and 21, 1934, revised) 170 



CONTENTS VII 

Page 
Exhibit 12. Partial redemption of Fourth Liberty Loan bonds before 

maturity (second call) 170 

Exhibit 13. Offering of Treasury bonds of 1946-48 (3 percent) and Treas- 
ury notes, series A-1939 (2}£ percent) 175 

Exhibit 14. Subscriptions and allotments, Treasury bonds of 1946-48, and 
Treasury notes, series A-1939 (from press releases, June 6, 8, and 12, 
1934, revised) 177 

Issues of Treasury bills 

Exhibit 15. Inviting tenders for Treasury bills dated November 1, 1933, 

and maturing January 31, 1934 (press release, Oct. 26, 1933) 178 

Exhibit 16. Acceptance of tenders for Treasury bills dated November 1, 

1933, and maturing January 31, 1934 (press release, Oct. 31, 1933) 179 

Exhibit 17. Summary of information contained in press releases issued in 
connection with Treasury bills offered from November 1, 1933, to June 
30, 1934 180 

Exhibit 18. General circular governing the sale and issue of Treasury bills. 181 

Miscellaneous 

Exhibit 19. Receipt of Liberty bonds, Treasury bonds, and Treasury notes 

for Federal estate or inheritance taxes 185 

Exhibit 20. Sections 4 and 5 of the Federal Farm Mortgage Act (Pub. No. 
88, 73d Cong.), guaranteeing principal and interest of Federal Farm 
Mortgage Corporation bonds by the United States 186 

Exhibit 21. Section 1 of Public No. 178, Seventy-third Congress, guaran- 
teeing principal and interest of the Home Owners' Loan Corporation 
bonds by the United States 187 

Exhibit 22. An act to amend section 3702, Revised Statutes (Pub. No. 

144, 73d Cong., S. 1528) 188 

MONEY AND BANKING 

Exhibit 23. An act to protect the currency system of the United States, to 
provide for the better use of the monetary gold stock of the United States, 
and for other purposes (Pub. No. 87, 73d Cong., H. R. 6976) - 189 

Exhibit 24. Proclamations, Executive orders, Treasury orders, and in- 
structions relating to gold 194 

Exhibit 25. Chronology of action with respect to gold from March 6, 1933, 

to February 1, 1934 201 

Exhibit 26. Daily price quotations for newly mined domestic gold in the 

United States from September 8, 1933, to January 31, 1934 205 

Exhibit 27. An act to authorize the Secretary of the Treasury to purchase 
silver, issue silver certificates, and for other purposes (Pub. No. 438, 
73d Cong., H. R. 9745) 205 

Exhibit 28. Proclamation and orders relating to silver 209 

Exhibit 29. Proclamation and Executive orders relating to banking, foreign 

exchange, and related matters 212 

TAXATION 

Exhibit 30. An act to raise revenue by taxing certain intoxicating liquors, 

and for other purposes (Pub. No. 83, 73d Cong., H. R. 6131) 215 

Exhibit 31. An act to provide for the taxation of manufacturers, importers, 
and dealers in certain firearms and machine guns, to tax the sale or other 
disposal of such weapons, and to restrict importation and regulate inter- 
state transportation thereof (Pub. No. 474, 73d Cong., H. R. 9741) 219 



Vni CONTENTS 

OBLIGATIONS OF FOREIGN GOVERNMENTS 

Page 

Exhibit 32. Statement by Acting Secretary of the Treasury Morgenthau, 
announcing the postponement of the payment due from Austria on January 
1, 1934, on account of its indebtedness to the United States (press release, 
Dec. 13, 1933) 222 

Exhibit 33. Correspondence exchanged between the Government of the 
United States and various foreign governments concerning foreign debts 
owing to the United States (Department of State press releases) 223 

Exhibit 34. An act to prohibit financial transactions with any foreign 
government in default on its obligations to the United States (Pub. No. 
151, 73d Cong., S. 682) 238 

Exhibit 35. Statement for the press by the Department of State concerning 
an opinion of the Attorney General requested by the Secretary of State 
upon various questions under the act of April 13, 1934, entitled "An act 
to prohibit financial transactions with any foreign government in default 
on its obligations to the United States " 238 

Exhibit 36. Message from the President to the Congress, transmitting a 
statement on the subject of debts owed the Government and people of 
the United States bv the governments and peoples of foreign countries 
(H. Doc. No. 392, 73d Cong., 2d sess.) 243 

MIXED CLAIMS 

Exhibit 37. Senate Report No. 1376, June 11, 1934, to accompany Senate 
Joint Resolution 135, to amend Settlement of War Claims Act of 1928, 
as amended (73d Cong., 2d sess.) 247 

Exhibit 38. Joint resolution extending for 2 years the time within which 
American claimants may make application for payment, under the settle- 
ment of War Claims Act of 1928, of awards of the Mixed Claims Com- 
mission and the Tripartite Claims Commission, and extending until 
March 10, 1936, the time within which Hungarian claimants may make 
application for payment, under the settlement of War Claims Act of 
1928, of awards of the War Claims Arbiter (Pub. Res. No. 38, 73d 
Cong., H. J. Res. 325) 253 

Exhibit 39. Joint resolution to amend the Settlement of War Claims Act 

of 1928, as amended (Pub. Res. No. 53, 73d Cong., H. J. Res. 365)-.. 253 

GOVERNMENT DEPOSITS 

Exhibit 40. Supplements to Department Circular No. 92, revised, relating 
to special deposits of public moneys under the act of Congress approved 
September 24, 1917, as amended 255 

Exhibit 41. Supplements to Department Circular No. 176, relating to 
regulations governing deposit of public moneys and payment of Govern- 
ment checks and warrants 256 

MISCELLANEOUS 

Exhibit 42. Accounting system of the Treasurv Department (Department 

Circular No. 514) . 256 

Exhibit 43. Regulations and instructions governing the issue of duplicate 
checks of disbursing officers (first supplement to Department Circular 
No. 327, revised) 257 

Exhibit 44. Laws and regulations governing the recognition of attorneys, 
agents, and other persons representing claimants and others before the 
Treasury Department and offices thereof 257 

Exhibit 45. Executive orders and Treasury orders changing organization 

and procedure in the Treasury Department 258 

Exhibit 46. Excerpt from a letter of the Postmaster General to the Secre- 
tary of the Treasury, dated November 15, 1934, certifying extraordinary 
expenditures contributing to the deficiency of postal revenues for the 
fiscal year ended June 30, 1934, in pursuance of Public Act. No. 316, 
Seventy-first Congress, approved June 9, 1930 (40 Stat. 523) 270 



CONTENTS IX 

TABLES 

Page 
Explanation of bases used in tables 273 

Description of accounts through which Treasury operations are effected.. 274 

RECEIPTS AND EXPENDITURES 

General tables 

Table 1. Details of receipts, by sources and accounts, for the fiscal year 1934 

(warrants and daily statement bases) 276 

Table 2. Details of expenditures, by organization units and accounts, for the 

fiscal year 1934 (checks-issued and daily statement bases) 282 

Table 3. Receipts, expenditures, and surplus or deficit for the fiscal years 

1931 to 1934 (daily statement basis) 294 

Table 4. Receipts and expenditures for the fiscal years 1789 to 1934 (war- 
rants and daily statement bases) 298 

Table 5. Summary of receipts and expenditures, and excess of receipts or 

expenditures, by months, for the fiscal year 1934 (daily statement basis) _ 306 

Table 6. Expenditures, by months; classified according to organization 

units, for the fiscal year 1934 (daily statement basis) 307 

Specific receipts and expenditures 

Table 7. Comparison of detailed internal revenue receipts for the fiscal 

years 1933 and 1934 (collection basis) 317 

Table 8. Internal revenue receipts, by sources, for the fiscal years 1916 to 

1934 (collection basis) 319 

Table 9. Internal revenue receipts, by States and Territories, for the fiscal 

year 1934 (collection basis) 321 

Table 10. Expenses of the Internal Revenue Service for the fiscal year 

1934 (checks-issued basis) 322 

Table 11. Customs duties (estimated), value of imports entered for con- 
sumption, and ratio of duties to value of dutiable imports and to value of 
all imports, for the calendar years 1923 to 1933 (on basis of reports of the 
Bureau of Foreign and Domestic Commerce) 326 

Table 12. Customs duties (estimated), value of dutiable imports, and ratio 
of duties to value of dutiable imports, by tariff schedules, for the years 
1923 to 1933 (on basis of reports of the Bureau of Foreign and Domestic 
Commerce) 326 

Table 13. Customs receipts, expenditures, and entries, fiscal year 1934 (col- 
lection basis) 329 

Table 14. Panama Canal receipts and expenditures for the fiscal years 1903 

to 1934 (warrant basis) 330 

Estimates of receipts 

Table 15. Actual receipts for the fiscal year 1934 and estimated receipts 

for the fiscal years 1935 and 1936, by sources 331 

PUBLIC DEBT 

Public debt outstanding 

Table 16. Public debt outstanding June 30, 1934, by issues (revised daily 

statement basis) 337 

Table 17. Description of the public debt issues outstanding June 30, 1934 

(revised daily statement basis) 340 

Table 18. Interest-bearing debt outstanding June 30, 1934, by kind of 
security and callable period or payable date (revised daily statement 
basis) 348 

Table 19. Principal of the public debt outstanding at the end of each 

fiscal year from 1853 to 1934 (revised daily statement basis) 349 



X CONTENTS 

Public debt operations 

Page 

Table 20. Public debt retirements chargeable against ordinary receipts 
during the fiscal year 1934, and cumulative totals to June 30, 1933 and 
1934, by sources and issues (revised daily statement basis) 351 

Table 21. Summary of transactions in interest-bearing and noninterest- 
bearing securities during the fiscal year 1934 (revised daily statement 
basis) . 353 

Table 22. Summary of transactions in interest-bearing securities, by form 

of issue, during the fiscal year 1934 (revised daily statement basis) 355 

Table 23. Changes in interest-bearing debt, by issues, during the fiscal 

year 1934 (revised daily statement basis) 356 

Table 24. Transactions in noninterest-bearing securities, by issues, during 

the fiscal year 1934 (revised daily statement basis) 360 

Table 25. Issues, maturities, and redemptions of interest-bearing securi- 
ties, exclusive of trust account and other special issues, June 1933 through 
June 1934 (daily statement basis) 364 

Table 26. Sources of public debt increase or decrease for the fiscal years 

1915 to 1934 (daily statement basis) 367 

Table 27. Transactions on account of the cumulative sinking fund during 

the fiscal year 1934 (revised daily statement basis) 368 

Table 28. Transactions on account of the cumulative sinking fund for the 

fiscal years 1921 to 1934 (revised daily statement basis) 369 

Table 29. Securities retired through the cumulative sinking fund, par 
amount and principal cost, to June 30, 1934 (revised daily statement 
basis) 369 

Interest on the public debt 

Table 30. Interest on the public debt payable, paid, and outstanding un- 
paid, for the fiscal year 1934 (revised daily statement basis) 370 

Table 31. Interest paid on the public debt, by issues, for the fiscal years 

1932 to 1934 (warrant basis) 371 

Table 32. Amount of interest-bearing debt outstanding, the computed 
annual interest charge, and the computed rate of interest, for the fiscal 
years 1916 to 1934, and by months from July 1931 to June 1934 (revised 
daily statement basis) 372 

Contingent liabilities 
Table 33. Contingent liabilities of the United States, June 30, 1934 373 

CONDITION OF THE TREASURY EXCLUSIVE OF PUBLIC DEBT LIABILITIES 

Table 34. Current assets and liabilities of the Treasury at the close of the 

fiscal years 1932, 1933, and 1934 (revised daily statement basis) 376 

Table 35. Net balance in the General Fund of the Treasury at the end of 

each month from July 1929 to June 1934 (daily statement basis) 377 

Table 36. Securities owned bv the United States Government, June 30, 

1934 . 378 

ASSETS AND LIABILITIES OF GOVERNMENT CORPORATIONS AND AGENCIES 

Table 37. Assets and liabilities of Government corporations and credit 

agencies of the United States, as of June 30, 1934 381 

STOCK AND CIRCULATION OF MONEY IN THE UNITED STATES 

Table 38. Stock of money, money in the Treasury, in the Federal Reserve 

banks, and in circulation at the end of each fiscal year from 1913 to 1934. 386 

Table 39. Stock of money, by kinds, at the end of each fiscal year from 

1913 to 1934 388 



CONTENTS XI 



Page 



Table 40. Money in circulation, bv kinds, at the end of each fiscal year 

from 1913 to 1934 389 

Table 41. Stock of money, money in the Treasury, in the Federal Reserve 

banks, and in circulation, by kinds, June 30, 1934 390 

MISCELLANEOUS 

Table 42. Principal of the funded and unfunded indebtedness of foreign 
governments to the United States, the accrued and unpaid interest 
thereon, and payments on account of principal and interest, as of 
November 15, 1934 391 

Table 43. Estimated money cost of the World War to the United States 

Government to June 30, 1934 392 

Table 44. Estimated amount of securities outstanding, interest on which 
is wholly exempt from normal income tax and surtax of the Federal 
Government, by years, on December 31, 1912 to 1933, by tvpe of 
obligor * " 392 

Table 45. United States securities outstanding, interest on which is exempt 
from normal income tax, but not surtax, of the Federal Government, 
on June 30 and December 31, 1917 to 1934 393 

Table 46. Net expenditures for Federal aid to States, on basis of warrants 
issued for the fiscal year 1920 and checks issued for the fiscal years 1933 
and 1934, and amounts appropriated for the fiscal year 1935, classified 
by appropriations from which direct payments are made to States and 
by the more important of the appropriations providing for expenditures 
by the Government in cooperation with States, municipalities, and 
other civil organizations for investigative, regulatory, protective, or 
construction work 394 

Table 47. Expenditures made by the Government as direct payments to 

States under cooperative arrangements during the fiscal year 1934 397 

PERSONNEL 

Table 48. Number of employees in the departmental service of the 
Treasury in Washington, by months, from June 30, 1933, to June 30, 
1934 402 

Table 49. Number of emplovees in the departmental and field services 

of the Treasury on June 30, 1933, and June 30, 1934 403 

Table 50. Number of persons retired, or eligible for retirement, retained 
in the departmental and field services of the Treasurv from August 20, 
1920, to June 30, 1934 404 

Index 405 



SECRETARIES, UNDER SECRETARIES, AND ASSISTANT SECRETARIES 
OF THE TREASURY DEPARTMENT DURING THE FISCAL YEAR 1934,' 
AND THE PRESIDENT UNDER WHOM THEY SERVED 



Term of service 



From — 



Mar. 4,1933 
Jan. 1, 1934 



May 19,1933 
Nov. 17,1933 
May 2, 1934 



Apr. 18,1933 
June 6, 1933 
June 12,1933 



Dec. 31, 1933 



Nov. 16, 1933 
Dec. 31, 1933 



Dec. 12, 1933 



Official 



Secretaries of the Treasury 



William H. Woodin, New York 

Henry Morgenthau, Jr., New York. 



Under Secretaries 



Dean Q. Acheson, Maryland 

Henry Morgenthau, Jr., New York. 
Thomas Jefferson Coolidge, 
Massachusetts. 

Assistant Secretaries 

Lawrence W. Robert, Jr., Georgia. 

Stephen B. Gibbons, New York 

Thomas Hewes, Connecticut 



Secretary of the 
Treasury 



Woodin 

Woodin 

Morgenthau. 



Woodin, Morgenthau... 

Woodin, Morgenthau 

Woodin 



President 



Roosevelt. 
Roosevelt. 



Roosevelt. 
Roosevelt. 
Roosevelt. 



Roosevelt. 
Roosevelt. 
Roosevelt. 



' For officials since 1789, see annual report for 1932, pp. xvii to xxi, and corresponding table in annual 
report for 1933. 

xm 



PRINCIPAL ADMINISTRATIVE AND STAFF OFFICERS OF THE 
TREASURY DEPARTMENT AS OF NOVEMBER 15, 1934 

OFFICE OF THE SECRETARY 

Henry Morgenthau, Jr. _ Secretary of the Treasury. 

T. J. Coolidge Under Secretary of the Treasury. 

Lawrence W. Robert, Jr Assistant Secretary of the Treasury. 

Stephen B. Gibbons Assistant Secretary of the Treasury. 

Vacant Assistant Secretary of the Treasury. 

Herbert E. Gaston Assistant to the Secretary. 

Jacob Viner Assistant to the Secretary. 

LeRoy Barton Assistant to the Secretary. 

Harold N. Graves _ Assistant to the Secretary. 

Henrietta S. Klotz Assistant to the Secretary 

John Kieley Assistant to the Secretary. 

William H. McReynolds... Administrative Assistant to the Secretary. 

W. N. Thompson Assistant Administrative Assistant to the Secretary. 

Archie Lochhead Technical Assistant to the Secretary. 

Charles R. Schoeneman Special Staff Assistant. 

Edwin R. Ballinger Technical Assistant to the Administrative Assistant. 

H. R. Sheppard Assistant to Assistant Secretary. 

Francis C. Rose Assistant to Assistant Secretary. 

W. C. Cram, Jr Technical Adviser to Assistant Secretary. 

F. A. Birgfeld... Chief Clerk and Superintendent. 

W. H. Moran Chief, Secret Service Division. 

L. C. Spangler Chief, Division of Supply. 

James E. Harper Chief, Division of Appointments. 

Gabrielle E. Forbush Chief, Correspondence Division. 

OFFICE OF THE GENERAL COUNSEL 

Herman Oliphant General Counsel. 

John G. Harlan Assistant to the General Counsel. 

Clarence V. Opper Assistant General Counsel. 

Alanson Willcox Assistant General Counsel. 

John G. Laylin Assistant General Counsel. 

Robert H. Jackson. Assistant General Counsel, Bureau of Internal Revenue. 

Eli Frank, Jr Chief Counsel, Bureau of Customs. 

DIVISION OF RESEARCH AND STATISTICS 

George C. Haas Director. 

L. H. Seltzer Head Economist. 

A. S. McLeod— Government Actuary. 

PUBLIC DEBT SERVICE 

William S. Broughton Commissioner of the Public Debt. 

S. R.Jacobs Assistant Commissioner of the Public Debt. 

Rene W. Barr Deputy Commissioner of the Public Debt. 

E. L. Kilby Assistant to the Commissioner. 

W. W. Durbin Register of the Treasury. 

Byrd Leavell — Assistant Register of the Treasury. 

Marvin Wesley ..-. Chief, Division of Loans and Currency. 

Melvin R. Loafman Chief, Division of Accounts and Audit. 

Maurice A. Emerson.. ,.... Chief, Division of Paper Custody. 

XIV 



XV 

OFFICE OF THE COMMISSIONER OF ACCOUNTS AND DEPOSITS 

D. W. Bell.. Commissioner of Accounts and Deposits. 

Vacant Assistant Commissioner of Accounts and Deposits. 

Edward F. Bartelt.. Chief Accountant. 

William T. Heflfelfinger _ Assistant to the Commissioner. 

Guy F. Allen _ Chief Disbursing Officer, Division of Disbursement. 

Andrew M. Smith Chief, Division of Bookkeeping and Warrants. 

Edward D. Batchelder .. Chief, Division of Deposits. 

Harry R. Schwalm.. Chief Examiner, Section of Surety Bonds. 

OFFICE OF THE COMPTROLLER OF THE CURRENCY 

J. F. T. O'Connor.. Comptroller of the Currency. 

F. Q. Await Deputy Comptroller. 

Eugene H. Gough Deputy Comptroller. 

Qibbs Lyons Deputy Comptroller. 

W. P. Folger Chief National Bank Examiner. 

J. E. Fouts Supervising Receiver, Insolvent National Bank Division. 

George E. Marble Chief Clerk. 

OFFICE OF THE TREASURER OF THE UNITED STATES 

William A. Julian Treasurer of the United States. 

Marion Banister Assistant Treasurer. 

George O. Barnes Executive Assistant to the Treasurer. 

Louis P. Allen Chief Clerk. 

OFFICE OF THE COMMISSIONER OF INTERNAL REVENUE 

Guy T. Helvering — Commissioner of Internal Revenue. 

Wright Matthews Assistant to the Commissioner. 

Charles T. Russell Deputy Commissioner. 

George J. Schoeneman Deputy Commissioner. 

D. Spencer Bliss Deputy Commissioner. 

Arthur J. Mellott Deputy Commissioner. 

Eldon P. King Special Deputy Commissioner. 

A. R. Marrs Head, Technical Staff. 

L. C. Mitchell Senior Technical Adviser, Technical Staff. 

Bertha Wetherton Special Assistant to Commissioner. 

BUREAU OF NARCOTICS 

Harry J. Anslinger Commissioner of Narcotics. 

Louis Ruppel Deputy Commissioner of Narcotics. 

BUREAU OF CUSTOMS 

James H. Moyle.. Commissioner of Customs. 

Frank Dow Assistant Commissioner of Customs. 

Thomas J. Gorman Deputy Commissioner, Customs Agency Service. 

MINT BUREAU 

Nellie Tayloe Ross Director of the Mint. 

Mary M. O'Reilly Assistant Director. 

BUREAU OF ENGRAVING AND PRINTING 

Alvin W. Hall Director of the Bureau of Engraving and Printing. 

Clark R. Long Assistant Director (Administration). 

Jesse E. Swigart Assistant Director (Production). 



XVI 

PUBLIC HEALTH SERVICE 

Hugh S. dimming Surgeon General. 

John McMullen Assistant Surgeon General. 

W. F. Draper Assistant Surgeon General. 

L. R. Thompson Assistant Surgeon General. 

Francis A. Carmelia.. Assistant Surgeon General. 

Walter L. Treadway Assistant Surgeon General. 

C. E. Waller... Assistant Surgeon General. 

S. L. Christian . Assistant Surgeon General. 

Ralph C. Williams Assistant Surgeon General. 

D. S. Masterson Chief Clerk. 

UNITED STATES COAST GUARD 

Rear Admiral H. G. Hamlet... Commandant. 

Captain Leon C. Covell Assistant Commandant. 

Commander Russell R. Waesche Aide to Commandant. 

A. T. Thorson Chief Clerk and Chief, Division of Finance. 

Oliver M. Maxam Chief, Division of Operations. 

PROCUREMENT DIVISION 

Rear Admiral C. J. Peoples Director of Procurement. 

W. E. Reynolds Assistant Director, Public Works Branch. 

Harry E. Collins Assistant Director, Supply Branch. 

Leo C. Martin Assistant to Assistant Director, Public Works Branch. 

Robert LeFevre Assistant to Assistant Director, Supply Branch. 

Louis A. Simon Supervising Architect. 

George O. Von Nerta. Supervising Engineer. 

BOAED OF ARCHITECTURAL CONSULTANTS 

Edward H. Bennett, Chairman Clarence C. Zantzinger 

Louis Ayres Louis A. Simon 

Arthur Brown, Jr. John Russell Pope 

William A. Delano Hal F. Hentz 
William Ward Watkin 

BOARD OF AWARDS 

George O.Von Nerta, Supervising Engineer, Chair- William K. Laws, Chief, Legal Section 
man John H. Schaefer, Office Manager 

Louis A. Simon, Supervising Architect John Weber, Secretary 

Nelson S. Thompson, Chief, Mechanical Engi- 
neering Section 

STANDING DEPARTMENTAL COMMITTEES 

BUDGET AND IMPROVEMENT COMMITTEE 

S. R. Jacobs, Chairman J. H. Schaefer 

F. A. Birgfeld, Vice Chairman Arthur E. Wilson 

W. N. Thompson M. E. Slindee 

D. S. Bliss F. J. Lawton 

L. C. Martin Charles R. Schoeneman 

Edward F. Bartelt E. C. Nussear, Secretary 

COMMITTEE ON ENROLLMENT AND DISBARMENT OF ATTORNEYS AND AGENTS 

W. W. Cook, Chairman Lawrence Becker, Secretary 

I. T. Gilruth, Vice Chairman 

COMMITTEE ON PERSONNEL 

F. A. Birgfeld, Chairman S. R. Jacobs 

James E. Harper 

COMMITTEE ON CIVIL SERVICE RETIREMENT 

F. A. Birgfeld, Chairman W. N. Thompson 

James E . Harper Frank Dow 



90353—35 2 



ANNUAL REPORT ON THE FINANCES 



Treasury Department, 
Washington, D. C, November 20, 1934. 
Sir: I have the honor to make the following report: 

BUDGET RESULTS 

Receipts 

Total receipts, exclusive of trust account items, during the fiscal 
year 1934 were $3,115,554,050, compared with $2,079,696,742 in 1933. 
Id creased receipts resulted in customs and in every important cate- 
gory of internal revenue except the tax on admissions. These in- 
creases, coupled with the new National Industrial Recovery taxes and 
the agricultural adjustment taxes, accounted for the $1,035,857,308 
increase in total receipts. 

PRINCIPAL SOURCES OF RECEIPTS FOR THE FISCAL YEARS 1925 TO 1934 (EXCLUSIVE OF 

TRUST ACCOUNT ITEMS) 



Billions 




1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 
Chart 2. 

The trend in receipts, by major sources, from 1925 to 1934, inclusive, 
is shown in the chart above; and a more detailed comparison of 
receipts for 1933 and 1934 is presented in the table on page 2. 

l 



REPORT OF THE SECRETARY OF THE TREASURY 



Miscellaneous internal revenue receipts in 1934 constituted 47 
percent of total receipts, compared with 41 percent in 1933; and con- 
stituted 53 percent of total receipts exclusive of agricultural adjust- 
ment taxes. Income tax receipts increased in 1934 by $71,800,000 
but constituted the smallest percentage (26 percent) of total receipts 
since 1917. 

Receipts by major sources for the fiscal years 1933 and 1934 ' 
[In millions of dollars] 





1933 


1934 


Increase 
(+), de- 
crease (— ) 


Internal revenue: 
Income taxes: 


319.4 
295.0 
131.8 


321.5 
355.0 
141.5 


+2.1 




+60.0 




+9.7 




746.2 


818.0 


+71.8 






Miscellaneous internal revenue taxes: 


29.7 

4.6 

402.7 

8.0 

35.2 


104.0 
9.2 
425.2 
90.0 
169.0 


+74.3 




+4.6 




+22.5 




+82.0 




+133. 8 






Manufacturers' excise: 


124.9 
32.8 
28.6 
16.2 
45.3 


202.6 
70.9 
33.1 
25.3 
58.1 


+77.7 


Automobiles, trucks, tires, tubes, and parts or accessories. - 


+38.1 
+4.5 




+9.1 


All other 


+12.8 








247.8 


390.0 


+142. 2 








57.3 
14.6 
7.5 
15.5 

38.5 


66.6 
19.3 
10.4 
14.6 
41.4 


+9.3 




+4.7 




+2.9 




-.9 


Checks 


+2.9 






Taxes under National Industrial Recovery Act: 




80.2 

50.2 

2.6 


+80.2 






+50.2 






+2.6 












133.0 


+133. 










'3.2 


>S.l 


+.1 








858. 2 


1, 469. 6 


+611.4 










353.0 


+353. 










1, 604. 4 
250.8 


2, 640. 6 
313.4 


+1, 036. 2 




+62.6 








1, 855. 2 


2, 954. 


+1, 098. 8 






Miscellaneous receipts: 

Proceeds of Government-owned securities: 


98.7 
32.1 
93.7 


20.4 
57.4 
83.7 


-78.3 




+25. 3 




-10.0 






Total miscellaneous receipts, exclusive of trust account items 


224.5 


161.5 


-63.0 




2, 079. 7 


3, 115. 5 


+1, 035. 8 







1 On basis of daily Treasury statements (unrevised), supplemented by report of the Commissioner of 
Internal Revenue. General and special accounts combined; for description of accounts, see p. 274; for classi- 
fication by accounts, see p. 276 

' Includes adjustment to basis of daily Treasury statements (unrevised). 

3 The adjustment to the daily Treasury statement basis more than absorbs "All other internal reve- 
nue", as reported by the Commissioner of Internal Revenue, by $3,200,000 in 1933 and by $3,100,000 
in 1934. 



REPORT OF THE SECRETARY OF THE TREASURY 6 

Income taxes. — In the fiscal year 1934 income taxes amounted to 
$818,000,000, compared with $746,200,000 in 1933. The increase of 
$71,800,000 was accounted for as follows: Collections of current 
taxes on individual incomes, $60,000,000; collections of current taxes 
on corporations, $2,100,000; and back tax collections, $9,700,000. 

The fiscal year 1934 was the first full fiscal year to reflect the 
increased normal rates and surtaxes, reduced personal exemptions, 
the elimination of tax credit for earned income, and other provisions 
of the Revenue Act of 1932 relating to individual income taxes. 
Consequently, collections of current taxes on individual incomes 
increased considerably in the face of a continued decline of net taxable 
incomes in the calendar year 1933. 

Current taxes on corporate incomes in the fiscal year 1934 likewise 
were collected for the first full fiscal year on the basis of the increased 
rate of 13% percent (compared with the old rate of 12 percent), plus 
an additional tax of % of 1 percent on net income reported on consoli- 
dated returns. That collections in 1934 exceeded 1933 collections by 
only $2,100,000 is due to the fact that net income in the calendar 
year 1933 was far below the 1931 total, which figured in the first 
half of the 1933 fiscal year collections. 

Miscellaneous internal revenue. — Receipts from miscellaneous in- 
ternal revenue taxes were $1,469,600,000 in the fiscal year 1934, 
compared with $858,200,000 in 1933, an increase of $611,400,000. 
Receipts from the leading revenue-producing taxes are shown in the 
table on page 2. 

In 1934 nearly 90 percent of miscellaneous internal revenue came 
from the following sources, in the order of their importance as revenue 
producers: Tobacco taxes, manufacturers' excise taxes, the tax on 
fermented liquors, National Industrial Recovery taxes, the estate 
tax, and taxes on distilled spirits and wines. 

The additional estate tax imposed by the Revenue Act of 1932 
was largely responsible for the increased collections of taxes on estates 
in 1934, which amounted to $104,000,000, compared with $29,700,000 
in 1933. Inasmuch as returns of this tax are not required to be filed 
until one year after death, 1933 collections reflected little effect of the 
additional tax. 

Increased collections of the tax on gasoline, raised from 1 to 1% cents 
per gallon by the National Industrial Recovery Act, accounted for 
more than one-half of the $142,200,000 increase in collections of manu- 
facturers' excise taxes. 

Taxes on fermented malt liquors collected during the fiscal year 
amounted to $169,000,000; on distilled spirits, $86,000,000; and on 
wines, $4,000,000. The manufacture and sale of beer had been 
authorized by the act of March 22, 1933, and consequently collections 
of taxes*on fermented malt liquors cover the entire fiscal year. The 



4 REPORT OF THE SECRETARY OP THE TREASURY 

manufacture and sale of distilled spirits and wine for beverage pur- 
poses have been legal since December 5, 1933; therefore, taxes col- 
lected on spirits and wine do not represent a full year's collection. 

Agricultural adjustment taxes. — Agricultural adjustment taxes totaled 
$353,000,000. Taxes on cotton and wheat produced the largest share, 
$144,800,000 and $117,600,000, respectively. 

Customs. — Customs receipts of $313,400,000 in 1934 exceeded by 
$62,600,000 the sum reported in 1933, and reflected a reversal, which 
began in the middle of 1933, of the previous steady decline in foreign 
trade. 

Miscellaneous receipts. — Miscellaneous receipts, exclusive of trust 
account items, declined from $224,500,000 in the fiscal year 1933 to 
$161,500,000 in 1934. These receipts include such items as the pro- 
ceeds from Government-owned securities, Panama Canal tolls, fees, 
fines and penalties, rents and royalties, the immigration head tax, tax 
on the circulation of national bank notes, and seigniorage. The 
decrease was due chiefly to the reduced receipts on account of obliga- 
tions of foreign governments. These receipts amounted to $98,700,000 
in the fiscal year 1933 and only $20,400,000 in 1934. Receipts on all 
other Government-owned securities rose from $32,100,000 in the 
fiscal year 1933 to $57,400,000 in 1934. The latter figure includes 
interest in the amount of approximately $48,900,000 paid by the 
Reconstruction Finance Corporation on account of advances made by 
the Secretary of the Treasury. 

Expenditures 

During the fiscal year 1934 general and emergency expenditures, 
exclusive of trust account items, aggregated $7,105,050,085, as com- 
pared with $5,142,953,627 for the fiscal year 1933. This increase was 
entirely a result of an expansion in emergency expenditures, which 
on the basis of the daily Treasury statement (unrevised) increased 
from $1,277,000,000 to $4,004,000,000, while general expenditures 
declined from $3,866,000,000 to $3,101,000,000. A portion of the 
rise in 1934 emergency expenditures, however, reflected the fact that 
in the year 1933 the only expenditures placed in the emergency 
category were the expenditures of the Reconstruction Finance 
Corporation. 

The table on page 6 compares, for the fiscal years 1932 to 1934, 
expenditures of emergency organizations and other expenditures 
classified by important groups. The total shown in this table as 
expenditures of emergency organizations includes emergency expendi- 
tures classified in the daily Treasury statement (unrevised) as such, 
and also certain general expenditures for Agricultural Adjustment 
Administration, refunds of receipts on processing taxes, and subscrip- 
tions to stock of Federal land banks. Prior to the fiscal year 1934 the 



REPORT OF THE SECRETARY OF THE TREASURY 



expenditures of emergency organizations included only expenditures 
on account of the Reconstruction Finance Corporation and subscrip- 
tions to capital stock of the Federal land banks. Expenditures made 
from general disbursing accounts for public works for certain loans 
and credits to farmers, for the distribution of wheat and cotton for 
relief, and for emergency conservation work, and transactions for the 
agricultural marketing fund are included in the statement on page 6, 
as the last item under the caption "all other" expenditures, and 

EXPENDITURES, FISCAL YEARS 1925 TO 1934 (EXCLUSIVE OF TRUST ACCOUNT ITEMS) 




1929 1930 

Chart 3. 



advances by the Reconstruction Finance Corporation to States, 
municipalities, and other public bodies for relief under the Emergency 
Relief and Construction Act of 1932, amounting to $298,560,000, are 
included under Reconstruction Finance Corporation direct loans and 
expenditures. For these reasons comparisons of expenditures along 
functional lines are impossible in many instances, particularly as re- 
gards public works and relief expenditures, aids to agriculture, and 
the "all other" category. It is certain, however, that substantial 



6 REPORT OF THE SECRETARY OF THE TREASURY 

increases were made in 1934 for aids to agriculture and to home owners, 
for relief, and for public works. On the other hand, the postal defi- 
ciency was reduced $65,000,000, payments to veterans decreased 
$307,000,000, and service on the public debt was reduced $34,000,000. 
This latter decline reflected a decrease of $102,000,000 in public debt 
retirements, which was partly offset by an increase of $68,000,000 in 
interest payments. 

All but $10,000,000 of the $290,000,000 shown in the following 
table as expended for account of the Agricultural Adjustment Ad- 
ministration consisted of items chargeable against receipts from 
agricultural adjustment taxes. These expenditures included rental 
and benefit payments, purchases for removal of surplus products, 
and administrative expenses. Receipts totaled $353,000,000 or 
$63,000,000 in excess of expenditures chargeable against them. 

Expenditures Y of emergency organizations and other expenditures, fiscal years 1982, 

1938, and 1984 

[In millions of dollars] 



Class of expenditure 



1932 



Agricultural Adjustment Administration 

Commodity Credit Corporation 

Farm Credit Administration 

Federal Farm Mortgage Corporation. 

Federal land banks: 

Capital stock 

Paid-in surplus 

Reduction in interest rates on mortgages . . 

Federal Emergency Relief Administration 

Federal Surplus Relief Corporation 

Civil Works Administration 

Emergency Conservation Work 

Public Works: 

Tennessee Valley Authority 

Loans to railroads 

Loans and grants to States, etc 

Public highways 

Boulder Canyon project . 

River and harbor work _ . 

All other - -. 

Home Loan System: 

Home loan bank stock 

Home Owners' Loan Corporation.. 

Federal Savings and Loan Association 

Emergency Housing. 

Subsistence homesteads 

Reconstruction Finance Corporation, direct loans and expenditures 

Export-Import Banks of Washington 

Federal Deposit Insurance Corporation 

Administration for Industrial Recovery 



( s ) 



7Hi: 



Total emergency organization expenditures. 



893 



Postal deficiency 

Interest on the public debt 

Public debt retirements 

National defense 

Veterans 

All other, including nonfunctional and departmental. 

Total expenditures 



203 
599 
413 
708 
985 
1,353 



5,154 



38 



1,121 



1,277 



117 
689 
462 



863 
1,067 



5,143 



(>) 



290 
164 
146 
200 

'2 

41 

7 

667 

40 

805 

332 

11 
71 
79 

268 
19 
72 

133 

39 

153 

1 

2 

585 

3 

150 

7 



4,283 



52 
757 
360 
480 
556 
617 



7,105 



i On basis of daily Treasury statements (unre vised). 

» Less than $500,000. 

3 Excess of credits (deduct). 

* Includes expenditures by Reconstruction Finance Corporation from proceeds of capital stock 
($500,000,000 in 1932) and from sale of the Corporation's obligations. 

'Advances to States, etc., under 1932 Relief Act, of $298,560,000, are included under Reconstruction 
Finance Corporation, direct loans and expenditures. 



REPORT OF THE SECRETARY OF THE TREASURY 



THE PUBLIC DEBT 



The gross public debt outstanding at the end of the fiscal year 1934 
amounted to $27,053,141,414 as compared with $22,538,672,560 on 
June 30, 1933, an increase of $4,514,468,854. The net changes in the 
character and amount of the outstanding debt are summarized in the 
following table showing the amounts of the various classes of debt 
outstanding at the beginning and at the end of the fiscal year. 

Changes in public debt outstanding June 30, 1933 and 1934, by classes 
[On basis of daily Treasury statements (unrevised), see p. 273] 



June 30, 1933 



June 30, 1934 



Increase (+) or 
decrease (— ) 



Interest-bearing debt: 
Open market issues: 

Pre-war bonds 

Liberty bonds 

Treasury bonds 

Total bonds.. 

Treasury notes 

Certificates of indebtedness 

Treasury bills... 

Total 

Special issues for investment of trust funds, and postal 
savings bonds: 

Postal savings bonds 

Treasury notes 

Certificates of indebtedness.. 

Total 

Total interest-bearing debt 

Matured debt on which interest has ceased 

Debt bearing no interest 

Total gross debt 



$753, 320, 130 
8, 201, 307, 550 
5,215,942,300 



$753, 320, 130 
6, 345, 774, 250 
9, 332, 732, 350 



-$1, 855, 533, 300 
+4,116,790,050 



14, 170, 569, 980 

4, 548, 379, 200 

2, 108, 327, 500 

954, 493, 000 



16,431,826,730 
6,653,111,900 
1,517,245,000 
1, 404, 035, 000 



+2, 261, 256, 750 

+2, 104, 732, 700 

-591, 082, 500 

+449, 542, 000 



21, 781, 769, 



26, 006, 218, 630 



+4, 224, 448, 950 



52, 697, 440 
231, 176, 000 
92, 000. 000 



78, 030, 240 
278, 439, 000 
117,800,000 



+25, 332, 800 
+47, 263, 000 
+25, 800, 000 



375, 873, 440 



474, 269, 240 



+98, 395, 800 



22, 157, 643, 120 

65,911.170 

315,118,270 



26. 480, 487, 870 

54, 266, 830 

518, 386, 714 



+4, 322, 844, 750 

-11,644,340 

+203, 268, 444 



22, 538, 672, 560 



27, 053, 141, 414 



+4,514,468,854 



The open market financing operations of the Treasury during 1934 
reflect chiefly: (1) Borrowings necessary to finance emergency ex- 
penditures, (2) refunding of maturing debt, and (3) increase in the 
General Fund balance. 

The volume of open market transactions during the year is sum- 
marized in the following table: 

Open market issues and maturities, fiscal year 1934 
[On basis of daily Treasury statements (unrevised), see p. 273] 



Class 



Issues 



Number 
of issues 



Amount 



Maturities 



Number 
of issues 



Liberty bonds 

Treasury bonds 

Treasury notes 

Certificates of indebtedness . 
Treasury bills 



Total. 



$4, 122, 343, 400 
2, 712, 686, 400 
1, 692, 150, 500 
4, 385, 975, 000 



$1,880,000,000 



2 561, 164, 700 
2, 283, 233, 000 
3, 936, 433, 000 



70 



12, 913, 155, 300 



8,660,830,700 



1 Fourth Liberty loan bonds called for partial redemption on Apr. 15, 1934. 

J Includes $316,930,100 Treasury notes due Aug. 1, 1934, exchanged June 15, 1934. 



8 



REPORT OF THE SECRETARY OF THE TREASURY 



Public debt transactions, other than open market operations, in- 
cluded the issuance and redemption of special obligations connected 
with the investment of trust funds and postal savings, operations in 
connection with the national bank note and Federal Reserve bank 
note retirement funds, and the issuance and redemption of Treasury 
bonds of a special series l made available for payment in gold. 

On the basis of the interest-bearing debt outstanding on June 30, 
1933, and on June 30, 1934, the computed annual interest charge was 
increased from $742,175,955 to $842,301,131, and the computed rate 
was reduced from 3.350 to 3.181 percent. The course of the interest- 

INTEREST-BEARING DEBT OUTSTANDING AND RATIO OF THE COMPUTED ANNUAL 
INTEREST CHARGE TO THE INTEREST-BEARING DEBT, BY MONTHS, JANUARY 1919 
TO JUNE 1934 



IS 












































*£~-lt 


i teres 


t-Be 


irinq 


Debt 
















































<r Co 


mput 


zd Ir 


terns 


t Rat 


i 


















••..•'•:. 
























"*• 











































PER 
CENT 



1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 

Chart 4. 



30 



bearing debt outstanding and of the computed rate of the interest 
charge on that debt for the fiscal years 1919 through 1934 is shown 
in the chart above. 

Information concerning issues, maturities, and redemptions of 
interest-bearing public debt securities in the open market is shown 
in table 25 on page 364 of this report, and Department circulars and 
public announcements concerning the public debt offerings during 

i Treasury bonds, series of Apr. 16, 1934, authorized by the Second Liberty Bond Act, approved Sept. 
24, 1917, as amended, were offered in the amount of $55,560,000 for payment in gold. The bonds, bearing 
% percent interest, were dated Jan. 16, 1934, and matured Apr. 16, 1934. All bonds were redeemed before 
maturity. 



REPORT OF THE SECRETARY OF THE TREASURY 9 

the fiscal year after November 1, 1933, appear as exhibits 1 to 17 
on pages 161 to 181. 

Refunding the Fourth Liberty Loan 

Fourth Liberty Loan 4% percent bonds of 1933-38 were originally 
issued under date of October 24, 1918, in the amount of $6,964,581,100. 
This amount had been reduced to about $6,268,000,000 when on 
October 12, 1933, the first call was issued for redemption on April 
15, 1934, of about $1,880,000,000, or 30 percent, of the outstanding 
bonds. This amount is only approximate. Fourth Liberty Loan 
bonds had been issued in the order of their serial numbers, and there- 
fore are divisible into 10 series, as determined by the final digits of the 
serial numbers. Three series were included in the first call, the 
bonds designated being those bearing serial numbers ending in 9, 
0, or 1. 

On October 15, 1933, a series of Treasury bonds of 1943-45 was 
offered for subscription bearing interest at the rate of 4% percent 
per annum from that date to October 15, 1934, and thereafter at the 
rate of 3% percent per annum. The new bonds were offered at par 
in exchange for outstanding Fourth Liberty Loan bonds, whether 
called or uncalled, and at 101^ for cash, the price for cash including 
accrued interest from October 15 to November 1, 1933, the date 
fixed for cash payment. 

The cash offering, which was for $500,000,000, or thereabouts, was 
closed on October 17, 1933, at which time subscriptions aggregating 
$1,989,015,000 were received, of which $500,421,950 were allotted. 
Exchange subscriptions, which were not closed until December 2, 

1933, aggregated $900,716,550, a like amount of Fourth Liberty Loan 
bonds having been tendered in exchange — $874,863,900 of the called 
and $25,852,650 of the uncalled bonds. By this operation outstand- 
ing Fourth Liberty Loan bonds called for redemption on April 15, 

1934, were reduced to about $1,005,000,000. 

On April 4, 1934, a series of 3% percent Treasury bonds of 1944-46 
was offered for subscription in exchange for Fourth Liberty Loan 
bonds called for redemption on April 15, and for Treasury notes of 
series A-1934, maturing May 2, 1934. The offering was confined to 
exchange subscriptions, cash subscriptions not being received. A 
total of $1,061,960,500, including $827,496,200 of the called bonds and 
$234,464,300 of the maturing notes, was exchanged for the new 
bonds. 

Through these two exchange offerings, $1,702,360,100 of the called 
bonds were refunded into Treasury bonds, resulting in an annual 
interest saving after the first year of over $17,000,000. On April 15 
there remained outstanding about $178,000,000 of the called bonds 



10 REPORT OF THE SECRETARY OF THE TREASURY 

due that date. To the end of the fiscal year, $127,000,000 of these 
bonds were redeemed in cash. 

On April 13, 1934, a second call was issued for the redemption on 
October 15, 1934 of about $1,246,000,000 of outstanding Fourth 
Liberty Loan bonds. The bonds included in the second call were 
those which bear serial numbers ending in 8 or 2, and the amount is 
approximately two-sevenths of the uncalled bonds outstanding on 
April 13, 1934. No steps for refunding of the bonds included in the 
second call were taken before the close of the fiscal year 1934. 

Department circulars issued and public announcements made dur- 
ing the fiscal year 1934 concerning the first call of October 12, 1933, 
and the second call of April 13, 1934, for partial redemption of Fourth 
Liberty Loan bonds, and the refunding issues announced on October 
12, 1933, and April 4, 1934, are included as exhibits 15 and 16 on 
pages 176 to 183 of the annual report for 1933 and as exhibits 1 and 
10 to 12 on pages 161 and 168 to 174 of this report. 

Cumulative sinking fund 

The permanent appropriation available for the cumulative sinking 
fund during the fiscal year 1934, including a small unexpended 
balance for the prior year, was $438,540,889. Treasury bonds in the 
face amount of $5,187,000, and Treasury notes in the face amount of 
$46,789,000, were purchased at a principal cost of $5,090,468 and 
$46,579,686, respectively; and $300,002,200, face amount of Fourth 
Liberty Loan bonds, and $7,513,700, face amount of Treasury notes 
of series A-1934, were redeemed at par for account of the fund. 
The face amount of total retirements on this account was thus 
$359,491,900 at an expenditure of $359,186,054. An unexpended 
balance of $79,354,835 was carried forward to the fiscal year 1935. 
Tables covering transactions on account of the fund for the fiscal 
year 1934, and from its inception on July 1, 1920, will be found on 
pages 368 and 369 of this report. 

Two amendments to the cumulative sinking fund acts were enacted 
during the year: First, under provisions of the Treasury Department 
Appropriation Act, 1935, the addition to the fund established by 
section 308 of the Emergency Relief and Construction Act of 1932 
was changed from an annual to a permanent appropriation, thus con- 
forming to other appropriation provisions of the sinking fund acts; 
and second, under the Gold Reserve Act of 1934, the appropriation 
for the fund, previously restricted to retirement of issues outstanding 
on July 1, 1920, and to issues subsequently made for refunding pur- 
poses, was extended to cover the retirement of any bonds or notes 
issued under the Second Liberty Bond Act, as amended. 



REPORT OP THE SECRETARY OP THE TREASURY 11 

Indirect obligations of the United States 

In addition to the public debt which is a direct obligation of the 
United States, there are classes of indirect obligations which are in 
the nature of contingent liabilities. These liabilities include obliga- 
tions, payment of which with regard to principal and/or interest is 
guaranteed by the Government, as well as obligations based on the 
credit of the United States. A statement, showing in detail the con- 
tingent liabilities of the Federal Government on June 30, 1934, is pre- 
sented on page 373 of this report. In this connection attention is 
called to the statement on page 381 of assets and liabilities of Govern- 
ment corporations and credit agencies of the United States, as of June 
30, 1934, compiled from reports received from organizations concerned. 

At the end of the fiscal year 1934, principal of outstanding obliga- 
tions of Government agencies fully guaranteed both as to principal and 
interest included: $312,000,000 of the Federal Farm Mortgage Corpo- 
ration, $235,000,000 of the Reconstruction Finance Corporation, and 
$134,000,000 of the Home Owners' Loan Corporation. The latter 
agency also had outstanding $612,000,000 of bonds guaranteed only 
as to interest but exchangeable until October 27, 1934, for fully 
guaranteed bonds. The Federal land banks had outstanding 
$331,000,000 of bonds guaranteed as to interest but not as to principal. 
Obligations outstanding on June 30, 1934, secured by the credit of 
the United States included $58,000,000 of loans to the Secretary of 
Agriculture, based upon all cotton in his possession or control and 
secured by warehouse receipts for such cotton; and postal savings 
funds, amounting to $1,198,000,000. 

GENERAL FUND OF THE TREASURY 

All cash receipts of the Government are deposited in the General 
Fund of the Treasury and all expenditures are made therefrom. The 
balance of this fund represents the cash balance of the Government. 
The net change in this balance from the close of the previous fiscal 
year is accounted for as follows: 

Summary of the net changes in the General Fund balance between June SO, 1933, 

and June 30, 1934 
[On basis of rlaily Treasury statements (unrevised), see p. 273] 

Balance June 30, 1933 $862,205,220. 61 

Increase in public debt in the fiscal year 1934 4. 514, 468, 854. 33 

Total to be accounted for 5, 376, 674, 074. 94 

Excess of expenditures over receipts in the fiscal year 1934: 

General and special accounts 1 $3, 989, 496, 035. 42 

Less charges to statutory debt retire- 
ments in the fiscal year 1934 __ 359, 864, 092. 90 
Net, exclusive of statutory debt 

retirements 3, 629, 631, 942. 52 

1 For a description of accounts through which Treasury transactions are effected, see p. 274. 



12 



REPORT OF THE SECRETARY OF THE TREASURY 



Summary of the net changes in the General Fund balance between June 30, 1983, 
and June 30, 1934 — Continued 

Excess of expenditures over receipts in the fiscal year 1934 — 
Continued. 

Less net increase in trust and con- 
tributed accounts $23,504,351.02 

Less net receipts in increment on 

gold account 811,375,756.72 

Net excess of expenditures over receipts $2, 794, 751, 834. 78 

Balance June 30, 1934 2, 581,922,240. 16 

Total 5, 376, 674, 074. 94 

Current cash assets and liabilities of the Treasury, June 30, 1933 and 1934, and 

changes during the year 

[On basis of daily Treasury statements (unrevised), see p. 273] 





June 30, 1933 

(gold valued at 

$20.67+ per fine 

ounce) 


June 30, 1934 

(gold valued at 

$35 per fine 

ounce) 


Increase (+), 
decrease (— ) 


Gold assets: 

Gold 


$3, 233, 846, 776. 44 


$7, 856, 074, 225. 67 


+$4, 622, 227, 449. 23 






Deduct gold liabilities: 

Gold certificates outstanding (outside of 
Treasury) 


1, 230, 718, 869. 00 

1 1. 771, 485, 595. 89 
» 44, 066, 151. 32 
156, 039, 088. 03 


958, 684, 599. 00 

3, 973, 332, 588. 66 

25, 722, 721. 73 

156,039,430.93 

1, 800, 000, 000. 00 


-272, 034, 270. 00 


Gold certificate fund, Federal Reserve 
Board . 


+2,201,846,992.77 


Redemption fund, Federal Reserve notes... 
Gold reserve i 


-18,343,429.59 
+342. 90 


Exchange stabilization fund 


+1,800,000,000.00 








Total 


2 3,202,309,704.24 


6, 913, 779, 340. 32 


+3,711,469,636.08 






Gold in General Fund 


> 31, 537, 072. 20 


942, 294, 885. 35 


+910, 757, 813. 15 






Silver assets: 

Silver bullion (sec. 45, Act of May 12, 1933). 




1, 560, 000. 00 
503, 852, 622. 00 


+1, 560, 000. 00 


Silver dollars 


507, 191, 369. 00 


-3,338,747.00 






Total 


507, 191, 369. 00 


505, 412, 622. 00 


-1,778,747.00 






Deduct silver liabilities: 

Silver certificates (sec. 45, Act of May 12, 
1933) 




1, 560, 000. 00 

493, 436, 414. 00 

1, 189, 324. 00 


+ 1,560,000.00 




479, 870, 570. 00 
1, 200, 124. 00 


+ 13,565,844.00 


Treasury notes of 1890 outstanding.. 


-10,800.00 






Total 


481, 070, 694. 00 


496, 185, 738. 00 


+15, 115, 044. 00 






Silver dollars in General Fund 


26, 120, 675. 00 


9, 226, 884. 00 


-16,893,791.00 






General Fund assets: 
In Treasury offices: 

Gold (as above) 


2 31, 537, 072. 20 
26, 120, 675. 00 
82, 207, 203. 16 

917, 767, 433. 37 
848, 458. 74 


942, 294, 885. 35 

9, 226, 884. 00 

93, 668, 569. 49 

1, 984, 894, 916. 20 
2,831,924.78 


+910, 757, 813. 15 


Silver dollars (as above) 


-16,893,791.00 


All other (coin, currency, and bullion).. 
In depositary banks, reserve banks, and 
treasury of Philippine Islands 


+11,461,366.33 
+1, 067, 127, 482. 83 


All other 


+ 1,983,466.04 






Total 


2 1, 058, 480, 842. 47 


3,032,917,179.82 


+ 1,974,436,337.35 






Deduct General Fund liabilities: 

Total 


196, 275, 621. 86 


450, 994, 939. 66 


+254, 719, 317. 80 






Balance of increment resulting from re- 




811,375,756.72 
1, 770, 546, 483. 44 


+811,375,756.72 


Working balance 


862, 205, 220. 61 


+908,341,262.83 






Balance in the General Fund of the Treasury 


862, 205, 220. 61 


2, 581, 922, 240. 16 


+1, 719, 717, 019. 55 



» "Gold fund, Federal Reserve Board", in 1933. 

' Redemption fund, Federal Reserve notes, carried as General Fund liability in 1933. In this table the 
1933 figures have been revised to include this item as a gold account liability. 

5 Reserve against $346,681,016 of United States notes and Treasury notes of 1890 outstanding in the amount 
of $1,200,124 in 1933 and $1,189,324 in 1934. Treasury notes of 1890 are also secured by silver dollars in the 
Treasury. 



REPORT OF THE SECRETARY OF THE TREASURY 13 

The composition of the General Fund of the Treasury, existing lia- 
bilities against the assets in the fund, and the balances in excess of 
such liabilities are shown for June 30, 1933 and 1934, in the above 
table. These figures are on the basis of the daily Treasury state- 
ments, unre vised (for explanation, see p. 273). Similar information is 
presented in somewhat greater detail, and on the basis of the daily 
Treasury statements (revised), in the table on p. 376 of this report. 

EMERGENCY LEGISLATION 

Further appropriations and allocations of funds were made during 
the fiscal year 1934 for the purpose of dealing with the emergency 
created by the depression. The amount of capital stock and obliga- 
tions that the Reconstruction Finance Corporation is authorized to 
have outstanding at any one time was increased from $4,575,000,000 
to $5,925,000,000, exclusive of indefinite authorizations. The various 
legislative provisions affecting the amount of capital stock and of 
other obligations which the Corporation may have outstanding at 
any ODe time are summarized as follows: 

Reconstruction Finance Corporation Act, sec. 2 (capital stock) $500,000,000 

Reconstruction Finance Corporation Act, sec. 9._- - 1,500,000,000 

Emergency Relief and Construction Act of 1932, sec. 205 (a) - 1,800,000,000 

National Industrial Recovery Act, sec. 302 ' 400,000,000 

Federal Home Loan Bank Act, sec. 6 (f) 125,000,000 

Emergency Farm Mortgage Act of 1933, sec. 38 - 300,000,000 

Federal Emergency Relief Act of 1933, sec. 2 (b)_. 500,000,000 

Act approved June 10, 1933, sec. 1 (insurance company preferred stock) 50,000,000 

Home Owners' Loan Act of 1933, sec. 4 (b).._ - 200, 000, 000 

Total authorized prior to July 1, 1933 --- -- 4, 575, 000, 000 

Act approved Jan. 20, 1934, sec. 3-.- -. 850,000,000 

Act approved June 16, 1934, sec. 3 (a) (purchase of obligations of Federal Deposit Insurance 

Corporation) -_. 250,000,000 

Emergency Appropriation Act, 1935, title II (purchase of securities held by Public Works 

Administration) 250, 000, 000 

Total authorized 5, 925. 000, 000 

Act approved Mar. 9, 1933, sec. 304 (bank preferred stock, etc.) 2 - 1 No statutory 

Agricultural Adjustment Act, sec. 5 2 -- limitatiol / 

National Housing Act, sec. 4 3 ) 

i Decrease, deduct. 2 Authorized prior to July 1, 1933. 3 Authorized during fiscal year 1934. 

During the year the Reconstruction Finance Corporation sold 
$1,670,000,000 of its notes to the Secretary of the Treasury, increasing 
the total sold to the Secretary to $3,255,000,000, in addition to the 
$500,000,000 of the Corporation's capital stock purchased by the 
Treasury. A total of $235,000,000 of notes was issued to banks from 
which the Corporation purchased preferred stock, capital notes, and 
debentures. Notes in the amount of $132,000,000 were issued for 
payment in gold ; these obligations were retired during the fiscal year 
in connection with the sale of the Corporation's gold holdings to 
the Treasury. 

The following table summarizes the funds appropriated and allo- 
cated to emergency organizations, expenditures therefrom, and un- 
expended balances. The allocation of funds from the $3,300,000,000 
provided under the National Industrial Recovery Act was virtually 
completed as shown in this statement. 



14 



REPORT OF THE SECRETARY OF THE TREASURY 



The emergency expenditures included in this statement for the 
period prior to the fiscal year 1934 include only expenditures on 
account of the Reconstruction Finance Corporation and subscriptions 
to capital stock of Federal land banks under authority of the act of 
January 23, 1932. Expenditures prior to the fiscal year 1934 by the 
several departments and establishments for public works under the 
Emergency Relief and Construction Act of 1932 were made from 
general disbursing accounts, and, therefore, are not susceptible to 
segregation from the general expenditures of such departments and 
establishments on the basis of the daily Treasury statement. 

Funds appropriated and allocated to emergency organizations, expenditures therefrom, 

and unexpended balances 

[In millions of dollars] 





Sources of funds ' 


Expen- 
ditures 
fiscal 
year 
1934 
and 
prior 
years 2 






Appropriations 


Recon- 
struc- 
tion 
Fi- 
nance 
Cor- 
pora- 
tion 


Total 




Organization 


Spe- 
cific 


Statutory and 
executive allot- 
ments 


Unex- 
pended 




Na- 
tional 
Indus- 
trial 
Recov- 
ery 
Act 


Emer- 
gency 
Appro- 
pria- 
tion 
Act, 
1935 




Agricultural Adjustment Administration 


3 860 
5 353 


38 




(<) 


898 
353 


290 
353 


608 












Net 


507 


38 

3 

60 






545 
432 
547 
200 

125 
125 
23 


8 63 
164 
282 
200 

123 
41 

7 


608 




97 


429 
310 
200 


268 




80 


265 






Federal land banks: 


125 
125 
23 

















84 


Reduction in interest rates on mortgages... 








16 



1 Appropriations to June 30, 1934; allocations to Oct. 31, 1934. 

» On the same basis as those exhibited ou page 2 of the daily Treasury statement (unrevised) but differ 
with respect to classification. The principal difference in classification is with respect to amounts paid from 
funds allocated by the Reconstruction Finance Corporation to various emergency organizations. The ex- 
penditures under the caption "Reconstruction Finance Corporation" in the daily Treasury statement (un- 
revised), comprehend all expenditures from funds of the Reconstruction Finance Corporation, including 
those allocated to other organizations, whereas expenditures included in the following statement on account 
of such allocated funds are exhibited as expenditures of the organizations to which the funds were allocated 
rather than expenditures of the Reconstruction Finance Corporation. Similarly certain expenditures of 
the Farm Credit Administration and the Commodity Credit Corporation, representing funds allocated to 
those organizations for the purpose of carrying out the provisions of the Agricultural Adjustment Act, are 
exhibited in the daily Treasury statement (unrevised) under the caption "Agricultural Adjustment 
Administration", whereas such expenditures are exhibited in this statement as expenditures of the Farm 
Credit Administration and the Commodity Credit Corporation, respectively. The total amount of 
expenditures in this statement can be reconciled with the total amount of emergency expenditures in the 
daily Treasury statement by adding to the latter the amounts included in general expenditures under the 
captions "Agricultural Adjustment Administration", "Refunds of receipts— processing tax on farm 
products", and "Subscriptions to stock of Federal land banks", and deducting the receipts under the 
caption "Processing tax on farm products." 

3 Includes $350,000,000 specific appropriations from the general Treasury under the acts of May 12, 1933, 
May 25, 1934, and June 19, 1934. 

* There are no statutory limitations on the amounts of funds which may be made available by the Recon- 
struction Finance Corporation for carrying out the purposes of sec. 5 of the Agricultural Adjustment Act, 
and for the purchase by the Reconstruction Finance Corporation of preferred stock cr capital notes of banks 
and trust companies under the act of Mar. 9, 1933. The Reconstruction Finance Corporation is required to 
make available to the Federal Housing Administrator such funds as he may deem necessary for the purposes 
of carrying out the provisions of the National Housing Act. The amounts included in this column for the 
purposes specified are based upon checks issued therefor from time to time by the Reconstruction Finance 
Corporation. The authority of the Reconstruction Finance Corporation to issue its bonds, notes, and de- 
bentures has been increased bv such amounts as may be required to provide funds for such purposes. 

» Of this amount, $H,000,000 has been allocated for the purchase of surplus sugar under the act of 
May 9, 1934. 

9 Excess of processing tax, deduct. 



REPOKT OF THE SECRETARY OF THE TREASURY 



15 



Funds appropriated and allocated to emergency organizations, expenditures therefrom, 
and unexpended balances — Continued 

[In millions of dollars] 



Organization 



Federal Emergency Relief Administration 

Federal Surplus Relief Corporation 

Civil Works Administration 

Emergency conservation work 

Department of Agriculture, relief 

Public Works: 

Tennessee Valley Authority 

Loans to railroads 

Loans and grants to States, municipali- 
ties, etc 

Public highways 

Boulder Canyon project.. ... 

River and harbor work 

All other 

Home Loan System: 

Home loan bank stock 

Home Owners' Loan Corporation 

Federal Savings and Loan Associations 

Emergency housing 

Federal Housing Administration 

Subsistence homesteads 

Reconstruction Finance Corporation— direct 

loans and expenditures 

Export-Import banks of Washington 

Federal Deposit Insurance Corporation 

Administration for Industrial Recovery 



Total 

Unallocated funds. 



Grand totil. 



Sources of funds 



Appropriations 



Spe- 
cific 



'556 

i 19 

'375 

93 



6 00 



2,448 



2,448 



Statutory and 


executive allot- 


ments 


Na- 


Emer- 


tional 


gency 


Indus- 


Appro- 


trial 


pria- 


Recov- 


tion 


ery 


Act, 


Act 


1935 



400 
323 



50 
200 

560 

437 

44 

249 

710 



L28 

1 
25 



3,300 

(10) 



3,300 



387 
22 



333 

114 



25 



1,425 
1 



1,426 



Recon- 
struc- 
tion 
Fi- 
nance 
Cor- 
pora- 
tion 



593 

33 

89 



125 
200 



« 3, 955 
13 



5,963 



Total 



1,561 

75 

864 

750 

114 

75 
200 

781 
693 
65 
345 
902 

125 
200 
50 
135 
16 
50 

3,955 

14 

150 

20 



13, 137 

1 



13, 138 



Expen- 
ditures 
fiscal 
year 
1934 
and 
prior 
years 



705 
40 
805 
332 



11 
71 

79 

268 

19 

73 

133 

81 
154 
1 
(it) 



2,412 

3 

150 

7 



6,100 



6,100 



Unex- 
pended 



856 

35 

59 

418 

114 

64 
129 

702 
425 
46 
272 
769 

44 
46 
49 
135 
16 
48 

1,543 
11 



7,037 
1 



7,038 



' The appropriation of $950,000,000, provided in the act of February 15, 1934, was allocated by the President 
as follows: Civil Works Administration, $375,000,000; Federal Emergency Relief Administration, $575,000,- 
000, of which latter amount $19,000,000 has been transferred to the Federal Surplus Relief Corporation for 
the purchase of commodities. 

8 Under the provisions of the Emergency Appropriation Act, fiscal year 1935, the Reconstruction Finance 
Corporation is authorized to purchase marketable securities acquired by the Federal Emergency Adminis- 
tration of Public Works, but the amount which the Reconstruction Finance Corporation may have in- 
vested at any one time in such securities may not exceed $250,000,000. Moneys paid for such securities are 
available for loans (but not grants) under title II of the National Industrial Recovery Act. The amount of 
obligations which the Reconstruction Finance Corporation is authorized to have outstanding at any one 
time is increased by the sums necessary for such purchases, not to exceed $250,000,000. The purchase of 
such securities by the Reconstruction Finance Corporation is reflected as expenditures of the Reconstruc- 
tion Finance Corporation and as credits against expenditures of the Federal EmergencyAdministration of 
Public Works. 

• Includes $500,000 allocated for savings and loan promotion as authorized by sec. 11 of the act of Apr. 27, 
1934. 

io Less than $500,000. 

ii Under see. 3 of the act of June 16, 1934, the Reconstruction Finance Corporation is authorized to pur- 
chase at par obligations of the Federal Deposit Insurance Corporation in a face amount of not to exceed 
$250,000,000, and the amount of obligations which the Reconstruction Finance Corporation is authorized 
to have outstanding at any one time is increased by $250,000,000. The amount to be included in this column 
will represent the proceeds deposited with the Treasurer of the United States on account of the sale of such 
obligations by the Federal Deposit Insurance Corporation to the Reconstruction Finance Corporation. 



90353—35- 



-3 



16 



REPORT OF THE SECRETARY OF THE TREASURY 



REVENUE LEGISLATION 

Important changes in Federal taxes occurred during the fiscal year 
1934. With repeal of the eighteenth amendment, formally pro- 
claimed by the President on December 5, 1933, existing taxes on 
distilled spirits and wines again became substantial revenue producers 
and the special taxes levied by the National Industrial Recovery Act, 
according to the specific provisions of that act, were repealed, effective 
as of the following dates: Dividends tax imposed by section 213 does 
not apply to dividends declared after December 31, 1933; capital 
stock tax imposed by section 215 does not apply in respect of any 
year beginning on or after July 1, 1934; excess-profits tax imposed by 
section 216 does not apply in respect of any taxable year ending after 
June 30, 1934. Further provisions for taxation were made by the 
specific acts cited below. 

Liquor Taxing Act of 1934. — This act, approved January 11, 1934, 
repeals the act of March 22, 1933, providing for the taxation of non- 
intoxicating liquor containing one-half of 1 percent or more of alcohol 
by volume and not more than 3.2 percent of alcohol by weight. A 
copy of the Liquor Taxing Act of 1934 will be found as exhibit 30 on 
page 21 5 of this report. The major taxes provided by the Liquor Tax- 
ing Act of 1934, which went into effect January 12, 1934. and the super- 
seded rates are as follows: 



, Liquor 


Rates 


Liquor Taxing Act of 1934 


Superseded 








Still wines containing following percent- 
ages of absolute alcohol, by volume: 




gallon. 


Over 14 and not over 21 percent 

Over 21 and not over 24 percent 




















Liqueurs, cordials, and similar eompounds. 


2H cents per half pint 


6 cents per half pint. 


and used in fortification of wines. 

Fermented malt liquors containing more 

than 3.2 percent of alcohol by weight. 

Manufacturers of fermented malt liquors: 

Brewery of 500 or more barrels a year.. 

Brewery of less than 500 barrels a year_ 


$5 per barrel of not over 31 gallons 

$100 per brewery per annum 

$50 per brewery per annum 


$6 per barrel of not over 
31 gallons. 

1$ 1,000 per brewery per 
/ annum. 



Revenue Act oj W3$. — This act, approved May 10, 1934, provides 
for the following major changes in taxation: 

(1) Corporations: The privilege of filing consolidated returns is 
limited to railroads with an increase in the income tax rate on such 
returns from 14% to 15% percent; for corporations accumulating sur- 
plus to avoid surtax on shareholders, a change in the special surtax 
from 50 percent of adjusted net income to 25 percent of the amount 
not in excess of $100,000, plus 35 percent of the amount in excess of 



REPORT OF THE SECRETARY OF THE TREASURY 17 

$100,000; limitation of deduction for losses from sales or exchanges of 
capital assets to $2,000 plus the gains from such sales, applicable to all 
corporations, except banks and trust companies, a substantial part of 
whose business is the receipt of deposits; in addition to the regular rate 
upon the undistributed adjusted net income of personal holding com- 
panies, a special surtax of 30 percent of the undistributed adjusted net 
income not in excess of $100,000, plus 40 percent of the amount in 
excess of $100,000. 

Taxes on capital stock and on excess profits of corporations are 
levied at the same rates as provided in the National Industrial 
Recovery Act, but with a slight modification of the determination of 
adjusted declared value of capital stock. 

(2) Individual incomes: A decrease in the normal rate from 4 and 
8 percent to 4 percent ; for the purpose of normal tax, a credit against 
the net income of 10 percent of earned income; for the purpose of the 
surtax, a credit for personal exemption and for dependents; surtaxes 
graduated from 4 percent on "surtax net income" in excess of $4,000 
and not in excess of $6,000, up to 59 percent on "surtax net income" 
in excess of $1,000,000; and other income tax changes, the most im- 
portant of winch is the treatment of gains and losses from sales or 
exchanges of capital assets, whereby taxable gains and losses are com- 
puted on the basis of certain percentages, which vary according to 
the period for which assets have been held. Deduction of net capital 
losses computed on the bases of the various percentages is limited to 
$2,000 plus gains from such sales. 

(3) Estates and gifts: Increase in rates for computing the addi- 
tional tax on estates so that the maximum tax rate on net estates in 
excess of $10,000,000 is 60 instead of 45 percent; increase in graduated 
gift tax rates so that the maximum tax rate on net gifts in excess of 
$10,000,000 is 45 instead of 33% percent. The increased rates for the 
additional estate tax apply to estates of decedents dying after May 
10, 1934, and the increased rates for the gift tax to gifts for the cal- 
endar years 1935 and thereafter. 

(4) Other taxes: Imposition of a tax on imports of certain marine 
animal and fish oils, processing taxes on vegetable and coconut oils, 
and excise taxes on crude petroleum and other articles; repeal of taxes 
on soft drinks and candy as of May 10, 1934, on use of certain boats 
as of June 30, 1934, and on checks as of January 1, 1935; increase in 
exemptions for taxes on furs and jewelry, reduction in stamp tax on 
sales of produce for future delivery. 

Extension of agricultural adjustment legislation. — By two amend- 
ments to the Agricultural Adjustment Act, additions were made to 
the basic agricultural commodities upon which processing taxes can 
be levied by proclamation of the Secretary of Agriculture. The act 
of April 7, 1934, adds to the list of basic commodities cattle, peanuts, 



18 EEPORT OF THE SECRETARY OF THE TREASURY 

rye, flax, barley, and grain sorghums; and the act of May 9, 1934, 
adds sugar beets and sugarcane. 

The Agricultural Adjustment Act provides for the imposition of 
taxes upon the first domestic processing of specified basic agricultural 
commodities, to become effective with respect to each commodity by 
proclamation of the Secretary of Agriculture. Similar taxes are au- 
thorized upon the first domestic processing of any commodity found 
by the Secretary of Agriculture to be competing to the disadvantage 
of a basic commodity. Taxes are also authorized on the floor stocks 
of articles processed wholly or in chief value from a commodity with 
respect to which a processing tax is imposed. Compensating taxes 
are imposed upon articles processed wholly or in chief value from a 
commodity with respect to which a processing tax is imposed, when 
such articles are imported into the United States, or into any posses- 
sion thereof to which the act applies, from any foreign country or 
possession to which the act does not apply. 

Under the Agricultural Adjustment Act, or the various amendments 
thereof, processing taxes are authorized to become effective in the 
case of each commodity on the first day of the marketing year next 
following the date of a proclamation of the Secretary of Agriculture, 
that rental or benefit payments are to be made with respect to that 
commodity, except in the case of sugar beets and sugarcane, which 
tax became effective on and after June 8, 1934. During the fiscal 
year 1934 agricultural adjustment taxes were levied with respect to 
the following basic agricultural commodities: Wheat, cotton, tobacco, 
field corn, hogs, sugar beets, and sugarcane; as well as on certain 
paper and certain jute found to be competing to the disadvantage of 
a basic commodity. 

Other laws have been enacted containing certain administrative 
provisions with respect to the taxes imposed under the Agricultural 
Adjustment Act. These laws relate to refunds in the case of certain 
exports and to refunds or credits in the case of deliveries of articles 
to organizations for charitable distribution or use, limitations with 
respect to the filing of claims, and adjustments where rates of taxes are 
increased or decreased. They also revise the definition of processing 
in connection with certain commodities, create certain exemptions 
and changes in method of payment of tax, and make possible an 
extension of time for the payment of processing taxes. 

The act approved April 21, 1934, to place the cotton industry on a 
sound commercial basis, etc., provides for the imposition of a tax upon 
the ginning of cotton; and the act approved June 28, 1934, to place the 
tobacco-growing industry on a sound financial and economic basis, 
etc., provides for a tax on the first bona fide sale of each pound of 
certain tobacco harvested subsequent to the enactment of this act. 



REPORT OF THE SECRETARY OF THE TREASURY 19 

Silver Purchase Act of 1984. — This act, approved June 19, 1934, 
provides for a stamp tax on the transfer of interests in silver bullion 
equal to 50 percent of the net profit to the transferor. The tax 
applies to all transfers of any interest in silver bullion on or after 
May 15, 1934, except transfers of silver bullion by deposit or delivery 
at a United States mint in compliance with an Executive order 
requiring such delivery of any or all silver by whomsoever owned or 
processed. A copy of this act is shown as exhibit 27 on page 205. 

National Firearms Act. — The National Firearms Act, approved 
June 26, 1934, provides an annual special tax of $500 on importers 
and manufacturers of certain firearms, $200 on dealers other than 
pawnbrokers, and $300 on pawnbrokers, and a stamp tax of $200 
each on certain firearms transferred in the United States, to be paid 
by the transferor. A copy of this act is presented as exhibit 31 
on page 219. 

ESTIMATES OF RECEIPTS AND EXPENDITURES 

Actual receipts and expenditures for the fiscal year 1934 and esti- 
mates for the fiscal years 1935 and 1936 are shown in the table begin- 
ning on page 20. Estimated expenditures are based on the latest 
information from the Bureau of the Budget. 

Total receipts from customs duties and internal revenue, exclusive 
of agricultural adjustment taxes, are estimated (on daily Treasury 
statement basis) at $2,895,000,000 for the fiscal year 1935, and at 
$3,172,000,000 for the fiscal year 1936, assuming extension of tem- 
porary taxes in the latter year. More detailed estimates of revenue 
are shown in table 15, on page 331. 

The revenues of the Federal Government are mainly dependent 
upon the tax structure and the level of business activity. Therefore, 
in preparing revenue estimates in November of each year, the Treas- 
ury is required to assume the continuance of the then existing tax 
structure and to forecast the probable trend of business activity for 
the ensuing 20 months (the period covering the remainder of the then 
current fiscal year and the next fiscal year). 



20 



REPORT OF THE SECRETARY OF THE TREASURY 



Receipts and expenditures for the fiscal year 1934, on the basis of daily Treasury 
statements (unrevised), and estimated receipts and expenditures for the fiscal years 
1935 and 1936 

[This statement does not include contingent liabilities resulting from the issue of obligations of the Re- 
construction Finance Corporation, the Federal Farm Mortgage Corporation, and the Home Owners 
Loan Corporation] 



General and Special Accounts 

receipts 

Internal revenue: 

Income tax 

Miscellaneous internal revenue 

Processing tax on farm products 

Customs 

Miscellaneous receipts: 

Proceeds of Government-owned securi- 
ties: 

Principal— foreign obligations 

Interest— foreign obligations 

All other 

Panama Canal tolls, etc 

Seigniorage 

Other miscellaneous 

Total 

EXPENDITURES 

General 

Departmental: 2 

Legislative establishment 

Executive proper 

State Department 

Treasury Department. 

War Department (nonmilitary)__ 

Department of Justice 

Post Office Department 

Interior Department 

Department of Agriculture 

Department of Commerce 

Department of Labor 

Shipping Board 

Other independent offices and commis- 
sions 

General public works, annual program.. 
Unclassified items 



Total departmental. 

Public building construction and sites. 

Treasury Department 1 

River and harbor work* 

National defense: > 

Army 

Navy 

Veterans' Administration » 

Adjusted-service certificate fund 

Agricultural Adjustment Administration. . 

Farm Credit Administration 

Refunds of receipts: 

Customs 

Internal revenue 

Processing tax on farm products 

Postal deficiency 

Panama Canal 2 

Subscriptions to stock of Federal land banks. 
Civil service retirement fund (Government 

share) 

Foreign service retirement fund (Govern- 
ment share) 

Canal Zone retirement fund (Government 

share) 

District of Columbia (Government share).. 
Interest on the public debt 



1934, actual 



$817, 961, 481. 18 

1, 469, 593, 550. 29 

353, 048, 796. 83 

313,434,302. 19 



396, 755. 15 
20, 033, 594. 10 
57,415,483.64 
27, 103, 068. 08 

517, 204. 81 
56, 049, 813. 26 



3,115,554,049.53 



17, 652, 

358, 

11,121, 

108, 538, 

4, 109, 

31, 598, 

12, 205, 

45, 922, 

58, 362, 

27, 452, 

10,831, 

9, 5U, 



732. 52 
897. 75 
102. 86 
056. 69 
859. 43 
524. 53 
729. 73 
163. 77 
572. 39 
419.86 
904. 62 
425.69 



22, 365, 462. 58 



360, 353. 02 



341, 335, 354. 16 

75, 515, 813. 86 
78, 281, 478. 49 

205, 305, 921. 93 
274, 388, 386. 06 
506, 549, 454. 14 

50, 000, 000. 00 
279, 723, 062. 38 

23, 123, 288. 26 

14, 046, 350. 08 
48, 664, 202. 21 
1, 194, 639. 95 
52, 003, 295. 62 
9, 197, 147. 37 
1,737,780.00 

20, 850, 000. 00 

292, 700. 00 



5, 700, 000. 00 
756, 617, 126. 73 



1935, estimates 



51,051,000,000 

1, 557, 197, 418 

589, 269, 089 

287, 000, 000 



70, 000 
600, 000 
78, 986, 000 
24, 968, 500 
62, 500, 000 
60, 059, 681 



3,711,050,688 



20, 224, 900 

441, 900 

14, 876, 500 

120, 050, 100 

993, 300 

32, 271, 800 

125, 000 

53, 415, 400 

64, 198, 900 

32, 432, 000 

15, 146, 600 

9, 857, 700 

27, 560, 670 



371, 879, 370 

24, 862, 300 
74, 043, 600 

269, 732, 000 
343, 053, 756 
495, 232, 000 

50, 000, 000 
548, 677, 000 

13, 637, 500 

16, 910, 800 
51, 231, 500 
64, 532, 000 
82, 099, 053 
10, 469, 900 
1, 980, 000 

20, 850, 000 

159, 100 



4, 539, 295 
835, 000, 000 



1936, estimates 



$1, 188, 000, 000 

i 1, 685, 900, 000 

570, 000, 000 

i 298, 000, 000 



70, 000 

325, 000 

163, 700, 000 

24, 846, 000 

6, 500, 000 

54, 563, 639 



3, 991, 904, 639 



19, 545, 

437, 

13, 479, 

128, 325, 

853, 

34, 517, 

25, 

67, 127, 

65, 089, 

36, 288, 

16,216, 

9, 593, 



000 ' 
000 1 

ooo : 

300 i 

700 a 

000 i 

000 

500 

000 

200 

000 

900 



30, 760, 800 
200, 000, 000 



603, 069, 600 

8, 780, 000 
62, 474, 200 

315, 259, 600 
477, 224, 665 
604, 885, 500 
100, 000, 000 
400, 000, 000 
12, 323, 000 

14, 000, 000 
50, 946, 200 
60, 000, 000 
80, 282, 569 
11, 360, 400 



40, 000, 000 

162, 400 

500, 000 

5, 700, 000 

875, 000, 000 



i Assuming extension of temporary taxes and duties in present form. 

» Additional expenditures on these accounts are included under " Federal Emergency Administration of 
Public Works. " 



REPORT OF THE SECRETARY OF THE TREASURY 21 

| Receipts and expenditures for the fiscal year 1934, on the basis of daily Treasury 
statements (unrevised), and estimated receipts and expenditures for the fiscal years 
1935 and 1 936— Continued 




1934, actual 


1935, estimates 


1936, estimates 


General and Special Accounts— Con. 
expenditures — continued 
General— Continued 
Public debt retirements: 


$359, 490, 900. 00 


$572, 541, 000 


$561, 419, 000 
75, 000, 000 


Purchases and retirements from repay- 
ment of loans of Public Works 
Administration 


Received from foreign governments 
under debt settlements 


357, 850. 00 
15, 342. 90 




Estate taxes, forfeitures, gifts, etc 

Supplemental and deficiency items 


25, 000 
85, 000, 000 


15, 000 
40, 000, 000 






3,100,914,534.14 


3, 936, 455, 174 


4, 398, 402, 134 


Emergency 
Agricultural Adjustment Administration: 


6,875,796.76 

76.55 

5, 000. 00 

2, 450, 640. 15 
60, 000, 000. 00 

2,811,949.79 

606. 04 

67, 168, 304. 97 

40, 863, 477. 16 

7, 029, 256. 79 
333, 702, 701. 28 


140, 890, 000 


12, 000, 000 


Department of Agriculture (cotton, etc.) . 
Treasury Department 






National Industrial Recovery Act: 

Department of Agriculture 


34, 255, 000 




Farm Credit Administration 

Commodity Credit Corporation 

Unclassified items -. 




3, 769, 825 








88, 788, 700 

84, 136, 500 

15, 920, 700 
610, 692, 000 
590, 000, 000 


3,025,000 


Federal land banks: 

Subscriptions to paid-in surplus 

Payment for reduction of interest rates 




Federal Emergency Relief Administration. . 






Federal Surplus Relief Corporation 


7, 039, 447. 80 
316, 157, 892. 29 
331, 940, 851. 40 






13, 842, 100 
402, 363, 000 
83, 904, 000 












Public Works: 


400, 005, 000. 00 
11, 036, 794. 57 
70, 739, 000. 00 

78, 596, 229. 75 
267, 882, 017. 66 
19, 445, 381. 64 
72, 450, 381. 47 
a 2, 330, 180. 52 

6, 539, 315. 18 
123, 381. 50 
747, 170. 01 

3, 190, 455. 42 

18, 928, 120. 22 

775, 477. 97 

38, 023, 229. 37 

22, 640, 904. 90 

751, 480. 25 

137, 450. 23 

6, 198. 00 

• 20, 235, 497. 81 

13, 002, 563. 35 

5, 170, 815. 47 

1, 908, 471. 87 

401, 033. 60 






35, 000, 000 
104, 000, 000 

166, 300, 000 
428, 600, 000 
30, 124, 200 
185, 447, 800 
7, 627, 500 

10, 000, 000 
2, 675, 400 
2, 500, 000 

33, 000, 000 
7,711,600 
1, 462, 400 

59, 207, 400 

149, 159, 700 

148, 500 

287, 000 






15, 000, 000 


Loans and grants to States, munici- 


50, 107, 000 




19, 580, 000 








59, 839, 250 






All other: 

Administrative expenses— Public 


10, 000, 000 








1, 500, 000 


Treasury Department: 

Public building construction 


56, 150, 000 


All other.. 


1, 000, 000 


War Department (nonmilitary) 

National defense: 




3, 639, 200 




103, 824, 600 
















69, 501, 300 
19, 849, 000 
9,311,000 
4, 188, 400 
1, 667, 400 
1, 000, 000 

12, 303, 000 

100, 000, 000 

1, 467, 429 

25, 974, 900 

1, 186, 467 


14, 109, 700 




1, 707, 400 




350, 000 




12, 000 




796, 000 






Independent offices and commis- 


905, 286. 01 


3, 185, 000 




3, 900, 000, 000 




180, 911. 17 
22, 209. 81 

63, 532. 67 
339,918.19 

754, 800. 00 
369, 351. 41 








Export-Import Banks of Washing- 








Federal savings and loan associations (sub- 


24, 000, 000 
15, 000, 000 


24, 500, 000 


Emergency housing 





3 Exclusive of $42,131.17 stated under Department of the Interior. 

♦ Includes $42,131.17 heretofore stated under "subsistence homesteads. 



22 



REPOET OF THE SECRETARY OF THE TREASURY 



Receipts and expenditures for the fiscal year 1934, on the basis of daily Treasury 
statements (unrevised), and estimated receipts and expenditures for the fiscal years 
1935 and 1936 — Continued 





1934, actual 


1935, estimates 1936, estimates 


General and Special Accounts— Con. 

expenditures— continued 

Emergency — Continued 

Reconstruction Finance Corporation: 

Direct expenditures by the Corporation. 
From funds allocated by the Corpora- 
tion: 


« $565, 823, 017. 05 

52, 392, 665. 72 

7, 756, 815. 01 

941,044.35 

114, 129, 660. 31 

85, 760, 050. 52 

25. 000, 000. 00 

37, 969, 954. 69 

« 180, 329, 985. 06 

38, 475, 700. 00 

153, 000, 000. 00 

* 333, 595, 834. 70 


$400, 000, 000 

5, 823, SOS 
3, 720, 600 




$2, 625, 000 


Regional agricultural credit corpora- 


5, 456, 800 


Loans to jointstock land banks 








Federal Farm Mortgage Corpora- 


266 
15, 000, 000 




Federal intermediate credit banks 








Commodity Credit Corporation 

Capital stock of home-loan banks. -- 
Capital stock of Home Owners' 


17, 049, 468 
21, 500, 000 

46, 000, 000 

506, 541, 800 
22, 559, 898 


197, 700, 000 
15, 000, 000 


Federal Emergency Relief Ad- 






27, 604, 525 


Federal Surplus Relief Corporation. 


32, 992, 150. 70 
88, 960, 000. 00 

2, 590, 791. 48 

149, 502, 149. 65 
6, 632, 491. 49 








Export-Import Banks of Washing- 


36, 367, 157 

497, 800 
11.477,600 




Federal Deposit Insurance Corporation 




Administration for Industrial Recovery 








4, 004, 135, 550. 81 


4, 644, 613, 852 


4,122,011,475 






Total general and emergency expendi- 


7, 105, 050, 084. 95 


8, 581, 069, 026 


8, 520, 413, 609 






Excess of expenditures over receipts 


3, 989, 496, 035. 42 


4, 869, 418, 338 


4, 528, 508, 970 


Summary 
Excess of expenditures 


3, 989, 496, 035. 42 
359, 864, 092. 90 


4, 869, 418, 338 
572, 566, 000 


4, 528, 508, 970 


Less public-debt retirements 


636, 434, 000 






Excess of expenditures (+) or excess of re- 
ceipts (— ) (excluding public debt retire- 
ments) 


+3, 629, 631, 942. 52 
-834, 880, 107. 74 


+4, 296, 852, 338 
-12,299,207 


+3, 892, 074, 970 


Trust and contributed accounts, excess of 


+50, 914, 369 






Total excess of expenditures (+) or 
excess of receipts (— ) (excluding 
public debt retirements) . 


+2, 794, 751, 834. 78 
+1,719,717,019.55 


+4, 284, 553, 131 
-251.060,671 


+3, 942, 989, 339 


Increase (+) or decrease (— ) in General 
Fund balance 


—790, 799, 557 






Increase (+) or decrease (— ) in the public 
debt 


+4, 514, 468, 854. 33 
22, 538, 672, 500. 15 


+4, 033, 492, 460 
27,053, 141,414 


+3, 152, 189, 782 
31.086,633,874 


Public debt at beginning of year 






Public debt at end of year 


27, 053, 141, 414. 48 


31,086,633,874 


34 238 823,656 






Trust Accounts and Increment on Gold 

receipts 
Trust and contributed accounts 


162, 179, 890. 63 
2,811,375,756.72 


166, 871, 979 

1, 100, 000 
100, 000, 000 


169, 053, 110 


Increment resulting from reduction in the 
weight of the gold dollar. 


Seigniorage 8 


25,000,000 






Total 


2, 973, 555, 647. 35 


267, 971, 979 









» Exclusive of $333,595,834. 70 stated under "Federal Emergency Relief Administration "and $18,800,000 
under "Commodity Credit Corporation." 

8 Includes $18,800,000 heretofore stated under Reconstruction Finance Corporation, direct expenditures. 

T See note 5. 

• This item represents seigniorage resulting from the issuance of silver certificates equal to the cost of 
the silver acquired under the Silver Purchase Act of 1934 and the amount retained for the silver received 
under the President's proclamation dated Aug. 9, 1934. 



REPORT OF THE SECRETARY OF THE TREASURY 



23 



Receipts and expenditures for the fiscal year 1934, on the basis of daily Treasury 
statements (unrevised), and estimated receipts and expenditures for the fiscal years 
1935 and 1 936— Continued 





1934, actual 


1935, estimates 


1936, estimates 


Trust Accounts and Increment on 
Gold — Continued 

EXPENDITURES 

Trust and contributed accounts 


$138, 675, 539. 61 
2, 000, 000, 000. 00 


$177, 672, 772 


$179, 167, 922 


Chargeable against increment on gold: 
Exchange stabilization fund 


Melting losses, etc.- 


3, 000, 000 
75, 000, 000 


1, 500, 000 
64, 299, 557 


Payments to Federal Reserve banks (sec. 
13 b, Federal Reserve Act, as amended). 








Total 


2, 138, 675, 539. 61 


255, 672, 772 


244, 967, 479 





Note.— Excess credits in italics to be deducted. 

In view of the nature of the Federal tax structure, it is not to be 
expected that revenues will reflect promptly an anticipated improve- 
ment in business conditions. For example, collections of income 
taxes during the latter half of the fiscal year 1935 will be based on 
the business volume of the calendar year 1934 and income tax collec- 
tions during the fiscal year 1936 will be based on the volume of busi- 
ness of the calendar years 1934 and 1935. Therefore, it is anticipated 
that the rising level of business activity wall increase income tax 
receipts only moderately during the remainder of the fiscal year 1935 
and the fiscal year 1936. Certain miscellaneous internal revenue re- 
ceipts, notably estate and gift taxes, show a lag in tax collections 
behind changes in general business conditions. 

Fiscal year 1935 

Total receipts from customs duties and internal revenue, excluding 
agricultural adjustment taxes, are estimated (on daily Treasury state- 
ment basis) at $2,895,000,000 for the fiscal year 1935, an increase of 
approximately $294,000,000 over the actual receipts in the fiscal year 
1934. This estimated increase is the net result of gains in revenue 
derived from improvement in business activity, changes inaugurated 
by the Treasury in its administration of depreciation allowances, 
reenactment of the capital stock and excess-profits taxes, upward 
revisions in the yields of income, estate, and gift taxes, incorporated 
in the Revenue Act of 1934, and other factors; less the decreases in 
revenue occasioned principally by the removal of certain taxes, 
chiefly those on dividends and checks, and by smaller customs receipts. 

Income tax receipts. — Total income tax collections are estimated at 
$1,051,000,000, an increase of $233,000,000 over actual collections for 
the fiscal year 1934. Collections from the current corporation income 
taxes are estimated at $440,000,000, an increase of $119,000,000 over 
the actual collections for the fiscal vear 1934. Of this increase, 



24 REPORT OF THE SECRETARY OF THE TREASURY 

$83,000,000 is anticipated to proceed from the higher level of cor- 
porate earnings, while the remainder is expected to result from the 
effects of eliminating consolidated returns, the changed provisions 
with regard to reorganizations under the Revenue Act of 1934, and 
the Treasury administration of depreciation allowances. 

The last named factor is also expected to add to the results of the 
special efforts of the Bureau of Internal Revenue to collect back 
taxes on incomes, collections of which are estimated at $167,000,000, 
an increase of $26,000,000 over the fiscal year 1934. 

Current individual income taxes are estimated to yield $444,000,000, 
an increase of $89,000,000 over the fiscal year 1934, of which ap- 
proximately $26,000,000 is attributable to the net effect of changes 
in the rate structure and in the capital gains and losses provisions 
incorporated in the Revenue Act of 1934. 

Miscellaneous internal revenue.— Total miscellaneous internal reve- 
nue receipts are estimated at $1,557,000,000, an increase of 
$87,000,000 (on daily Treasury statement basis) over those of the fiscal 
year 1934, despite a substantial decline in anticipated receipts from 
manufacturers' excise taxes, stamp taxes, and certain other sources. 

Estimated increased receipts from estate taxes, resulting mainly 
from the anticipated increase in the value of estates, and to a slight 
extent from the application of the increased rates provided by the 
Revenue Act of 1934, and greater revenues resulting from the grow- 
ing domestic manufacture and consumption of distilled spirits and 
wines, fermented malt liquors, and tobacco, are expected to more 
than counterbalance certain losses in revenue as follows: (1) Repeal 
of the tax on dividends which yielded more than $50,000,000 during 
the 6 months of the fiscal year 1934 that it was in effect; (2) repeal 
of taxes on checks, soft drinks, and candy; (3) reduction from 5 
cents per $100 to 3 cents per $100 in the stamp tax on sales of produce 
for future delivery; (4) estimated decline of $43,000,000 in the yield 
of the tax on gasoline in the fiscal year 1935 because of the fact that 
the rate is 1 cent per gallon, as compared with the rate of \)i cents 
per gallon imposed by the National Industrial Recovery Act and in 
effect during part of the fiscal year 1934. 

Customs receipts.— Customs receipts for the fiscal year 1935 are 
expected to be about $26,000,000 smaller than those of the preceding 
year. The decrease is to be attributed to the reduction in duty on 
Cuban sugar and to a smaller volume of other dutiable imports, exclu- 
sive of alcoholic beverages. The duty on Cuban sugar was reduced 
from 2 cents per pound to 1.5 cents per pound, effective June 8, 
1934; and to 9/10 of 1 cent per pound, effective September 3, 1934, 
after the signing of the Cuban Trade Agreement. The effect of the 
reduced sugar duty upon the customs receipts of the fiscal year 1935 
was partly counteracted by the concentration in the latter half of 



REPORT OF THE SECRETARY OF THE TREASURY 25 

the calendar year 1934 of a large part of the year's quota for Cuban 
sugar imports. Further counteracting, in part, the decline in cus- 
toms revenues from sugar and other imports, is an estimated increase 
of $10,000,000 in the fiscal year 1935 of revenues from imports of 
distilled spirits and fermented liquors. 

Agricultural adjustment taxes. — Agricultural adjustment taxes on 
farm products are estimated (on daily Treasury statement basis) to 
yield $589,000,000, an increase of $236,000,000 over actual collections 
in the fiscal year 1934. The largest increase is anticipated in corn- 
hog taxes, collections of which are expected to amount to $217,000,000, 
as against $81,500,000 in the fiscal year 1934. A very substantial 
increase is expected in receipts from taxes on sugar, which are esti- 
mated at $82,000,000 as against less than $170,000 collected in the 
fiscal year 1934. Taxes on tobacco are estimated to rise from 
$18,000,000 to $33,000,000, and on wheat from $117,600,000 to 
$121,000,000. On the other hand, collections from taxes on cot- 
ton, including jute and paper fiber, are expected to decline from 
$154,000,000 in the fiscal year 1934 to about $111,000,000 in the fiscal 
year 1935. The processing tax on peanuts, which was not effective 
in the fiscal year 1934, is expected to yield about $5,000,000. 

Fiscal year 1936 

Total receipts from customs duties and internal revenue, excluding 
agricultural adjustment taxes, are estimated at $3,172,000,000 for the 
fiscal year 1936 if the temporary taxes expiring June 30 and July 31, 
1935, are extended. This figure represents (on daily Treasury state- 
ment basis) an increase of $277,000,000 over the estimated receipts 
in the fiscal year 1935 and of $571,000,000 over the actual receipts 
in the fiscal year 1934. Failure to extend the temporary taxes would 
reduce the total internal revenue receipts by approximately $378,- 
000,000, and customs by approximately $11,000,000, to a total of 
$2,783,000,000, or $112,000,000 less than estimated receipts from these 
sources in the fiscal year 1935 (on daily Treasury statement basis). 

Income tax receipts. — Total income tax collections are estimated at 
$1,188,000,000, an increase of $137,000,000 over the estimated collec- 
tions for the fiscal year 1935. Receipts from income taxes in the 
fiscal year will reflect fully the upward revision of the tax structure 
under the Revenue Act of 1934 and are expected to show further gains 
because of the moderately higher incomes anticipated for the calendar 
years 1934 and 1935 as compared with those for 1933 and 1934, 
respectively. 

Current corporation income taxes are estimated to yield $509,- 
000,000, an increase of $69,000,000 over the estimates for the fiscal 
year 1935; and current individual income taxes are estimated to yield 
$506,000,000, an increase of $62,000,000 over the 1935 estimate. 



26 REPORT OF THE SECRETARY OF THE TREASURY 

Collections of back taxes on incomes are estimated at $173,000,000, 
an increase of $6,000,000 over the estimated level in the preceding 
fiscal year. 

Miscellaneous internal revenue. — If the temporary taxes expiring 
June 30 and July 31, 1935, are extended, important increases are 
anticipated in receipts during the fiscal year 1936. Total miscellane- 
ous internal revenue receipts, assuming extension of the temporary 
taxes, are estimated at $1,686,000,000, an increase of $129,000,000 
over the estimated collections for the fiscal year 1935 (on daily Treas- 
ury statement basis). 

Estate tax and gift tax collections will reflect fully the increased 
rates of the Revenue Act of 1934 and are estimated to yield $191,- 
000,000 and $25,000,000, respectively, representing increases of 
$54,000,000 and $14,000,000 as compared with estimated receipts 
from these taxes in the fiscal year 1935. Revenues from distilled 
spirits and wines and from fermented liquors are estimated to show 
increases of $27,000,000 and $11,000,000, respectively, over estimates 
for the fiscal year 1935, partly in consequence of the anticipated 
higher level of incomes and partly because of the rising trend in the 
domestic manufacture and consumption of distilled spirits and wines, 
due to improvement in quality combined with a reduction in illicit 
manufacture. Repeal of the tax on checks, effective as of January 1, 
1935, will offset part of the gains in the fiscal year 1936 from other 
sources by approximately $24,000,000. 

Customs receipts. — Customs receipts are estimated at $298,000,000 
for the fiscal year 1936, assuming that temporary duties on certain 
commodities (coal, lumber, pertroleum products, copper and prod- 
ucts) are extended, an increase of $11,000,000 over the estimated 
collections of 1935. Decreases are expected in collections from 
Cuban sugar imports and from imports of distilled spirits and fer- 
mented liquors, but other dutiable imports are expected to more 
than counterbalance these reductions. The lower duty on Cuban 
sugar will be effective throughout the year and, hence, is not ex- 
pected to yield as much revenue as in the fiscal year 1935, when 
imports that would normally have been made in the forepart of 
the calendar year 1934 were concentrated in the latter half of that 
year, thus swelling the customs receipts of the 1935 fiscal year. A 
decline of some $3,000,000 is anticipated in the receipts from duties 
on imports of alcoholic beverages by reason of improvement in the 
quality of the domestic product. 

Agricultural adjustment taxes.— Receipts from agricultural adjust- 
ment taxes for the fiscal year 1936 are estimated at $570,000,000. 
This estimate was made on the assumption that it would be neces- 
sary to continue the work of the Agricultural Adjustment Adminis- 
tration on practically the same basis as during the fiscal year 1935. 



REPORT OF THE SECRETARY OF THE TREASURY 27 

MONETARY DEVELOPMENTS 

Gold 

The regulation of the acquisition, holding, and export of gold estab- 
lished in the spring of 1933, under authority confirmed in the Emer- 
gency Banking Act of March 9, 1933, was continued in the Executive 
order of August 28, 1933, which revoked earlier orders and required 
the delivery to a Federal Reserve bank of all gold coin, gold bullion, 
or gold certificates domestically held, with certain exceptions. 

By the Executive order of August 29, the Secretary of the Treasury 
was authorized to receive gold recovered from natural deposits in the 
United States on consignment for sale to persons licensed to acquire 
gold for use in the arts, industries, and professions, or, by export to 
foreign purchasers. 

On October 25, the President issued an Executive order revoking the 
Executive order of August 29, and amending that of August 28. The 
order of October 25 authorized the Reconstruction Finance Corpora- 
tion to acquire gold recovered from natural deposits in the United 
States which had been received on consignment by a United States 
mint or assay office and to hold, earmark for foreign account, export, 
or otherwise dispose of such gold. On the same day the Reconstruc- 
tion Finance Corporation announced that it would receive sub- 
scriptions for its debentures maturing on February 1, 1934, payable in 
newly mined gold recovered from natural deposits in the United 
States (official release, Oct. 26, 1933). The daily authorized prices for 
which newly mined gold was acquired under the above orders over the 
period September 8, 1933, to January 31, 1934, appear as exhibit 26, 
on page 205 of this report. Certain foreign gold imported after Nov- 
ember 1, 1933, was also authorized by the Reconstruction Finance 
Corporation to be received by the Federal Reserve Bank of New York 
in payment for the notes of the Corporation. 

The Executive order of August 28 was supplemented by an order 
of the Secretary of the Treasury on December 28 (amended on Jan. 
11 and supplemented on Jan. 15, 1934), requiring all gold coin, 
gold bullion, and gold certificates domestically held (with certain 
stated exceptions) to be delivered for the account of the Treasurer 
of the United States. 

In his message to Congress of January 15, 1934, the President 
recommended the passage of legislative provisions which Congress 
embodied in the Gold Reserve Act of 1934, approved on January 30. 
A copy of this act appears as exhibit 23 on page 189. This act includes 
the following provisions relating to gold: 

Title to all gold coin and gold bullion of the Federal Reserve Board, 
the Federal Reserve banks and Federal Reserve agents is vested in 
the United States Government, for which credits in the United States 
Treasury in equivalent dollar amounts are established; 



28 REPORT OF THE SECRETARY OF THE TREASURY 

Except to the extent permitted in regulations issued under the 
Gold Reserve Act, no currency of the United States is redeemable in 
gold, provided that gold certificates owned by the Federal Reserve 
banks are redeemable at such times and in such amounts, as, in the 
judgment of the Secretary of the Treasury, are necessary to main- 
tain the equal purchasing power of every kind of currency of the 
United States. Such redemptions as are made in gold are to be 
made in gold bullion ; 

The Secretary of the Treasury is authorized to prescribe the condi- 
tions under which gold may be acquired and held, imported, exported, 
or earmarked; 

All gold coins of the United States are to be withdrawn from 
circulation and, together with all other gold owned by the United 
States, formed into bars. No United States gold coin is hereafter 
to be minted or paid out; 

The Secretary of the Treasury is authorized to buy or sell gold 
as an operation in the General Fund of the Treasury, at such rates 
and upon such terms and conditions as he deems most advantageous 
to the public interest, except that gold held as currency reserve or 
security may be sold only to the extent necessary to maintain such 
currency at a parity with the gold dollar; 

The Secretary of the Treasury is authorized, for a period of 2 years, 
unless the authorization is terminated earlier or extended 1 year by 
the President, to deal in gold and foreign exchange and such other 
instruments of credit and securities as he may deem necessary for 
the purpose of stabilizing the exchange value of the dollar. A stabi- 
lization fund of $2,000,000,000 is established for this purpose out of 
the increment resulting from reduction in the weight of the gold 
dollar ; 

The authority contained in title III of the act of May 12, 1933, 
permitting the President under certain conditions to fix the weight of 
the gold dollar at not less than 50 percent of its then legal weight, 
was made more specific by adding the provision that the weight of 
the gold dollar shall not be fixed at more than 60 percent of its then 
legal weight. 

The President's proclamation of January 31, 1934, issued under 
the above authorization, fixed the weight of the gold dollar at 15^i 
grains of gold, nine-tenths fine. This action constituted a reduction 
of the gold in the dollar to 59.06 percent of the former content and 
gave to gold an equivalent value of $35 a fine ounce. 

On January 31, 1934, the Treasury Department issued a statement 
providing for the sale of gold for export whenever the United States 
exchange rates with gold standard currencies reach gold export point. 
The exports are to foreign central banks which buy and sell gold at 
fixed prices. 



REPORT OF THE SECRETARY OF THE TREASURY 29 

Silver 

The Presidential proclamation of December 21, 1933, issued under 
the authority of title III of the act of May 12, 1933, directed the 
United States mints to receive silver mined in the United States 
since the date of the proclamation, and to deliver to the tenderer of 
such silver, standard silver dollars ! in face amount equal to the silver 
dollars which might be coined from 50 percent of the silver so ten- 
dered. Under this authorization, domestic silver produced since 
December 21, 1933, is received by the mints on the basis of about 
64 y 2 cents per fine ounce. 

The Silver Purchase Act of 1934, approved June 19, 1934, declared 
it to be the policy of the United States that the proportion of silver 
to gold in the monetary stocks of the United States should be increased 
with the ultimate objective of having and maintaining one-fourth of 
the monetary value of such stocks in silver. Whenever the proportion 
of silver in the stocks of gold and silver is less than one-fourth, the 
Secretary of the Treasury is directed to purchase silver, at such times 
and upon such terms and conditions as he may deem reasonable and 
most advantageous to the public interest, but at a price not to exceed 
its monetary value and not to exceed 50 cents per fine ounce for silver 
situated in continental United States on May 1, 1934. He is required 
to issue silver certificates in face amount not less than the cost of all 
silver purchased under the act. With the approval of the President, 
the Secretary is authorized to regulate or prohibit the acquisition, im- 
portation, exportation, or transportation of silver and silver contracts. 
The President is authorized at his discretion to require the delivery to 
the United States mints of any or all silver, in return for which shall 
be paid the monetary value of such silver in any form of United 
States coin or currency desired (less mint charges), provided that 
such value is not less than the market price of silver over a reasonable 
period previous to the date of the order. The act also imposed a tax 
at the rate of 50 percent of any profit on all transfers of any interest 
in silver bullion, with certain exceptions, on or after May 15, 1934. 

On June 28, 1934, the Secretary of the Treasury issued an order 
prohibiting the exportation or transportation of silver from the con- 
tinental United States except under license issued pursuant to the 
order. 

Silver certificates 

The issuance of silver certificates against silver accepted from for- 
eign governments in payment of indebtedness to the United States 
under title III of the act of May 12, 1933, was begun on January 13, 
1934. 



1 See section on silver certificates below 



30 REPORT OF THE SECRETARY OF THE TREASURY 

The Gold Reserve Act of 1934 authorized the President to issue 
silver certificates "against any silver bullion, silver, or standard silver 
dollars in the Treasury not then held for the redemption of any out- 
standing certificates." Under this act, silver certificates became 
issuable against any unencumbered silver in the Treasury, irrespective 
of the authority under which the silver was received. 

It was decided, therefore, to provide a single or consolidated series 
of silver certificates for issuance against any free silver held in the 
Treasury. Consequently payment of the certificates specifically 
prepared for issuance against silver received from foreign governments 
under the act of May 12, 1933, was discontinued, and issues of cer- 
tificates under that and later authorizations awaited the preparation 
of the consolidated series. 

This consolidated series of new silver certificates has been given 
the designation, "Series of 1934." 

Attention is called to exhibits on pages 189 to 215 containing legis- 
lation, Executive orders, proclamations, and orders of the Secretary 
of the Treasury relating to monetary matters. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

The Federal Deposit Insurance Corporation was created by the 
Banking Act of 1933 to insure the deposits of all banks which are 
entitled to insurance as specified in the act and to purchase, hold, 
and liquidate the assets of closed member banks of the Federal 
Reserve System. All licensed banks in the Federal Reserve System, 
without examination, automatically became members of the deposit 
insurance fund established by the act, and nonmember banks operat- 
ing on an unrestricted basis were permitted to apply for participa- 
tion and became eligible when certified as solvent by the State bank- 
ing authorities, subject to examination and approval by the Corpora- 
tion. The Corporation has been chiefly concerned with the insurance 
provisions of the act. 

A temporary plan for the insurance of deposits in the amount of 
$2,500 of the net claim of any depositor was provided originally for 
the period January 1 to July 1, 1934, at which time a permanent 
plan was to have become effective. Under the provisions of the act 
of June 16, 1934, however, the temporary plan of deposit insurance 
was extended until July 1, 1935, and the amount of insured deposits 
of any depositor was increased from $2,500 to $5,000, with certain 
exceptions for mutual savings banks, for which a separate insurance 
fund was established. 

On June 30, 1934, the Federal Deposit Insurance Corporation had 
received from the United States Treasury $150,000,000, and from 
Federal Reserve banks $139,000,000, representing subscriptions to 
capital stock in accordance with the act creating the corporation. 



REPORT OF THE SECRETARY OF THE TREASURY 31 

In addition, member banks of the temporary deposit insurance fund 
had been assessed $40,000,000, of which $9,000,000 represented 
assessments of banks withdrawing from the temporary fund. During 
the 6-month period, January-June 1934, the Corporation earned 
$2,400,000 on its investments; the expenses, including those of the 
initial organization, estimated net loss on account of payments to 
insured depositors in the one bank which closed during the period, 
and a provision of $400,000 for estimated suspense items, amounted 
to $3,200,000. At the close of the period the assets of the Corporation 
included cash on deposit with the Treasury in the amount of 
$99,000,000 and investments in United States Government bonds 
amounting to $228,000,000. 

An aggregate of 14,166 banks were members of the deposit 
insurance fund on June 30, 1934. The membership included 5,417 
national banks, 958 State member banks, 7,556 State nonmember 
commercial banks, and 235 mutual savings banks. It is estimated 
that more than 56,000,000 accounts were insured and that the in- 
sured deposits amounted to approximately $16,000,000,000. 

By June 30, 1934, 167 mutual savings banks and 21 commercial 
banks had signified their intention to withdraw from the insurance 
fund, in accordance with provisions of the law and regulations issued 
by the Corporation. In this connection the Corporation was pre- 
pared to make refunds amounting to about $9,000,000. Of the 
mutual savings banks withdrawing from the fund, 133, located in 
New York State, have taken such action owing to the fact that a 
State-wide insurance fund for mutual savings banks has been estab- 
lished in that State. Action was taken by these banks prior to the 
establishment of the separate insurance fund for mutual savings 
banks under the provisions of the act of June 16, 1934. Sixty-eight 
mutual savings banks have become members of this separate Federal 
fund. 

BUREAU OF INTERNAL REVENUE 

During the fiscal year 1934 important changes were made in the 
internal revenue laws affecting both income and miscellaneous taxes, 
providing additional administrative measures for the protection of 
the revenue, increasing the rates of certain existing taxes and desig- 
nating new objects of taxation. Discussion of revenue legislation 
appears on pages 16 to 19. 

Collections of internal revenue, exclusive of agricultural adjustment 
taxes during the fiscal year 1934, in the amount of * $2,301,000,000, 
exceeded collections in the preceding fiscal year by $681,000,000. 
The cost of collecting each $100 of internal revenue was $1.25 in the 
fiscal year 1934, compared with $1.85 in 1933. Agricultural adjust- 
ment taxes amounted to 1 $371,500,000; collection, which began during 

1 On the basis of the report of the Commissioner of Internal Revenue. 
90353 — 35 4 



32 REPORT OF THE SECRETARY OF THE TREASURY 

the fiscal year 1934, was effected at a cost of 69 cents per $100 of 
such taxes collected. The relatively lower cost of collecting agricul- 
tural adjustment taxes may be ascribed, at least in part, to the fact 
that Internal Revenue employees on the regular rolls shared the 
administrative burden with employees paid from agricultural adjust- 
ment funds. 

Back taxes on incomes 

In the autumn of 1933 a drive was inaugurated to increase collec- 
tions of back taxes on incomes, and in January 1934 a 3-day meeting 
of collectors, revenue agents in charge, supervisors of accounts and 
collections, special intelligence agents in charge, and other field 
officials was held in Washington. At that time an aggregate quota 
of $200,000,000 in back tax collections was set for the calendar year 
1934. 

Assessments of back taxes on incomes, exclusive of jeopardy assess- 
ments (most of which are appealed), totaled $194,000,000 during 
1934, an increase of $24,400,000 over 1933. Actual collections of 
back taxes on incomes in the fiscal year 1934 totaled $140,600,000, 
an increase of $8,200,000 over the preceding year and of $30,600,000 
over the amount which it was originally anticipated would be collected. 

The most significant improvement effected during the year in the 
administration of the back tax problem was the reduction in the num- 
ber of cases pending before the Board of Tax Appeals and appellate 
courts. The number of such cases pending was 18,080 as of June 
30, 1933, and 12,474 as of June 30, 1934, a net reduction of 5,606 
cases. Of the 9,582 cases closed during the year, 7,490 were settled 
by agreement without trial. Another significant phase of the work 
appears in the record of agreements secured after final notices of 
deficiency had been issued but before appeals had been filed. Such 
agreements during 1934 resulted in the assessment of $38,500,000, as 
compared with $10,700,000 in 1933. 

Investigations, undertaken during the fiscal year 1934, of alleged 
sales of securities between members of families and close business 
associates resulted in recommendations for the assessment of addi- 
tional taxes totaling more than $25,000,000. Returns of information 
required to be filed by brokers formed the basis for these investigations. 

Satisfactory progress was made during the fiscal year in the pro- 
gram to determine reasonable and consistent depreciation allowances 
for taxpayers claiming such deductions. While it is not possible at 
this stage of the program to measure accurately the result in back 
tax collections, data compiled for the 3-month period ended July 15, 
1934, indicate a total reduction in depreciation allowances that will, 
it is estimated, produce approximately $30,000,000 in additional 
taxes. 



REPORT OF THE SECRETARY OF THE TREASURY 33 

Alcohol tax administration 

The twenty-first amendment to the Constitution became effective 
on December 5, 1933, making inoperative on that date the National 
Prohibition Act so far as it concerned the use of intoxicating liquors 
for beverage purposes. The Bureau of Industrial Alcohol and the 
Alcoholic Beverage Unit of the Bureau of Investigation, Department 
of Justice, were consolidated with the Bureau of Internal Revenue 
by Executive order of March 10, 1934, which became effective May 
10, 1934. The Alcohol Tax Unit was organized in the Bureau of 
Internal Revenue to assume the functions of determining assess- 
ments of taxes on spirits, wines, and beer, and to suppress unlawful 
transactions in these liquors. The field organizations of the Bureau 
of Industrial Alcohol and of the Alcoholic Beverage Unit of the 
Department of Justice were rearranged by the Alcohol Tax Unit 
into 15 districts with 62 branch offices. 

By the end of the fiscal year 1934, the following were under the 
supervision of the Alcohol Tax Unit: 174 distilleries, 188 warehouses, 
805 wineries and 91 bonded wine storerooms, 725 breweries, 384 
rectifying plants, 6,666 wholesale liquor dealers, 39 denaturing 
plants, 69 bonded dealers in and 4,298 bonded manufacturers using 
specially denatured alcohol, and 5,887 hospitals, laboratories, and 
educational institutions using tax-free alcohol. 

A detailed description of the work of the Bureau of Internal 
Revenue will be found on pages 97 to 118 of this report. 

CONSTRUCTION ACTIVITIES OF THE TREASURY 

The Department's building operations during the fiscal year 1934, 
carried on under several different programs and appropriations, 
resulted in the completion and occupation during the year of 203 
projects with limits of cost of $38,830,400. In addition 52 projects 
with a total limit of cost of $24,594,977 were placed under contract, 
85 additional projects with a total limit of cost of $7,596,901 were 
on the market for bids, or in the final stage of preparing specifica- 
tions. Plans were being prepared for 172 additional projects, at a 
limit of cost of $15,283,445, and land had been acquired for 5 proj- 
ects to cost approximately $456,000. Sites for 151 projects, to 
cost approximately $19,479,465, had been selected, or were in process 
of selection. 

In the closing days of the fiscal year, additional funds were made 
available for construction activities in an emergency construction 
fund of $65,000,000, provided by the Emergency Appropriation 
Act, approved June 19, 1934. Under this act, before the close of 
the fiscal year, 303 projects were selected by the Secretary of the 



34 REPORT OF THE SECRETARY OF THE TREASURY 

Treasury and the Postmaster General from projects contemplated 
by previous legislation, at a total limit of cost of $60,228,700. 

In selecting these lists of projects the Secretary of the Treasury 
and the Postmaster General were guided by the wording of the 
Appropriation Act which provides that "with a view to relieving 
country-wide unemployment" they "shall endeavor to distribute the 
projects equitably throughout the country so far as may be con- 
sistent with the needs of the public service." 

The acquisition of the necessary land and the preparation of 
plans and specifications were taken in hand immediately with a view 
to getting the projects on the market for construction bids and 
contracts awarded within the shortest practicable time. 

Building program in the District of Columbia 

The program for Federal buildings in the District of Columbia under 
the original public building program is nearing completion. The 
Department of Commerce, the original Internal Revenue Building, 
the Post Office Department Building, the extension of the City Post 
Office Building, the Central Heating Plant, and the Public Health Serv- 
ice Building are completed and occupied. The Department of Labor 
Building and the Interstate Commerce Commission Building, with 
their connecting wing, the Department of Justice Building, the 
Archives Building, the last of the seven wings of the extensible office 
building of the Department of Agriculture, and the National Insti- 
tute of Health are all rapidly nearing completion. A contract under 
the Public Works Program has been awarded for the construction of 
an addition to the Internal Revenue Building and the work is under 
way. 

Status of work under the several building programs 

The status of the various programs under which the Treasury's 
building activities are carried on is indicated below. 

The original public building program. — The Public Building Act 
approved May 25, 1926, and subsequent acts enlarging the regular 
building program made general authorizations of $702,296,794 and 
total specific authorizations and appropriations for buildings and land 
of $494,642,437. Of the $494,642,437 specifically authorized under 
this program as of June 30,1934, $426,544,427 in the aggregate was 
obligated as of that date. Expenditures to June 30, 1934, have been 
made under these obligations to the amount of $396,612,829. The 
amount of obligations outstanding at the end of the fiscal year was 
$29,931,598. The unobligated portion of the funds appropriated 
under these acts became unavailable under the provisions of the act 
approved March 31, 1933, except for items necessary to the com- 
pletion of projects already under contract. Of the 735 construction 
projects previously under contract in this program, 578 with limits 



REPORT OF THE SECRETARY OF THE TREASURY 35 

of cost of $170,321,222 had been completed on June 30, 1934, leaving 
still under contract 157 projects with limits of cost of $272,358,457. 
The projects completed during the fiscal year under this program are 
listed in the opening paragraph of this article. 

Program under the Public Works Administration. — Under the 
National Industrial Recovery Act, approved June 16, 1933, except 
with respect to uncompleted projects under contracts made previous 
to that date, public building construction was made subject to allot- 
ment by the Administrator of Public Works. During the fiscal year 
1934, allotments of Public Works Administration funds were made to 
the Treasury for 465 building projects, most of which were contem- 
plated by previous legislation, at a total limit cost of $67,410,788. 
No projects have yet been completed under this program; the status 
of the projects under contract, etc., is included in the opening para- 
graph of this article. 

Detailed information with reference to all building programs and 
appropriations will be found in the abstract of the report of the Pro- 
curement Division under which the building activities of the Treasury 
are conducted, on pages 127 to 131 of this report. 

BUREAU OF CUSTOMS 

Customs receipts for the fiscal year 1934 amounted to $313,434,000, 
an increase of $62,684,000 over the preceding year. About 40 percent 
of this increase, $24,000,000, represented duties on imports of dis- 
tilled and fermented liquors, the importation of which was legalized 
by the repeal of the eighteenth amendment, effective December 5, 

1933. The remaining 60 percent may be attributed to higher unit 
values and larger quantities of commodity importations. An even 
larger increase in importations was offset in part by a reduction in 
importations of sugar from Cuba, in anticipation of the Reciprocal 
Trade Agreement between Cuba and the United States. Although 
the agreement was not effective until after the close of the fiscal year 

1934, the rate on Cuban sugar was reduced by proclamation of the 
President of May 9, 1934, and made effective June 8, 1934. 

The value of dutiable imports entered for consumption was $605,- 
012,000, or 44.4 percent over the preceding year, and 4.8 percent over 
1932. The value of imports entered free of duty constituted 63.6 per- 
cent of the total value of all imports entered for consumption during 
1934, as compared with 64.3 percent for 1933. 

The value of dutiable merchandise imported for consumption, ex- 
clusive of distilled and fermented liquors, was $574,660,000, or 37.2 
percent over the preceding year. In addition to these imports the 
value of distilled and fermented liquors released from customs custody 
between December 5, 1933, and June 30, 1934, was $30,352,000. 



36 



REPORT OF THE SECRETARY OF THE TREASURY 



The imports of distilled spirits and wines from December 5, 1933, 
through June 30, 1934, the duties collected thereon and the stocks 
in bonded warehouses at the end of the fiscal year were as follows: 



Distilled 
spirits (im- 
ports and 
stocks in proof 
gallons) 



Wines (im- 
ports p.nd 
stocks in 
wine gallons) 



Imports: 

Total, free and dutiable -- 

Entered for consumption ' ... 

Stocks in customs bonded warehouses at end of year 
Duties collected 



8, 291, 408 

3, 790, 155 

4, 529, 297 
$18, 644, 429 



4, 938, 652 

3, 041, 646 

2, 176, 557 

$5, 379, 274 



1 Includes withdrawals for ship supplies and diplomatic use. 

The general trade situation and customs collections are summarized 
by fiscal years in the following table: 

Merchandise exports and imports and customs collections, 1929 to 1934 
[In millions of dollars] 



Fiscal year 


Exports 


General 
imports 


Excess 

of 
exports 

over 
imports 


Customs 
receipts ' 


Fiscal year 


Exports 


General 
imports 


Excess 

of 

exports 

over 

imports 


Customs 
receipts l 


1929 


5,373 
4,694 
3,083 


4,292 
3,849 
2,432 


1,082 
845 
651 


602 
587 
378 


1932 


1,948 
1,440 
2,042 


1,730 

1,168 
1,721 


218 
272 
321 


328 


1930 


1933 


251 


1931 


1934 


313 









• On basis of daily Treasury statements (unrevised). 



A more complete statement of the activities of the Bureau of 
Customs is presented on pages 87 to 92 of this report. 



NONFISCAL ACTIVITIES 



Coast Guard 



During the year the Coast Guard continued to perform its usual 
duties, which have close relation both to the maritime interests and 
general public interests. In the main, its activities included the In- 
ternational Ice Patrol of the trans-Atlantic steamship lanes, in the 
vicinity of the Grand Banks of Newfoundland, and associated ice- 
observation and oceanographic cruises and surveys; patrol of the 
coast — including aircraft patrol— to aid vessels and persons in dis- 
tress; patrol of the waters of the North Pacific Ocean, Bering Sea, 
and southeastern Alaska in the enforcement of laws for the protec- 
tion of the fur seal and sea otter, and of game, the fisheries, and fur- 
bearing animals of Alaska, and of other laws in Alaska; supervision 
over the anchorage and movements of vessels at ports and other 
places; enforcement of the customs, navigation, and motor boat laws; 



REPORT OF THE SECRETARY OF THE TREASURY 



37 



prevention of the smuggling of liquor and other contraband ; removal 
of derelicts and other obstructions to navigation from the paths of 
marine commerce; and the preservation of life and property at sea 
and along the coasts. A noteworthy record was achieved during the 
year by the service forces in the saving of life — 5,597 persons were saved 
or rescued from peril. 

The following is a summary of the principal operations of the Coast 
Guard which are susceptible of statistical presentation: 



Increase (+) 

or 
decrease (— ) 



Lives saved or persons rescued from peril 

Persons on board vessels assisted 

Persons in distress cared for 

Vessels boarded and papers examined . 

Vessels seized, reported, or warned for violations of law 

Fines and penalties incurred by vessels reported. _ 

Regattas and marine parades patrolled 

Instances of lives saved and vessels assisted 

Instances of miscellaneous assistance 

Derelicts and other obstructions to navigation removed or 

destroyed 

Value of derelicts and other obstructions recovered 

Value of vessels assisted (including cargoes) 

Persons examined for certificates as lifeboat men.. 



6,492 

33,716 

595 

83, 031 

1,549 

$244, 558 

155 

7,176 

7,476 

300 

$55, 565 

0, 516, 220 

3,828 



5,597 

34, 767 

1,246 

31,730 

1,401 

$94, 500 

204 

6,861 

7,877 

267 

$112, 100 

$47, 296, 109 

5,917 



-895 

+ 1,051 

+651 

-51,301 

-148 

-$150,058 

+49 

-315 

+401 

-33 

+$56, 535 

+$6, 779, 889 

+2, 089 



A more detailed account of these and other operations of the Coast 
Guard will be found on pages 76 to 83 of this report. 

Public Health Service 

The unusual features of the work of the Public Health Service 
during the year occurred in connection with the outbreak of three 
major epidemics, amoebic dysentery in Chicago, epidemic encephalitis 
in St. Louis, and poliomyelitis in California. The Public Health 
Service cooperated with State and local authorities in these epidemics 
by the institution of careful epidemiological and laboratory studies. 

The reservations of the United States with reference to the Inter- 
national Sanitary Convention for Aerial Navigation were accepted 
by all prior signatory governments, and the convention was signed on 
behalf of the United States by the American Minister at The Hague 
on April 6, 1934. Ratification of the convention by the 23 countries 
now signatory is pending. 

The regulations governing the importation of birds of the parrot 
family into ports of the United States were revised further to safe- 
guard this country. Quarantine officers of the United States were 
authorized to accept, under certain conditions, foreign certificates of 
deratization or deratization exemption not visaed by the American 
consular officers at the ports of issuance; under the Philippine Islands 
Independence Act, medical officers of the Public Health Service on 
duty in Manila were authorized to perform the medical examinations 



38 REPORT OF THE SECRETARY OF THE TREASURY 

of citizens of the Philippine Islands who are applicants for immigra- 
tion visas under the Philippine quota, and to make the medical 
examinations required in connection with the issuance of workers' 
permits to Filipino laborers destined for Hawaii; and instructions 
were issued to officers of the Public Health Service on duty at quaran- 
tine stations on the Mexican border to pass without formal examina- 
tion Mexican citizens making temporary visits and presenting identifi- 
cation cards issued by American consular officers in the interior of 
Mexico. 

In connection with the civil works program the Public Health 
Service assisted 14 States with malaria-control drainage projects, 
aided in the construction of more than 225,000 sanitary outdoor 
toilets for rural homes in 22 States, and assisted States in the sealing 
of abandoned mines to remove acid wastes from streams, and in 
conducting a rat-flea survey in connection with typhus fever control. 

The research activities were for the most part a continuation of the 
investigations begun during the preceding fiscal year and included 
such problems as cancer, heart disease, leprosy, nutrition, spotted 
fever, psittacosis, typhus fever, and industrial hygiene. 

In addition to cooperating with the State and local health depart- 
ments in the control of venereal diseases, the Public Health Service 
participated in important studies in the clinical aspects of syphilis. 
At the request of the medical director of the Tennessee Valley Author- 
ity, a comprehensive program for the control of venereal diseases was 
submitted and the suggested measures were put into effect in the 
Norris area. 

Administrative duties connected with the establishment of the 
United States Narcotic Farms, the supervision and furnishing of 
medical, psychiatric, and technical services for the Federal penal and 
correctional institutions, and studies dealing with the country's 
medical and scientific needs for narcotic drugs and with the medico- 
social problems of drug addiction were continued. 

American merchant seamen and other legal beneficiaries continued 
to receive medical care in 26 marine hospitals and 183 contract 
hospitals in 154 ports of the United States and the possessions; sea- 
men remain the most numerous class of beneficiaries. The customary 
medical assistance was given other Government agencies. 

The activities of the Public Health Service are more fully presented 
on pages 139 to 147 of this report. 

Bureau of Narcotics 

In pursuing its policy of special enforcement against major nar- 
cotic law violators, the Bureau of Narcotics has made continued 
progress in eliminating the sources of supply of illicit narcotic drugs. 
Through the arrangement with foreign countries for the direct inter- 



REPORT OF THE SECRETARY OP THE TREASURY 39 

national exchange of information relative to illicit narcotic dealers 
and their shipments, and with the cooperation of the Bureau of Cus- 
toms, the supply of narcotics heretofore available to the domestic 
illicit traffic from smuggled sources has been substantially decreased. 
Upon analysis of narcotic drugs seized in illicit traffic, particularly 
heroin, adulteration up to 90 percent to meet market demand has 
been noted. Another factor which aided in decreasing smuggling 
supplies at the place of foreign manufacture was the Convention for 
Limiting the Manufacture and Regulating the Distribution of Nar- 
cotic Drugs, first ratified by the United States March 31, 1932, sub- 
sequently ratified or acceded to by 46 other governments, and valid 
and effective as an international agreement since July 9, 1933. By 
July 1, 1934, the convention had been in effect nearly a year. 

Decreased smuggling supplies have forced peddlers and addicts to 
tap legitimate domestic medical supply channels, evidenced by rob- 
beries of narcotic stocks as reported by wholesale and retail drug 
stores and by practitioners, by forgery or false execution of narcotic 
prescriptions, and b} r improper prescribing or dispensing of narcotics 
by a few practitioners. These methods of diversion of narcotics have 
received enforcement attention. The assistance of State and munici- 
pal enforcement agencies has been solicited to supplement the activity 
of Federal narcotic officers. Efforts are being made to give greater 
effect to local cooperation by causing the enactment throughout the 
States generally of the uniform State narcotic law, approved nearly 
2 years ago by the Conference of Commissioners on Uniform State 
Laws and by the American Bar Association. During the fiscal year 
1934 this act was adopted with little or no amendment in four States — 
Kentucky, Rhode Island, South Carolina, and Virginia. This makes 
a total of eight States which have adopted this model legislation. 
The four other States which had previously adopted the amendment 
are Florida, Nevada, New York, and New Jersey. 

A more complete account of the activities of the Bureau will be 
found on pages 123 to 125 of this report. 

ORGANIZATION CHANGES 

A number of important changes in the organization of the Treasury 
Department were made during the fiscal year 1934. On November 
20, 1933, by Treasury Department order, the following offices were 
created: (1) Assistant to the Secretary, in charge of all matters of 
public relations; (2) General Counsel to the Secretary, in charge of 
all legal matters; and (3) Administrative Assistant to the Secretary, 
in charge of all administrative matters including personnel and the 
departmental budget. The Revenue Act of 1934, approved May 
10, 1934, established the General Counsel as the chief law officer of 
the Department with the title of General Counsel for the Department 



40 REPORT OF THE SECRETARY OF THE TREASURY 

of the Treasury, and abolished the offices of General Counsel and 
Assistant General Counsel for the Bureau of Internal Revenue, and 
of Solicitor and Assistant Solicitor of the Treasury. A Legal Divi- 
sion was established on June 20, 1934, by order of the Secretary of 
the Treasury and was placed under the direct supervision and control 
of the General Counsel. To the Administrative Assistant to the Secre- 
tary, by Treasury Department order dated December 26, 1933, was 
assigned the supervision of the office of the Chief Clerk of the 
Department, which previously had reported to the Under Secretary, 
and of the Divisions of Appointments and of Supply, which previously 
had reported to an Assistant Secretary. 

By order of the Secretary, pursuant to Executive orders of June 
10 and July 27, 1933, there was established on October 10, 1933, a 
Procurement Division, reporting directly to the Secretary and having 
charge of the policies and methods of procurement, warehousing, 
and distribution of all property, equipment, and supplies. There 
were transferred to this Division the functions of specified Govern- 
ment agencies, including those of the Office of the Supervising 
Architect and the General Supply Committee of the Treasury De- 
partment, which latter activities formerly reported to an Assistant 
Secretary. Pursuant to the Executive order of June 10, 1933, there 
was also organized on December 16, 1933, a Division of Disburse- 
ment, which by order of the Secretary of the Treasury was assigned 
to the general supervision of the Commissioner of Accounts and 
Deposits. 

Following the repeal of the eighteenth amendment to the Consti- 
tution, a number of changes were made in the organization of the 
Bureau of Industrial Alcohol. On December 6, 1933, the Bureau 
was consolidated under the Bureau of Internal Revenue. By Execu- 
tive order, the President on March 10, 1934, abolished the Bureau 
of Industrial Alcohol and the Office of Commissioner of Industrial 
Alcohol and transferred the functions, duties, and personnel of the 
Bureau of Industrial Alcohol to the Bureau of Internal Revenue. By 
the same Executive order, the functions and personnel of the Alcohol 
Beverage Unit of the Division of Investigation of the Department of 
Justice, except those employed in the Taxes and Penalty Section of 
that Unit, were transferred to the Bureau of Internal Revenue. This 
action was effective 60 days thereafter, namely, May 10, 1934. On 
May 10, 1934, Treasury Decision 4432 established in the Bureau of 
Internal Revenue a unit designated as the Alcohol Tax Unit, to which 
was assigned all of the functions and duties theretofore performed by 
the Bureau of Industrial Alcohol and those transferred from the 
Department of Justice. 



REPORT OF THE SECRETARY OF THE TREASURY 41 

The Bureau of Internal Revenue and the Secret Service Division 
were ordered to report directly to the Secretary of the Treasury 
instead of to the Fiscal Assistant Secretary. 

The various Executive and Treasury orders affecting the organiza- 
tion of the Treasury are shown in exhibit 45 on page 258 of this report. 

Attention is invited to the attached reports of other bureaus and 
divisions of the Treasury Department and to the exhibits and tables 
accompanying the report on the finances. 

Henry Morgenthau, Jr., 

Secretary of the Treasury. 

To the Speaker of the House of Representatives. 



ADMINISTRATIVE REPORTS 
OF BUREAUS AND DIVISIONS 



43 



ADMINISTRATIVE REPORTS OF BUREAUS AND DIVISIONS 

OFFICE OF THE COMMISSIONER OF ACCOUNTS AND DEPOSITS 

Daily Statement oj the United States Treasury 

The Treasury makes available in the Daily Statement of the United 
States Treasury information with respect to the receipts and expendi- 
tures of the Government, the condition of the Treasury, and the public 
debt. In view of the special interest in the status of the funds pro- 
vided by the Congress for carrying out the recovery program, provision 
was made to include in the Daily Statement of the United States 
Treasury a statement showing the sources of funds of the emergency 
organizations (1. e., from specific appropriations, statutory or execu- 
tive allotments from lump-sum appropriations, or through allocations 
from the Reconstruction Finance Corporation), the expenditures 
therefrom, and the current unexpended balances. 1 . A copy of the 
statement showing the status of funds for carrying out the recovery 
program is shown on page 14 of this report. 

Combined statement of assets and liabilities oj governmental corporations 
and credit agencies 

There is available as of June 30, 1934, 2 a combined statement of 
assets and liabilities of governmental corporations and credit agencies 
of the United States, compiled from reports received from the organi- 
zations concerned. This statement appears on page 381 of this report. 

Statement oj the Public Debt oj the United States 

The Statement of the Public Debt of tne United States, issued at the 
end of each month, contains a detailed classification of the obligations 
constituting the gross debt of the United States, together with certain 
detailed information concerning the outstanding securities represent- 
ing the interest-bearing debt. Since June 1920 the reverse side of the 
Statement of the Public Debt has included a statement of the face 
amount of securities owned by the United States Government. 

Effective June 30, 1934, several important changes were made in the 
form of the public debt statement for the purpose of making additional 
information conveniently available. The detailed information rela- 
tive to the outstanding interest-bearing issues has been extended to 
include a condensed statement of the tax exemption features of the 
various issues and of their receivability in payment of certain taxes 
and their circulation privileges. This information appears in the 
footnotes to the table beginning on page 340 of this report. 

Contingent liabilities oj the United States. — The public debt repre- 
sents a direct obligation of the United States, but there are classes of 
indirect obligations of the United States which are in the nature of 



1 First included in daily Treasury statement, July 6, 1934. 
1 Released by the Secretary of the Treasury Aug. 29, 1934. 



45 



46 REPORT OF THE SECRETARY OF THE TREASURY 

contingent liabilities. The United States has assumed responsibility 
for the payment of such obligations, but they are, in the first instance, 
secured by specific collateral assets. For example, under the act of 
Congress approved June 25, 1910, as amended, the "faith of the United 
States is solemnly pledged to the payment of the deposits made in 
Postal Savings depositary offices." These funds when received in 
the Postal Savings System are authorized to be redeposited in banks 
throughout the United States, which pledge collateral to secure such 
funds deposited with them. To the extent that such funds are not 
deposited in banks or represented by cash in possession of the Postal 
Savings System, they are invested in obligations of the United States. 

Likewise, the United States guarantees as to "principal and 
interest" bonds issued by the Home Owners' Loan Corporation and 
the Federal Farm Mortgage Corporation. These bonds are backed 
by mortgages on homes and farms acquired by these organizations at 
conservatively appraised values and under safeguards and limitations 
prescribed by statute. An additional margin of security is provided 
to the extent of the capital stock of these corporations which has been 
subscribed for and paid in by the United States. 

No comprehensive tabulation of contingent liabilities of the 
United States has previously been published by the Treasury. 
Effective June 30, 1934, there is included with the Statement of the 
Public Debt of the United States a monthly statement of contingent 
liabilities of the United States, a copy of which appears on page 373. 

Treasury accounting system 

In order to provide a more effective and coordinated control of the 
accounting in the various bureaus, divisions, and offices of the 
Treasury Department, the Secretary, on June 30, 1934, issued 
Department Circular No. 514, providing that thereafter no installa- 
tion of new accounting forms, systems, and procedures and no change 
in existing accounting forms, systems, and procedures shall be made 
in the Treasury Department without express approval of the Secretary 
of the Treasury or of an officer of the Department duly authorized 
to act for the Secretary, and also providing that all recommendations 
with respect thereto, before being acted upon by the Secretary of the 
Treasury or by his duly authorized representative, shall be submitted 
to the Office of the Commissioner of Accounts and Deposits for 
investigation and report. A copy of this circular appears as exhibit 
42 on page 256. 

Obligations of foreign governments 

During the fiscal year 1934 the United States received payments 
aggregating $9,062,691.16 on account of the indebtedness of foreign 
governments, of which $212,000 was for account of principal, 
$8,812,630.16 was for account of interest, and $38,061 was for 
account of annuities under the moratorium agreements. 

Payments due July 1 to December 31, 1933. — The following statement 
shows payments due during the period July 1 to December 31, 1933, 
and the amounts actually paid on account by certain governments: 



REPORT OF THE SECRETARY OF THE TREASURY 

AMOUNTS PAYABLE 



47 



Country 



Funding agreements 



Principal 



Interest 



Moratorium 
agreements 



Total 



Belgium,. 

Czechoslovakia. 

Estonia 

Finland 

France 

Great Britain... 

Greece ' 

Hungary 

Italy 

Latvia 

Lithuania 

Poland 



$1, 500, 000 
114, 500 
62, 000 



$2, 375, 000. 00 



32, 000, 000 

236, 000 

12, 785 



47,500 
1~393,~ 666' 



286, 265. 00 

148, 592. 50 

19, 261, 432. 50 

75, 950. 000. 00 

223, 445. 00 

28, 444. 36 

1, 245, 437. 50 

119,609.00 

92, 386. 01 

3, 582, 810. 00 



$484 153.88 

182.812.78 

36, 585. 29 

19, 030. 50 

3, 046, 879. 72 

3, 720, 765. 05 

(17, 137. 38 

4, 225. 58 

896. 155.88 

15, 274. 26 

13, 683. 26 

456, 229. 71 



22, 

117. 



859, 453. 88 
682, S12. 78 
437, 350. 29 
229, 623. 00 
30S, 312. 22 
670, 765. 05 
526, 582. 38 
45, 454. 94 
141, 593. 38 
182, 383. 26 
106, 069. 27 
432, 039. 71 



Total. 



35, 365, 785 



103, 313, 421. 87 



14, 943, 233. 29 



153, 622, 440. 16 



AMOUNTS ACTUALLY PAID 



Czechoslovakia 


$150, 000 
62,000 






$150, 000. 00 


Finland.. 


$148, 592. 50 
7, 500, 000. 00 

( 2 ) 
1, 000, 000. 00 
9, 530. 16 
7, 000. 00 


$19, 030. 50 


229, 623. 00 




7, 500, 000. 00 

( 2 ) 
1, 000, COO. 00 








Italy 












9, 530. 16 








7, 000. 00 










Total 


212,000 


8, 665, 122. 66 


19, 030. 50 


8,896,153.16 







1 Exclusive of principal payment of $150,000 postponed under the provisions of the debt agreement with 
Greece. 

2 A payment of $59,928 (27H percent of the amount due Nov. 10, 1933) was received on July 6, 1934. 

Payments due January 1 to June 80, 1934- — The following statement 
shows payments due during the period January 1 to June 30, 1934, 
and the amounts actually paid on account by certain governments: 

AMOUNTS PAYABLE 



Country 


Funding agreements 


Moratorium 
agreements 


Total 


Principal 


Interest 














$4, 300, 000. 00 
1, 500, 000. 00 


$2, 375, 000. 00 


$484, 453. 88 

182, 812. 78 

36, 585. 29 

19, 030. 50 

3, 046, 879. 72 

9, 720, 765. 05 

67, 137. 38 

4, 225. 58 

896, 155. 88 

15, 274. 26 

13, 683. 26 

456, 229. 71 

97, 500. 16 


$7, 159, 453. 88 




1, 682, 812. 78 




286, 265. 00 

147, 507. 50 

19, 261, 432. 50 

75, 950, 000. 00 

226, 632. 50 

33, 185. 08 

1, 245, 437. 50 

119,609.00 

92, 386. 00 

3, 582, 810. 00 


322, 850. 29 






166, 538. 00 




36, 691, 906. 35 


59, 000, 218. 57 




85, 670, 765. 05 




240, 000. 00 


533, 769. 88 




37, 410. 66 


Italy... 


12, 600, 000. 00 


14, 741, 593. 38 




134, 883. 26 




41, 795. 00 


147, 864. 26 




4, 039, 039. 71 




1, 200, 000. 00 
300, 000. 00 


1, 297, 500. 16 






300, 000. 00 










Total. 


56, 873, 701. 35 


103, 320, 265. 08 


15, 040, 733. 45 


175, 234, 699. 88 







AMOUNTS ACTUALLY PAID 







$147, 507. 50 
( 2 ) 


$19, 030. 50 


$166, 538 






( 2 ) 










Total.. 




147, 507. 50 


19, 030. 50 


166, 538 









1 Exclusive of payments postponed under the provisions of the respective debt agreements: Austria, 
$494,860. 23; Greece, $150,000. 
s A payment of $76,272 (35 percent of the amount due May 10, 1934) was received on July 6, 1934. 

90353—35 5 



48 



REPORT OF THE SECRETARY OF THE TREASURY 



A message from the President of the United States to the Congress, 
dated June 1, 1934, containing a review of the situation with respect 
to the debts owed the Government and people of this country by the 
governments and peoples of other countries will be found as exhibit 36 
on page 243 of this report. 

Press releases and the various notes exchanged between the Depart- 
ment of State and representatives of foreign governments regarding 
the amounts due during the fiscal year will be found as exhibit 33 
on page 223 of this report. 

A statement showing the principal of the funded and unfunded 
indebtedness of foreign governments to the United States, the accrued 
and unpaid interest thereon, and payments on account of principal and 
interest as of November 15, 1934, appears as table 42 on page 391. 

Public No. 151, Seventy-third Congress, approved by the President 
on April 13, 1934, provides that it shall be unlawful within the United 
States or anj 7 place subject to the jurisdiction of the United States, 
for any person to purchase or sell bonds, securities, or other obligations 
of any foreign government or political subdivision thereof or any 
organization or association acting for or on behalf of a foreign govern- 
ment or political subdivision thereof, issued after the passage of this 
act, or to make any loan to such foreign government, political sub- 
division, organization, or association, except a renewal or adjustment 
of existing indebtedness while such government, political subdivi- 
sion, organization, or association, is in default in the payment of its 
obligations, or any part thereof, to the Government of the United 
States. The text of this act appears as exhibit 34 on page 238. An 
opinion of the Attorney General dated May 5, 1934, requested by the 
Secretary of State, upon various questions arising under the act will 
be found in exhibit 35 on page 238 of this report. 

The total amounts previously due from foreign governments on 
account of their indebtedness to the United States under the funding 
and moratorium agreements and not paid as of November 15, 1934, 
according to contract terms are shown in the following statement: 



Country 



Amounts not paid according to contract terms 



Funding agreements 



Principal 



Interest 



Moratorium 
agreements 



Total 



Belgium 

Czechoslovakia 

Estonia 

France 

Great Britain.. 

Greece 

Hungary ' 

Italy 

Latvia 

Lithuania 

Poland 

Rumania 

Yugoslavia 

Total 



$8, 500, 

4, 170, 

135, 

58, 169, 

32, 000, 

1, 179, 

25, 

24, 900, 

47, 

81, 

1, 625, 

2, 200, 

825, 



000.00 
085. 83 
500. 00 
041. 35 
000. 00 
000. 00 
070.00 
000.00 
500. 00 
500. 00 
000. 00 
000. 00 
000. 00 



$9, 000, 000. 00 



1, 104, 165. 00 

77, 045, 730. 00 

210, 349, 481. 58 

780, 724. 00 

118,518.14 

1, 736, 291. 74 

343, 296. 84 

260, 167. 66 

13, 819, 410. 00 



$968, 907. 76 

365, 625. 56 

73, 170. 58 

6,093,759.44 

19, 441, 530. 10 

201, 412. 14 

8, 451. 16 

1,792,311.76 

30, 548. 52 

27, 366. 52 

912, 459. 42 

97, 500. 16 



$18, 468, 

4, 535, 

1,312, 

141, 308, 

261, 791, 

2, 161, 

152, 

28, 428, 

421, 

369, 

16, 356, 

2, 297. 

825, 



907. 76 
711.39 
835. 58 
530. 79 
011.68 
136. 14 
039. 30 
603. 50 
345. 36 
034. 18 
869. 42 
500.16 
000.00 



133, 857, 697. 18 



314, 557, 784. ! 



30,013,043.12 



478, 428, 525. 26 



1 The Hungarian Government has deposited with the foreign creditor's account at the Hungarian National 
Bank the aggregate amount of 676,105.17 pengo. The debt funding agreement with Hungary provides 
for payment in dollars in the United States. 



REPORT OF THE SECRETARY OF THE TREASURY 49 

On September 6, 1934, the Trustees of the Austrian Guaranteed 
Loan of 1923-43 notified the Austrian Government that the objection 
raised in their letter of November 21, 1933, to the payments due by 
Austria under the relief credit agreements on January 1, 1934, must 
be considered as covering all payments due by Austria under relief 
credit agreements, including the annuities due January 1, 1934, 
covering payments postponed under the so-called Hoover moratorium. 
In view of this action by the Trustees, in recently clarifying their 
notice of November 21, 1933, the annuity of $34,767.23, due Janu- 
ary 1, 1934, from Austria under the agreement of September 14, 1932, 
which had previously been treated by the Treasury as a payment due 
and unpaid, has been postponed, subject to repayment beginning 
January 1, 1944, in accordance with the provisions of the agreements 
of May 8, 1930, and September 14, 1932, between Austria and the 
United States. 

Receipts from Germany 

During the fiscal year 1934 the United States received no payments 
from the Government of Germany under the debt-funding agree- 
ment of June 23, 1930, covering the costs of the American Army 
of Occupation and the awards of the Mixed Claims Commission, 
United States and Germany, other than a semiannual payment of 
interest due on principal installments postponed under the provisions 
of that agreement. 

Army costs.- — Payments aggregating 18,600,000 reichsmarks due dur- 
ing the fiscal year on account of the costs of the Army of Occupation 
were postponed under the provisions of the debt-funding agreement. 
In accordance with the provisions of the agreement such postponed 
payments bear interest at the rate of 3% percent per annum. On 
September 30, 1933, interest in the amount of 458,562.50 reichsmarks, 
due on principal installments previously postponed, was paid in 
reichsmarks into an account in Germany, and was not paid to the 
United States in dollars, as required by the terms of the debt agree- 
ment. The interest due on March 31, 1934, on account of principal 
installments previously postponed was paid by Germany in the sum 
of 627,125 reichsmarks, or $249,800.84. 

There has been no change in the Army cost account from that 
shown in the statement appearing on page 39 of the Annual Report 
for 1932. 

Mixed claims, United States and Germany. — The payment of 
20,400,000 reichsmarks. due on September 30, 1933, from the Govern- 
ment of Germany on account of mixed claim awards, was postponed 
under the provisions of the debt agreement of June 23, 1930. The 
amount postponed bears interest at the rate of 5 percent per annum, 
payable semiannually. Germany paid the sum of 2,040,000 reichs- 
marks, representing the interest due September 30, 1933, on amounts 
previously postponed on this account into an account in Germany, 
but this payment was not paid to the United States in dollars, as 
required by the debt agreement. 



50 REPORT OF THE SECRETARY OF THE TREASURY 

On March 31, 1934, Germany paid the sum of 2,550,000 reichs- 
marks, or $1,015,733.92, representing the interest due on that date 
on payments aggregating 102,000,000 reichsmarks previously post- 
poned under the provisions of the debt agreement. The payments 
aggregating 102,000,000 reichsmarks, which were previously post- 
poned, became due on March 31, 1934, and there also matured on 
that date a payment of 20,400,000 reichsmarks. These principal 
sums were not paid by the Government of Germany. 

Annuities under moratorium agreement. — The first semiannual 
installment of the annuity under the moratorium agreement with the 
Government of Germany dated May 26, 1932, was due on September 
30, 1933, in the amount of 1,529,049.45 reichsmarks. This amount 
was paid in reichsmarks into an account in Germany and was not 
paid to the United States in dollars, as required by the moratorium 
agreement. The second semiannual installment of the annuity due 
on March 31, 1934, in the amount of 1,529,049.45 reichsmarks, was 
not paid by Germany. 

Treasury administration of alien and mixed claims 

The Settlement of War Claims Act of 1928 authorized the Secretary 
of the Treasury to make payments on account of (1) awards of the 
Mixed Claims Commission, United States and Germany, for claims 
of American nationals against the Government of Germany; (2) 
awards of the War Claims Arbiter for claims of German, Austrian, 
and Hungarian nationals against the Government of the United 
States; and (3) awards of the Tripartite Claims Commission for claims 
of American nationals against the Governments of Austria and 
Hungary. 

The time within which claimants receiving awards from the Mixed 
Claims Commission, United States and Germany, and the Tripartite 
Claims Commission, United States, Austria,, and Hungary, could file 
application expired on March 10, 1934. Congress, however, by act 
of June 18, 1934 (Public Res. No. 38, 73d Cong.), extended the time 
within which such applications could be filed for a period of an addi- 
tional two years from March 10, 1934. A copy of the act will be 
found as exhibit 38, page 253 of this report. 

The joint resolution approved June 27, 1934, to amend the Settle- 
ment of War Claims Act of 1928, as amended (Public Res. No. 53, 
73d Cong.), which will be found as exhibit 39 on page 253 of this 
report, requires the postponement of (a) further payments to German 
nationals from the German special deposit account established under 
section 4 of the Settlement of War Claims Act of 1928, on account of 
awards made by the War Claims Arbiter for ships, patents, and a radio 
station seized and used by this Government during the war; and (b) 
further return of property belonging to German nationals held by the 
Alien Property Bureau, Department of Justice, while Germany is in 
arrears on its payments on claims of American nationals under the 
debt agreement of June 23, 1930. The position of the United States 
with respect to the enactment of this joint resolution is presented in 
Senate Report No. . 1376, submitted by the Committee on Finance 
after its consideration of the joint resolution. Senate Report No. 
1376 appears as exhibit 37 on page 247. 



REPORT OF THE SECRETARY OF THE TREASURY 51 

Mixed Claims Commission: Claims against Germany. — The Treas- 
ury had made payments up to September 30, 1934, in the aggregate 
amount of $135,377,880.29 on account of awards of the Mixed Claims 
Commission, from winch there has been deducted $676,889.99, repre- 
senting one-half of 1 percent authorized by the Settlement of War 
Claims Act, making net payments to claimants of $134,700,990.30. 
Of the deductions so made, $650,025.54 have been covered into the 
Treasury as miscellaneous receipts or reserved for such purpose in 
accordance with the act as reimbursement to the United States for 
expenses incurred, and $26,864.45 has been paid to the German 
Government or reserved for payments to that Government in accord- 
ance with the agreement of December 31, 1928, and the act of Congress 
approved June 21, 1930, for defraying such expenses as were incurred 
by that Government in connection with the adjudication of the late 
claims. 

The following summary shows by classes, number, and amount of 
awards certified to the Treasury by the Secretary of State, the amount 
paid on account, and the balance due as of September 30, 1934: 



52 



REPORT OF THE SECRETARY OF THE TREASURY 






O. 






J? 


c 


c 


S, 






03 
so 


s 


•e* 


s 




o 


X 


s 


o 


a 


(J 


s» 




~c 






S 


"13 


•~* 


~ 


a 


a 


Ci 


• ., 






to 


e 


.H 


CQ 


*! 


"& 


w 


»v 




J~ 




a 


«♦-, 


99 




1* 










"a 


~S) 






a 













i-l CN 1 


co ^- 


b 






a 




■* 1 


-* i 


■Hi CN 1 


o >o 


CN 








■* 1 




-* O 1 


OS 00 


X 








a 


OS 1 


OS 1 


OS CN i 


i-H O 


"1 






a 

a 

M 

CD 


a 


N 1 




N CO 1 


H CN 


CO 






o 

a 
< 


"* 1 


"■H 1 


-* C> I 


^H IO 


— 






CO 1 


CO 1 


CO O 1 


•* IO 


OS 






O I 


O 1 


O CN 1 


CN O 


00 






> 


CN 1 


9 ! 


CN OS 1 


H O 








o 




-HH 1 


■* ,-1 i 


O CN 


CO 











&■ 1 














a" 5 ! 
















P 


g tj« 
















^S 




















n oo 


IO »o 


O NH 


CO oo 


_ 


C»i-H 


00 




0) 

t»o 


iHN 


-Hi CO 


H n>o 


CO CO 


t- 




TO 




t--^ 




N cs »o 


CN -HH 


cc . 


^H ^ 






»o CO 


OS H 


N COO 


N O 


1- 




OJ 




to ° 


r~--* 


rt CN 


OS OH 


t~ H 


00 


05 CN ^^^^ ^^ 


CN 


hH 


go 


00 H 


O OS 


O HM 


"H^ 00 


?l 


go? ~~ S^- 


>i 




O OS 


IO CO 


H O CN 


OS O 


o 


oo<» 




to 


OO 


N H 


CO OS CO 


00 "3< 


CO 


-N 
CN 


eo 




<i 


CO 


CD 


CO CN 


o o 


o 


O 


CO 


03 


OS 


OS 


OS -^ 


CO CN 


o 




o 


Q 




^ 














a' 3 'H 


00 CO 
















OS 
CN 
















a is «* 
















**! 


















«h"0 


CO CN 


00 o 


00 OS o 


CN IO 


r- 


H^l oiO i-i 


OS 




NOS 


CO »o 




■o >o 


o 


tHt* H00 i^ 


OS 




lOCO 


OS CN 


t^. CN OS 


00 IO 


Hi 


IO H -<h' CO CN 


cd 






•oo 




^ O iO 


o -^ 


>o 


0DCO HH N 






"32 & 


rtOO 


OS o 


OS CN tH 


CO »o 


00 


-H^ N OCO ■<* 


o 




■h° Sfi 
















h- 1 


03O ® 


CNN 


OS 00 




■Hi t^ 




OOO HO ^ 


o 




<52 


O ^ 


H -Hi 


O ION 


CN O 


OS 


CN -H^ ■•* t^ IO 


■* 




h^x 


IO 


IO coos 


CO CO 




O^l OOOS CO 


o 


IO 


IO CN 


N 


N to 


IO i-l 


CO 


lOCN O H 


tc 












CN 


CI 




CN 


O 




<* 














a°l 


CIO 










H N II ! 






CN O 










H-* |l l 






00 H 










O0H 1 1 l 






DS? 


















^1 


COCN 










COCN 








iO o 


o ! 


■O H CN 


CO t- 


'- 


IOO ^ ^ IO 


CN 




rds or 
unt of 
h and 
sonal 
jury 


no 

N IO 


N 1 

CN ! 


r- cocn 

CN HO 


IO 00 
o t~ 


-r 
00 


NO O CN CO 
N IO ^ i-A CO 


X 




COC-S. 


CO 1 


O ON 


-!I< O 


= 


CO CN O IO CN 






H CO 


O i 


O 00O 


00 N 


S3 


■^ O CO 00 IO 


CO 


1— 1 


03 Oti *- □ 

P S oj a 


OS co 


CO i 


CD CN iO 


•<H CO 


ro 


OS O CN IO 00 


:i 




00 IO 


•* i 


■* CO -H 


OS oo 


X 


COiO CO H 00 


oo 




•^1 IO 


O I 


O NH 


00 i-H 


o 


•HilO NH H 


o 


C3 


■a) 03 T3 " 


CO 


■*■ 


•* 


■* 


o 


CO 


IO 


5 




«> 














a h « 


OiO 










oh i ! ! 






(M H 










CN H II I 






-H^ H 










-3> H II i 






*^g 


















a 


oo 


OS IO 


•* -*00 


O t- 


n 


o »o O O O 


pa 




OCN 


CN 00 


tH N00 


O CO 


T 


■H^ IO NO H 


CN 




a 


*oco 


00 CD 


r-5 ooo" 


H CO 


o 


NO IO IO IO 


d 




o 


Tjl CO 


O <M 


00 i-H -* 


■Hi CN 




O CO ^H O OS 


JO 




a 

C3 


H00 


O CN 


N OtN 


o o 


CO 


000 O0H OS 


O0 




IO IO 


H N 


CO IO OS 


00 OS 


l~ 


CO H COO CN 


N. 




00 OS 


00 00 


OS »oo 


IO H 




00 OS N 00 H 






*C3 


coco 


CO i-H 


H t~^J< 


CO o 


OS 


CON IOO IO 


CO 






coco 


O 


O OSi-H 


H CN 


CO 


HCO NH H 


IO 




O 


•o 


CO 


to o 


CO -^ 


1 - 


CN 


^0 




e 


(& 




1—1 


CN 


CN 


- 


























HO 










-* H II 1 






IO OS 










CO CD II 1 






o aog 

H 3 P 

a « 


IOCN 










CNCN II I 






■*"CN 










■*CN ! ! 


























a 

03 i 




! o i ! 




' ' ' 'S S3 ' 












!ii I 

\™£ ! 
i-ots i 
!'S a ! 




! ! ! !-§£ i 










a i 

c3 | 

-r 3 > 
o ; 


■o ! ! 

^H | | 

C3 




934: 

ards: 

1928, to 
ent of 










O ! 


^ i : 

03 ! , 


:§tS ; 




o ! i a • ," > S i 












. a ! ! 




pt. 3 

edin 

Jan. 
Settl 










t-i ! 


tJ ! ! 


al payable to Jan. 1, 1928 

lereon to date of payment or, if 
5 percent per annum, as speci 
War Claims Act of 1928 




H 




T3 
CD 

s 

CD 

cd 


si °° 

OS OS 

0*rt" 
■-I CO 


co ; 

ft ! 

o I 
t-i i 

Pi ; 

a ! 
.2 ' 


<a 1 | 

a> ! ! 
P< i ! 

"c^g 

cyos os 




t up to Se 

10, 1922.. 
31, 1928. . 
tes specifl 1 
1922 
1928 
num from 

by the 


CO 
OS 

b 

CO 

ft 




-8 

03 


Amount due on account: 
Principal of awards: 
Agreement.of Aug. 
Agreements Dec. 


< i 
•° ! 
'3 I 


03 J" 1 
^Oh 

„r bici 

2<1h 


a 
5 

a 

o 


on accoun 
awards: 
nt of Aug. 
nt of Dec. 
, 1928, at ra 
f Aug. 10, 
f Dec. 31, 
ent per an 
s directed 
1928 


11 
3Q 

o 

a 
2 






a ; 

a ! 

a 


HO o 

3 a) <u 

to ODU) 


CD 

3 

"3 


Payments made 

Principal of i 

Agreeme 

Agreeme 

Interest to Jan. 1 

Agreement o 

Agreement o 

Interest at 5 perc 

of payment, a 

Claims Act of 


a 
3 






o ! 

§i 


Tot 
rest tl 
34, at 
ent of 


o 


o 

e 






So 
h5 


CD 

a 


0J OS JH 










^i 










CN 





REPORT OF THE SECRETARY OF THE TREASURY 



53 



,-H CO 

CO'* 
CO cs 



l s >; 

TJ tuD O 
<X> 3 <U 

goo 

CJ*o*J 

fe a a 

"aa 

^. <d a> 

o£2 

v^ beta) 



IMOO *0 



CO* 

coo 
»oof 



O CO 
GO O 
.-100 



t^ H 

•ocs" 

CC CO 
OO) 



O CO 

od o 

00 t^ 



O0 CS ^H 



I" 3 

g> 00 '3 

* ill 1 



rH O* 



_;a 



9 oo 



Pi? 



"co22°-p ffl 

..• • c3 """ ' p a> 
3 <B.«2ri OJ3 

S-S^"co-^oS,5? 



§ s g g' 

flosa 



' o : 



03 u 



a o a a ri*z+± <a o 
o„ eeH p H Kd 
< Q a3a>a ,c3 ©a>a}P 
S a b„ &'-» a a. ■« «s 



3 O. 
'O'o 
a> P 



■.„ be bo- k. 



m 



-' cjj au w ~ ■ 

a 2°^ 



2| 

c3 5" 

caP-i 


S 3 


P. 


ss a 


'pod 
3S* 


03.2 


a~- 

ca^ 


03.2 


"3 9 




Co 




S?a 


■" <D 


<«.9 






sz-° 


r^S 


£ C3 


E^ o 






o * 


co -3 
XS 3 




3"S 


3 a 


O 3 




8 ° 




sa 


■a-" 



— o 
&0 



« ft 



d^ 



as <d;3 



£J3 



© o 
.OS 

_ o 

*«■ 

* o 
t-: a 

O— ' 



ga 



-Sco 


^^ 


.S2-a 
3-" 




s« 


-^ p 
P o 


«* 


o M 


rnFl 




KS 




a£ 




>>C3 


gJ3 


c3 a^j 


32 


ai_.a 


p^ 


■ooS 




'o ^' 


M O O 




>-( ° 


.2 C3 


^23 


sH 








C3Q 


C3 _ o 
O00 C3 


[»«-, 


pS.S 


3^; 






»'° £ 


ei 




a> 


dig 

C8 03.2 

n55 


SO 


.So 



6©- -, 



3 
>■ 

n 


C- 


a 


C' 


fl 3 

3 3 




t 1 


y; 


3 


O o © 

saa 














— 






3 






z 


X 


n 

03 




-^ 




a 


- 


S) 

s> 
■J. 


35 


3 

2 



54 REPORT OF THE SECRETARY OF THE TREASURY 

War Claims Arbiter. — Under the Settlement of War Claims Act of 
1928 it was the duty of the War Claims Arbiter, within certain limita- 
tions, to hear the claims of the German, Austrian, and Hungarian 
nationals and to determine the fair compensation to be paid by the 
United States for ships seized, patents sold or used by the United 
States, and a radio station sold to the United States. 

War Claims Arbiter: Claims of German nationals. — Except for the 
accrual of an additional year's interest, there has been practically 
no change in the status of the awards of the War Claims Arbiter on 
account of claims of German nationals since September 30, 1933, as 
shown by the table on page 49 of the Annual Report of the Secretary 
of the Treasury for the fiscal year 1933. 

War Claims Arbiter: Claims oj Austrian and Hungarian nationals. — ■ 
The total awards of the War Claims Arbiter to Austrian nationals 
amounted to the sum of $663,740, together with $248,948 as interest 
at the rate of 5 percent per annum from July 2, 1921, to December 
31, 1928, or a total of $912,688. The Treasury had made payments 
on account of these awards as of June 30, 1934, in the amount of 
$912,688, together with interest since December 31, 1928, at the rate 
of 5 percent per annum in the amount of $149,549. 

The awards made by the Arbiter to Hungarian nationals in the 
sum of $39,125, together with interest amounting to $14,675 at the 
rate of 5 percent per annum from July 2, 1921, to December 31, 1928, 
or a total of $53,800, have been paid with the exception of three 
awards amounting to $4,675.24, together with interest at the rate of 
5 percent from December 31, 1928. 

German special deposit account. — The following statement shows 
the total amounts deposited in the German special deposit account, 
the amounts paid therefrom up to September 30, 1934, and the balance 
held in the account: 

Statement showing funds deposited in the German special dej jsit account and the 
payments made therefrom up to September 30, 1934 

RECEIPTS 

From investments by Alien Property Custodian under 
Trading with the Enemy Act, as amended: 

Unallocated interest fund $25,000,000.00 

Less refunds . 3,250,000.00 

21, 750, 000. 00 

20 percent German property retained 17,552,096.91 

$39,302,096.91 

From Germany: 

2J4 percent of Dawes' annuities available for repara- 
tions (Paris agreement of Jan. 14, 1925). 32,183,060.87 

Under German-American debt agreement, June 23, 

1930 _ _ 19,469,964.00 

Interest on payments postponed under terms of debt 

agreement dated June 23, 1930.. _ 1,743,738.70 

— ■ 53, 396, 763. 57 

Appropriation for ships, patents and radio station 86, 738, 320. 83 

Expenses of Administration, War Claims Arbiter, on 

account German nationals ._. 113,624.20 

_ 86, 851, 945. 03 

Earnings and profits on investments by Secretary of the 
Treasury 4,344,446.95 

Total receipts „ $183,895,252.46 



REPORT OF THE SECRETARY OF THE TREASURY 



55 



Statement showing funds deposited in the German special deposit account and the 
payments made therefrom up to September SO, 1984 — Continued 

PAYMENTS ON ACCOUNT 

Awards of the Mixed Claims Commission: 

Under agreement of Aug. 10, 1922... $129,354,916.20 

Under agreement of Dec. 31, 1928 5,346,074.10 



Awards of War Claims Arbiter: 

For ships 37, 126, 205. 21 

For patents andoneradiostation 6, 242, 006. 50 



$134,700,990.30 



One-half of 1 percent deducted from mixed claims payments covered into 
Treasury ($3,597.14 withheld but not paid).. 

One-half of 1 percent deducted from mixed claims payments on account of 
awards entered under agreement of Dec. 31, 1928 (act of June 21, 1930) 
and paid to Germany ($2,714.36 withheld but not paid) 

Advances to special fund, expenses of administration of the settlement of 
War Claims Act of 1928 (Office of the Secretary of the Treasury) 

Expenses of administration, War Claims Arbiter account of German 
nationals 



43,368,211.71 
646, 428. 40 



35, 175. 00 
113, 624. 20 



Balance in German special deposit account (including investments). 

Made up as follows: 

$4,447,000 face amount 3 percent Treasury bonds of 1951-55. 



$178, 888, 579. 70 
5, 006, 672. 76 



$110,000 face amount 3J4 percent Treasury notes, series A, due 

Sept. 15, 1937 

Cash balance 

Total — 



Principal cost 
,425,098.51 



110, 103. 13 
471,471.12 



5, 006, 672. 76 



Tripartite Claims Commission: Claims against Austria. — A full 
statement of the payments made to American nationals on account 
of the awards entered by the Tripartite Claims Commission against 
Austria was included in the annual reports for the fiscal years 1929 
to 1932. No payments were made on the awards during the past 
year. There is one award unpaid in the amount of $135.06. 

Tripartite Claims Commission: Claims against Hungary. — The 
awards entered by the Tripartite Claims Commission against Hun- 
gary, in favor of American nationals, amounted to $199,975.57. As 
of June 30, 1934, awards aggregating $23,765 had not been paid 
because claimants had not filed applications required by law. 

Railroad obligations 

The total receipts during the fiscal year on account of railroad 
securities amounted to $1,270,803.10, classified as follows: 





Principal 


Interest 


Total 


Collections by Treasury Department: 

Sec. 210 . 


$704, 016. 27 


$475, 405. 27 
12, 841. 02 
5, 266. 45 


$1, 179, 421. 34 


Sec. 207 


12,841.02 




67, 200. 00 


72, 466. 45 






Total 


771, 216. 27 
5, 000. 00 


493, 512. 74 
1,074.29 


1, 264, 728. 81 




6, 074. 29 








776, 216. 27 


494, 587. 03 


1,270,803.10 







56 



REPORT OF THE SECRETARY OF THE TREASURY 



There was also received the sum of $2,207,745.62 from the Pullman 
Co. under the provisions of section 209 (d) of the Transportation Act 
of 1920, as amended. The company made this payment because its 
railway operating income for the guaranty period from March 1, 1920, 
to September 1, 1920, was $2,207,745.62 in excess of the minimum 
railway operating income for the 3-year "test period" ending June 
30, 1917. 

The following statement shows the total amount of railroad obli- 
gations, by classes, originally held by the United States Government, 
the amount held on June 30, 1934, and payments received on account 
(exclusive of certain miscellaneous obligations held by the Director 
General of Railroads): 

Railroad obligations held originally by the United States Government, amount held 
June 30, 1934, o,nd total payments of principal and interest received (exclusive of 
certain miscellaneous obligations held by the Director General of Railroads) 





Principal amount 
originally held 


Principal 

amount held 

on June 30, 

1934 


Total payments received 




Principal 


Interest 


Federal Control Act: 


$346, 556, 750. 00 
98, 401, 755. 00 
62, 103, 453. 28 

282, 712, 837. 36 
290, 800, 667. 00 


$33, 600. 00 


$346, 523, 150. 00 
98, 401, 755. 00 
62, 103, 453. 28 

277, 493, 337. 36 
258, 342, 725. 66 


$45, 292, 355. 38 


See. 7 


23, 100, 562. 27 


See. 12. . 




4,248,171.96 


Transportation Act: 

Sec. 207 — 


5, 219, 500. 00 
32, 457, 941. 34 


54, 334, 839. 70 


Sec. 210 


89, 952, 264. 89 






Total. 


1, 080, 575, 462. 64 


37, 711, 041. 34 


1, 042, 864, 421. 30 


216,928,194.20 







Section 204- — There have been no transactions under section 204 
since June 30, 1931. The total payments under this section have 
amounted to $10,967,801.80. 

Section 207. — A statement showing the principal amount of obliga- 
tions of carriers acquired pursuant to section 207 of the Transportation 
Act, 1920, as amended, receipts on account of principal, and obliga- 
tions outstanding June 30, 1933, appears as table 38 on page 370 of 
the Annual Report of the Secretary of the Treasury for 1933. There 
was no change in the status of such obligations during the fiscal year 
ended June 30, 1934. 

Sections 209 and 212.— During the year there was paid to carriers on 
this account the sum of $51,572.64, making the total payments 
$532,006,103.30. 

Section 210. — This section established a revolving fund of $300,000,- 
000 to be used for loans to railroads under the conditions set forth in a 
certificate of the Interstate Commerce Commission authorizing each 
loan, and also for paying judgments, decrees, and awards rendered 
against the Director General of Railroads. No new loans are being 
made as the time for making application has expired. The net ex- 
penditures by the Director General during the fiscal year under this 
section, after deducting repayments, amounted to $3,562.41, making 
net expenditures bv him on this account of $33,631,037.66 to June 30, 
1934. 

Total loans (including renewal loans and repayments thereof aggre- 
gating $59,800,000) to June 30, 1934, amounted to $350,600,667, 
repayments amounted to $318,142,725.66, and loans outstanding as 



REPORT OF THE SECRETARY OF THE TREASURY 



57 



of that date amounted to $32,457,941.34. Table 39 on page 371 of 
the Annual Report for 1933 shows by carriers the obligations held on 
June 30, 1933, on account of loans under section 210. Repayments 
during the fiscal year ended June 30, 1934, were made by the follow- 
ing carriers: 

Chicago & Western Indiana R. R. Co . _ $219,000 00 

Fernwood, Columbia & Gulf R. R. Co 2^000.00 

National Railway Service Corporation, account of the — 

Minneapolis & St. Louis Railroad Co 45,711.90 

Wheeling & Lake Erie Ry. Co 391,304 37 

Toledo, St. Louis & Western R. R. Co 46,000.00 

Total 704,016.27 

The following statement shows the amounts of principal and inter- 
est due from carriers in default as of June 30, 1934, on account of 
their obligations for loans under this section: 

Principal and interest due from carriers in default on June 30, 1934, on account 

of loans under sec. 210 



Name of carrier 



Principal 
in default 



Interest in 
default 



Total 



Aransas Harbor Terminal Ry . 

Des Moines & Central Iowa R. R 

Fort Dodge, Des Moines & Southern R. R. Co. 

Gainesville & Northwestern R. R. Co 

Georgia & Florida Ry., receiver 

Minneapolis & St. Louis R. R. Co 

Missouri & North Arkansas Ry. Co 

Salt Lake & Utah R. R. Co 

Seaboard Air Line Ry. Co -. 

Seaboard-Bay Line Co 

Virginia Blue Ridge Ry. Co 

Virginia Southern R. R. Co 

Waterloo, Cedar Falls & Northern Ry. Co 

Wichita Northwestern Ry. Co 

Wilmington, Brunswick & Southern R. R. Co.. 



$44, 304. 67 
633, 500. 00 
200, 000. 00 
75, 000. 00 

0) 
382, 000. 00 

0) 
141, 300. 00 

(') 
785, 000. 00 
106, 000. 00 
38, 000. 00 
800, 000. 00 
381, 750. 00 
90, 000. 00 



263 
53 
49, 

213, 

874, 
2, 033 

497, 
3, 168, 

188, 
50, 
18, 

929, 

240, 
21, 



066. 17 
619. 73 
168. 02 
352. 53 
840. 00 
769. 73 
255. 19 
326. 80 
834. 96 
400. 00 
880. 00 
627. 84 
615. 88 
502. 50 
600. 00 



897, 
253, 
124, 
213, 

2, 256, 

2, 033, 
638, 

3, 168, 

973, 

156, 

56, 

1, 729, 
622, 
111, 



370. 84 
119. 73 
168. 02 
352. 53 
840. 00 
769. 73 
255. 19 
626. 80 
834. 96 
400. 00 
880. 00 
627. 84 
615. 88 
252. 50 
600. 00 



Total 4, 676, 854. 67 8, 607, 859. 35 



13, 284, 714. 02 



1 Principal not yet due. 

Securities owned by the United States Government 

The aggregate amount of securities owned by the Government on 
June 30, 1934, based upon the latest reports received, was $17,026,- 
671,010.22 (including securities aggregating $235,445,700 acquired 
with funds originally advanced to the Reconstruction Finance Cor- 
poration) as against $14,776,524,896.68 on June 30, 1933, an increase 
of $2,250,146,113.54. A summary comparison of the holdings at 
the end of the last two fiscal years is as follows: 

Summary of securities owned by the United States on June SO, 1933 and 1934 





June 30, 1933 


June 30, 1934 


Increase (+) or 
decrease (— ) 


Foreign obligations: 

Received under debt settlements 

All other 


$11, 064, 038, 496. 50 
683, 210, 284. 67 


$11, 155, 851, 007. 57 
859, 205, 363. 64 


+$91, 812, 511. 07 
+175, 995, 078. 97 






Total 


11,747,248,781.17 
56, 334, 508. 04 

7, 000, 000. 00 

12,000,000.00 
2, 057, 959, 236. 28 


12, 015, 056, 371. 21 
59, 601, 795. 44 

7, 000, 000. 00 

12, 000, 000. 00 
3, 705, 424, 714. 69 


+267, 807, 590. 04 


Capital stock of war emergency corpora- 


+3, 267, 287. 40 


Capital stock, etc., of other Government 
corporations and credit agencies: 
Capital stock of Panama Railroad Co... 
Capital stock of Inland Waterways 






Reconstruction Finance Corporation 


+1, 647, 465, 478. 41 



58 



REPORT OF THE SECRETARY OF THE TREASURY 



Summarxj of securities owned by the United States on June 30, 1933 and 1934- 

Continued 



June 30, 1933 



June 30, 1934 



Increase (+) or 
decrease (— ) 



Capital stock, etc., of other Government 
corporations and credit agencies — Con. 

Capital stock of Federal Deposit Insur- 
ance Corporation 

Capital stock of Federal home loan 
banks ' 

Capital stock of Home Owners' Loan 
Corporation ' 

Capital stock (preferred and full-paid 
income shares) of Federal savings 
and loan associations _. 

Capital stock and paid-in surplus of 
Federal land banks 

Capital stock and paid-in surplus of 
Federal intermediate credit banks 

Capital stock of central bank for co- 
operatives 

Capital stock of banks for cooperatives. . 
Other obligations and securities: 

Railroad obligations.. 

Obligations acquired by Public Works 
Administration 

Notes received by Farm Credit Admin- 
istration evidencing outstanding ad- 
vances made from the revolving 
fund created by the Agricultural 
Marketing Act 

Securities received by Secretary of War. . 

Securities received by Secretary of Navy. 

Securities received by U. S. Shipping 
Board Bureau 



$42, 970, 000. 00 
1, 000, 000. 00 



124, 871, 729. 25 
60, 000, 000. 00 



38, 482, 257. 61 



465, 452, 216. 77 

828, 000. 00 

4, 924, 381. 40 

157, 453, 786. 16 



$150,000,000.00 
81, 445, 700. 00 
154, 000, 000. 00 

1, 086, 300. 00 

163, 883, 152. 16 

85, 000, 000. 00 

50, 000, 000. 00 
60, 000, 000. 00 

37,711,041.34 

145, 423, 423. 39 



150, 360, 286. 43 

828, 000. 00 

4, 909, 988. 20 

142, 940, 237. 36 



+$150, 000, 000. 00 
+38, 475, 700. 00 
+153, 000, 000. 00 

+ 1,086,300.00 

+39,011,422.91 

+25, 000, 000. 00 

+50, 000, 000. 00 
+60, 000, 000. 00 

-771, 216. 27 

+145, 423, 423. 39 



-315,091,930.34 



-14,393.20 
-14,513,548.80 



Total. 



14, 776, 524, 896. 68 



17,026,671,010.22 



+2, 250, 146, 113. 54 



1 Acquired with funds originally advanced to the Reconstruction Finance Corporation. 

There was a net increase during the year of $267,807,590.04 in the 
principal amount of obligations of foreign governments held by the 
United States. This increase was due to an increase of $267,874,750 
in the dollar equivalent of the German bonds held by the United 
States, which are in reichsmarks. On June 30, 1933, for purposes of 
showing the securities owned, the bonds were converted at 23.82 
cents to the reichsmark, whereas on June 30, 1934, the bonds were 
converted at 40.33 cents to the reichsmark. There was also a decrease 
of $67,159.96 in principal, due to a payment by the Government of 
Finland. A detailed statement of the securities held on June 30, 
1934, will be found as table 36, page 378. 

Trust funds invested by the Treasury 

Adjusted service certificate fund. — Investments for the account of the 
adjusted service certificate fund, created by the act of May 19, 1924, 
were made during the fiscal year 1934 in special issues of Treasury 
obligations bearing interest at the rate of 4 percent per annum in 
accordance with the procedure outlined on pages 118-120 of the 
Annual Report of the Secretary of the Treasury for the fiscal year 1925. 

Investments made during the year amounted to $180,100,000 of 
which $50,000,000 represented funds appropriated by Congress under 
the provisions of the act approved June 16, 1933; $126,100,000 repre- 
sented the principal proceeds of maturing notes reinvested; and 
$4,000,000 was derived from interest on investments. During the 



REPORT OF THE SECRETARY OF THE TREASURY 59 

year $154,300,000 face amount of securities (including $126,100,000 of 
maturing notes and notes amounting to $38,200,000 redeemed to meet 
current payments from the fund) were redeemed on account of the 
adjusted service certificate fund, the proceeds of which, together with 
interest thereon, were credited to the fund. 

According to reports received by the Treasury from the Veterans' 
Administration, net expenditures of the fund during the fiscal year 
1934 amounted to approximately $66,000,000, of which about 
$40,000,000 represented the net increase in direct loans to veterans. 

A statement of the fund as of June 30, 1934, as shown by the books 
of the Treasury (exclusive of fund assets held by the Veterans' 
Administration on account of bank loans on adjusted service cer- 
tificates redeemed amounting to $51,963,727.88 and direct loans to 
veterans amounting to $1,101,108,119.40) is as follows: 

Adjusted service certificate fund, June SO, 1984 

FUND ACCOUNT 

Appropriations: 

To June 30, 1933 $1, 196, 000, 000. 00 

Available July 1, 1933 50, 000, 000. 00 

$1, 246, 000, 000. 00 

Interest on investments: 

To June 30, 1933.... - 103,377,513.78 

July 1, 1933, to June 30, 1934 4, 614, 783. 61 

107, 992, 297. 39 

Total 1,353,992,297.39 

Checks paid by Treasurer of the United States, less credits on account of repayments of 
loans and interest thereon.. - 1,234,505,953.30 

Balance in fund June 30, 1934 119, 486, 344. 09 

FUND ASSETS 1 

Investments, 4 percent Treasury certificates of indebtedness.. 117,800,000.00 

Unexpended balances: 

To credit of chief disbursing officer, Division of Disbursement, and disbursing officers 
of the Veterans' Administration with the Treasurer of the United States 1,611,272.65 

To credit of fund on books of the Division of Bookkeeping and Warrants 75, 071. 44 

Total fund assets June 30, 1934 119,486,344.09 

Civil service retirement and disability fund.- — -The civil service retire- 
ment and disability fund was created by the act of May 22, 1920. 
During 1934 the Treasury continued to make investments for account 
of the fund in special issues of Treasury notes bearing interest at the 
rate of 4 percent per annum in accordance with the procedure outlined 
in the Annual Report of the Secretary of the Treasury for the fiscal 
year 1926. Total investments amounting to $47,700,000 were made, 
of which $16,900,000 represented the proceeds of maturing notes. 
Redemptions, in addition to the maturing notes, were made in the 
amount of $18,900,000 to meet current payments from the fund. 

Total credits to the fund during the fiscal year amounted to 
$60,221,817.47, of which $28,703,458.68 was on account of deductions 
from basic compensation of employees and service credit payments, 
$10,518,358.79 represented interest on investments, $20,850,000 was 
appropriated by Congress to fulfill the current liability of the United 
States Government in connection with the fund, and $150,000 was 
appropriated from the revenues of the District of Columbia to cover 
its liability on account of the fund. The total earnings and profits on 
investments to June 30, 1934, amounted to $59,748,989.07. 

' Exclusive of assets held by Veterans' Administration. 



60 REPORT OF THE SECRETARY OF THE TREASURY 

The following statement shows the status of the fund as of June 30, 
1934: 

Civil service retirement and disability fund, June 30, 1984 

Credits: 

On account of deductions from basic compensation of employees and 
service credit payments: 

From Aug. 1, 1920, to June 30, 1933. » $290, 760, 432. 58 

July 1, 1933, to June 30, 1934... 28, 703, 458. 68 

$319, 463, 891. 26 

Appropriations: 

To June 30, 1933 103, 450, 000. 00 

Available July 1, 1933 '21,000,000.00 

124,450,000.00 

Interest and profits on investments: 

From Aug. 1, 1920, to June 30, 1933 49, 230, 630. 28 

July 1, 1933, to June 30, 1934. — 10, 518, 358. 79 

59, 748, 989. 07 

Total... 503,662,880.33 

Less checks paid by Treasurer of the United States on account of annuities and refunds, 
Aug. 1, 1920, to June 30, 1934 241,608,546.38 

Total 262,054,333.95 

Assets: 

Face amount Principal cost 

$15, 811, 050 4<4 percent fourth Liberty Loan bonds $15, 605, 115. 98 

6, 884. 000 4!4-3>4 percent Treasury bonds, 1943-45 6, 794, 338. 03 

32, 400, 000 4 percent special Treasury notes payable June 30, 1935 32, 400, 000. 00 

64, 200. 000 4 percent special Treasury notes payable June 30, 1936 64, 200, 000. 00 

44, 000, 000 4 percent special Treasury notes payable June 30, 1937 44, 000, 000. 00 

72. 100, 000 4 percent special Treasury notes payable June 30, 1938 72, 100, 000. 00 

26, 000, 000 4 percent special Treasury notes payable June 30, 1939 26, 000, 000. 00 

261,099,454.01 

261, 395, 050 

Unexpended balances June 30, 1934: 

To credit of disbursing officers 406,801. 14 

On books of Division of Bookkeeping and Warrants 548, 078. 80 

954, 879. 94 

Total fund assets June 30, 1934 262, 054, 333. 95 

Foreign service retirement and disability fund. — The foreign service 
retirement and disability fund was established by section 18 of the 
act of May 24, 1924 (43 Stat. 144), and is under the administrative 
supervision of the Secretary of State, but under the act the Secretary 
of the Treasury is directed to make investments from time to time of 
such portion of the fund as in his judgment may not be immediately 
required for authorized payments, the income derived from such 
investments to be credited to the fund as a part thereof. 

Investments for account of the foreign service retirement and disa- 
bility fund were made during the fiscal year 1934 in special issues of 
Treasury notes in the face amount of $772,000, bearing interest at the 
rate of 4 percent per annum in accordance with the procedure outlined 
in the Annual Report of the Secretary of the Treasury for the fiscal 
year 1927. Redemptions during the year amounted to $454,000 face 
amount, including $246,000 maturing notes and $208,000 of notes 
redeemed to meet current payments from the fund. The net invest- 
ments amounted to $318,000. 

Credits to the fund during the year aggregated $554,936.29, of which 
$163,733.60 was on account of deductions from basic compensation of 
employees and service-credit payments, $98,502.69 represented earn- 
ings on investments, and $292,700 was appropriated by Congress to 

1 Exclusive of $1,430,808.84 transferred to the Canal Zone retirement and disability fund pursuant to act 
of May 2, 1931. 

' Includes $20,850,000 appropriated from the General Fund to cover the liability of the United States 
and $150,000 appropriated from the revenues of the District of Columbia to cover its liability in connection 
with the financing of the fund. 



REPORT OF THE SECRETARY OF THE TREASURY 61 

meet the current liability of the Government in connection with 
the fund. 

The following statement shows the status of the fund as of June 
30, 1934: 

Foreign service retirement and disability fund, June 30, 1934 
Credits: 

On account of deductions from basic compensation and service credit 
payments: 

From May 24, 1924, to June 30, 1933 $1,454,802.02 

July 1, 1933, to June 30, 1934 163, 733. 60 

$1, 618, 535. 62 

Appropriations: 

To June 30, 1933 1,276,000.00 

Available July 1, 1933 292, 700. 00 

1,568,700.00 

Interest and profits on investments: 

From May 24, 1924, to June 30, 1933 302, 586. 48 

July 1, 1933, to June 30, 1934.. 98,502.69 

401, 089. 17 

Total 3,588,324.79 

Less cheeks paid by Treasurer of the United States on account of annuities 
and refunds, May 24, 1924, to June 30, 1934 1, 107, 049. 63 

Balance in fund June 30, 1934.. 2, 481, 275. 16 

Assets: 

Face amount Principal cost 

$509, 000 4 percent special Treasury notes due June 30, 1935. $509, 000. 00 

440, 000 4 percent special Treasury notes due June 30. 1936. 440, 000. 00 

654, 000 4 percent special Treasury notes due June 30, 1937 654, 000. 00 

514, 000 4 percent special Treasury notes due June 30, 1938 514, 000. 00 

320, 000 4 percent special Treasury notes due June 30, 1939 320, 000. 00 

2,437,000.00 

2, 437, 000 

Unexpended balance June 30, 1934: 

Treasurer of the United States, disbursing account 23, 357. 22 

On books of Division of Bookkeeping and Warrants 20,917.94 

44, 275. 16 

Total fund assets June 30, 1934. 2, 481, 275. 16 

Canal Zone retirement and disability fund.- — The Canal Zone retire- 
ment and disability fund was created by section 9 of the act of March 
2, 1931 (46 Stat. L. 1477), and under section 10 of the act the Secretary 
of the Treasury is directed to make investments from time to time of 
such portions of the fund as in his judgment may not be immediately 
required for the payment of the annuities, refunds, and allowances 
authorized by the act, the income from such investments to be credited 
to the fund. 

Investments for account of this fund in the face amount of $97,000 
were made during the fiscal year 1934 in special issues of Treasury 
notes bearing interest at the rate of 4 percent per annum in accordance 
with the procedure outlined on page 125 of the Annual Report of the 
Secretary of the Treasury for the fiscal year 1931. Redemptions 
to meet current expenditures from the fund during the year amounted 
to $52,000 face amount, making net investments of $45,000 for the 
year. Credits to the fund during the year aggregated $595,157.46, 
of which $506,262.88 was on account of deductions from basic com- 
pensation of employees and service-credit payments, and $88,894.58 
represented earnings on investments. 



62 



REPORT OF THE SECRETARY OF THE TREASURY 



The following statement shows the status of the fund as of June 
30, 1934: 

Canal Zone retirement and disability fund, June 80, 1934 
Credits: 

Account of deductions from basic compensation of employees subject to 
retirement act: 

From July 1, 1931, to June 30, 1933 $2,683,686.93 

July 1, 1933, to June 30, 1934 506, 262. 88 

Interest and profits on investments: — * 3, 189, 949 - 81 

From July 1, 1931, to June 30, 1933 151,371.20 

July 1, 1933, to June 30, 1934 88,894.58 

— — 240, 265. 78 

Total 3, 430, 215. 59 

Less checks paid by Treasurer of the United States, on account of annuities 
and refunds, July 1, 1931, to June 30, 1934.... 1, 071, 694. 70 

Balance in fund June 30, 1934 2, 358, 520. 89 

Assets: 

Face amount Principal cost 

$1, 942, 000 4 percent special Treasury notes maturing June 30, 1936 $1, 942, 000. 00 

179, 000 4 percent special Treasury notes maturing June 30, 1937 179, 000. 00 

93, 000 4 percent special Treasury notes maturing June 30, 1938 93, 000. 00 

88, 000 4 percent special Treasury notes maturing June 30, 1939 88, 000. 00 

2,302,000 2,302,000.00 

Unexpended balances June 30, 1934: 

Treasurer of the United States, disbursing account 11,905.04 

On books of Division of Bookkeeping and Warrants 44,555.85 

56. 520. 89 

Total fund assets June 30, 1934 2,358,520.89 

District of Columbia teachers' retirement fund. — The act of January 
15, 1920, as amended by the District of Columbia appropriation act 
of June 5, 1920, vested the administration of this fund in the Commis- 
sioners of the District of Columbia, except that it was directed that 
such funds shall be held and invested by the Treasurer of the United 
States. A further amendment of June 11, 1926, created a reserve 
fund, provided for annual appropriations to this end, and provided 
that investments on account of such fund shall be held by the Treas- 
urer of the United States separate from the investments on account of 
contributions of teachers. During the fiscal year 1934, the Treasurer 
purchased for account of the deductions fund (derived from deduc- 
tions from teachers' compensation) $285,000 face amount of United 
States and Puerto Rican bonds at a principal cost of $308,777.26, as 
follows: 



Class of security 



4 percent Treasury bonds of 1944-54. _ 
4J4 percent Treasury bonds of 1947-52 
4J^ percent Puerto Rican bonds 



Face amount 



$43, 000. 00 

220, 000. 00 

16, 000. 00 



285, 000. 00 



Principal 
cost 



$44, 021. 25 

248, 793. 44 

15, 962. 57 



3, 777. 26 



There were also purchased for account of the Government reserves 
fund $202,000 face amount of United States and Puerto Rican bonds 
at a principal cost of $215,832.69, as follows: 



Class of security 



Face amount 



Principal 
cost 



4 percent Treasury bonds of 19 14-54 _ . 
4H percent Treasury bonds of 1947-52 
4J4 percent Puerto Rican bonds 



$12,000.00 
135, 000. 00 
55, 000. 00 



202, 000. 00 



$12. 285. 00 
148, 438. 13 
55, 109. 56 



215, 832. 69 



REPORT OF THE SECRETARY OF THE TREASURY 63 

The following statement shows the status of the combined funds 
as of June 30, 1934: 

District of Columbia teachers' retirement fund, June SO, 1934 
Credits: 

On account of deductions from basic compensation of teachers: 

From Jan. 15, 1920, to June 30, 1933 $3,403,324.77 

July 1, 1933, to June 30, 1934 291,646.59 

$3, 694, 971. 36 

Appropriations: 

To June 30, 1933 2,669,940.91 

Available July 1, 1933 400,000.00 

3,069,940.91 

Interest on investments: 

From Jan. 15, 1920, to June 30, 1933 1,057,939.33 

July 1, 1933, to June 30, 1934 219,477.40 

1,277,416.73 

Total 8,042,329.00 

Less disbursements on account of annuities, refunds, etc., Jan. 15, 1920, to 
June 30, 1934 2,418, 180.32 

Balance in fund June 30, 1934 - _. 5, 624, 148.68 

Assets: 

DEDUCTIONS FUND 

Face amount Principal cost 

$26, 850 4% percent First Liberty Loan converted bonds $27, 529. 64 

562,750 4}4 percent Fourth Liberty Loan bonds 541,497.81 

339, 200 414 percent Treasury bonds of 1947-52 367, 781. 44 

122,000 4 percent Treasury bonds of 1944-54 123,387.50 

87,000 3*4 percent Treasury bonds of 1946-56 87,437.81 

48,000 3?6 percent Treasury bonds of 1943-47 49,500.00 

142, 000 3?6 percent Treasury bonds of 1941-43 . 137, 657. 50 

232, 000 4H-&A percent Treasury bonds of 1943-45 232, 000. 00 

182, 000 4V 2 percent Philippine Islands bonds 197, 669. 56 

16,000 4y 2 percent Puerto Rican bonds 15,962.57 

55,320 4 percent Federal land bank bonds 54,660.95 

1,358,880 4}4 percent Federal land bank bonds 1,313,830.89 

459,440 4y 2 percent Federal land bank bonds 467,020.91 

91,380 4% percent Federal land bank bonds 94,627.91 

166,000 5 percent Federal land bank bonds 156,835.78 

3,867,400.27 

3, 888, 820 

= GOVERNMENT RESERVES FUND 

21, 000 4}4 percent Fourth Liberty Loan bonds 21, 183. 75 

135, 000 4M percent Treasury bonds of 1947-52 148, 438. 13 

12,000 4 percent Treasury bonds of 1944-54 12,285.00 

31,000 3 3 4 percent Treasury bonds of 1946-56 31,145.31 

199,000 3% percent Treasury bonds of 1943-47 204, 701. 25 

178, 000 3% percent Treasury bonds of 1941-43 177, 606. 56 

55, 000 4j/2 percent Puerto Rican bonds 55, 109. 56 

215,640 4 percent Federal land bank bonds 208,050.78 

819,600 4% percent Federal land bank bonds 776,281.48 

100 4?4 percent Federal land bank bonds 101. 64 

40,000 5 percent Federal land bank bonds.. 37,547.20 

1, 672, 450. 66 

1, 706, 340 

5, 539, 850. 93 

Accrued interest paid in 1934 (on investment purchases) , repayable in 1935 658. 04 

Unexpended balance June 30, 1934 on books of Division of Bookkeeping and 
Warrants - 83, 639. 71 

Total fund assets June 30, 1934 5,624,148.68 

Longshoremen's and harbor workers 1 compensation fund. — This fund 
was established under the act of March 4, 1927 (44 Stat. 1444, sec. 
44), to provide for the payment of compensation for disability or 
death resulting from injury to employees, in certain maritime employ- 
ments, and for the maintenance of employees undergoing vocational 
rehabilitation. Each employer is required to pay into the fund the 
sum of $1,000 as compensation for the death of an employee of such 
employer resulting from injury where it is determined that there is 
no person entitled under the act to receive compensation for such 
death. Fifty percent of each such payment shall be available for the 
payments on account of injury increasing disability and 50 percent 
shall be available for the payments on account of maintenance for 
employees undergoing vocational rehabilitation. 

90353—35 6 



64 



REPORT OF THE SECRETARY OF THE TREASURY 



The fund is administered by the United States Employees' Com- 
pensation Commission. Moneys not required for immediate dis- 
bursement are invested by the Treasurer of the United States. 

The following statement shows the status of the fund as of June 
30, 1934: 

Longshoremen' s and harbor workers' compensation fund, June 80, 1984 

Credits: 

On account of assessments: 

To June 30, 1933 $110,000.00 

July 1, 1933, to June 30, 1934 10,000.00 



Interest on investments: 

To June 30, 1933 

July 1, 1933, to June 30, 1934. 



$120, 000. 00 



9, 731. 92 
4, 327. 85 



14, 059. 77 

Total 134,059.77 

Less disbursements on account of current claims and expenses 21.041.64 

Balance in fund June 30, 1934 113,018. 13 



Assets: 

Face amount Principal co.it 

$47,600 4J4 percent fourth Liberty Loan bonds 1933-38 $47,988.64 

5,500 4J4 percent Treasury bonds, 1947-52 5,840.31 

11,550 4H-3J4 percem Treasury bonds, 1943-45 11,550.00 

11,000 4J4 percent Federal land bank bonds- 9, 680. 48 

11,000 4H percent Federal land bank bonds 9,542.97 



10.000 3 percent Treasury bonds 1951-55. 
11,000 AYi percent Federal farm loan bonds. 



107,650 

Unexpended balances: 

Disbursing Officer (check book balances). 

Division of Bookkeeping and Warrants. . 



9, 959. 38 
9,171.77 



1, 093. 27 
8, 191. 31 



103, 733. 55 



9, 284. 58 



Total fund assets June 30, 1934 113,018. 13 

Library of Congress trust fund. — Under the act of March 3, 1925, 
as amended, a Library of Congress Trust Fund Board, consisting of 
the Secretary of the Treasury, the chairman of the Joint Committee 
on the Library, the Librarian of Congress, and two persons appointed 
by the President, is authorized to accept, receive, hold, and administer 
such gifts or bequests of personal property for the benefit of or in 
connection with the Library, its collections, or its service as may be 
approved by the Board and by the Joint Committee on the Library. 
The moneys or securities given or bequeathed to the Board are required 
to be receipted for by the Secretary of the Treasury, who is authorized 
to invest, reinvest, or retain investments as the Board may determine. 
In accordance with the policy adopted by the board, investments 
and reinvestments of the trust funds are made in interest-bearing 
securities of high rating. 

The following statement shows the earnings collected on account 
of each donation as of June 30, 1934: 

Library of Congress trust fund earnings to June 30, 1934 



Donation 



Income account 



Total col- 
lected to 
June 30, 1933 



Collected 

during fiscal 

year 1934 



Total col- 
lected to 
June 30, 1934 



Babine 

Beethoven... 
Benjamin... 
Bowker 

Carnegie 

Coolidge 

Guggenheim 
Huntington. 
Longworth.. 
Wilbur 

Total.. 



$571. 25 

1, 729. 96 

20, 000. 50 

629. 82 

20, 390. 06 

54, 274. 68 

12, 861. 67 

34, 882. 46 

13.97 

45, 096. 15 



$250. 51 

504. 75 

1, 352. 00 

110.30 

3, 486. 80 

6, 815. 39 

3, 785. 15 

4, 247. 50 

54.93 
13, 336. 62 



$821. 76 

2, 234. 71 

21, 352. 50 

740. 12 

23, 876. 86 

61,090.07 

16, 646. 82 

39, 129. 96 

68.90 

68, 432. 77 



190, 450. 52 



33, 943. 95 



224, 394. 47 



REPORT OF THE SECRETARY OF THE TREASURY 



65 



The following statement shows the principal cash accounts for 
each donation: 

Library of Congress trust fund — Cash receipts, cost of investments, and unexpended 

balances, fiscal year 1934 



Donation 



Principal account 



Unex- 
pended 
balance, 
June 30, 
1933 



Cash re- 
ceipts dur- 
ing fiscal 
year 1934 



Cash avail- 
able during 
fiscal year 



Cost of in- 
vestments 
made dur- 
ing fiscal 
year 



Unex- 
pended 
balance, 
June 30, 
1934 



Babine 

Beethoven. .. 
Benjamin— . 

Bowker 

Coolidge 

Guggenheim 
Huntington. 
Longworth.. 
Wilbur 

Total.. 



$38. 16 
4.00 
26.62 
45.68 
18.38 
39.60 
33. 75 
39.38 

225. 83 



$250. 00 



5, 284. 70 
103, 609. 81 



$38. 16 

4.00 

26.62 

45.68 

268. 38 

39.60 

33.75 

5, 324. 08 

103, 835. 64 



$4, 351. 03 
103, 635. 00 



471. 40 



109, 144. 51 



109, 615. 91 



107, 986. 03 



$38. 16 

4.00 

26.62 

45.68 

268. 38 
39.60 
33.75 

973. 05 

200. 64 



1, 629. 88 



The board received on account of the securities held in the donation 
of Mrs. Elizabeth Sprague Coolidge the sum of $250 representing 
5 percent payment on account of $5,000 face amount of Chicago 
Railway 5 percent bonds. Cash donations aggregating $3,930 were 
received on account of the Longworth Foundation. There was also 
received during the year on account of this donation $1,354.70 
from maturing investments. Receipts aggregating $103,609.81 were 
received from maturing investments held for account of the Wilbur 
donation; $1,000 face amount of called fourth Liberty Loan 4% 
percent bond held for account of the Babine donation was exchanged 
for $1,000 face amount of 4:%-3% percent Treasury bonds of 1943-45. 

Investments made during the year were as follows: 



Donation 


Face 
amount 


Securities 


Principal 
cost and 
accrued 
interest 




$4, 100 




$4,316.81 




Accrued interest paid on above bonds (reimbursable to 
principal account). 


34.22 


Wilbur 


100, 800 


103, 635. 00 








Total.... 


104, 900 


107, 986. 03 









The following statement shows the securities held by the Board for 
account of each donation as of June 30, 1934. The securities are 
held in safe-keeping by the Treasurer of the United States, and the 
Federal Reserve Bank of New York, subject to the order of the 
Secretary of the Treasury for account of the Board. 



66 REPORT OF THE SECRETARY OF THE TREASURY 

Library of Congress Trust Fund Board securities held June SO, 1984 



Name of security 



Alexis V. Babine donation 



American Chain Co., Inc. 
Federal land hank bonds. 

U. S. Government 

U. S. Government 



Tuns-Sol Lamp Works, Inc., 2 shares. 
Tung-Sol Lamp Works, Inc., 4 shares. 

Beethoven Association donation 



Canadian National Railway. 
Federal land bank bonds 



William E. Benjamin donation 
Standard Oil Co. of California 



R. R. Bowker donation 2 



Austrian Government 

German Government 

J apanese Government 

American Telephone & Telegraph Co. 



Carnegie donation 

Commonwealth Edison Co 

Federal land bank bonds 

Missouri Pacific R. R. Co 

New England Telephone & Telegraph Co. 

Eli2abeth Sprague Coolidge donation 

Canadian National Railways Co 

Do 

Chicago Railways Co 

Federal land bank bonds 

Do 

Do 

Great Northern Ry. Co 

Houston Home Telephone Co 

Missouri Pacific R. R. Co 

New England Telephone & Telegraph Co. 

Public Service Co. of Northern Illinois 

Rio Grande Southern R. R. Co 

U. S. Government 

Utah Power & Light Co 

American Ship Building Co 

American Telephone & Telegraph Co 

American Window Glass Co 

Board of Trade Building Trust of Boston.. 

Commonwealth Edison Co 

Elgin National Watch Co 

Mexican Northern Ry. Co 

Public Service Co. of Northern Illinois 



Harry F. Guggenheim donation 

Federal land bank bonds 

Harbor Commissioners of Montreal 

Archer M. Huntington donation 

Central Pacific Ry. Co 

Federal land bank bonds 

Missouri Pacific R. R. Co 



Nicholas Longworth donation 
U. S. Government 



James B. Wilbur donation 

Canadian National Railways 

Federal land bank bonds 

Do 

Public Service Co. of Northern Illinois. 
U. S. Government 

Do 



Total. 



Face 

amount 



$600 
3. soo 
1,000 
1.000 

0) 
0) 



10, 000 
100 



33,800 



1,000 
2, 000 
2,000 
4,800 



52, 000 

80 

5,000 

25, 400 



7,000 
10, 000 
3, 750 
ll,fi40 
2, GOO 
680 
10,000 
100 
2,000 

16, 400 
13, 000 

1,000 

300 

10, 000 

6,000 

17, 100 
2,500 

700 
12,400 
5, 625 

800 
5,000 



740 
75, 000 



105, 000 

1,000 

49, 500 



4,100 



44, 000 

16, 300 

280 

100, 000 

3,000 

100, 800 



780, 895 



Rate 



Percent 
7 

4H 



,5 

4M 



5 



f 3 4 

5 

5 

4K 

*H 

iM. 

7 

5 

5 

*M 

5 

4 

W% 

5 



4 S( 

5 



4 

I 3 } 
.5 



5 

m 

7 
4 



Class of security 



Preferred stock. 

Farm loan bonds. 

Fourth Liberty Loan bonds of 1933-38. 

414-3K percent Treasury bonds of 

1943-45. 
Preferred stock. 
Common stock. 



Guaranteed gold bonds. 
Farm loan bonds. 



Common stock. 



Sinking fund bonds guaranteed loan. 
German external loan. 
Sinking fund gold bonds. 
Common stock. 



First mortgage bonds. 

Farm loan bonds. 

First and refunding mortgage bonds. 

First mortgage bonds. 



Guaranteed gold bonds. 

Do. 
First mortgage bonds. 
Farm loan bonds. 

Do. 

Do. 
General mortgage bonds. 
First mortgage bonds. 
First and refunding mortgage bonds. 
First mortgage bonds. 
First and refunding mortgage bonds. 
First mortgage bonds. 
Treasury bonds of 1940-43. 
First mortgage bonds. 
Common stock. 

Do. 

Do. 

Do. 

Do. 

Do. 

Do. 
Preferred stock. 



Farm loan bonds. 
Guaranteed gold bonds. 



First and refunding mortgage bonds. 

Farm loan bonds. 

First and refunding mortgage bonds. 



Treasury bonds of 1944-54. 



Guaranteed gold bonds. 
Farm loan bonds. 

Do. 
Preferred stock. 
Treasury bonds of 1940-43. 
Treasury bonds of 1944-54. 



1 No par. 

* Life interest in ¥i of income retained under terms of donation. 



REPORT OF THE SECRETARY OF THE TREASURY 



67 



United States Government life insurance fund. — Under the provisions 
of section 18 of the act approved December 24, 1919, as amended 
March 4, 1923, the Secretary of the Treasury is required to invest in 
interest-bearing obligations of the United States or in bonds of the 
Federal land banks all moneys received in payment of premiums on 
converted insurance in excess of authorized payments. The act 
approved March 3, 1927, as amended by the Emergency Adjusted 
Compensation Act of February 27, 1931, authorized the Administra- 
tor of Veterans' Affairs to make loans to veterans upon their adjusted 
service certificates out of the United States Government life insurance 
fund. All of the funds available for investment during the fiscal year 
1934 were used to make loans to veterans or invested in obligations 
of the United States. The Administrator of Veterans' Affairs reported 
outstanding loans to veterans from this fund, June 30, 1934, on policies 
and adjusted service certificates, aggregating $550,061,163.97. The 
net increase in loans on adjusted service certificates during the year 
amounted to $33,346,218.45. 

Monthly reports are made by the Treasury to the Veterans' 
Administration of all securities in the fund and the principal cost 
thereof as the result of investments made by the Secretary of the 
Treasury, and periodic verifications of the security holdings are made 
through reports rendered to the Administrator by the safe-keeping 
offices. The investments as of June 30, 1934, were as follows: 

Government life insurance fund, June 30, 1934 



4J4 percent Treasury bonds of 1947-52.. 

4 percent Treasury bonds of 1944-54 

3% percent Treasury bonds of 194C-56 

4H percent Federal farm loan bonds 

4J^ percent Federal farm loan bonds 

Total investments made by the Secretary of the Treasury 

Policy loans. 

Adjusted service certificate loans 

Total investments made by Administrator of Veterans' Affairs 
Total investments in fund 



Par value Principal cost 



$35, 479, 

6,371, 

200, 

32, 550, 

69, 200, 



000. 00 
000. 00 
000. 00 
000. 00 
000. 00 



143,800,000.00 



121,718, 
428, 343, 



128.89 
035. 08 



550,061,103.97 



693, 861, 163. 97 



$36, 190, 

6, 680, 

207, 

32, 477, 

69, 742, 



122.74 
295. 98 
437. 50 
590. 04 
644. 40 



145, 298, 090. 66 



121, 718, 
428, 343, 



128. 89 
035. 08 



550. 061, 163. 97 



695, 359, 254. 63 



National Institute of Health gift fund. — The National Institute of 
Health was created by the act of May 26, 1930 (46 Stat. 379), for 
the purpose of creating a system of fellowships in said institute, and 
to authorize the Government to accept donations for use in ascertain- 
ing the cause, prevention, and cure of diseases affecting human 
beings, and for other purposes. 

Under the provisions of section 2 of the act, the Secretary of the 
Treasury is authorized to accept, on behalf of the United States, 
gifts made unconditionally by will or otherwise for study, investiga- 
tion, and research in the fundamental problems of diseases of man 
and matters pertaining thereto, and for the acquisition of grounds 
or for the erection, equipment, and maintenance of buildings and 
premises. 

The Secretary of the Treasury is also authorized to accept condi- 
tional gifts if recommended by the Surgeon General of the Public 
Health Service and the National Advisory Health Council. Any 
such gifts shall be held in trust and shall be invested by the Secretary 
of the Treasury in securities of the United States, and the principal 
or income thereof shall be expended by the Surgeon General, with the 



68 REPORT OF THE SECRETARY OF THE TREASURY 

approval of the Secretary of the Treasury, for the purposes indicated 
in the act. 

No gifts were received during the year. In order to meet expendi- 
tures of the institute, $1,000 face amount of 4^ percent Treasury 
bonds of 1947-52 was sold. The receipts and expenditures during 
the year were as follows: 

Receipts and expenditures during 1934 

Unexpended balance June 30, 1933 - $847. 56 

Receipts: 

Net earnings collected during year on investments - 3,739.03 

Principal cost of securities sold during year -.- - 1,115.68 

Total - 5,702.27 

Expenditures: Advances to institute - --- 4, 2] 8- 67 

Unexpended cash balance June 30, 1934 1, 483. 60 

The following statement shows the status of the fund as of June 
30, 1934: 

National Institute of Health conditional gift fund, June 80, 1934 

Credits: 

Principal proceeds of donated securities redeemed at par at maturity - $100, 000. 00 

Net earnings on investments --- 12, 860. 90 

Total - - - 112,860.90 

Less advances to meet expenditures on account of the institute -- 13, 197. 69 

Balance in fund June 30, 1934 - - 99,663.21 

Assets* 

$88,000 face amount 4J4 percent Treasury bonds of 1947-52, principal cost 98, 179. 61 

Unexpended balance to credit of the fund on books of Division of Bookkeeping and War- 
rants. — - 1,483.60 

Total fund assets June 30, 1934 99, 663. 21 

Alien property trust fund. — Under the act of October 6, 1917, as 
amended, and the Settlement of War Claims Act of 1928, approved 
March 10, 1928 (44 Stat. 254), as amended, the Secretary of the 
Treasury held on June 30, 1934, Government securities in the face 
amount of $26,710,000 for account of the Alien Property Custodian. 
During the year the following transactions were made in this account. 

Securities: Face amount 

Held June 30, 1933 — - $28,976,500.00 

Sold or redeemed.... - - 2, 266, 500. 00 

Held June 30, 1934 - — - 26,710,000.00 

A statement of the alien property trust fund as of September 15, 
1934, follows: 

Alien property trust fund as of Sept. IB, 1934 
Credits: 

Trusts - $36,920,029.87 

Earnings on investments, etc - -- --- 30, 763, 799. 20 

Total 67,683,829.07 

Assets: Principal at 

Face amount amortized cost 

$9,800,000 4 percent Treasury bonds 1944-54.... $10,432,461.93 

11,250,000 4 H percent Fourth Liberty Loan bonds 11,250,000.00 

5,100,000 4J4-3M percent Treasury bonds 1943-45 5,100,000.00 

350. 000 3W percent Treasury notes maturing Aug. 1, 1936 353, 828. 13 

200, 000 3J4 percent Treasury notes maturing Sept. 15, 1937 203, 000. 00 

10,200 2}i percent Treasury notes, series A-1939 10,413.56 

27,349,703.62 

26, 710, 200 

Accrued interest receivable - 390, 461. 51 

Participating certificates issued under section 25 (e) of the Trading With the Enemy 
Act - 

Noninterest-bearing. - $21, 750, 000. 00 

5 percent interest-bearing.. 17,552,096.91 

39,302,096.91 

Cash with Treasurer of the United States < 641, 667. 03 

Total fund assets, Sept. 15, 1934 67,683,829.07 



REPORT OF THE SECRETARY OF THE TREASURY 69 

Checks issued by the Treasury Department during the fiscal year 
on account of the alien property trust fund were as follows: 

To claimants upon authorizations of the Alien Property Custodian and the Attorney Gen- 
eral $1,636,827.58 

To the Alien Property Custodian for — 

Distribution of income... 1,910, 171.92 

Distribution of Government earnings 500,000.00 

Administrative expenses.. 250,000.00 

Total 4,296,999.50 

General railroad contingent fund.- — The general railroad contingent 
fund was created by paragraph 6 of section 15 (a) of the Interstate 
Commerce Act, approved June 18, 1910, as amended by the act of 
February 28, 1920 (41 Stat. 489). Under the provisions of this 
section any carrier which received for any year a net railway operat- 
ing income in excess of 6 percent of the value of the railway's property 
held for and used by it in the service of transportation was required 
to place one half of such excess in a reserve fund established and 
maintained by and for use of the carrier, the other half to be paid to 
the Government for deposit in the general railroad contingent fund. 

Under the provisions of section 15 (a) of the Interstate Commerce 
Act as amended by section 206 (a) of the Emergency Railroad Trans- 
portation Act, 1933, approved June 16, 1933, the Secretary of the 
Treasury is directed to liquidate the general railroad contingent fund 
and to distribute the fund among the carriers which have made 
payments under that section. 

A statement showing the distribution by the Secretary of the Treas- 
ury of the general railroad contingent fund as of October 31, 1933, 
is included in the annual report of the Secretary of the Treasury for 
the fiscal year 1933 as exhibit 40, page 270. During the year ended 
June 30, 1934, the Treasury made refunds to the following carriers: 

Fianklin & Abbeville Ry. Co $22,404.18 

Gideon & North Island R. R. Co 1,484.77 

Jonesboro, Lake City & Eastern R. R. Co 56.234.48 

Kinston Carolina R. R. Co.. 91.82 

Potato Creek R. R. Co 1,575.82 

Sugar Land Ry. Co 40,246.05 

Wichita Falls & Southern R. R. Co 521.04 

Total 122,558.16 

All amounts due carriers have been paid except the sum of $30,000 
due the Genesee & Wyoming R. R. Co. and the sum of $2,388.61 due 
the Central Railroad Co. of Arkansas. The existence of the latter 
corporation has terminated. A refund will be made as soon as it is 
determined who is entitled to receive payment. 

The following statement shows the status of the fund as of June 

30, 1934: 

General railroad contingent fund, June SO, 193 4 

Credits: 

Excess earnings deposited in Treasury under section 15 (a) of the Interstate Commerce 

Act $10,739,279.57 

Interest and profits on investments 3,735,720.97 

Total 14,475,000.54 

Deduct: 

Amounts refunded prior to passage of Emergency Rail- 
road Transportation Act of 1933: 

Illinois Terminal Co $800,000.00 

Tuckerton R. R. Co 2,164.28 

Washington Run R. R. Co. 3,167.20 

$805,331.48 

Amounts refunded to June 30, 1934, under Emergency 

Railroad Transportation Act of 1933 13,637,280.45 

14,442,611.93 

Balance in fund June 30, 1934.. 32, 388. 61 



70 REPORT OF THE SECRETARY OF THE TREASURY 

Special funds 

Colorado River Dam fund.- — This fund was established under the 
act of December 21, 1928, to provide for the construction of works 
commonly referred to as the Boulder Canyon project. All revenues 
received in carrying out the provisions of the act are payable into the 
fund. Expenditures are made out of the fund under the direction of 
the Secretary of the Interior. 

The Secretary of the Treasury is authorized to advance to the fund, 
from time to time, within the appropriations therefor, such amounts 
as the Secretary of the Interior deems necessary for carrying out the 
provisions of the act, except that the aggregate amount of such 
advances shall not exceed the sum of $165,000,000. Of this amount, 
$25,000,000 shall be allocated to flood control, and shall be repaid to 
the United States out of 62 }{ percent of revenues, if any, in excess of 
the amount necessary to meet periodical payments during the period 
of amortization, as provided in section 4 of the act. If the $25,000,000 
is not repaid in full during the period of amortization, then 62 % per- 
cent of all net revenues shall be applied to payment of the remainder. 

The Secretary of the Treasury is required to charge the fund, as of 
June 30 each year, with such amount as may be necessary for the 
payment of interest at the rate of 4 percent per annum accrued during 
the year upon the amounts advanced from the General Treasury and 
remaining unpaid, except that if the fund is insufficient to meet the 
payment of interest the Secretary of the Treasury may, in his dis- 
cretion , defer any part of such payment, and the amount so deferred 
shall bear interest at the rate of 4 percent per annum until paid. 
Under an opinion of the Attorney General of the United States, dated 
December 26, 1929, funds advanced from the General Treasury to 
the Colorado River Dam fund for construction costs of the all- 
American canal are not subject to the interest charge. To date, 
however, no funds have been advanced to the fund on account of the 
all-American canal. 

On June 30, 1934, the liability of the Colorado River Dam fund to 
the General Fund of the Treasury amounted to $61,508,529.64 repre- 
senting advances in the sum of $58,058,561.96 and interest in the 
amount of $3,449,967.68. Upon recommendation of the Secretary of 
the Interior and in accordance with the authority contained in sec- 
tion 2 (d) of the act of December 21, 1928, the Secretary of the 
Treasury deferred for one year the payment of the total amount of 
interest due on June 30, 1934, of $3,449,967.68. 

The status of the fund as of June 30, 1934, was as follows: 

Colorado River Dam fund, June SO, 1934 

Advances from General Fund: 

Fiscal year 1931 $1,745,866.46 

Fiscal year 1932 - 17,018,608.34 

Fiscal year 1933 19,709,297.48 

Fiscal year 1934.... 19, 584, 789. 68 

T . . $58, 058, 561. 96 

Interest: 

Fiscal year 1931 - 25,631.58 

Fiscal year 1932 355.029.92 

Fiscal year 1933_ 1, 161, 488. 18 

Fiscal year 1934 1,933,449.58 

Total - 3,475,599.26 

Less amount covered into Treasury as miscellaneous receipts 25, 631. 58 

'3,449,967.68 

Total liability to General Fund - 61, 508, 529. 64 

i Payment of interest due June 30, 1934, $3,449,967.68 deferred for 1 year under sec. 2 (d) of the act of Dec. 
21, 1928. 



REPORT OF THE SECRETARY OF THE TREASURY 71 

Advances to reclamation fund. — Under the act of Congress approved 
June 17, 1902 (32 Stat. 388), there was established in the Treasury a 
special fund known as the "reclamation fund", representing receipts 
from the sale of public lands in certain States and Territories to be used 
for the construction of irrigation works for the reclamation of arid 
lands. Pursuant to the act of Jane 25, 1910 (36Stat.835),theSecretary 
of the Treasury advanced to the reclamation lund from the General 
Fund of the Treasury $20,000,000. The act of June 12, 1917 (40 Stat. 
149), provides for the reimbursement of the money so advanced 
through the transfer of $1,000,000 annually from the reclamation fund 
to the General Fund of the Treasury beginning July 1, 1920, and con- 
tinuing until full reimbursement is made. Beginning with the fiscal 
year 1921 there has been returned to the General Fund $1,000,000 
annually, making a total of $10,000,000 for the 10 years ended with 
the fiscal year 1930. The Deficiency Act of February 6, 1931, provided 
for a suspension of the annual payments for a period of two years and 
the act of April 1, 1932, as amended by the act of March 3, 1933, 
provided a further extension until the fiscal year beginning July 1, 
1936. 

The Deficiency Act of March 4, 1931, authorized an additional 
advance to the reclamation fund from the General Fund of $5,000,000 
all of which was advanced between April 28, 1931, and November 30, 
1931. 

The following statement shows the status of the account as of 
June 30, 1934: 

Charges: 

Advances from the General Fund: 

Under act of June 25, 1910 $20, 000, 000 

Under act of Mar. 4, 1931 5,000,000 

Total 25,000,000 

Less repayment of advances to June 30, 1930 '. 10,000,000 

Unreimbursed balance. 15,000,000 

Division of Bookkeeping and Warrants 

The Division of Bookkeeping and Warrants, in the name of the 
Secretary of the Treasury, issues all warrants on the Treasurer of the 
United States, and under section 10 of the act of July 31, 1894 (U. S. C, 
title 5, sec. 255), keeps the official accounts relating to the receipt, 
appropriation, and expenditure of the public money, covering all 
departments and establishments of the Government. Other duties 
of the Division include the preparation of the annual digest of appro- 
priations and the combined statement of receipts and expenditures, 
and the handling of duplicate checks, outstanding liability claims, 
budget matters, special deposit accounts, etc. The Division also 
maintains budgetary accounts relating to the apportionment and 
obligation of public funds covering all executive departments and 
independent establishments. 

Statements of the receipts and expenditures of the Government for 
the fiscal year 1934, compiled by this Division, are shown as tables 
1 and 2, pages 276 to 293 of this report. 

» Installments'for 1931-36 suspended. 



72 



REPORT OF THE SECRETARY OF THE TREASURY 



Division of Deposits 

The Division of Deposits is charged with the administration of 
matters pertaining to the designation and supervision of Government 
depositaries and the deposit of Government funds in such depositaries. 
The regulations of the Treasury governing the deposit of public funds 
in depositaries are incorporated in Department Circulars Nos. 176 
and 92. 

The following statement shows the number and classes of deposi- 
taries maintained by the Treasury and the Government deposits 
held by such depositaries on June 30, 1934: 

Number of depositaries and amount of Government deposits held on June SO, 1984, 

by class of depositaries 

[On basis of daily Treasury statements (revised), see p. 273] 



Depositaries 



Federal Reserve banks (including branches) 

Member bank depositaries: 

To credit of Treasurer of the United States 

To credit of other Government officers 

Insular depositaries (including Philippine treasury) : 

To credit of Treasurer of the United States 

To credit of other Government officers 

Foreign depositaries: 

To credit of Treasurer of the United States 

To credit of other Government officers 

Special depositaries 

Total.. 




$64, 185, 068. 68 

6, 437, 148. 95 
24, 319, 522. 60 

1,220,034.09 
89, 077. 92 

1, 338, 468. 05 

1,750,451.20 

1,854,045,099.45 



1, 953, 384, 870. 94 



i In addition 217 branch banks are carried on the depositary list of the Treasury under the designation 
of the parent banks. 

2 Includes 2,018 national banks and 1,422 State banks and trust companies, of which 2,066 held deposits 
on June 30, 1934. 

Several factors contributed toward unusual activity in the Treas- 
ury's depositary system during the fiscal year ended June 30, 1934, 
principally the rapid progress made by the Comptroller of. the Cur- 
rency in the reopening of unlicensed banks under old or new charters, 
or absorption by going banks, the establishment of new bureaus and 
agencies of the Government, requiring additional depositary facilities, 
and the increased number of special depositaries which were qualified 
to make payment by credit for Government securities purchased 
under the terms of Department Circular No. 92. On March 16, 1933, 
approximately one-third of the regular depositaries were unlicensed. 
At the end of June 1934, all cases, with a few exceptions, had been 
adjusted. During the fiscal year 1934, approximately 1,300 changes 
and adjustments were effected within the depositary system, including 
new designations; some were necessary to meet new or changed 
governmental requirements and others resulted from reorganization 
of depositaries under new charters, the cancelation of designations 
in cases involving the curtailment or termination of governmental 
activities in certain localities, or the liquidation of existing depositaries, 
and other adjustments involving changes in the balances carried 
with general or limited depositaries. Changes in the collateral se- 
curity accounts of depositary banks were abnormal, chiefly as the 
result of the Treasury's call for redemption of? 4% percent Fourth 
Liberty Loan bonds on October 15, 1933, and April 15,^1934, and 



REPORT OF THE SECRETARY OF THE TREASURY 73 

the issuance of new Government securities and of securities guaran- 
teed by the Government, either as to interest or principal, or both, 
all of which were made eligible as collateral security for Government 
deposits supervised by the Secretary of the Treasury. (Amendments 
to Department Circulars Nos. 92 and 176, in this connection, will 
be found as exhibits 40 and 41 on pp. 255 and 256.) 

The adjustment of depositary accounts in banks closed for liquida- 
tion during the past two years has proceeded in orderly fashion and was 
substantially completed during the past fiscal year. To date, the 
United States has not sustained any losses through the failure of 
depositary banks. 

As indicated on page 70 of the annual report for the fiscal year 1933, 
the collection of interest upon Government deposits carried with 
banks by the Secretary of the Treasury, terminated by June 30, 1933, 
except in the case of certain special deposits. The total of all interest 
received by the Treasury to June 30, 1934, from all depositaries 
designated by the Secretary of the Treasury, including past-due 
interest accrued on deposits to June 30, 1933, is $112,702,126.59, 
according to the latest revised figures. 

Section of Surety Bonds 

On June 30, 1934, there were 62 domestic companies holding certifi- 
cates of authority from the Secretary of the Treasury under the act 
of Congress approved August 13, 1894, as amended by the act of 
Congress approved March 23, 1910, qualifying them as sole sureties 
on recognizances, stipulations, bonds, and undertakings permitted 
or required by the laws of the United States, to be given with one or 
more sureties. There were also 2 domestic companies and 5 branches 
of foreign companies holding certificates of authority authorizing 
them to act only as reinsurers on bonds in favor of the United States. 
Changes in the outstanding certificates of authority during the period 
ended June 30, 1934, are indicated in the following table: 

Companies authorized as of June 30, 1933 71 

Changes during the year ended June 30, 1934: 
Certificates terminated: 

Companies in process of liquidation 3 

Company in rehabilitation 1 

4 

Certificates issued - 2 

Net reduction in number 2 

Companies authorized as of June 30, 1934 69 

In accordance with the practice of the Treasury, a number of 
departmental circulars to the heads of departments and independent 
establishments of the Government, bond-approving officers, and 
others concerned, have been issued during the past year to advise 
such officials of the status of the bonds in favor of the United States 
executed by the companies whose certificates of authority were 
terminated. These circulars are numbered as follows: 492, 493, 495, 
496, 497, 510, and 511. 

Division of Disbursement 

The Division of Disbursement was organized December 16, 1933, 
under the provisions of section 4 of Executive Order No. 6166, which 
transferred the function of disbursement of moneys of the United 



74 REPORT OF THE SECRETARY OF THE TREASURY 

States exercised by any agency of the executive branch of the Govern- 
ment to the Division of Disbursement of the Treasury Department. 
The office of the Disbursing Clerk of the Treasury Department was 
transferred on December 16, 1933, and one week later the disbursing 
functions of eight independent establishments were likewise trans- 
ferred. At various times up to June 1, 1934, this function was trans- 
ferred from each of the departments and independent establishments 
located in Washington, except the Post Office Department, the Panama 
Canal, and that portion of the War and Navy Departments relating 
to national defense. 

The personnel, supplies, equipment, and appropriations which were 
available for the disbursing work performed by these various depart- 
ments and establishments were transferred to the Division of Disburse- 
ment as provided by the Executive order. The Division has been 
furnished quarters in the Treasury Annex, with an assignment of 
space in the old Post Office Building, for making rental and benefit 
payments for the Agricultural Adjustment Administration, and on 
June 30, 1934, had a force of approximately 700 employees. As the 
consolidation has been effected, the various accounts have been 
merged when possible without conflicting with established accounting 
procedures. 1 

In March 1934, at the request of the Federal Emergency Relief 
Administration, the Division of Disbursement established an office at 
Oklahoma City, Okla., for the purpose of disbursing relief administra- 
tion funds in that State. About a month later offices at Boston, Mass., 
and Bismarck, N. Dak., were established for the same purpose. 

During the month of June, field offices were established at Minne- 
apolis, Kansas City, and San Francisco for the purpose of making dis- 
bursements in connection with emergency purchases of livestock and 
seed under the drought relief program of the Agricultural Adjustment 
Administration. It is anticipated that additional offices in other 
parts of the country will be established in the near future for the same 
purpose. 

At various times assistant disbursing officers of the Division have 
been sent to various localities in order to make payments for land 
purchased for slum eradication projects of the Public Works Ad- 
ministration. 

The Division has been requested by several of the Government- 
owned corporations to perform the disbursing services for those organ- 
izations, and as new agencies of the Government have been created, 
the Division has assumed the function of disbursement for those 
agencies. Among the largest agencies for which the function of dis- 
bursement has been assumed are the Railway Labor Retirement 
Board and the Federal Housing Administration. 

On June 30, 1934, the Division of Disbursement was issuing in 
Washington an average of approximately 75,000 checks per day in 
payment of pay rolls and vouchers. The various field offices were 
issuing an average of approximately 50,000 checks per day, and in 
addition, the offices disbursing emergency relief funds were making 
several thousand payments in cash each week for the relief of transients. 

1 On July 1, 1934, all disbursements by the Division were consolidated in the account of the Chief Disburs- 
ing Officer. 



REPORT OF THE SECRETARY OF THE TREASURY 75 

DIVISION OF APPOINTMENTS 

Number of employees 

For the fiscal year ended June 30, 1934, there was a net increase 
of 2,310 in the number of employees in the Treasury Department in 
Washington. The principal increases occurred in the Office of the 
Treasurer, due to the large number of checks issued by the Civil 
Works Administration, and in the Division of Loans and Currency, 
because of the activities in connection with the calling of the Fourth 
Liberty Loan and the handling of bonds of the Home Owners' 
Loan Corporation and the Federal Farm Mortgage Corporation. 
The principal decrease was in the Bureau of Engraving and 
Printing. 

In the field service the force was reduced from 48,922 on June 30, 
1933, to 45,245 on June 30, 1934, a net decrease of 3,677. The prin- 
cipal decrease was caused by the transfer of the Custodian Service 
to the Post Office Department. Considerable increases occurred in 
the Public Health Service, due to the activities in connection with 
the Civil Works Administration program, and in the Bureau of 
Internal Revenue, caused by various new tax laws. 

The number of employees in the departmental service of the Treas- 
ury, classified according to bureaus and offices, at the end of each 
month from June 30, 1933, to June 30, 1934, is shown in table 48, 
page 402, of this report. A comparison of the number of employees 
in the departmental and field services of the Treasury on June 30, 

1933, and June 30, 1934, is contained in table 49, page 403. 

Retirement of employees 

During the fiscal year 1934, 318 persons were retired from the 
departmental service of the Treasury Department, 23 of whom 
were retired at their own option. During the same period 290 
persons were retired from the field services, 18 at their own option. 
As of June 30, 1934, 10 persons above the retirement age were re- 
tained in the departmental service of the Treasury and 1 in the 
field service, under authority of the President in accordance with 
the provisions of section 204 of the Economy Act. Up to June 30, 

1934, 36 employees of the Treasury Department in Washington, and 
177 employees of the field services, who have served 30 years or more, 
and whose services were discontinued on account of necessary reduc- 
tion of force on or since June 30, 1933, have been granted annuities 
under the provisions of section 8 (a) of the Independent Offices 
Appropriation Act of June 16, 1933. 

Table 50, page 404, shows the number of persons retired and the 
number retained in the departmental and field services of the Treas- 
ury under the provisions of the Civil Service Retirement Act, as 
amended, and of section 204 of the Economy Act of June 30, 1932, 
and the number granted annuities under the provisions of sec- 
tion 8 (a) of the Independent Offices Appropriation Act of June 
16, 1933. 

BUDGET AND IMPROVEMENT COMMITTEE 

The Budget and Improvement Committee is responsible, under 
the direction of the budget officer, for the preparation and examina- 
tion of Treasury estimates of appropriations and for the improve- 



76 REPOKT OF THE SECRETARY OF THE TREASURY 

ment of administrative methods and procedure within the Treasury 
Department. In addition to examining all estimates, the committee 
makes inquiries as to the reserves which may be set up under the 
various appropriations and considers other matters affecting expendi- 
tures of the Department. 

Subsequent to the submission of the regular estimates of appro- 
priations for the fiscal year 1935, supplemental and deficiency esti- 
mates aggregating $98,831,462 were received. After examination by 
the budget officer, with the assistance of the committee, these esti- 
mates were reduced to $98,754,441 and submitted to the Director of 
the Bureau of the Budget. 

In pursuance of the President's intention to effect substantial 
reductions in all expenditures, the Director of the Bureau of the 
Budget indicated that the cash withdrawals from the Treasury dur- 
ing the fiscal year 1934 on account of appropriations for the Treasury 
Department, other than for interest on and retirement of the public 
debt, should not exceed amounts under particular appropriations 
which were determined in general by taking as a base for each the 
amount appropriated for 1934, or the actual expenditures for 1932, 
whichever was less; and, after deducting the amount of the 15 per 
cent reduction in compensation of all officers and employees, making 
a further reduction equal to 10 percent of the remainder. The 
amounts so allocated were modified from time to time in accordance 
with changed conditions during the year and particularly because 
of the restoration of 5 percent of the compensation effective Febru- 
ary 1, 1934. The revised total of the allocations for cash withdrawals 
was $252,884,936 of which $246,764,423 was actually withdrawn from 
the Treasury, leaving a saving of $6,120,513. 

For the fiscal year 1935 the Director of the Bureau of the Budget 
has approved $182,817,841 for expenditure from appropriations, with 
reserves of $2,631,670 for savings. 

For the fiscal year 1936 heads of bureaus and offices submitted 
estimates for annual and permanent and indefinite appropriations 
aggregating $1,635,269,793. After the examination by the Budget 
and Improvement Committee, items aggregating $21,721,720 were 
disapproved in estimates for annual appropriations. There was 
approved and submitted to the Director of the Bureau of the Budget 
for annual appropriations, $180,084,953 (which amount included 
$16,801,550 of appropriations made in lieu of permanent and indefi- 
nite appropriations, which were repealed by the Permanent Appro- 
priations Repeal Act 1934, approved June 26, 1934) ; for permanent 
and indefinite appropriations and special funds, $2,491,420; trust 
funds, $15,535,300; interest on the public debt, $854,000,000; and 
public debt retirements chargeable against ordinary receipts, $561,- 
434,000; making a grand total of $1,613,545,673. 

COAST GUARD 

The following is a summary of the principal operations of the 
Coast Guard for the fiscal year 1934, in which comparisons with the 
preceding year 1933 are indicated : 



REPORT OF THE SECRETARY OF THE TREASURY 



77 



1933 



Increase (+) 

or decrease 

(-) 



Lives saved or persons rescued from peri] 

Persons on board vessels assisted ___ 

Persons in distress cared for 

Vessels boarded and papers examined. 

Vessels seized, reported, or warned for violations of law 

Fines and penalties incurred by vessels reported 

Regattas and marine parades patrolled 

Instances of lives saved and vessels assisted 

Instances of miscellaneous assistance 

Derelicts and other obstructions to navigation removed or 

destroyed 

Value of derelicts and other obstructions recovered 

Value of vessels assisted (including cargoes) 

Persons examined for certificates as lifeboat men 



6,492 

33, 716 

595 

S3, 031 

1,549 

$244, 558 

155 

7,176 

7,476 

300 

$55, 565 

$40, 516, 220 

3,828 



5, 597 

34, 767 

1,246 

31,730 

1,401 

$94, 500 

204 

6,861 

7,877 

267 

$112, 100 

17, 296, 109 

5,917 



-895 

+1,051 

+651 

-51,301 

-148 

-$150, 058 

+49 

-315 

+401 

-33 

+$56, 535 

+$6, 779, 889 

+2, 0S9 



Protection to navigation 

International service of ice observation and ice patrol. — Two cut- 
ters and one 125-foot patrol boat were detailed to carry on this 
service for the season of 1934. Since vessels using the Canadian 
steamship lanes had reported numerous icebergs just north of lati- 
tude 45°, of which many were in positions for a probable drift to 
the southward, the 125-foot patrol boat was detailed in April 1934 
to make a survey of ice conditions in the regions of the Grand 
Banks. The ice patrol was inaugurated on April 17, and from 
that date to June 29, 1934, two cutters made alternate cruises of 
about 15 days each in the ice regions. Four times each day ice in- 
formation was broadcast to shipping, and once each day the Hydro- 
graphic Office of the Navy was furnished the latest ice information. 
Surface sea temperatures were collected for use in the preparation 
of surface isotherm charts which were valuable in predicting the 
drift of icebergs. The 125-foot patrol boat was employed exclu- 
sively in oceanographic work. This vessel made three oceano- 
graphic cruises and dynamic surveys of the patrol area, and from 
these data current charts were prepared for use in determining the 
probable set and drift of the ice. During the first 7 months of 
1934 approximately 575 different icebergs were reported south of 
latitude 48°, which number is considerably greater than the yearly 
average of 377. While the ice season as a whole was heavier than 
usual, the menace to the North Atlantic steamship lanes, United 
States tracks, was considerably less than during years of average 
ice conditions. The patrol was discontinued on June 29, 1934. 

Winter patrol. — The President, on November 6, 1933, on the rec- 
ommendation of the Secretary of the Treasury, designated 12 cutters 
to perform the customary special winter cruising along the coast for 
the season 1933-34 to aid vessels in distress. One of the cutters was 
withdrawn and ordered to the Coast Guard depot for overhauling 
and repairs. These cutters cruised 36,606 miles, afforded assistance 
to 45 vessels, whose value, including cargoes, amounted to $3,763,832. 
There were 480 persons on board the vessels assisted. Sixty-three 
vessels were boarded in the interest of United States laws. 

Anchorage and movements of vessels. — Supervision was continued 
over the anchorage and movements of vessels at ports and in local- 
ities where Federal regulations have been promulgated in the inter- 
est of safe navigation and the free and orderly movement of marine 



78 REPORT OF THE SECRETARY OF THE TREASURY 

traffic in congested areas. At the larger ports this duty has been 
performed by officers designated as captains of the port, and en- 
forcement of the regulations in other localities has been carried out 
through periodic inspections by Coast Guard vessels and by special 
assignments. 

Enforcement of customs and other laws 

The duties of the Coast Guard in connection with the enforcement 
of the customs, navigation, and motor-boat laws of the United States 
were continued as was also the customary assignment of Coast 
Guard vessels at the principal ports to assist the customs authorities 
in boarding incoming vessels, and in the conduct of other customs 
duties. Assistance was also afforded to other branches of the Gov- 
ernment in the enforcement of Federal laws. 

Liquor smuggling. — Smuggling of liquor into the United States 
from the sea changed considerably as a result of the repeal of the 
eighteenth amendment on December 5, 1933. As a result of re- 
duced appropriations a large number of units were put out of com- 
mission and the Coast Guard was not in a position to resume 
promptly effective antismuggling measures. Immediately follow- 
ing repeal there was a sharp decline in smuggling on all coasts, but 
the end of the fiscal year 1934 witnessed a considerable renewal of 
smuggling activities. At that time smuggling was of moderate ex- 
tent off the Atlantic coast north of the Chesapeake Capes, of con- 
siderable volume in the Carolinas and Georgia, and heavy in Florida 
and along the coast of the Gulf of Mexico. On the Pacific coast 
smuggling in bulk has almost terminated. A serious problem is the 
control of smuggling in aircraft which fly from the Bahamas into 
Florida, and from Mexico into the United States. Night flights and 
night landings are known to have been made, and destinations far 
inland are said, to be common. A construction program of aircraft 
has been undertaken in an endeavor to control this form of smug- 
gling- . , , - , 

Patrol in northern waters. — The regular annual patrol of the 

waters of the North Pacific Ocean, Bering Sea, and southeastern 
Alaska was conducted for the season of 1933 by six Coast Guard cut- 
ters and one 125-foot patrol boat. The vessels cruised over 51,000 
miles, assisted 16 vessels, boarded 61 vessels, afforded medical and 
dental aid to 1,886 persons, and transported 317 persons. 

The patrol for the season of 1934, which was in progress at the 
close of the fiscal year, is being performed by seven cutters and two 
125-foot patrol boats. 

Northern Pacific halibut fishery. — The Coast Guard annually per- 
forms for the Bureau of Fisheries, Department of Commerce, the 
duty of patrolling the waters in the interest of law enforcement with 
respect to halibut fishing. The work was carried on by one cutter 
from October 16 to 26, 1933, and March 3 to 21, 1934. 

Communications 

Telephone and telegraph lines and cables. — The Coast Guard owns 
and operates a coastal communication system consisting of telephone 
and telegraph lines of approximately 1,488 miles of pole line, 2,712 



REPORT OF THE SECRETARY OF THE TREASURY 79 

miles of open wire aerial circuits, 46 miles of aerial and underground 
cables, and 607 miles of submarine cable. In addition to the routine 
overhauling and repairing of the telephone and telegraph lines, 
major projects were undertaken involving the replacement of sub- 
marine cable at various places on the coasts. Other improvements 
were made in the construction, rebuilding, and extension of service 
lines, and the installation of cables connected with new projects. 

The Coast Guard continued its scientific study and investigation 
of telephone transmission problems, with the result that considerable 
progress has been made. 

Radio. — The extended use of aircraft in the Coast Guard necessi- 
tated the development of radio equipment to meet the special needs 
of the service. Material progress has been made in the matter of 
the elimination of electrical induction interference to radio recep- 
tion on the planes and in the development of radio direction finders. 

The program for the standardization and improvement of radio 
installations aboard vessels and aircraft of the service was continued. 
Previous experimentation in the matter of the installation of radio 
equipment on lifeboats located at life-saving stations of the Coast 
Guard has definitely proven that a standard plan could be evolved 
and put into operation. 

An officer of the Coast Guard continued to represent the Treas- 
ury Department on the Interdepartmental Radio Advisory Com- 
mittee. 

Equipment 

Floating equipment. — On June 30, 1934, there were in commission 
in the Coast Guard 37 cruising cutters, 24 harbor craft, 4 special 
craft, nine 165-foot patrol boats, thirty-two 125-foot patrol boats, 
thirteen 100-foot patrol boats, six 78-foot patrol boats, fifty-eight 
75-foot patrol boats, 75 picket boats, and 24 miscellaneous patrol 
boats. This floating equipment does not include the primarily life- 
saving boat equipment attached to Coast Guard vessels and stations. 

The remaining eight destroyers formerly obtained from the Navy 
were decommissioned and returned to the custody of the Navy. 

A program for the construction of seven 328-foot cutters and 
five 165-foot cutters, nine 165-foot patrol boats, four 110-foot harbor 
cutters, and a number of lifeboats and surfboats for cutters and sta- 
tions is now underway. 

In addition to overhauling, reconditioning, and repairing certain 
vessels at the Coast Guard repair depot at Curtis Bay, Md., routine 
repairs to vessels and boats were made under contract with private 
concerns and at navy yards. New engines were installed in two 
patrol boats at an Army base. 

Special study has been given to the preservation of the steel struc- 
ture of Coast Guard floating units and it is thought the subject has 
so developed as to permit the service to take an advanced step in the 
preservation of all cutters and patrol boats. 

Small boats. — Investigation and research work in connection with 
accelerated corrosion of lifeboat sheathing has continued with the 
cooperation of the laboratories and metallurgists of the various com- 
mercial firms which manufacture sheathing material. Conclusions 
will be available shortly and it is contemplated that steps will be 
taken to adopt the latest and most satisfactory material for sheathing 
90353—35 7 



80 REPORT OF THE SECRETARY OF THE TREASURY 

not only new boats, but also present boats in service on which the 
sheathing is deteriorated. 

Research work on copper bottom paint has been completed, and a 
standardized paint of known ingredients has been adopted. This 
procedure eliminates the use of various commercial brands of copper 
bottom paints for wood hulls which have proven unsatisfactory. 

Experimental work of investigating and testing in the related 
fields of special metals, woods, marine equipment, fittings, and out- 
fits was continued with success. Considerable economy has resulted 
from the improvement of lumber procurement, and the adoption at 
the Coast Guard depot of modern practices in the bending of white- 
oak frames. 

Special attention was given to the incorporation of modern innova- 
tions in the design and construction of the two new 52-foot motor 
lifeboats. One boat will probably be completed by the end of 1934; 
the construction of the second boat, which is in frame, will follow. 

Aviation. — During the year Coast Guard airplanes cruised 219,572 
miles and searched over an area of 1,975,014 square miles. The 
planes were in the air 2,752 hours, and 5,494 vessels and planes were 
identified. Through the checking and reporting system established 
by the service along the Atlantic seaboard 11,592 airplanes were 
reported. 

Coast Guard aircraft rendered assistance in 44 cases; transported 
critically sick or injured persons at sea to hospitals on shore, and 
serum and oxygen flasks to hospitals ; located lost, missing, or over- 
due vessels and boats, and boats suspected of smuggling, and carried 
on regular patrol duty in the prevention of smuggling of contraband 
and aliens into the United States. 

Contracts were awarded for the construction of 10 Douglas and 
9 Grumman amphibian airplanes. A program for the erection of 
four new air stations has been started and is progessing rapidly. 

On March 9, 1934, the Secretary of the Treasury directed that all 
aviation activities of the Treasury Department be consolidated under 
one head, and 15 planes of miscellaneous types, and their equipment, 
belonging to the Customs Service, were transferred to the Coast 
Guard. 

Three Coast Guard air patrol detachments have been established, 
respectively, at Buffalo, N. Y., San Antonio, Tex., and San Diego, 
Calif., to aid in combatting' smuggling of contraband over the 
Canadian and Mexican borders. Six land planes of the 02U-2 type 
were transferred from the Navy to the Coast Guard during the year. 
Twenty commissioned Coast Guard officers are undergoing flight 
training at the Naval Air Station, Pensacola, Fla. Thirty enlisted 
men were sent to Pensacola for flight training during the year. A 
school for the training of enlisted men for aviation ratings has been 
established at the Coast Guard air station, Cape May, N. J. 

Ordnance. — The curtailment of expenditures has been continued in 
the interests of economy, but efforts have been made to maintain 
efficiency both in the use of arms and in the upkeep of equipment. 

The Coast Guard won 3 national championship trophies, 1 gold 
medal, 19 silver medals, 43 bronze medals, and 11 President's bras- 
sards in small arms competitions with other services and civilian 
organizations. Interest in small arms efficiency has steadily grown, 
particularly among the personnel of stations. 



REPORT OF THE SECRETARY OF THE TREASURY 81 

Work on an armory at the Coast Guard depot has been completed, 
making possible the overhaul and repair of small arms at minimum 
cost. A large part of the work of reconstructing surveyed material 
is performed by personnel who are taking the armorer's course. This 
course includes training in the operation of small arms target ranges 
and in the use of the new light type wrecking outfit. An under- 
ground, reinforced concrete magazine completed at the depot pro- 
vides safe stowage space for all classes of ammunition and pyro- 
technic material, and a new landing dock facilitates the loading and 
unloading of magazine stores. 

Experiments with shoulder line-throwing equipment have been 
continued. A special projectile for use with the service rifle has been 
developed. 

When the modification of the fire control systems of two cutters 
has been completed, and the installations authorized for two others 
have been accomplished, all electric-drive cutters with the exception 
of one cutter will have sound powered telephone systems for fire con- 
trol and intercommunication. Each of 22 units has been equipped 
with two vertical range-finder mounts, a range-computer slide rule 
and a check plate, and at the academy a Vickers director has been 
installed for instruction purposes. This equipment has been fur- 
nished in order to increase gunnery efficiency. 

The academy, stations, oases, repair depot, engine school, repair 

base, etc. 

Coast Guard Academy. — During the fiscal year, 51 cadets were 
appointed to the academy, 25 cadets resigned, and 5 cadets completed 
the course of instruction and were graduated from the academy and 
commissioned as ensigns on May 28, 1934. There were 101 cadets 
under instruction at the end of the fiscal year. 

The practice cruise for cadets for 1933 was in progress at the close 
of the last fiscal year. Two cutters composed the special practice 
squadron for the 1934 cruise, and left New London, Conn., on June 3, 
1934. Their itinerary includes calls at two United States ports and 
a number of foreign ports. The cruise is expected to terminate the 
latter part of August. 

Stations and bases. — On June 30, 1934, 242 Coast Guard (life-sav- 
ing) stations were in an active status and three shore bases were in 
commission. Ten shore bases and one floating base were discontinued 
during the year. 

Rebuilding, repairs, alterations, additions, and improvements 
were completed during the year at 151 Coast Guard stations, 2 divi- 
sions, 8 bases, 12 radio stations, 1 communications storehouse, 6 air 
stations, at the Coast Guard Academy ( New London, Conn.), Fort 
Trumbull Training Station (New London, Conn.), the Coast Guard 
depot (Curtis Bay, Md.), 7 miscellaneous units, and in 4 Coast 
Guard districts on property damaged by storm. 

Contracts were awarded or work was begun within the year for 
major work of rebuilding, alterations, and improvements at 11 Coast 
Guard stations, 1 division, 2 radio stations, 1 communications store- 
house, 4 air stations, at the Coast Guard Academy, and the Coast 
Guard depot. The Port Orford station, contract for the construe- 



82 REPORT OF THE SECRETARY OF THE TREASURY 

tion of which was awarded in the last fiscal year, was placed in 
commission July 1, 1934. 

Repair depot. — During the year a number of Coast Guard vessels 
were overhauled, reconditioned, repaired, and improved at the repair 
depot, Curtis Bay, Md. The boat-building shop at the depot con- 
structed a number of standard and miscellaneous boats for assign- 
ment to units of the Coast Guard as needed. 

Engine School and Repair Base. — The reclamation plant, which 
operated at base 9, Cape May, N. J., as an industrial unit of the 
service, was used in reconditioning several types of marine engines 
and in converting aircraft engines for marine use, and also in re- 
pairing vessels of other units operating in the vicinity. The latter 
part of April 1934 the plant was moved to the Gas Engine School, 
at Norfolk, Va., and both units were combined under the name of 
Engine School and Repair Base. The duties of the repair base will 
remain the same. 

Engineering competition 

Thirty-one cruising cutters and eight Coast Guard destroyers took 
part in the engineering competition during the year. Before the 
end of the year the eight destroyers were decommissioned so none 
of these qualified. The engineering competition results in maintain- 
ing engineering personnel and material in the highest possible state 
of readiness and efficiency. 

Personnel 

On June 30, 1934, there were on the active list of the Coast Guard 
459 regular and 2 temporary commissioned officers; 101 cadets; 84 
chief and 503 regular warrant officers; 180 temporary warrant offi- 
cers, 160 of whom were on duty with the War Department under 
orders contained in Executive Order 6169; 8,754 enlisted men, and 
277 civilian employees in the field, of whom 234 were per diem 
civilian employees at the Coast Guard depot, Curtis Bay, Md. 

Recruiting. — At the beginning of the fiscal year the recruiting 
service of the Coast Guard comprised 4 main stations and 3 
substations. During the year two substations were closed due to 
the suspension of recruiting. Of 6,054 applicants for enlistment, 
189 were enlisted, 248 were rejected for physical disability, and 
5,617 rejected for other disabling causes. 

Training. — The training for enlisted personnel was necessarily 
curtailed on account of a lack of funds, but where circumstances 
permitted, men were trained in various schools with excellent re- 
sults. Equipment was added to the plant of the Engine School and 
Repair Base, at Norfolk, Va., providing better facilities for train- 
ing. During the early part of the year Coast Guard men were 
trained in the Marine Corps Armorer's School, Philadelphia, Pa., 
and in the Naval Gun Factory, Washington, D. C. Several men 
were also trained at the Parachute Materiel School, Lakehurst, N. J., 
maintained by the Navy. 

The Coast Guard Institute, at New London, Conn., continues to 
afford opportunities to men desiring to pursue home-study courses 
to prepare for promotion in whatever specialty they desire. During 



REPORT OF THE SECRETARY OF THE TREASURY 



83 



the year, 256 International Correspondence Schools diplomas and 
592 Coast Guard Institute educational certificates were awarded to 
the personnel. 

Awards of life-saving medals 

The Secretary of the Treasury, under the provisions of law, 
awarded during the year 10 gold and 47 silver life-saving medals of 
honor in recognition of bravery exhibited in the rescue or attempted 
rescue of persons from drowning in waters over which the United 
States has jurisdiction, or upon an American vessel. 

Appropriations and expenditures 

The following table shows the amounts appropriated for the Coast 
Guard for the fiscal year 1934, together with the balances of appro- 
priations from the previous year, and the expenditures and unex- 
pended balance of each appropriation. This includes an allotment 
of $25,031,872 from the National Industrial Recovery Appropria- 
tion for repairs on, and construction of, vessels, stations, etc. 

Appropriations, expenditures, and unexpended balances for the Coast Guard for 

the fiscal year 193^ 



Title of appropriation for Coast Guard 



Amount of 
appropria- 
tion, 
allotment, 
or balance 



Expended 
and 

obligated 



Trans- 
ferred 



Impounded 
salaries 



Unex- 
pended 
balance 



Salaries, Office of Coast Guard 

Pay and allowances 

Fuel and water 

Outfits 

Rebuilding and repairing stations, etc 

Communication lines 

Civilian employees 

Contingent expenses 

Repairs to Coast Guard vessels 

Retired pay, former life-saving service 

National Industrial Recovery, Treasury, 

Coast Guard 

Additional vessels 

Coast Guard Academy 

Total 



$341, 
18, 900, 
1,825, 
1, 800, 

327, 

140, 
94, 

225, 
2, 000, 

120, 

25, 031, 
101, 
62, 



000. 00 
000. 00 

hoc. oo 
ooo. 00 

040. 00 
000. 00 
910. 00 
000. 00 
000. 00 
000. 00 

872. 00 
384. 80 
427. 44 



$306, 

14, 845, 

1, 254, 

1, 400, 

264, 

130, 

86, 

177, 

1,516, 



23, 220, 

i 16, 

4, 



393. 02 
343. 02 
171. 24 
374. 25 
353. 04 
528.10 
033.41 
791. 45 
46S. 30 
714. 79 

040. 87 
140. 20 
930. 44 



$495 
49, 691 



$21, 664 
, 505, 406 



9,586 
1,732 
649 
8, 305 
553 
15,011 
13, 278 



$12, 447. 38 

, 499, 559. 98 

570, 828. 76 

390, 039. 75 

60, 954. 96 

8, 822. 90 

571. 59 

46, 655. 55 

468, 520. 70 

17, 007. 21 

,811,831.13 
117, 525. 00 
57, 497. 00 



50, 90S, 634. 24 



43, 280, 002. 33 2 50, 186 1, 576, 184 



6, 062, 261. 91 



' 1933 obligations canceled. 
2 Transfers: 

From pay and allowances, Coast Guard $49,691 

To Commissioner of Accounts 9, 167 

To salaries, Procurement Division 7,697 

To salaries and expenses, Bureau of Engraving and Printing 29,827 

To salaries, Procurement Division 3,000 

49, 691 

From salaries, Coast Guard 495 

To Division of Disbursements, salaries 495 



COMPTROLLER OF THE CURRENCY 

Changes in the condition of national banks 

The total assets of the 5,422 licensed national banks on June 30, 
1934, aggregated $23,901,592,000, in comparison with assets of 
$20,860,491,000 reported by 4,902 licensed banks on June 30 the 



84 



REPORT OF THE SECRETARY OF THE TREASURY 



previous year. The deposits of the licensed banks in 1934 aggre- 
gated $19,932,660,000, or $3,158,545,000 more than the amount re- 
ported for licensed banks a year earlier. The loans and investments 
totaled $17,046,296,000, or $1,554,893,000 more than on June 30, 1933. 

The 95 unlicensed national banks still in the hands of conservators 
had total assets of $136,128,000 and total deposits of $97,999,000. 

The assets and liabilities of licensed national banks on the date of 
each report from June 30, 1933, to June 30, 1934, are shown in the 
following statement: 

Abstract of reports of condition of licensed national banks at the date of each 
report from June 30, 1933, to June 30, 193/, 

[Dollars in thousands] 



Number of banks. 



ASSETS 



Loans and discounts (including rediscounts) 1 

Overdrafts 

United States Government securities 

Securities guaranteed by United States Government 

as to interest and/or principal 

Other bonds, stocks, securities, etc.. 

Customers' liability account of acceptances. --. 

Banking house, furniture and fixtures. 

Other real estate owned 

Reserve with Federal Reserve banks 

Cash in vault 

Balances with other banks 

Outside checks and other cash items -. 

Redemption fund and due from United States 

Treasurer 

Acceptances of other banks and bills of exchange or 

drafts sold with endorsement 

Securities borrowed 

Other assets '. 



Total. 



LIABILITIES 

Demand deposits, except United States Government 
deposits, other public funds and deposits of other 
banks _ 

Time deposits, except postal savings, public funds, 
and deposits of other banks.. 

Public funds of States, counties, municipalities, etc.. 

United States Government and postal savings de- 
posits 

Deposits ot other banks, certified and cashiers' checks 
outstanding, and cash letters of credit and travelers' 
checks outstanding 



Total deposits 

Secured by pledge of loans and/or invest- 
ments a 

Not secured by pledge of loans and/or in- 
vestments > 



Circulating notes outstanding 

Agreements to repurchase United States Government 

and other securities sold 

Bills payable 

Rediscounts 

Acceptances of other banks and bills of exchange or 

draft sold with endorsement 

Acceptances executed for customers. 

Acceptances executed by other banks for account of 

reporting banks 

Securities borrowed 

Interest, taxes, and other expenses accrued and un- 



paid- 



Other liabilities- 



June 30, 
1933 



«, 116, 972 

2,800 

4, 031, 576 



3, 340, 055 
225, 835 
641, 694 
132, 187 

1,412,127 
288, 478 

2, 381, 333 
37, 008 

37,428 

4,912 

4,359 

203, 727 



20, 860, 491 



7, 035, 751 



354, 017 
089, 388 



1, 024, 374 



2, 270, 585 



16, 774, 115 



730, 435 

9,223 
88,528 
29,327 

4,912 
229, 304 

3,374 
4,359 

41,617 
88,743 



Oct. 25, 
1933 



5,057 



58, 257, 937 

4,224 

4,111,645 



3, 383, 270 
198, 820 
646, 292 
158, 422 

1, 684, 024 
329, 786 

2, 149, 654 
25, 543 

38, 387 

4,330 

3,699 

202, 616 



21, 198, 649 



7, 180, 766 



5, 484, 561 
1, 076, 691 



1, 095, 139 



2, 218, 051 



17, 055, 208 



746, 913 

13,412 
81, 064 
19, 302 

4,330 
205, 624 

7,777 
3,699 

60, 009 
77, 710 



Dec. 30, 
1933 



5,159 



!8, 101, 156 

3,053 

4, 469, 147 



3, 401, 
229, 
645, 
158, 

1, 747, 
343, 

2, 313, 
43, 



40, 474 

14, 005 

5,716 

231, 358 



$7, 899, 279 

3,394 

5, 407, 348 

141, 579 

3, 286, 864 

191, 258 

643, 643 

165,415 

2, 029, 848 

358, 302 

2, 498, 833 

32, 812 

40,851 

12, 504 

4,508 

224, 735 



21, 747, 483 



7, 331, 057 

5, 519, 119 
1, 253, 554 

1, 125, 215 



2, 360, 937 



17, 589, 882 



778, 566 

5,905 
68, 452 
13, 535 

14, 005 
235, 718 

6,816 
5,716 

45, 100 
81, 622 



Mar. 5, 
1934 



5,293 



$7, 694, 749 

2,994 

5, 645, 741 

357,911 

3, 344, 901 

129, 128 

655, 819 

151,970 

2, 497, 400 

352, 402 

2, 798, 241 

48, 922 

36, 426 

1,408 

2,112 

181,468 



22, 941, 173 



7, 463, 649 

5, 730, 547 
1,331,771 

1, 509, 252 



2, 755, 268 



790, 487 
640, 397 
150, 090 



790, 037 

6,051 

47, 369 

5,350 

12,504 
194, 824 

5,790 
4,508 

55, 618 
108,073 



June 30, 
1934 



5,422 



23, 901, 592 



, 041, 580 



075, 625 
499, 013 



1, 330, 460 



2, 985, 982 



932, 660 
523, 159 
409, 501 



698, 293 

4,399 
13, 672 
2,007 

1,408 
133, 221 

6,683 
2,112 

41,741 
64,363 



1 Includes customers' liability under letters of credit. 

2 Information not compiled prior to Mar. 5, 1934. 



REPORT OF THE SECRETARY OF THE TREASURY 



85 



Abstract of reports of condition of licensed national banks at the date of each 
report from June 80, 1933, to June 30, 1934 — Continued 

[Dollars in thousands] 





June 30, 
1933 


Oct. 25, 
1933 


Dec. 30, 
1933 


Mar. 5, 
1934 


June 30, 

1934 


liabilities— continued 


$1,515,647 
940, 598 
235, 600 
164, 709 


$1, 566, 698 
916, 183 
264, 376 
176, 344 


$1, 588, 250 
880, 670 
236, 022 
197, 224 


$1, 653, 930 

867, 825 

248, 870 

149, 807 

130 


$1, 737, 827 




854, 057 




257,311 




151, 207 




571 












Total 


20, 860, 491 


21, 198, 649 


21, 747, 4?3 


22, 941, 173 


23, 901, 592 








Memoranda: 

Par value of capital stock: 


51,193 

2,600 

1, 463, 412 


75,119 

3,800 

1, 488, 682 


140, 295 

4,400 

1, 444, 759 


243,291 

5,535 

1, 406, 162 


401,989 




10, 081 




1,326,722 






Total -. 


1, 517, 205 


1, 567, 601 


1, 589, 454 


1, 654, 988 


1, 738, 792 






Loans and investments pledged to secure liabilities: 2 








2, 869, 879 
997, 637 
121, 407 


2, 606, 142 










991,388 










102, 226 












Total. 








3, 988, 923 


3, 699, 756 












Pledged: 








816, 269 
1,658,117 

935, 153 

245, 805 
146, 572 
87, 907 

64, 893 
34, 207 


724, 566 


Against United States Government and 








1, 445, 592 


Against public funds of States, counties, 
school districts, or other subdivisions or 








975, 448 










249, 491 










176, 768 










26, 387 


With State authorities to qualify for the exer- 








82, 902 










18, 602 












Total 








3, 988, 923 


3, 699, 756 













2 Information not compiled prior to Mar. 5, 1934. 

Reopening and reorganization of national banks 

On July 1, 1933, there remained in conservatorship as a result 
of the President's proclamation of March 6, 1933, 985 national banks 
with total deposits of $990,218,000. During the fiscal year 1934, 
three banks previously licensed to reopen had their licenses revoked 
and were placed in conservatorship bringing the total to 988 with 
total deposits of $994,201,000. 

As the result of the activities of the Reorganization Division, 583 
banks with deposits of $742,833,000 were licensed to reopen under 
old or new charters or absorbed by other national banks ;^ 14 banks 
with deposits of $4,972,000 were placed in voluntary liquidation or 
received authorization for the sale of their assets to State banks ; and 
296 banks with deposits of $148,317,000 were placed in receivership. 
On June 30, 1934, there remained unlicensed 95 national banks, of 
which 82 with deposits of $89,747,000 have approved plans of re- 
organization, leaving only 13 with deposits of $8,332,000 without 
approved reorganization plans. 



86 



REPORT OF THE SECRETARY OF THE TREASURY 



Summary of national banks, licensed and unlicensed, from July 1, 1938, to 

June SO, 193J t 



[Dollars in thousands] 






Status of banks 


Number 


Deposits ' 


Unlicensed, July 1, 1933.. . 


985 
3 


$990, 218 


Revocation of licenses .. 


3,983 






Changes in unlicensed banks, July 1, 1933, to June 30, 1934: Num- 

Reorganized under old or new charter or absorbed by an- ber Deposits 

other national bank 583 $742,833 

Voluntary liquidation or left the national banking system. 14 4, 972 
Placed in receivership.. 296 148, 317 


988 
893 


994,201 
896 122 






Unlicensed, June 30, 1934 


95 


98, 079 






Unlicensed, June 30, 1934 (deposits as of June 30, 1934) .. 


95 


97, 999 






Licensed, July 1, 1933 


4,902 
520 


16, 821, 850 


Changes in licensed banks, July 1, 1933 to June 30, 1934: 

Number Deposits 
New charters issued 2 495 $555,037 




Restored to solvency. 3 2,229 








Total increase for year 652 713,740 




Voluntary liquidations 123 107,635 

Placed in receivership 2 334 




Revocation of licenses . 3 3,637 








Total reduction for year 132 111,606 




Net increase in licensed banks for year .. 


602, 134 






Licensed, June 30, 1934 .. 


5,422 


17,423,984 






Licensed, June 30, 1934 (deposits as of June 30, 1934, call)..- 


5,422 


19, 932, 660 







1 Deposits, unless otherwise indicated, are taken from condition reports as of Dec. 31, 1932, and con- 
servators' first reports. In the case of new banks, deposits are approximately as of opening date. 

2 Represents newly chartered banks which opened in period. 

/Summary of changes in membership in the national banking system 

The authorized common capital of the 5,633 national banks in 
existence on June 30, 1934, was $1,354,428,741, a decrease during the 
year of $242,828,434, and the authorized preferred capital of these 
banks was $412,963,600, an increase during the year in this class of 
capitalization of $358,519,000. The net increase in capitalization 
was $115,690,566. During the year charters were issued to 491 
national banking associations, of which 205 had common stock only, 
aggregating $30,192,500 ; the remaining 286 banks had an aggregate 
of $23,061,800 common stock and $25,873,800 preferred stock. 

During the year, 798 existing national banks took advantage of 
the provisions of the act of March 9, 1933, and increased their capital 
by issuing preferred stock of an aggregate par value of $332,728,900. 
While charters were issued during the year to 491 associations, there 
was a net decrease of 313 in the number of banks — that is, from 5,946 
to 5,633 — by reason of voluntary liquidations, receiverships, and 
consolidations. 

Changes in the number and capital of national banks during the 
last year are shown in the following summary : 



REPORT OF THE SECRETARY OF THE TREASURY 



87 



Organisation, capital stock changes, and liquidations of national banks during 

the fiscal year 193't 



Charters granted 

Issues of preferred capital (798 banks) 2 _- 
Increases of common capital (87 banks) 3 - 
Restored to solvency 



Total- 



Voluntary liquidations 

Receiverships 4 --. 

Decreases of capital (328 banks) 5 

Closed under consolidation (Act of Nov. 7, 1918) and capital 
decreases incident thereto 



Total- 



Net increase in preferred capital 

Net decrease in banks and common capital 

Charters in force June 30, 1933, and authorized capital. 

Charters in force June 30, 1934, and authorized capital . 



Number of 
banks 



294 
563 



861 



6 313 
5,946 



5,633 



Capital 



Common 



$53, 254, 300 



9,636,116 
3, 555, 000 



S, 445, 416 



41, 428, 000 

71, 867, 500 

201, 248, 350 

1, 250, 000 



315, 793, 850 



242, 828, 434 
1, 597, 257, 175 



1, 354, 428, 741 



Preferred 



$25, 873, 800 
332, 728, 900 



358, 602, 700 



50, 000 
"33,766 



83, 700 



358, 519, 000 



54, 444, 600 



412, 963, 600 



1 Of these banks 286 had both common and preferred capital stock. 

2 Includes 2 increases aggregating $400,000 which were accomplished in connection with consolidations 
under the acts of Nov. 7, 1918, and Feb. 25, 1927. 

3 Includes 1 increase of $50,000 which was effected as a result of a consolidation under the act of Nov. 7, 
1918, and 1 increase of $100,000 incident to the consolidation of a State bank under the act of Feb. 25, 1927, 
and 7 increases aggregating $710,000 by stock dividends. 

* Includes 41 banks with aggregate capital of $6,520,000, which had been previously reported in voluntary 
liquidation. 

5 Includes 2 banks with preferred stock retirements. 

8 Net decrease in number of national banks in existence including adjustment of the number of receiver- 
ships for 41 banks previously reported in voluntary liquidation. 

BUREAU OF CUSTOMS 

Receipts 

Customs receipts during the fiscal year 1934 showed an increase 
over those for the preceding year for the first time since 1929. Total 
collections for the year, $314,093,508, represented an increase of 25 
percent over those for 1933, although they were 4 percent lower than 
the receipts for 1932. 

A large portion of the increase is the result of the collection of duty 
on distilled liquors and wines, which, from December 5, 1933, to June 
30, 1934, amounted to $24,023,703. The difference was due in part to 
increases in the quantities of certain commodities imported and in 
part to higher unit values of imported merchandise dutiable on an ad 
valorem basis. 

The following statement shows in detail customs collections, refunds, 
and payments of drawback claims for the fiscal years 1933 and 1934. 
The total amount collected and covered into the Treasury as customs 
receipts does not include tonnage tax, head tax, internal revenue tax, 
and miscellaneous collections made by customs officers for other 
bureaus and deposited as receipts for the appropriate bureau or 
service. 



88 



EEPORT OP THE SECRETARY OF THE TREASURY 



Customs receipts and refunds during the fiscal years 1933 and 1934 
[On basis of accounts of Bureau of Customs] 





1933 


1934 


Receipts: 


$250, 501, 722 

$39, 356 
622. 421 

23.698 

41, 756 

71, 707 


$313, 093, 728 


Miscellaneous: 

Sale of unclaimed merchandise and abandoned 


$133,351 




485, 826 




200,524 




88,249 




91,830 








798, 838 


999, 780 








251, 300, 560 

4, 923, 378 
7, 590, 971 


314, 093, 508 


Refunds: 


5, 849, 243 




8, 076, 988 








12, 514, 349 


13,926,231 







Volume of business 

Entries of merchandise. — The number of entries of merchandise 
increased from 2,010,068 in 1933 to 2,159,660 in 1934. Every type 
of entry participated in this increase, with the exception of mail. 
Although the mail entries decreased from 521,032 in 1933 to 449,799 
in 1934, duties collected on importations through the mails, exceeding 
$100 in value, aggregated $3,047,944, an increase of $809,302 over 
1933. 

Vessels, highway traffic. — The decline in international traffic con- 
tinued during 1934, as shown in the following table: 

Number of vehicles and persons entering the United States from abroad during the 
fiscal years 1933 and 1934 





1933 


1934 


Increase 
(+) or de- 
crease (— ) 


Vehicles: 


9, 433, 328 

27, 731 

39,284 

5,209 


8, 744, 310 

28,590 

38,420 

4,572 


Percent 
-7.3 




+3.1 




-2.2 




-12.2 






Total 


9, 505, 552 


8, 815, 892 


-7.3 






Passengers by: 


26, 960, 991 

3, 652, 768 

811,301 

19, 847 

9, 383, 672 


25, 555, 099 

3, 569, 714 

905, 021 

20, 729 

9, 635, 860 


-5.2 




-2.3 




+11.5 




+4.4 




+2.7 






Total 


40, 828, 579 


39, 686, 423 


-2.8 







Drawback transactions. — Drawback entries numbered 17,319, which 
is 9.3 percent more than for 1933. In addition 160,609 notices of 
intent to export merchandise with benefit of drawback were filed, 
an increase of 55.3 percent over 1933. Drawback claims allowed 
increased from $7,708,797 in 1933 to $8,092,783 for the past year, 
while drawback claims paid increased from $7,590,971 to $8,076,988. 



REPORT OP THE SECRETARY OF THE TREASURY 89 

Under authority of section 318 of the Tariff Act of 1930, the Presi- 
dent, by proclamation dated December 30, 1933, declared an emerg- 
ency to exist because of tne general business conditions and author- 
ized the Secretary of the Treasury to extend for 1 year, after the 
expiration of the 3-year period prescribed by law, the time within 
which merchandise imported during 1931 may be permitted to re- 
main in warehouse under the provisions of sections 557 and 559 of 
tne Tariff Act of 1930; the time^during which proof may be fur- 
nished that wool or camel's hair imported or withdrawn from bonded 
warehouse conditionally free of duty, under bond, during the calendar 
year 1931 has been used in manufactures prescribed in paragraph 
1101, Tariff Act of 1930; and the time within which articles manu- 
factured or produced with the use of merchandise imported during the 
calendar year 1933 may be exported with benefit of drawback under 
section 313, Tariff Act of 1930. Pursuant to this proclamation the 
Secretary of the Treasury issued Treasury Decision 46823, granting 
an extension of the time for 1 year in these cases. 

Public Act No. 397, Seventy-third Congress, to provide for the 
establishment, operation, and maintenance of foreign trade zones in 
ports of entry of the United States, to expedite and encourage foreign 
commerce, and for other purposes, was approved June 18, 1934. 
Regulations covering the protection of the revenue and prescribing 
customs procedure in zones to be established pursuant to this act 
are in course of preparation. 

Seizures. — Seizures for violations of the customs laws continued to 
decline, the number effected being 38,841, or a decrease of 12 percent 
from the preceding year. The number of liquor seizures was 11,721, 
as compared with 21,013 for 1933. Since repeal of the eighteenth 
amendment, most of the liquor seizures have been made either along 
the Atlantic coast or in dry States adjacent to the Mexican border. 

In connection with violations of the customs laws, 786 automobiles, 
161 boats, and 14 airplanes, with an aggregate value of $502,078, were 
seized, a decrease of 374 automobiles, 235 boats, and 16 airplanes 
from the number seized during 1933. In addition, customs officers 
effected 1,169 seizures for other agencies of the Government and de- 
tained 672 persons for violation of immigration, prohibition, and other 
laws. 

Fines and penalties.- — Collections due to violations of laws pertain- 
ing to the Customs Service aggregated $686,349, an increase of $40,- 
330 over 1933. Undervaluation and false invoicing were responsible 
for almost one-third of the collections during 1934. Penalties for 
failure to declare foreign merchandise were responsible for only 5 
percent of the total, whereas in 1933 they aggregated practically one- 
fourth of all fines collected. 

Antidumping 

Upon the recommendation of tne antidumping unit of the investi- 
gative branch of the Customs Service, in cooperation with the Bureau 
of Customs, findings of dumping have been issued by the Secretary of 
the Treasury on a number of commodities. Only $6,625 was collected 
in dumping duties during the year, as compared with $37,807 col- 
lected in 1933. 



90 REPORT OF THE SECRETARY OF THE TREASURY 

Countervailing duties 

Countervailing duties are collected under the provisions of section 
303 of the Tariff Act of 1930, which directs the Secretary of the 
Treasury to impose rates of duty comparable with those imposed 
by foreign countries on the same commodity. The total collected 
amounted to $223,625, as compared with $203,556 during the pre- 
ceding year. Approximately one-half of the 1934 collections was on 
coal and lumber products imported from Canada, while more than 
one-fourth represents duties on automobiles and parts from Great 
Britain and other countries. Countervailing duties on liquors and 
wines from Great Britain constituted 11 percent of the collections of 
such duties. 

Smuggling 

The system of handling criminal cases in connection with the 
smuggling of merchandise has resulted in securing a high percentage 
of convictions. All criminal cases incident to seizures effected by the 
Customs Service are investigated, reported, and followed through 
the courts by customs agents. When seizures are made, customs 
agents interrogate the persons immediately after arrest, are respon- 
sible for the taking of their fingerprints and photographs, undertake 
to develop evidence in connection with the cases, present the case 
to the United States Commissioner, report them in proper form to 
the United States attorney, cooperate in their presentation to grand 
juries, cooperate with United States marshals in locating and enforcing 
attendance of defendants and witnesses at trials, and cooperate with 
the United States attorney in the actual presentation of testimony 
during trials. 

Obscene books, pamphlets, stationery, etc., abortive and preventive 
drugs and appliances, lottery tickets and related advertisements, and 
insurrectionary or treasonable literature are prohibited importations 
under section 305, Tariff Act of 1930. During the past year, 16,440 
seizures of lottery tickets and advertisements and 714 seizures of 
obscene and other prohibited articles were destroyed. In addition, 
31 seizures were permitted to be exported under customs supervision, 
17 were released to the importers after investigation, and 758 lottery 
seizures were assigned to the Post Office Department for the issuance 
of fraud orders. 

The prevention of smuggling of narcotics has occurred in several 
instances by the use of a file containing the names of all persons 
suspected of smuggling and methods employed for landing contraband. 
The work has also been facilitated by the close relationship main- 
tained between the Royal Canadian Mounted Police and the 
Customs Service. 

Smuggling of watches and watch movements declined during the 
year. The activities of the customs agents, especially on the Cana- 
dian border, resulted in the apprehension of some of the most no- 
torious smugglers of these articles. 

The smuggling of grain, grain products, and particularly raw wool 
from Canada, has been continuous. These products are brought into 
border territory, a large portion of which is difficult to patrol be- 
cause of inadequate equipment and the climatic conditions during 
the winter months. Last winter the international boundary line 



REPORT OF THE SECRETARY OF THE TREASURY 91 

was accessible for crossing at practically all points by utilizing sleighs 
and sleds. 

An investigation instituted at the beginning of the present calendar 
year into the smuggling activities of a certain company and its allied 
companies, owned or controlled by persons of Vancouver, British 
Columbia, disclosed that more than 200,000 cases of foreign liquors 
had been landed on the Pacific coast between July 1929, and the 
date of the repeal of the eighteenth amendment. A civil suit was 
instituted in the United States District Court at Seattle, Wash., for 
the recovery of $17,500,000, the forfeiture value of the liquors and 
other charges due the United States. Two of the four defendants 
named in the indictment posted a $100,000 bond, each, which they 
forfeited by default. In order to further secure itself in case of 
favorable judgment, the Government has levied attachments against 
the real and personal property of the defendant companies valued 
at approximately $500,000. 

Miscellaneous provisions of the tariff act 

Marking of imported articles. — Importations received _ without 
having been marked so as to indicate the country of origin, as re- 
quired by section 304, Tariff Act of 1930, were disposed of as follows: 
In 7,935 cases, the articles were released after having been marked 
under customs supervision; in 5,074 cases, they were released as 
incapable of being marked; and in 211 cases, were exported. The 
10 percent additional dutv imposed under this section resulted in a 
collection of $125,097 in 1934, as compared with $69,741 in 1933. 

Merchandise bearing American trade marks. — Under the provisions 
of section 526 of the Tariff Act of 1930, prohibiting the unauthorized 
importation of merchandise bearing an American trade mark, 
2,701 seizures were accomplished during the year, of which 9 were 
destroyed, 19 exported, 2,400 permitted to be imported after removal 
or obliteration of the trade mark, and 256 permitted to be imported 
by consent of the trade-mark registrant, the remainder being either 
sold or released under bond. 

Investigative unit 

Undervaluation. — Investigations of undervaluation cases continued 
a most important factor in the work of the investigative unit, both 
in the United States and abroad. Information was obtained which 
indicates the continued attempt on the part of unscrupulous importers 
to invoice merchandise incorrectly. Recoveries made as the result 
of this class of work during 1934/ amounted to $284,590, which was 
in excess of that collected in 1933. 

A major undervaluation and smuggling case involving an importer 
of women's apparel was concluded in Philadelphia, Pa., and resulted 
in the acceptance of an offer in compromise of $30,553, and in 
addition $700 in penalties and forfeiture value was collected from the 
president of the firm for the smuggling of a diamond bracelet. 

Criminal cases. — Criminal cases incident to seizures effected by 
the Customs Service are investigated, reported, and followed through 
the courts by customs agents. This system has continued with 
gratifying success since it has resulted h/securing a high percentage 
of convictions. 



92 REPORT OF THE SECRETARY OF THE TREASURY 

Classification. — Many investigations have been conducted relative 
to the classification of merchandise imported. Evidence was de- 
veloped to warrant a change in the classification of human hair 
imported from China so as to provide a 20 percent instead of a 10 
percent ad valorem rate of duty. This change will result in increased 
revenue of hundreds of thousands of dollars per year. It was also 
found that leaf tobacco imported from Cuba was not being properly 
classified and appraised. 

Customs foreign service. — The investigative unit maintains offices 
in Canada, Europe, the Orient, and Cuba, which are divided for 
administrative purposes into districts. An officer, known as a 
Treasury attache, is in charge of each of these foreign offices, except 
the district of Montreal, Canada, whose chief officer is the supervising 
customs agent. A corps of trained investigators is assigned to each 
Treasury attache. These investigators contact foreign manufac- 
turers in an effort to establish foreign market values of merchandise 
exported to the United States, in response to requests made by 
appraising officers in this country. 

The foreign service officers render invaluable service through their 
cooperation with the domestic service in the detection and prevention 
of the smuggling of narcotics and other articles. 

Customs information exchange. — The customs information ex- 
change is the medium used by the Customs Service to disseminate 
information relative to market values and classifications of imported 
merchandise and other pertinent customs data. The statement 
following summarizes its activities during the year: 

Number 

Appraisers' reports of value received 11, 506 

Appraisement of appeal reports received . - -. 2,575 

Changes in values circulated 2, 346 

Requests for investigations abroad 1,361 

Reports received in response to requests for investigations 1,948 

Reports received covering original investigations by Treasury attaches... 5,751 

Difference in classification reported 357 

The exchange issues weekly circulars giving the dates of sailing 
of vessels from foreign ports and their arrival at the various United 
States ports. 

Summary. — The following statement shows the results achieved 
by the investigative unit during the past year, in so far as direct 
results have a monetary measure or may be measured by count of 
individual cases: 

Number 

Ports examined.. 196 

Drawback investigations 1,936 

Foreign investigations - 2,087 

Arrests — - 1,087 

Convictions 789 

Acquittals 104 

Failures to indict --- 97 

Indictment cases pending 274 

Seizures made - - - 1,003 

Seizures appraised.. — 946 

Seizures released or pending. 270 

Cases pending investigation: 

July 1, 1933 - — — 1,309 

June 30, 1934 1,531 

Amount 

Appraised value of seized merchandise $1,213,112.27 

Merchandise entered free but found dutiable 23, 140.73 

Bail forfeitures. 54,380.50 

Fines imposed by United States courts 139,549.49 

Fines, penalties, and forfeitures incurred, exclusive of court fines 621, 316. 00 

Increased and additional duties collected 284, 589. 53 

Deposits as offers in compromise 556,643.34 

Proceeds of sale of seized merchandise 278, 607. 62 



REPORT OF THE SECRETARY OF THE TREASURY 93 

BUREAU OF ENGRAVING AND PRINTING 

Deliveries of currency, securities, stamps, and miscellaneous work 
by the Bureau during the year amounted to 315,905,581 sheets, as 
compared with 308,917,247 sheets for the previous year, an increase 
of 6,988,334 sheets. A comparative statement of deliveries of finished 
work follows : 

Deliveries of finished tvorh in the fiscal years 1933 and 193'i 



Currency: 

United States notes 

Silver certificates 

Gold certificates 

National bank currency 

Federal Reserve notes 

Federal Reserve bank notes (national cur- 
rency).. 

Total... 



Bonds, notes, certificates, and bills: 

Pre-war bonds 

Liberty bonds 

Treasury bonds.. 

Treasury notes 

Treasury bills 

Certificates of indebtedness 

Insular bonds: 

Philippine Islands 

Puerto Rican 

Farm loan bonds 

Consolidated farm loan bonds 

Collateral trust debentures 

Federal Farm Mortgage Corporation 

bonds 

Home Owners' Loan Corporation bonds. .. 
Reconstruction Finance Corporation notes 

Philippine treasury certificates 

Notes for the bank of the Philippine 

Islands 

Interim receipts for bonds of Home wners' 
Loan Corporation 

Interim certificates for Puerto Rican bonds 

Interim transfer certificates for postal savings 
bonds 

Specimens: 

Treasury bonds 

Treasury notes 

Treasury bills 

Certificates of indebtedness 

Insular bonds, Puerto Rican 

Farm loan bonds 

Consolidated farm loan bonds 

Collateral trust debentures 

Federal Farm Mortgage Corporation bonds 
Home Owners' Loan Corporation bonds... 
Reconstruction Finance Corporation notes. 

Total 



Stamps: 

Customs 

Internal revenue: 

United States 

Philippine Islands 

Puerto Rican 

Virgin Islands 

District of Columbia 

Specimens, United States 

Postage stamps: 

United States 

United States, surcharged 

Zone" 

Canal Zone 

Philippine Islands 

Specimens, United States 

Proofs, United States 

Postal Savings stamps 

Total 



Sheets 



1933 



8, 746, 000 

49, 248, 000 

1, 662, 000 

6, 579, 285H 

10, 424, 000 

3, 174, 000 



7!), ,s:«, 285 Yi 



37, 823 
102, 678H 
482, 447M 
367, 025 

18, 206 
115,140 

200 
3,440 
25, 245?lo 



8,182 



1, 538, 600 
132, 200 



750 



1H 

11 
4 



2,831,9661^0 



119, 700 
93, 854, 696^04 



' Canal 



419, 350 
38 



102% 

116, 145, 256 

16,800 

3,150 

344, 483 

151*%oo 



5,318 



210,909,0453^40 



1934 



Face value, 1934 



4, 500, 001 

39, 273, 000 

20, 000 

4, 527, 120 

3, 916, 600 

2, 224, 000 



54, 460, 721 



60, 900J^ 
140, 484 
2, 298, 333% 
339, 625 
19, 934 
69, 125 

700 

1,938 

33, 457 

249, 636 

21,440 

2,118,310 

2, 956, 300 

29, 850 

724, 500 



93, 500 
100 

1,000 



5% 
3 

% 
10 



18 
23 

10 
14 



9, 159, 2343%o 



145, 365 

108, 633, 98617%04 

189, 425 

423, 200 

525 

22, 440 

12754 

113,628,878 

15, 750 
20, 664 
122, 976 

44 23 /ioo 
2 
5,882 



223,209,265*3734,00 



$234, 000, 012 
476, 244, 000 
456, 000, 000 
457, 921, 200 
609, 480, 000 

221, 760, 000 



2, 455, 405, 212 



206, 115, 520 
1, 461, 756, 800 

10, 606, 165, 300 
8, 881, 400, 000 

11, S91, 118,000 
3, 753, 000, 000 

700. 000 

1, 350, 000 

33, 439, 500 

784, 500, 000 

648, 200, 000 

893, 800, 000 

1, 204, 525, 000 

1, 749, 500, 000 

2, 628, 750 



42,118,198.870 



Subjects 
4, 537, 300 

9, 500, 659, 758 

22, 291, 584 

30, 403, 000 

52, 500 

4, 488, 000 

3, 238H 

11, 839, 687, 310 

1, 575, 000 

1, 558, 200 

12, 418, 560 

3,020 

450 

588, 200 



21, 418, 266, 120H 



94 



REPORT OF THE SECRETARY OF THE TREASURY 



Deliveries of finished work in the fiscal years 1933 and 1934 — Continued 





Sheets 


Subjects 




1933 


1934 


Miscellaneous: 


8, 444, 205 

58, 260 

31, 290% 

4, 348, 704 

281, 111 

2, 032, 125 

147, 1261 %s 

1 

127 


24, 430, 978 
50,440 
112, 966 
3, 907, 372 
255, 470 
156, 937H 
161, 076^6 


122, 154, 890 




243, 020 




63, 718 




17, 531, 207 




1, 277, 350 




755, 500 




2, 722, 412 






Specimens 


1,120 


5,648 


Total 


15, 342, 950^5 


29, 076, 359% 


144, 753, 745 




308,917, 246'26^/ 1276 


315,905,581^25 









There was expended during the year for salaries and expenses 
$7,101,598, as compared with $7,840,291 in 1933. These expenditures 
are exclusive of $311,221 and $892,836 for 1934 and 1933, respectively, 
the amounts impounded under the provisions of sections 110 and 
203 of the Economy Act. The following statement shows the appro- 
priations, reimbursements, and expenditures for the fiscal years 1933 
and 1934 : 



Appropriations, reimbursements, and expenditures for the fiscal years 1933 

and 1934 





1933 


1934 


Increase (+) or 
decrease (— ) 


Appropriated by Congress, salaries and expenses 


$6, 430, 000. 00 


$5, 060, 680. 00 
29, 827. 00 

2. 692, 005. 31 


-$1, 369, 320. 00 
+29, 827. 00 


Reimbursements to appropriation from other bureaus 


2, 531, 569. 36 


+160, 435. 95 






Total -- 


8, 961, 569. 36 
7, 840, 291. 57 


7, 782, 512. 31 
7, 101, 598. 56 


- 1, 179, 057. 05 




-738, 693. 01 






Unexpended balance (including impoundments) 


1, 121, 277. 79 


680, 913. 75 


-440, 364. 04 



1 An additional amount of $3,239.65, received from sale of by-products and useless 
property, was deposited to the credit of the Treasurer of the United States as miscella- 
neous receipts. 

2 Includes $12,000 and $S,000 transferred to Bureau of Standards for research work 
in the fiscal years 1933 and 1934, respectively ; $264,993.98 and $238,485.42 transferred 
to retirement fund in the fiscal years 1933 and 1934, respectively. 

Spoilage of currency was reduced from 2.59 percent for 1933 to 
2.52 percent for 1934. 

The following dies for new postage stamps and other work were 
engraved during the year : 



UNITED 


STATES 


POSTAGE STAMPS 




Issue 


Denomi- 
nation 


Issue 


Denomi- 
nation 




Cents 
3 
5 
3 
3 
3 
3 


Wisconsin Tercentenary 


Cents 

3 




National Park, Yosemite (orders for 2 
to 10 cent, inclusive, also received) 

Air mail, Flight of Zeppelin to the Cen- 
tury of Progress Exposition 






1 








50 




Air mail 


6 











PHILIPPINE POSTAGE STAMPS, ORDINARY 



Rizel 

Woman with Palay. 

Filipino Girl 

Pearl Fishing 




Fort Santiago 

Salt Springs 

Magellan's Landing. 
Juan de la Cruz 



Centavos 
10 
12 
16 
20 



REPORT OF THE SECRETARY OF THE TREASURY 95 

The passage of the 40-hour week law for mechanics affected 769 
employees of the Bureau. Inasmuch as 3,289 employees were not 
included in this legislation it was necessary to continue operating 
the plant on a 44-hour basis and to coordinate as effectively as pos- 
sible the work of these two groups of employees. 

The rotating furlough continued throughout the year, but sched- 
ules were changed frequently to meet conditions brought about by 
the receipt of new and increased orders for securities of various 
classes. 

The greatest pressure for work during the year occurred in con- 
nection with checks, bonds, and postal savings certificates. All or- 
ders received were urgent and three shifts were frequently estab- 
lished until sufficient engraved stock was available. Much overtime 
work was necessary to meet delivery schedules. There was also con- 
siderable loss of time and extra expense in meeting orders as a result 
of changes in regular production routine in order to meet urgent 
orders. 

The largest bond orders came from the Federal Farm Mortgage 
Corporation and the Home Owners' Loan Corporation, and aggre- 
gated (the orders totaling) more than 2,000,000 sheets. Special 
stamps were prepared for bottled distilled spirits, and a special 
issue of liquor stamps was ordered by the District of Columbia. 
In addition, certificates of indebtedness, Treasury notes, and bonds 
were printed in connection with the Treasury financing program. 
New models were prepared for gold and silver certificates and for 
Federal Reserve notes. The engraving work of a few denominations 
of silver certificates was completed before the end of the year and a 
small quantity was printed and delivered. 

Production and distribution of Civil Works Administration checks 
required the employment of 50 temporary employees and the organi- 
zation of three 8-hour shifts. 

COMMITTEE ON ENROLLMENT AND DISBARMENT OF ATTORNEYS 

AND AGENTS 

The Committee on Enrollment and Disbarment of Attorneys and 
Agents, created by Department Circular No. 230, dated February 
15, 1921, is responsible for the examination of applicants wishing to 
practice as attorneys, agents, or other representatives before the 
Treasury Department or offices thereof; and receives complaints, con- 
ducts hearings, and makes inquiries concerning violations of the regu- 
lations by enrolled practitioners. The conclusions of this committee 
in each case are submitted as recommendations to the Secretary of 
the Treasury. 

During the fiscal year 1934, 1,329 applications for enrollment of 
attorneys and agents were approved and 4 were disapproved. In 
one case the applicant for enrollment was afforded a formal hearing 
by the committee. 

On June 30, 1933, complaints were pending against 93 enrolled indi- 
viduals, 48 new complaints were filed during the year, and 49 were 
disposed of by the Secretary, leaving 92 pending on June 30, 1934. In 
16 cases the Secretary, on recommendation of the committee, accepted 
the answers of the respondents as sufficient and the complaints were 
dismissed. In each of 33 cases the committee, after formal hearing 
accorded the respondent, submitted its findings and recommenda- 

90353—35—8 



96 REPORT OF THE SECRETARY OF THE TREASURY 

tions to the Secretary, who disposed of them as follows: In 3 cases it 
was found that the charges were not proven and the complaints were 
dismissed; in 30 cases the charges were found proven in whole or in 
part and the Secretary imposed penalties — 22 practitioners were dis- 
barred from further practice before the Treasury Department, 4 were 
suspended from practice for various periods, and 4 were reprimanded. 

It is the policy of the committee to give an enrolled attorney or 
agent opportunity to show cause why formal disbarment proceedings 
should not be instituted against him; 11 such cases occurred during 
the year. 

Since the organization of the Committee on Enrollment and Dis- 
barment, 36,241 applications for enrollment have been approved and 
502 disapproved. One hundred and sixty-one practitioners have 
been disbarred from further practice before the Treasury Department, 
114 have been suspended from practice for various periods, and 156 
have been reprimanded. In 13 cases the order of disbarment has 
been terminated and the practitioner restored to good standing before 
the Department. 

SECTION OF FINANCIAL AND ECONOMIC RESEARCH > 

The section, which includes the Office of Government Actuary, per- 
forms a combined research, editorial, actuarial, and service function 
for the Treasury, largely in the field of finance. Upon request or on 
the initiative of the section, studies and investigations in taxation, 
public debt, and other subjects in or related to the field of public 
finance are conducted, largely for use within the Department. Studies 
in taxation during the fiscal year were related especially to tax legisla- 
tion passed during the period. The section engages also in estimating 
revenue receipts. 

As in the past, the Annual Report of the Secretary of the Treasury 
was edited and in part prepared by the section, under the general 
supervision of the Under Secretary; the section also participated in 
the preparation and editing of Statistics of Income for 1932, and of 
other Treasury publications. 

The monthly publication of daily yields of Government bonds and 
notes, and the monthly estimate of the population of the United 
States (appearing on the Circulation Statement of United States 
Money) were continued. A monthly index of yields of Treasury 
bonds was inaugurated during the fiscal year. 

Service on various governmental committees was performed by 
members of the section, including the service of the Government 
Actuary on the Board of Government Actuaries in connection with 
the Civil Service retirement law. 



1 By order of the Secretary of the Treasury, dated Sept. 17, 1934, the Section of Financial and Economic 
Research was abolished. The same order created the Office of Director of Research and Statistics to exercise 
direct authority over and responsibility for all economic research, production, analysis, and publication of 
statistics in all branches of the Treasury Department. The Director is also the Chief of the Division of 
Research and Statistics (including the Office of the Government Actuary) which was created to absorb the 
duties theretofore assigned to the Section of Financial and Economic Research. 



REPOET OF THE SECRETARY OF THE TREASURY 

BUREAU OF INTERNAL REVENUE 

General 



97 



Internal revenue collections. — Receipts from internal revenue, in- 
cluding agricultural adjustment taxes, during the fiscal years 1933 
and 1934 were as follows : 



Summary of internal revenue receipts for the fiscal years 1933 and 1934 l 

[On basis of reports of collections, see p. ?74] 



Sources 


1933 


1934 


Increase 


Income Tax Unit: 


$394, 217, 783. 93 
352, 573, 620. 18 


$397, 515, 851. 94 
419, 509, 487. 78 


$3, 298, 068. 01 
66, 935, 867. 60 






Total 


746,791,404.11 


817,025,339.72 
50, 229, 122. 97 
2, 630, 615. 56 


70, 233, 935. 61 








2, 630, 615. 56 






Total 




869, 885, 078. 25 


123, 093, 674. 14 






Miscellaneous Tax Unit: 


34, 309, 723. 85 
402, 739, 059. 25 

392, 238, 008. 12 


113, 138, 364. 10 
425, 168, 897. 04 

633, 282, 270.' 62 


78, 828, 640. 25 
22, 429, 837. 79 

241, 044, 262. 50 




Sales (capital stock, stamp and excise, admis- 
sion, communications, checks, oleomargarine, 




Total _ 


829, 286, 791. 22 


1, 171, 589, 531. 76 
371, 422, 885. 64 


342, 302, 740. 54 
371 422 885 64 


Agricultural adjustment tax 








Alcoholic Tax Unit: 

Alcoholic liquor taxes: 

Received by collectors of internal revenue. . 


43,174,316.92 
5, 505. 52 


252, 333, 373. 97 
6, 577, 958. 65 


209, 159, 057. 05 
6, 572, 453. 13 




Total 


43, 179, 822. 44 
581, 206. 53 


258,911,332.62 
430, 366. 25 


215 731 510 18 


Miscellaneous receipts (prohibition, delinquent 


160, 840. 28 






1, 619, 839, 224. 30 


2, 672, 239, 194. 52 


1, 052, 399, 970. 22 





1 In this summary tax receipts are classified according to the administrative organization for the audit of 
returns, i. e., the Income Tax Unit, the Miscellaneous Tax Unit which includes the Estate Tax Division, 
the Tobacco Division, the Sales Tax Division, the Processing Tax Division, and the Alcohol Tax Unit. 
A detailed statement of collections appears in table 7, p. 317. 

2 Includes income tax on Alaska railroads (act of July 18, 1914) amounting to $4,262.03 for 1933 and $2,240.12 
for 1934. 

Refunds. — In the foregoing statement of receipts no deductions 
have been made on account of refunds, which during the fiscal year 
1934 were paid from the several appropriations as follows: 

Refunding taxes illegally collected 1932 and prior years. $402. 96 

Refunding taxes illegally collected 1933 and prior years. 7, 792, 909. 27 

Refunding taxes illegally collected 1934 and prior years.. 38, 027, 006. 05 



Total 45,820,318.28 

Advances to Agricultural Adjustment Administration (transfer to Internal Revenue for 
refunds) 1,374,404.47 

Grand total, all refunds (interest included) 47, 194, 722. 75 

In addition to the above amount, there were certain repayments 
as provided under specific appropriations which were not refunds 
of taxes erroneously paid under our present internal revenue laws. 
The redemption of stamps represents the return to the Government 
of stamps purchased by the taxpayer in excess of his requirements. 
The stamps so redeemed during the fiscal year, including interest, 
totaled $1,479,237.36. 



98 



REPORT OF THE SECRETARY OF THE TREASURY 



Number of claims, amount refunded, and interest allowed on each class of tax 
during the fiscal year 193^ 



Appropriation and class of tax 



Number 
of claims 



Amount re- 
funded ' 



Interest allowed 



"Refunding taxes illegally collected", for the fiscal year 1932 
and prior years, 1933 and prior years, and 1934 and prior 
years: 

Income taxes 

Miscellaneous internal revenue: 

Capital stock 

Estate and gift 

Sales 

Spirits and narcotics 

Tobacco 

Miscellaneous 

Total 

Agricultural adjustment taxes 

Grand total, all refunds 

Repayments (not refunds of taxes erroneously collected) : 
Redemption of stamps: 

Tobacco 

Spirits and narcotics 

Miscellaneous 

Total 



65, 495 

720 
1,007 
1,837 

638 
13 



$40,810,312.65 

128,401.07 

3, 386, 790. 93 

1, 334, 895. 84 

46, 407. 29 

637. 92 

112, 872. 58 



$11,754,027.39 

30,320.16 

395, 406. 14 

407,124.62 

992. 52 

15.76 

20, 197. 18 



70, 058 
8,320 



45, 820, 318. 28 
1, 374, 404. 47 



12, 608, 083. 77 
2, 685. 57 



78, 378 



47, 194, 722. 75 



12, 610, 769. 34 



1,213 
3,064 
8, 566 



902, 946. 64 
83, 520. 82 
492, 769. 90 



1, 479, 237. 36 



184. 16 
51, 954. 09 



52, 138. 25 



1 Including interest. 

If the tax refunds during the year on account of erroneous or 
illegal collections for 1934 and prior years, amounting to $47,194,- 
722.75, and payments for redemption of stamps, amounting to 
$1,479,237.36, were deducted from the gross collections of $2,672,- 
239,194.52, the net collections for the fiscal year 1934 would be 
$2,623,565,234.41. The gross collections, however, are used for com- 
parative purposes in this report. 

Additional assessments. — The additional assessments resulting 
from office audits and field investigations, which amounted to 
5,188,720.51, were as follows : 



Additional assessments made during the fiscal year 193J/, by class of tax 



Class of tax 


Amount 




' $279, 971, 171. 04 








Miscellaneous internal revenue: 


14, 773, 265. 93 


Gift 


152,485.74 




229, 464. 70 




3, 418, 745. 54 




207, 179. 81 




16,910,810.72 








Total 


2 35, 691, 952. 44 










3 12, 525, 597. 03 










328, 188, 720. 51 







i Includes, for income taxes, $247,327,330.04 from the Income Tax Unit and $32,643,841 from the Accounts 
and Collections Unit. The assessments of the Income Tax Unit include $53,296,583.68 made under the 
jeopardy provisions of sees. 279 and 280 of the Revenue Act of 1926 and sec. 273 of the Revenue Acts of 1928 
and 1932. 

2 Includes, for miscellaneous internal revenue, $22,463,679.44 from the Miscellaneous Tax Unit and 
$13,228,273 from the Accounts and Collections Unit. 

3 Includes, for agricultural adjustment taxes, $905,912.03 from the Processing Tax Unit and $11,619,685 
from the Account? and Collections Unit, 



REPORT OF THE SECRETARY OF THE TREASURY 



99 



Cost of administ?'ation.- — The total amount expended and obli- 
gated in administering tax laws during the fiscal year 1934 was 
$31,370,404.12. This sum does not include the amount expended for 
refunding taxes illegally or erroneously collected, and for redemp- 
tion of stamps, which is in no sense an administrative expense. The 
total revenue collected was $2,672,239,194.52 of which $2,300,816,- 
308.88 represented internal revenue and $371,422,885.64, agricultural 
adjustment taxes. Therefore, the cost of collecting each $100 of the 
total revenue was $1.17. Administration of the internal revenue 
laws cost $28,826,225.73, as compared with $30,031,722.98 during the 
fiscal year 1933. The cost of collecting each $100 of internal revenue 
was $1.25, as compared with $1.85 for the fiscal year 1933. (The 
amounts expended by the Bureau of Industrial Alcohol in adminis- 
tering the liquor laws prior to consolidation with the Bureau of 
Internal Be venue, May 10, 1934, are not included in these figures.) 
The amount expended and obligated in administering the agricultural 
adjustment tax laws was $2,544,178.39, or 69 cents for each $100 of 
agricultural adjustment taxes collected. 

Income Tax Unit 

The Income Tax Unit is charged with the duty of auditing and 
closing all income tax returns except those filed on form 1040A. 
Returns filed on form 1040A (returns of individuals reporting in- 
come, chiefly from salaries and wages, of less than $5,000) are 
audited in the collectors' offices under the supervision of the Accounts 
and Collections Unit. 

Summary of work of the Income Tax Unit for the fiscal years 1933 and 1984 



Returns on hand in Washington and in the field at beginning of year ' 

Returns received during year: 

Reopened and amended 

Original 

Total 

Total to be disposed of 

Returns closed during year: 2 

Additional assessments except, jeopardy: 

Before final notice of deficiency 

After final notice of deficiency: 3 

Agreement 

Default 

Total 

Jeopardy assessments (subject to appeal).. 

Certificates of overassessment 

No change 

Total closed 

Returns not closed during year: 

On hand for audit in Washington and in the field at end of year 

Awaiting action of taxpayer after mailing final notice of deficiency 

Involved in appeals to Board on final 60 or 90-day notice of deficiency mailed 
during year 

Total not closed 



Number 



1933 



254, 771 



112, 972 
2, 080, 146 



2,193,118 



2, 447, 889 



85, 628 



3,136 

9,657 



98, 421 

1,595 

45, 986 

1, 967, 582 



2, 113, 584 



325, 734 
2,836 



5,735 



334, 305 



325, 734 



87, 252 
1, 920, 041 



2, 007, 293 



2, 333, 027 



84, 026 



4, 339' 

7, 255 



95, 620 

1,600 

34, 859 

1, 830, 018 



1, 962, 097 



363, 670 
1,913 



5,347 



370, 930 



1 This total does not include returns with respect to which final notices of deficiency (60 or 90-day letters) 
were mailed prior to the beginning of the year. 

2 Excludes returns closed through decisions of Board of Tax Appeals. 

3 Includes some returns with respect to which final notices of deficiency (60 or 90-day let ters) were mailed 
prior to the beginning of the year. 



100 



REPORT OF THE SECRETARY OF THE TREASURY 



Additional revenue. — The total additional revenue made avail- 
able for collection (exclusive of jeopardy assessments) was $194,- 
030,746.36 as compared with $169,629,609.96 the previous fiscal year, 
an increase of $24,401,136.40. The field forces of the Income Tax 
Unit secured agreements to the immediate assessment and collection 
of $18,897,448.21, while $175,133,298.15 was assessed after considera- 
tion in Washington. 

The additional revenues are classified in the following table to 
show the amounts involved as additional tax, interest, and penalty, 
and also the procedure involved in reaching a settlement with the 
taxpayers. 

Additional revenue made available for collection during the fiscal years 1983 
and 193Ji, classified according to the tax, interest, and penalty, and the agree- 
ment procedure involved 





1933 


1934 




Amount 


Percent 


Amount 


Percent 


Tax --- 


$134, 914, 736. 48 

31, 232, 819. 66 

2, 003, 206. 42 


79.5 
18.4 
1.2 


$151, 483, 716. 42 

38, 126, 719. 46 

2, 284, 213. 67 


78.1 




19.6 




1.2 






Total --- -- 


168, 150, 762. 56 
1, 478, 847. 40 


99.1 
.9 


191,894,649.55 
2, 136, 096. 81 


98.9 


Rejected claims for abatement and credit 


1.1 




169, 629, 609. 96 


100.0 


194, 030, 746. 36 


100.0 






Procedure involved in settlement: 


21, 361, 130. 31 

39, 754, 168. 16 

10, 653, 592. 10 

27, 751, 240. 03 
68, 630, 631. 96 


12.7 

23.7 

6.3 

16.6 
40.8 


18, 897, 448. 21 

41, 742, 943. 05 

38, 503, 162. 99 

23, 420, 736. 50 
69, 330, 358. 80 


9.8 


Regular procedure: 

Agreements executed by taxpayer with- 


21.8 


Agreements executed by taxpayer sub- 
sequent to 60 or 90-day letters .-. 

Appeals not filed within 60 or 90-day 


20.1 
12.2 


Action of Board of Tax Appeals 


36.1 


Total 


168, 150, 762. 56 


100.0 


191,894,649.55 


100.0 







i The effect of Mimeograph 3552 is to shorten the interest period when the additional tax is agreed to 
by the taxpayer and field force. The above figures cover assessments made during periods June 1, 1932, 
to May 31, 1933, and June 1, 1933, to May 31, 1934. 

In addition to the amount of revenue thus made available, addi- 
tional taxes were also assessed under the jeopardy provisions of the 
several revenue acts, as follows: 

Additional revenue assessed under the jeopardy provisions of revenue acts 
during the fiscal years 1933 and 1934 1 





1933 


1934 




$78, 177, 841. 35 
11, 783, 456. 63 


$26, 223, 540. 96 




13, 425, 730. 81 








89, 961, 297. 98 
16, 806, 103. 31 
3, 128, 595. 28 


39, 649, 271. 77 




8, 875, 646. 89 




4, 771, 665. 02 








109, 895, 996. 57 


53,296,583.68 







i The amounts shown in this table may or may not represent taxes upon which collectors can proceed to 
immediate collection, since the majority of jeopardy assessments are appealed to the Board of Tax Appeals. 



EEPORT OF THE SECRETARY OP THE TREASURY 



101 



Final notices of deficiency (60 or 90-day letters). — During the 
year 13,003 final notices of deficiency (60- or 90-day letters) were 
mailed by the Income Tax Unit, as compared with 17,772 for the 
previous fiscal period. 

Petitions were filed with the Board of Tax Appeals involving 41 
percent of the returns with respect to which 60- or 90-day letters had 
been issued. This compares with 37 percent (revised basis) during 
the fiscal year 1933. 

The following table shows the number of tax years involved in 
petitions filed with the Board of Tax Appeals during the fiscal years 
1931 to 1934, inclusive : 



Number of tax years involved in petitions filed with the Board of Tax Appeals 
during the fiscal years 1931 to 1934, by tax years 



Tax year 


1931 


1932 


1933 


1934 


Tax year 


1931 


1932 


1933 


1934 


1917 


30 

38 
50 
127 
86 
105 
174 
452 
617 
1,288 


18 
28 
28 
86 
29 
82 
66 
108 
161 
246 


9 
35 
32 
64 
37 
35 
37 
52 
65 
113 


24 
21 
18 
37 
58 
33 
60 
76 
95 
128 


1927 


3,164 

5,643 

378 

5 

1 


849 

1,493 

5,107 

269 

4 

1 


175 

298 

1,827 

3,576 

236 

6 

1 


172 


1918 


192S.. 


223 


1919 


1929. 


589 


1920 


1930. 


1 632 


1921 


1931 


2,023 
156 


1922 


1932.. 


1923 


1933 




2 




Total 








1925... 


12, 158 


8,575 


6,598 


5 347 


1926 









Claims and over assessments. — The following table shows the num- 
ber of refund claims adjusted and the certificates of overassessment 
issued, together with the amounts of overassessments involved, during 
the fiscal years 1933 and 1934 : 

Refund claims adjusted and overassessments determined during the fiscal years 

1933 and 1984 





1933 


1934 


Claims: 


Number 
24,046 
39, 326 


Number 

22, 434 




34, 135 








63, 372 


56, 569 






Allowed in full or in part 


27, 147 
13, 791 


25, 641 




10, 196 








•it). 938 


35, 837 








22, 434 


20, 732 






Certificates of overassessment issued when no claim had been filed.. 

Amount of overassessments settled by: 

Abatement 


30, 157 

Amount 
$108, 614, 453. 21 
18, 877, 869. 82 
32, 627, 780. 15 


26,480 

Amount 
$112, 371, 340. 67 


Credit 


19, 123, 080. 94 


Refund . 


29, 056, 285. 26 






Total 


160, 120, 103. 18 
10, 379, 441. 26 


160, 550, 706. 87 




11, 754, 027. 39 






Grand total 


170, 499, 544. 44 


172,304,734 26 







Note. — The amount involved in claims filed during the year was $176,132,959.94 as 
compared with $229,134,005.48 the preceding year. Of the claims adjusted during the 
year, the amounts rejected totaled $113,340,642.51 as compared with $170,934,417.94 the 
preceding year. 



102 



REPORT OF THE SECRETARY OF THE TREASURY 



There were also allowed during the year 10,114 collectors' claims, 
of which 8,898 recommended abatements or credits and 1,216 recom- 
mended refunds. A collector's claim usually lists a number of items 
in favor of different taxpayers, and those settled during the year 
covered 13,590 items for abatement or credit and 42,128 for refund. 

Returns on- hand. — A comparative table of returns for all tax years 
on hand at the close of the past four years follows : 

Returns on hand in the Income Tax Unit on June 30, 1931 to 193J f , by tax years 



Tax year 


1931 


1932 


1933 


1934 


1917 


142 
180 
174 
298 
249 
276 
423 
735 
1,001 
1,630 


150 
207 
251 
275 
261 
307 
373 
517 
677 
1,101 


293 
248 
267 
240 
239 
245 
315 
536 
1,028 
1,265 


116 
85 
118 
116 
98 
146 
157 
212 
277 
388 


1918 


1919 . 


1920 


1921 . 


1922 


1923 


1924 


1925 


1926 





Tax year 



1927. 
1928. 
1929 _ 
1930. 
1931. 
1932. 
1933. 



Total. 



1931 



5,061 

10, 172 

237, 868 

' 106, 491 



364, 700 



3,713 

4,380 

10, 496 

209, 921 

' 22, 142 



254, 771 



1933 



2,939 
2,632 
5,236 
9,929 
208,111 
'92,211 



325, 734 



634 
1,033 
3,246 
4,298 
9,522 
297, 803 
i 45, 421 

363, 670 



1 Figures are incomplete, since the preliminary work against the returns for the year just previous to 
the end of the fiscal year cannot be completed within that fiscal year. 

Audit in Washington. — The following table presents an analysis of 
the returns, original and reopened, pending in the several divisions 
and sections of the Washington office : 

Original and reopened returns under consideration in Washington, June 30, 

193 1], by tax years 





Audit Review Division and Conference 
Section 


Valuation 
Division 


Special 
Ad- 
just- 
ment 
Sec- 
tion 


Total 


Tax year 


Individual 
returns 


Corporation 
returns 


Consolidated 
returns 




Orig- 
inal 


Re- 
opened 


Orig- 
inal 


Re- 
opened 


Orig- 
inal 


Re- 
opened 


Orig- 
inal 


Re- 
opened 


Re- 
opened 


Orig- 
inal 


Re- 
opened 


1917 




58 
31 
51 
25 
20 




1 

2 
3 

6 

1 




23 
20 
17 
23 
17 


1 


5 
5 
8 
9 
9 


23 
17 
22 
34 
39 


1 


110 


1918 




75 


1919 




101 


1920 




97 


1921 




86 








Total. 




185 




13 




100 


1 


36 


135 


1 


469 








1922 




20 

18 

30 

29 

52 

161 

222 

903 

920 


1 
2 
2 

5 

6 

40 

125 


5 

4 

3 

7 

19 

41 

68 

179 

292 


4 
4 

18 
19 
29 
39 
50 
127 
232 


18 

18 

30 

36 

66 

95 

147 

214 

206 


2 

2 

4 

14 

20 

30 

42 

63 

238 


9 
11 
19 
13 
19 
28 
50 
100 
106 


66 
80 
74 
104 
110 
105 
216 
428 
554 


6 

6 

24 

37 
53 
77 
104 
409 
1,223 


118 


1923 . 




131 


1924... 


1 
2 
2 
3 
6 
179 
628 


156 


1925 


189 


1926 


266 


1927 


430 


19281 


703 


1929 


1,824 


1930 


2,078 






Total 


821 


2,355 


181 


618 


522 


830 


415 


355 


1,737 


1,939 


5,895 






1931.. 


2,750 

6,695 

202 


1,182 
519 
36 


600 

1,638 

100 


264 

98 

9 


461 

1,185 

73 


140 
43 
4 


604 

1,323 

11 


90 
66 


831 
540 

15 


4,415 

10,841 

386 


2,507 


1932 


1,266 


1933.. 


64 






Total 


9,647 


1,737 


2,338 


371 


1,719 


187 


1,938 


156 


1,386 


15, 642 


3,837 






Grand total 


10, 468 


4,277 


2,519 


1,002 


2,241 


1,117 


2,354 


547 


3,258 


17, 582 


10, 201 



REPORT OF THE SECRETARY OF THE TREASURY 103 

Audit in the field. — On June 30, 1934, there were 310,566 returns 
for all years pending for verification in the offices of the 38 field 
divisions of the Income Tax Unit, compared with 230,119 returns on 
hand June 30, 1933. 

Changes in tax liability were recommended by the field forces in 
137,682 returns, or 26 percent of the 527,517 returns disposed of by 
the field during the year. On 110,590 returns, or 80 percent of those 
changed, taxpayers agreed with revenue agents' conclusions. The 
total additional tax recommended by revenue agents during the fiscal 
year was $203,510,465.96, compared with $209,560,777.80 the preced- 
ing fiscal year. 

The technical staff 

Effective November 16, 1933, the Commissioner of Internal Reve- 
nue abolished the special advisory committee and created in lieu 
thereof the technical staff. The following represents the results of 
the settlement work conducted by these two settlement agencies 
during the fiscal year 1934 : 

On July 1, 1933, the special advisory committee had on hand a 
total of 7,652 docketed cases pending before the United States Board 
of Tax Appeals. During the period from July 1, 1933, to November 
15, 1933, it considered to a conclusion 2,333 Board cases and recom- 
mended for settlement 1,410 Board cases, or 60 percent thereof. The 
deficiency proposed on cases recommended for settlement by the com- 
mittee during this period was $37,352,377.57 and the recomputed 
deficiency (without eliminating the enforced credit in estate tax 
cases) was $7,680,868.25. 

On November 16, 1933, the staff took over 5,970 docketed Board 
cases. During the period from November 16, 1933, to June 30, 1934, 
it considered to a conclusion 3,410 Board cases, and recommended for 
settlement 2,135 Board cases, or 63 percent thereof. The deficiency 
proposed on cases recommended for settlement by the staff from 
November 16, 1933, to June 30, 1934, was $36,755,176.44; and the 
recomputed deficiencv (eliminating the enforced credit in estate tax 
cases) was $20,454,996.51. 

Miscellaneous Tax Unit 

The Miscellaneous Tax Unit is charged with the administration of 
all internal revenue taxes, other than those applicable to incomes and 
alcoholic liquors, as well as agricultural adjustment taxes. The unit 
is composed of five divisions, namely, Estate Tax Division, Sales Tax 
Division, Tobacco Division, Processing Tax Division, and Silver Tax 
Division. A force operating in the field is engaged solely in investi- 
gating matters affecting the miscellaneous taxes. There has been a 
substantial increase in the personnel of the Miscellaneous Tax Unit, 
made necessary by additional work in connection with the admin- 
istration of the processing and related taxes, the capital stock tax, 
the silver tax, and other miscellaneous taxes imposed under laws 
recently enacted. 

Estate Tax Division. — Estate tax collections amounted to $103,- 
985,288.04, an increase of $74,292,226.15 over the collections for the 
preceding year. This increase is due primarily to the additional 
estate tax imposed under the Revenue Act of 1932. Gift tax collec- 
tions amounted to $9,153,076.06, an increase of $4,536,414.10 over the 



104 



REPORT OF THE SECRETARY OF THE TREASURY 



preceding year. The collection of approximately $7,000,000 of defi- 
ciencies asserted in estate and gift taxes was stayed by the filing of 
appeals with the United States Board of Tax Appeals. 

The Kevenue Act of 1932 lowered the exemption applicable to 
estates in the case of residents from $100,000 to $50,000. Chiefly as a 
result of the lowered exemption there were 11,210 estate tax returns 
filed during the year 1934, an increase of 2,706 over the number filed 
during the preceding year. There were filed 3,619 gift tax returns, 
which represented an increase over the preceding year of 1,909 
returns. 

The administrative work of investigating and auditing returns of 
estate and gift taxes is shown in the summary which follows : 

Summary of investigation and audit of estate tax and gift tax returns for the 
fiscal years 1933 and 1934 





Estate tax 


Gift tax 




1933 


1934 


1933 


1934 


Returns in field: 

On hand at beginning of year. 


2,118 
7,632 


1,967 
10, 410 




1,068 


Received for investigation . 


1,397 


1,045 






Total to be disposed of . 


9,750 
7,783 


12, 377 
8,928 


1,397 
329 


2,113 


Major reports submitted by field force 


1,440 






On hand at end of year 


1,967 


3,449 


1,068 


673 






Returns in Bureau: 

On hand at beginning of year.. 


5,523 
8,504 


4,587 

11,210 

867 




1,706 


Received 


1,710 


3,619 


Reopened. 












Total to be disposed of 


14, 027 
9,440 


16, 664 
10, 176 


1,710 

4 


5,325 


Closed (assessment made)... 


2,034 






On hand at end of year 


4,587 


6,488 


1,706 


3,291 






Protest letters of taxpayers as a result of tax determined 
by audit: 


139 
2,137 


98 
864 






Received. 




25 








Total to be disposed of . 


2,276 
2,178 


962 
726 




25 


Disposed of by Estate Tax Division - 




9 








On hand at end of year 


98 


236 




16 








Final and conclusive agreements (sec. 606 of the Rev- 
enue Act of 1928): 


216 
386 


288 
132 




















602 
314 


420 
417 






Closed 














288 


3 














297 


•243 













1 This figure is included in the 10,176 returns closed, shown above. 

As a result of the audit of estate tax returns, deficiencies in tax 
aggregating $13,185,549.91 were assessed, such deficiencies being at- 
tributable to approximately 52.5 percent of the cases closed. Defi- 
ciencies in gift tax amounting to $138,097J)1 were assessed. The 
refunds of estate and gift taxes amounted to $2,991,384.79 (exclusive 
of interest), and taxes were abated in the amount of $61,130,238.15. 
Substantially all of the abatements of estate tax resulted from the 
allowance of credit for State estate, inheritance, legacy, or succession 



REPORT OF THE SECRETARY OF THE TREASURY 



105 



taxes. In these cases the Federal estate tax had been assessed either 
at the time the return was filed, or later for the purpose of protecting 
the interests of the Government because the evidence required to sub- 
stantiate the credit had not been filed by the end of the statutory 
period provided for the assessment of the tax. A summary of 
refund and abatement claims follows: 

Estate tax and gift ta-x claims on hand, received and disposed of during the 

fiscal year 1934 





Estate tax claim? 


Gift tax claims 




Refund 


Abatement 


Relund 


Abatement 




Num- 
ber 


Amount 


Num- 
ber 


Amount 


Num- 
ber 


Amount 


Num- 
ber 


Amount 


Claims filed: 

On hand July 1, 1933-... 


219 
646 


$6, 504, 801. 50 
2, 588, 305. 20 


6 
304 


$14, 680. 55 
29,711,713.82 


1 
14 


$8, 654. 40 
11,615.55 






Received during year 


4 


$6, 357. 83 


Total to be disposed of_ 


865 


9, 093, 106. 70 


370 


29, 726, 394. 37 


15 


20, 269. 95 


4 


6, 357. 83 




591 
118 


2, 509, 778. 81 
3, 401, 820. 35 


365 


29, 724, 421. 09 


6 
1 


3, 837. 16 
8, 708. 18 


4 


6, 357. 83 


Rejected 












Total disposed of 


709 


5,911,599.16 


365 


29, 724, 421. 09 


6 


12, 545. 34 


4 


6, 357. 83 


On hand June 30, 1934. 


156 


3, 181, 507. 54 


5 


1, 973. 28 


9 


7, 724. CI 












No claims filed, overassess- 

ments allowed 

Interest allowed - 


444 


472,911.03 
389,895.83 

5, 163. 04 

3, 377, 748. 71 


270 


31,383,102.14 


19 


4, 857. 79 
347. 27 


4 


16, 357. 09 


Additional 2 percent inter- 
est ' -... 


8 
1,043 












Total amount allowed, in- 


635 


61, 107, 523. 23 


24 


9, 042. 22 


8 


22, 714. 92 





1 As provided by the act of Mar. 3, 1933. 

Sales Tax Division. — The yield from the taxes administered in the 
Sales Tax Division amounted to $633,282,185.22, an increase over the 
preceding year of approximately $241,000,000. These figures do not 
include the taxes relating to distilled spirits, wines, and fermented 
liquors, since the alcoholic liquor taxes are now administered by the 
Alcohol Tax Unit of the Bureau. The increase in collections is due 
principally to the imposition of the capital stock tax and to larger 
returns of manufacturer's excise taxes, stamp taxes, tax on checks, 
tax on electrical energy, and taxes on telegraph, telephone, cable, 
and radio messages. 

A comparison of the taxes collected by the Sales Tax Division 
during the fiscal years 1933 and 1934, and the sources of those taxes, 
are shown in the table which follows : 

Miscellaneous taxes collected during the fiscal years 1983 and 1984 



Source 


1933 


1934 


Increase (+) or 
decrease (— ) 


Documentary stamps, including playing cards: 

Bonds of indebtedness, capital stock issues, etc 

Capital stock sales or transfers. 


$16, 034, 755. 59 
33, 188, 494. 94 
4, 206, 597. 74 
3, 908, 354. 20 


$16, 259, 304. 76 

38, 065, 999. 47 

7, 847, 743. 08 

4, 406, 384. 68 


+$224, 549. 17 
+4, 877, 504. 53 


Sales of produce (future delivery) 


+3, 641, 145. 34 


Playing cards 


+498, 030. 48 






Total. 


57, 338, 202. 47 


66, 579, 431. 99 


+9,241,229 52 







106 REPORT OF THE SECRETARY OF THE TREASURE 

Miscellaneous taxes collected during the fiscal years 1933 and 1934 — Continued 



Source 


1933 


1934 


Increase (+) or 
decrease (— ) 




$1, 347, 190. 45 

15,511.97 


$1, 476, 230. 32 
14, 984. 59 


+$129, 039. 87 


Adulterated and process or renovated butter, filled 


-527. 38 






Total — 


1, 362, 702. 42 


1,491,214.91 


+128,512.49 






Manufacturer's excise taxes (title IV, Revenue Act of 
1932) 


219, 188, 686. 92 

7, 467, 297. 50 

28, 562, 739. 33 

13, 734. 173. 58 

830, 582. 59 

2, 365, 040. 83 

38, 456, 493. 49 


356, 850, 559. 07 
10, 379. 369. 59 
33, 134, 407. 26 
18, 094, 685. 26 
1,156,114.59 
2, 715, 850. 67 
41, 383, 198. 66 


+ 137,661.872.15 




+2,912,072.09 




+4,571,667.93 


Telegraph, telephone, cable, and radio messages, etc 


+4.360,511.68 
+325, 532. 00 




+350, 809. 84 




+2, 926, 705. 17 






Total 


310, 605, 014. 24 


463, 714. 185. 10 


+153, 109,170.86 








15, 520, 512. 30 
6, 679, 260. 95 


14,613,414.42 
5,986,150.46 


-907, 097. 88 




-693, 110. 49 






Total 


22, 199, 773. 25 


20, 599, 564. 88 


-1,600,208.37 








35, 388. 89 
457, 067. 63 
239, 859. 22 

44, 612. 64 


52, 980. 41 

495, 270. 18 

180, 672. 98 

520. 64 


+ 17,591.52 




+38, 202. 55 




-59, 186. 24 




-44, 092. 00 






Total 


776, 928. 38 


729, 444. 21 


-47, 484. 17 










80, 168, 344. 13 


+80, 168, 344. 13 










392, 282, 620. 76 


633, 282, 185. 22 


+240, 999, 564. 46 







The claims for refund and abatement of taxes received and ad- 
justed in the Sales Tax Division during the fiscal years 1933 and 
1934 are shown in the table which follows : 

Claims for refund and abatement received and disposed of during the fiscal 

years 1933 and 193 h 





1933 


1934 




Number 

3,283 
39, 407 


Number 

8,881 




29, 531 






Total 


42, 690 


38,412 




3,173 










42, 690 
33,809 


35, 239 




28, 122 








8,881 


7,117 








Amount 

$4, 856, 797. 72 
694, 285. 98 


Amount 
$4, 402, 950. 35 




510, 206. 32 







There were 9,041 sales tax credit cases, totaling $1,927,597.94, on 
hand at the beginning of the year; 17.891 cases amounting to $3,- 
982,614.23 were received ; 18,663 cases aggregating $2,770,365.88 were 
disposed of, leaving on hand at the end of the year 8,269 sales tax 
credit cases amounting to $3,139,846.29. 

A total of $673,460,413.37, representing 1,803,570 items, was ap- 
proved by the Commissioner on miscellaneous assessment lists. The 



REPORT OF THE SECRETARY OP THE TREASURY 



107 



miscellaneous tax lists do not include the processing and related taxes, 
or the taxes collected by the sale of stamps. There was included 
in these lists a total of $22,463,679.44, representing 50,180 additional 
assessments resulting from office audit and field investigation. The 
interest paid and assessed on the miscellaneous tax lists amounted 
to $1,898,607.61. 

During the year there were received and examined 1,288,348 re- 
turns filed by taxpayers in connection with the taxes administered 
in the Sales Tax Division, not including the capital stock tax returns. 
There were received in the same period returns of capital stock by 
corporations as follows: 371,496 taxable domestic returns; 115,092 
nontaxable domestic returns; 272 taxable foreign returns and 37 
nontaxable foreign returns. The total capital stock returns filed 
numbered 486,897, of which approximately 150,000 had been exam- 
ined at the end of the year and closed. 

The number of offers in compromise submitted in settlement of 
liabilities incurred in connection with sales, tobacco, estate, gift, 
spirits, narcotics, capital stock, and miscellaneous stamp and special 
taxes, and the aggregate amounts thereof, received and disposed of 
are shown in the table which follows : 

Offers in compromise received and disposed of during the fiscal years 1933 

and WSJf 





1933 


1934 




Number 


Amount 


Number 


Amount 




1,532 
17, 194 


$116,277.73 
689,054.41 


9,898 
25, 168 


$391, 287. 95 




627, 182. 48 








18, 726 


805, 332. 14 


35, 066 


1, 018, 470. 43 








7,751 
715 
362 


327, 629. 89 
52, 259. 70 
34, 154. 60 


23, 242 

926 

6 

6,027 


389, 894. 83 




83, 418. 71 




235. 00 




79, 750. 99 












8,828 


414,044.19 


30, 201 


553, 299. 53 








9,898 


391, 287. 95 


4,865 


465, 170. 90 







1 The duties and functions of the Miscellaneous Tax Unit relating to alcoholic liquor offers in compro- 
mise were transferred to the Bureau of Industrial Alcohol on Dec. 13, 1933. 

Tobacco Division. — The collections from tobacco taxes amounted 
to $425,168,897.04, which reflected an increase of $22,429,837.79, or 
5.57 percent, over the previous year. The sources of the taxes col- 
lected on the various tobacco products are shown in table 8, page 319. 

Processing Tax Division. — The total collections from processing, 
compensating, and floor stock taxes imposed under the Agricultural 
Adjustment Act during the year amounted to $371,422,885.64. The 
amount of tax liability due is somewhat in excess of actual collec- 
tions, as many taxpayers availed themselves of the privilege pro- 
vided by the act of securing extensions of time of from 30 to 90 
days, within which to make payment of the tax. A summary of the 



108 



REPORT OF THE SECRETARY OF THE TREASURY 



taxes imposed under the Agricultural Adjustment Act, collected dur- 
ing the year, is shown in the table which follows : 

Collections of processing and related taxes by commodities, fiscal year 193 4 1 



Commodity 


Processing 


Compensat- 
ing 


Floor tax 
(wholesale) 


Floor tax 
(retail) 


Total 


Wheat... 


$104, 038, 634. 96 
85, 713, 359. 52 

3, 413, 305. 32 
70, 716, 192. 12 
15, 873, 985. 81 

5, 251, 648. 11 


$20, 774. 75 

1, 086, 773. 45 

18,450.05 

33, 289. 21 

155, 209. 07 

916, 342. 01 

140, 020. 78 


$10, 941, 402. 43 

46, 375, 040. 40 

982, 676. 73 

6, 166, 969. 51 

1, 814, 629. 01 

3, 006, 960. 26 

30, 395. 59 


$2, 620, 362. 68 
11,592,059.27 
81, 761. 64 
118, 160. 40 
244, 602. 16 
69,880.40 


$117,621,174.82 




144, 767, 232. 64 




4, 496, 193. 74 




77,034,611.24 




18, 088, 426. 05 




9, 244, 830. 78 




170, 416. 37 










Total 


285, 007, 125. 84 


2, 370, 859. 32 


69, 318, 073. 93 


14, 726, 826. 55 


371, 422, 885. 64 







1 Processing taxes were levied under the Agricultural Adjustment Act on the dates indicated: Wheat 
July 9, 1933; cotton, Aug. 1, 1933; tobacco, Oct. 1, 1933; field corn, Nov. 5, 1933; hogs, Nov. 5, 1933; paper 
and jute, Dec. 1, 1933; and sugar, June 8, 1934. 

The returns of processing tax, compensating tax, and floor stock 
tax filed during the year are shown in the following table : 

Number of processing and related tax returns filed by commodities, 
fiscal year 1934 



Commodity 



Wheat 

Cotton 

Corn 

Hogs 

Tobacco 

Paper and jute 

Sugarcane and sugar beets. 

Total. 



Processing 



42, 616 
11, 248 
53, 122 
117, 228 
41,076 
1,199 



266, 489 



Compen- 
sating 



5,305 
38, 106 
2,633 
1,634 
1,965 
2,032 
128 



51, 803 



Floor tax 
(wholesale) 



65, 451 
47, 646 
21, 866 
16, 554 
12, 671 
10, 430 
41 



174, 659 



Floor tax 
(retail) 



206, 998 
247, 912 
107, 186 

78, 438 
197, 955 

11, 352 
7 



Total 



320, 370 
344,912 
184, 807 
213, 854 
253, 667 
25, 013 
176 



1, 342, 799 



In addition to the general provisions of internal revenue laws 
relative to claims for refund, abatement, or credit, the Agricul- 
tural Adjustment Act, as amended, specifically provides for the re- 
fund or credit of taxes paid with respect to articles delivered for 
charitable distribution or use and for the refund of taxes paid with 
respect to articles exported. 

An analysis of all claims received and disposed of during the year 
in connection with the taxes imposed under the Agricultural Ad- 
justment Act is shown in the table which follows : 



Claims received, d 


'sposed of, 


and 


on hand a 


uring 


the fiscal year 1934 


Kind 


Received 


Allowed 


Rejected 


On hand June 30, 
1934 


Num- 
ber 


Amount 


Num- 
ber 


Amount 


Num- 
ber 


Amount 


Num- 
ber 


Amount 


Refund: 

Export 


22, 229 
8,919 
8, 385 
2,083 
3,586 
76 


$7, 463, 126. 64 
2, 140, 049. 54 
2, 220, 763. 27 
1, 471, 403. 78 

13, 975, 874. 14 
2, 546. 61 


6,323 
2,090 
4,813 
179 
1,463 
10 


$1, 153, 279. 71 

620,118.59 

187, 966. 38 

5, 136. 11 

1, 300, 520. 51 

165. 04 


324 

372 
951 
487 
232 


$145, 342. 49 
231, 524. 68 
469, 676. 64 
382, 318. 57 
617, 503. 48 


15,582 
6,457 
2,621 
1,417 
1,891 
66 


$6, 164, 504. 44 


Charitable 

Other 


1, 288, 406. 27 
1, 563, 120. 25 


Credit 


1, 083, 949. 10 


Abatement 


12,057,850.15 


Uncollectible 


2, 381. 57 










Total 


45, 278 


27, 273, 763. 98 


14, 878 


3, 267, 186. 34 


2,366 


1, 846, 365. 86 


28,034 


22, 160, 211. 78 







REPORT OF THE SECRETARY OF THE TREASURY 109 

The offers in compromise submitted during the year in settlement 
of the liabilities incurred under the Agricultural Adjustment Act 
totaled 684 and amounted to $35,945.14. 

During the year a total of $332,733,693.67, representing 1,351,230 
items, was approved by the Commissioner on the processing tax as- 
sessment lists. Included in this amount was $905,912.03, represent- 
ing 835 additional assessments resulting from office audit and field 
investigation. The interest assessed on the processing tax lists 
amounted to $79,902.85. 

Silver Tax Division. — A division is being organized to administer 
the silver tax, which became effective May 15, 1934, and a force will 
be functioning in sufficient time to audit returns when filed in accord- 
ance with the regulations, and to adjust claims and furnish rulings. 

Alcohol Tax Unit 

On December 5, 1933, the effective date of the twenty-first amend- 
ment to the Constitution, the functions of the Bureau of Industrial 
Alcohol were transferred to the Bureau of Internal Revenue and the 
personnel of the Bureau was placed under the Commissioner of 
Internal Revenue. These transfers were made by Treasury Decision 
4410, in accordance with the authority contained in section 4 of 
the act of March 3, 1927. The Bureau of Industrial Alcohol was 
continued for the time being as a unit of the Bureau of Internal 
Revenue. 

By Executive order the President, on March 10, 1934, under au- 
thority of section 16 of the act of March 3, 1933, abolished the 
Bureau of Industrial Alcohol and the office of Commissioner of In- 
dustrial Alcohol and transferred the functions and duties, as well 
as the personnel of the Bureau of Industrial Alcohol, to the Bureau 
of Internal Revenue. By the same Executive order the functions 
and personnel of the Alcoholic Beverage Unit of the Division of In- 
vestigation, Department of Justice, except those employed in the 
Taxes and Penalties Section of that unit, were transferred to the 
Bureau of Internal Revenue. Under the statute this Executive order 
was required to be transmitted to the Congress and could not take 
effect until 60 days after it was so transmitted, unless otherwise de- 
termined in accordance with law. No action was taken by the Con- 
gress in respect of this Executive order, and it accordingly took 
effect on May 10, 1934. 

On May 10, 1934, Treasury Decision 4432 established in the Bu- 
reau of Internal Revenue the Alcohol Tax Unit. This unit was 
charged with the administration of internal revenue laws relating 
to the supervision of production and warehousing, and the tax pay- 
ment of distilled spirits, alcohol, wines, fermented liquors, cereal 
beverages, and denatured alcohol. All functions relating to the 
production, custody, and supervision of these products, together with 
the inquiries and investigations relating to returns for occupational 
taxes and the detection of violations of laws relating to these prod- 
ucts, remain with the local supervisors. The receipt and accounting 
for taxes continued as a function of the collectors of internal revenue. 

The 12 field districts of the Bureau of Industrial Alcohol, each 
under the direction of a district supervisor, were continued. The 
23 local offices of the Alcoholic Beverage Unit were also continued, 



110 REPORT OF THE SECRETARY OF THE TREASURY 

each under the direction of an acting investigator in charge. The 
12 field districts are being rearranged into 15 districts with 62 
branch offices. The 23 local offices transferred from the Alcoholic 
Beverage Unit will be merged with the 62 branch offices when these 
branch offices are established. Each of the branch offices will be 
under the direction of an investigator in charge and will function as 
enforcement agencies for the detection and suppression of violations 
of laws relating to spirits, wines, and beer. 

The Alcohol Tax Unit in Bureau headquarters was placed in 
charge of a deputy commissioner of internal revenue, with two 
assistant deputy commissioners. One assistant deputy commis- 
sioner will have supervision of the permissive activities of the unit, 
and one assistant deputy commissioner is charged with the duties 
relating to the enforcement of the liquor laws. 

Five major divisions were set up in Bureau headquarters in the 
Alcohol Tax Unit: The Technical Division; the Audit Division; 
the Enforcement and Investigative Division; the Field Inspection 
Division; and the Plant Control Division. 

The Technical Division supervises the chemical laboratories of the 
Bureau and passes upon plans and surveys of distilleries, bonded 
warehouses, breweries, and wineries, to determine whether all re- 
quirements of law and regulations are complied with. 

The Audit Division examines and adjusts the accounts of alcohol 
and other distilled spirits, rectified spirits, wine, and beer, and has 
general supervision over assessments, claims, and offers in com- 
promise relating to taxes on these products. 

The Enforcement and Investigative Division directs the operations 
of investigators and inspectors in the detection and prosecution of 
persons violating the internal revenue laws relating to distilled 
spirits, wine, and beer. It is contemplated that there will be approx- 
imately 1,800 field agents in this force. 

The Field Inspection Division examines the offices of field super- 
visors and branch officers with respect to procedure and manage- 
ment. There are at present nine field office inspectors in this division. 

Inspectors operating under the Plant Control Division examine 
distilleries, alcohol and denaturing plants and warehouses, wineries, 
breweries, and rectifying plants to determine whether they are com- 
plying with the requirements of the laws and regulations. There 
are at present 34 plant-control inspectors. 

Accounts and Collections Unit 

The Accounts and Collections Unit, which is the central admin- 
istrative organization for the 64 collection districts, is divided into 
3 divisions: The Collection Accounting Division; the Collectors' 
Personnel, Equipment, and Space Division; and the Disbursement 
Accounting Division. 

There were filed in the collectors' offices during the year, 9,144,268 
tax returns, compared with 7,288,080 for the previous year, an in- 
crease of 1,856,188. Of the total tax returns filed in 1934, there were 
4,933,376 income tax returns compared with 5,166,091 filed during 
the previous year, a decrease of 232,715. 

Approximately 2,300,000 income tax returns of individuals on 
form 1040-A were audited and closed in collectors' offices during the 
year, and 4,140,634 information returns were verified. In connection 
with this audit work 44,954 income tax returns were investigated. 



REPORT OF THE SECRETARY OF THE TREASURY 111 

A total of 9,351,968,124 revenue stamps, valued at $833,901,971.05, 
was issued to collectors of internal revenue and the Postmaster Gen- 
eral, compared with 8,415,413,120 stamps, valued at $565,354,578.51, 
issued during the fiscal year 1933. Stamps returned by collectors 
and by the Postmaster General amounted to $52,946,424.83, compared 
with $5,698,164.98 for 1933. The repeal of the eighteenth amend- 
ment to the Constitution was mainly responsible for the large in- 
crease in the number and value of stamps issued to collectors and the 
stamps returned by collectors to the Bureau. 

After the appropriate administrative procedure, collectors of in- 
ternal revenue transmitted to the Bureau, or otherwise disposed of, 
151,470 claims as compared with 110,519 during 1933, an increase of 
40,951. The number of claims on hand at the close of the fiscal year 
1934 was 6,878, compared with 2,396 at the close of the previous fiscal 
year. The large increase in the number of claims on hand at the 
end of the year was due principally to necessary correspondence of 
collectors with processing taxpayers for additional information be- 
fore the claims could be forwarded to the Bureau. 

During the year field deputy collectors made 532,609 revenue- 
producing investigations in connection with the verification of tax 
returns, the discovery of delinquent taxpayers and warrants for dis- 
traint. The total amount of tax involved in these investigations was 
$57,491,799, including $44,588,643 collected and $12,903,156 reported 
for assessment. The amounts involved for the various types of work 
were: 

Additional taxes collected and reported for assessment by collectors' field forces 
during the fiscal year 1934 



Verification of tax returns . 

Delinquent taxpayers 

Warrants for distraint 

Total 



Collected 



$3, 028, 888 
14, 603, 119 
26, 956, 636 



44, 588, 643 



Reported for 
assessment 



$3, 696, 757 
9, 206, 399 



12, 903, 156 



There were 103,808 warrants for distraint served by deputy collec- 
tors during the year, and on June 30, 1934, there were 52,425 warrants 
in the hands of the field forces for collection as compared with 27,434 
on June 30, 1933. 

Special attention has been given to the discovery of the various 
classes of delinquent taxes and to the collection of back income taxes. 
That these efforts have been successful is evidenced by the fact that 
the total income tax collections during the year, relating to other than 
current taxable periods (back taxes) amounted to $140,586,953.02, 
which is $30,586,953.02 in excess of the amount which it was originally 
anticipated would be collected. After the Director of the Budget 
released $2,885,799 to assist in carrying out the program for the 
speedy collection of back taxes, the Treasury made another estimate 
increasing to $130,000,000 the probable amount of back tax 
collections. 

The supervisors of accounts and collections submitted 100 reports 
covering their examinations of the accounts of the various collectors' 

90353—35 9 



112 REPORT OF THE SECRETARY OF THE TREASURY 

offices compared with 120 reports submitted during 1933. With the 
exception of two districts, every collector's office was examined at 
least once and most of them twice during the year. During the year 
these officers installed in office 59 new collectors and 6 acting 
collectors. 

Collectors' 1 Personnel, Equipment, and Space Division. — At the 
beginning of the fiscal year 1934 there was in the Internal Revenue 
Collection Service engaged on regular internal revenue work a total 
authorized force, including collectors, of 4,571 employees at an 
annual basic salary rate of $10,022,701. On July 15, 1933, a reduc- 
tion of 242 positions was made in the total authorized collectors' 
personnel. On October 2, 1933, 190 of these positions were restored 
in connection with a special drive inaugurated for the collection of 
back taxes and 82 additional positions were later authorized as a 
further aid in the prosecution of the delinquent tax drive, to provide 
needed assistance in connection with the increased work as the result 
of repeal of the eighteenth amendment, and to aid collectors in han- 
dling the increased work incident to the many new taxes. At the close 
of the fiscal year there was a total authorized force, including collec- 
tors, of 4,601 employees at an annual basic salary rate of $9,654,580. 
It will be observed that there was a net increase of only 30 in the 
total number of positions although there was a decrease of $368,121 in 
the annual basic salary rate. The decrease in the annual rate is 
due to the large turn-over in the force during the year and the fact 
that all appointments have been made at the initial salary rates in 
the respective grades. 

During the year a total of $163,474.70 was expended from the 
internal revenue allotment for the employment of temporary per- 
sonnel, compared with $93,682.02 during the preceding fiscal year. 
The increase of $69,792.68 in expenditures for temporary assistance 
during the year was occasioned chiefly by emergency conditions which 
arose in connection with the repeal of the eighteenth amendment. 
During the year the sum of $1,720,133.89 (net) was expended for 
salaries of permanent and temporary office and field employees on 
the processing tax roll. 

Considerable preliminary work was handled during the latter part 
of the year in connection with the setting up of a special section in 
collectors' offices in cotton-producing States to administer the tax col- 
lection provisions of the Bankhead Cotton Control Act. At the 
close of business June 30, 1934, collectors of such districts had been 
authorized to employ a total of 235 temporary office and field 
employees on the cotton tax roll to carry out the tax provisions of 
this act. 

During the fiscal year the sum of $115,969.24 was expended from 
the rental of quarters for collectors' offices and branch offices, com- 
pared with $209,306.43 in the preceding fiscal year. The decrease of 
$93,337.19 was brought about by the removal of several of the offices 
from commercial to Federal space and in certain instances through 
reduction in rental under existing leases. 

Disbursement Accounting Division. — The Disbursement Account- 
ing Division is charged with keeping the internal revenue appropria- 
tion accounts and expenditures, and is responsible for the administra- 
tive examination required by law of the accounts of 64 collectors of 
internal revenue and 38 internal revenue agents in charge of divi- 



REPORT OF THE SECRETARY OF THE TREASURY 



113 



sions, including internal revenue salary accounts of the collector of 
customs at San Juan, Puerto Rico. The appropriation accounting 
work increased considerably during the year by reason of the 
bureau's administrative duties in connection with assessing and 
collecting the processing taxes. 

Office of the General Counsel 

Under the provisions of section 512 of the Revenue Act of 1934, the 
office of General Counsel for the Department of the Treasury, and 
the office of Assistant General Counsel for the Bureau of Internal 
Revenue were created. The incumbents qualified and took office on 
June 20, 1934, at which time the office of General Counsel for the 
Bureau of Internal Revenue was abolished. 

General CoumseVs Committee. — On July 5, 1933, a committee was 
organized in the office of the General Counsel for the Bureau of 
Internal Revenue known as the " General Counsel's Committee ", and 
composed of six members, one of whom was the General Counsel. 
The purpose of this committee is to facilitate and expedite the ren- 
dering of final decisions in cases and at the same time to coordinate 
rulings so that conflicting results in similar cases in different sections 
of the office would be minimized. During the fiscal year just closed 
the committee received 286 cases and closed 274, leaving 12 cases 
pending on June 30, 1934. 

Civil Division. — The Civil Division, in cooperation with, and at 
the request of the Department of Justice and the various United 
States attorneys, assists in handling civil internal revenue cases 
arising in the Federal district courts, the United States Court of 
Claims, and the Supreme Court of the District of Columbia, together 
with a limited number of cases originating in State courts. Except 
in bankruptcy and receivership cases, and cases arising in the Court 
of Claims, the actual trials of such cases and the arguments upon 
appeals are now conducted by the Department of Justice pursuant 
to the President's Executive order of June 10, 1933. The Division's 
major activities during the fiscal year are shown in the following 
tables : 

Civil cases received and disposed of during the -fiscal year 1931) * 





Pending 
July 1, 1933 


Received 
during year 


Closed 
during year 


Pending 
July 1, 1934 


In court 


2,935 

212 

1,072 


716 
109 
843 


965 
116 
705 


2,686 
205 


For suit by the United States 


Lien cases in court 


1,210 






Total 


4,219 


1,068 


1,786 


4, 101 







Excludes bankruptcy, receivership, insolvency, compromise, and liquor cases. 

Civil cases pending in courts July 1, 1933 and 1934 1 



Courts 



July 1,1933 July 1,1934 



District courts 

Circuit courts of appeals 

Court of Claims 

Supreme Court 

State courts and miscellaneous 

Pending payment of judgment claims. 

Total 



1,909 


1,877 


116 


125 


687 


576 


25 


5 


49 


17 


149 


86 



2,935 



' Excludes bankruptcy, receivership, insolvency, compromise, and liquor cases 



114 



REPORT OF THE SECRETARY OF THE TREASURY 



Offers in compromise of pending suits received during the year 
numbered 51. Compromise offers disposed of, including those pend- 
ing at the beginning of the fiscal year, numbered 45, of which 16 
were accepted and 29 were rejected. The total amount of taxes 
sought to be recovered in cases finally compromised was $538,515.02, 
and the sum of $73,452.67 was secured. 

The number of cases tried or decided during the fiscal year is 
shown in the following table : 

Tax cases tried and decided by the Federal courts during the fiscal year 1984 





Cases tried 


Cases decided 




For Gov- 
ernment 


Against 
Govern- 
ment 


Partly for 
and partly 
against 
Govern- 
ment 


Total 




165 
37 

78 
5 


169 

54 

47 

4 


78 

20 

14 

4 


20 

3 

1 


267 




74 




64 




9 






Total - 


285 


274 


116 


24 


414 







The work of the division for the fiscal year 1934, in bankruptcy 
and receivership cases, is summarized as follows : 

Bankruptcy and receivership cases closed during the fiscal year 1934 



Cases 



Number 



Pending July 1, 1933 

Received during year 

Total to be disposed of 
Closed during year 

Pending June 30, 1934 



2,174 
1,509 



3,683 
1,585 



In the 1,585 cases closed, relating to bankruptcy and receivership, 
claims were filed in the amount of $8,672,514.96, and the sum of 
$1,848,214.76 was collected. 

Interpretative Division. — This division is charged with the prepa- 
ration of opinions relating to the administrative construction of in- 
ternal revenue laws and, until July 1, 1934, with the framing of 
regulations to carry such laws into effect. The enactment by Con- 
gress of new legislation, such as the Revenue Act of 1934, the Liquor 
Taxing Act of 1934, the acts amending and supplementing the 
Agricultural Adjustment Act of 1933, increased the work of this 
division. 

Review Division. — This division reviews cases involving refunds, 
credits, and abatements of internal revenue taxes. It prepares pub- 
lic decisions in accordance with Treasury Decision 4264 in all cases 
where the overassessments exceed $20,000; prepares reports to the 
Joint Committee on Internal Revenue Taxation in cases involving 
credits and/or refunds in excess of $75,000, as required by section 
710 of the Revenue Act of 1928 ; and also participates in conferences 



Report of the secretary of the treasury 115 

and negotiations in other bureau agencies involving proposed over- 
payments. 

There were 779 cases disposed of during the year involving reduc- 
tions in tax aggregating $102,143,621.93. In 169 of these cases mem- 
oranda were prepared. The allowances were reduced by adjust- 
ments in this division in the amount of $4,113,449.51. Some of the 
principles involved in these adjustments affected the disposition of 
other cases pending elsewhere in the Bureau. Public decisions were 
promulgated in 575 cases, and memoranda were submitted to the 
joint congressional committee in 39 cases. 

As heretofore this division has regularly afforded conferences in 
cases in which issues appeared to require action contrary to the tax- 
payer's contentions. 

Appeals Division. — Cases involving income, estate, and gift taxes 
filed with the Board of Tax Appeals are in the immediate charge of 
this division. During this fiscal year 9,582 cases were closed while 
3,976 new cases were filed. At the end of the year there were pend- 
ing 16 gift tax cases involving $198,715; 449 estate tax cases involv- 
ing $60,160,922 ; and 12,009 income tax cases involving $388,133,443 ; 
or a total of 12.474 cases involving $448,493,080. Of this number 
11,338 were pending before the Board and 1,136 were in appellate 
courts on appeal from Board decisions. 

Cases tiled with and closed before the Board of Tax Appeals during the fiscal 

years 1933 and 1934 



Cases 


1933 


1934 


Number 


Amount 


Number 


Amount 




20, 469 
5,997 


$707, 265, 709. 56 
229, 620, 213. 68 


18, 080 
3,976 


$574, 257, 340 




83, 692, 291 








26, 466 


936, 885, 923. 24 


22, 056 


657, 949, 631 






Closed during year: 


1,122 
1,537 
5,727 




574 
1,518 
7,490 






















Total 


8,386 


164,409,489.40 


9,582 


209,456,551 








18, 080 


i 772, 476, 433. 84 


12, 474 


448, 493, 080 







1 This sum includes duplications aggregating $198,219,093 in amount representing deficiencies redeter- 
mined against transferees and subsidiary corporations in affiliated groups. This duplication is eliminated 
from the computations for the fisoal year 1934. 

Penal Division. — The Penal Division, in cooperation with the 
Department of Justice and the various United States attorneys, 
passes upon criminal internal revenue cases; prepares opinions on 
liability for percentage penalties for fraud (occasionally for negli- 
gence or delinquency), and on acceptance or rejection of offers in 
compromise of tax cases in which such questions are involved. The 
Division also prepares opinions interpreting or construing percent- 
age penalty and criminal statutes, and opinions on all questions of 
law involved in a case where there is also a question of percentage 
penalty or crime. The Division also passes upon questions as to 
whether cases that have been closed by agreement under section 606 
of the Revenue Act of 1928, and similar provisions of the other 



116 REPORT OF THE SECRETARY OF THE TREASURY 

revenue acts, should be reopened, because of " fraud or malfeasance, 
or misrepresentation of a material fact ", and informers' reward 
claims under section 3463 of the Revised Statutes. 

The following table shows the work of the division during the last 
two fiscal years : 

Cases received and disposed of by the Penal Division during the fiscal years 

1933 and 1934 



Cases 



1933 



Pending at beginning of year. 
Received during year 

Total to be disposed of. 
Disposed of .. 

Pending at end of year. 



933 
1,444 



1,123 
1,634 



2,377 
1,254 



2,757 
1,233 



1.123 



1,524 



Administrative Division. — The activities of the Administrative 
Division include the review of offers in compromise and the holding 
of conferences on difficult and complicated or protested cases. The 
Division is charged with the supervision of the personnel, library, 
manuscripts, mail, and records ; and devises and inaugurates methods 
of procedure, assembles and reviews efficiency ratings, interviews 
applicants, and performs other varied and miscellaneous duties per- 
taining to the work of the General Counsel's office. 

Compromise Section. — During the fiscal year 629 cases handled in 
this Section were closed by acceptance of offers in compromise and 
collection of filed claims in the aggregate amount of $5,208,075. 
The following table shows the volume of cases handled by the 
Section. 

Offers in compromise, fiscal year 1934 

Pending action by Compromise Section at beginning of year 1, 790 

Received during year 3, 905 

Total to be disposed of 5, 701 

Closed or in process of closing 4, 456 

Pending action by Compromise Section at end of year 1, 245 

Effective June 4, 1934, all offers in compromise involving income 
tax liability, except cases in which insolvent banks, or assignment 
for the benefit of creditors, or liquidation proceedings, or liability of 
decedents or their estates are involved, were, by order of the Com- 
missioner, transferred to the Technical Staff. Up to June 4, 1934. 
the Section handled all offers submitted in compromise of income and 
miscellaneous taxes, interest, ad valorem penalties, and specific penal- 
ties, except those offers that involved fraud penalties, criminal prose- 
cution, section 104 of the Revenue Acts of 1928 and 1932, or section 
220 of prior revenue acts. 

In addition to the individually docketed cases covered by the above 
table this section, during the fiscal year 1934, handled cases briefed 
in the Income Tax Unit covering interest and delinquency penalties 
and cases briefed in the Miscellaneous Tax Unit covering specific 
penalties, as shown in the following table and, since the organization 
of the Alcohol Tax Unit, May 10, 1934, offers involving specific 



REPORT OF THE SECRETARY OF THE TREASURY 



117 



penalties under the Liquor Taxing Act of 1934 are being routed to 
this section and handled as other specific penalty cases. Cases in- 
volving questions of remission and/or mitigation of forfeitures under 
section 709 of the Revenue Act of 1928 are also being routed to this 
section by the Alcohol Tax Unit, but action on them is being withheld 
pending determination of procedure to be followed. 

Interest and penalty compromise cases, fiscal year 1931i 



Interest and 
delinquency 
penalty cases 



Specific 

penalty 

cases 



Total 



Pending July 1, 1933— 

Received July 1, 1933-June 30, 1934 

Total to be disposed of 

Returned for change - 

Rejected - 

Number accepted — 

Total disposed of - 

Amount accepted 

Pending June 30, 1934- 



28 
3,610 



3,638 



2,382 

24 

1,232 



3,638 

, 839. 69 






33, 033 



33, 033 



2,394 

388 

30, 251 



33, 033 

$205, 589. 10 





28 
36, 643 



36, 671 



4,776 

412 

31, 483 



36, 671 

$264, 428. 79 





Intelligence Unit 

The Intelligence Unit was formed on July 1, 1919. Its duties 
were defined as, primarily, the investigation of willful attempts to 
defraud the Government of taxes due under the various revenue acts, 
and the investigation of charges against employees in the Internal 
Revenue Service. There have been added to the duties of the unit 
since that time the investigation of charges against attorneys and 
agents practicing before the Treasury Department, the investiga- 
tion of offers in compromise of tax liability, and such special inves- 
tigations as may be desired by the Commissioner with respect to 
the general work of the Bureau of Internal Revenue and by the Sec- 
retary of the Treasury with respect to general departmental matters. 

The principal work of the unit consists in the investigation of 
tax fraud cases. This work is performed in cooperation with inter- 
nal revenue agents and deputy collectors and has increased steadily 
during the last few years. For the period from July 1, 1919, to 
June 30, 1934, there were investigated 7,744 tax fraud cases (approx- 
imately 31,000 tax years). There have been 1,236 indictments for 
these offenses and to date 688 of these cases have been disposed of 
in the courts, resulting in the conviction or plea of guilty of 615 
individuals and 73 acquittals. During the period from July 1, 
1919, to June 30, 1934, the total amount of taxes and penalties recom- 
mended for assessment as a result of investigations of this char- 
acter was $354,659,992. The yearly average of such recommenda- 
tions for the 15 years ended June 30, 1934, was $22,310,666; the aver- 
age for the last 6 fiscal years has been $30,306,000. 

In addition to the collections by the Bureau of Internal Revenue 
of taxes, penalties, and interest, amounts are covered into the Treas- 
ury by way of fines imposed in criminal cases ; in fact, in some juris- 
dictions the courts have imposed an additional penalty by requiring 
the defendants to pay the costs of the investigations, that is. the 
salaries and expenses of the agents incurred during investigations. 



118 REPORT OF THE SECRETARY OF THE TREASURY 

Since the organization of the unit charges of a serious nature 
involving employees of the service have been investigated by spe- 
cial agents, and in all cases where the interests of the service de- 
manded, employees have been promptly separated from their posi- 
tions. In those instances in which violations of the criminal stat- 
utes were indicated, prosecutions have been instituted. 

The investigation of charges against attorneys and agents ad- 
mitted to practice before the Treasury Department was assigned 
to this unit effective April 1, 1924. From that date to June 30, 1934, 
957 such cases were investigated, as a result of which 157 agents 
and attorneys were disbarred from practicing and 308 otherwise 
punished. 

The work of the Intelligence Unit has been performed by a yearly 
average of 79 special agents, including special agents in charge of 
divisions, with a present enrollment of 115. The present annual cost 
of this unit is $522,650, and the average annual cost has been approx- 
imately $358,000. 

LEGAL DIVISION 

The Treasury Department had no legal division until Executive 
Order No. 6166 of June 10, 1933, became effective on August 10, 
1933. Legal questions arising in the Department were referred for 
opinion and advice to the Solicitor of the Treasury, who was an 
officer of the Department of Justice answerable to the Attorney 
General. By section 5 of the aforesaid Executive order the func- 
tions of the office of the Solicitor of the Treasury not specifically placed 
under the Department of Justice were transferred to the Treasury. 

With a view to centralizing control and coordinating in one agency, 
under a single officer, the legal duties and functions of the Depart- 
ment, handled by legal units in the different bureaus and agencies, 
there was submitted to the Congress a provision which subse- 
quently became section 512 of the Revenue Act of 1934. This sec- 
tion created in the Department of the Treasury the office of General 
Counsel for the Department, and provided that the General Counsel, 
to be appointed by the President with the advice and consent of the 
Senate, should be the chief law officer of the Department. The sec- 
tion also authorized the appointment, in the same manner, of an As- 
sistant General Counsel for the Bureau of Internal Revenue and the 
appointment by the Secretary of not exceeding five Assistant General 
Counsels. The offices of General Counsel for the Bureau of Internal 
Revenue and of Solicitor of the Treasury were abolished and the 
powers, duties, and functions of such offices were transferred to the 
General Counsel. The General Counsel qualified and took office on 
June 19, 1934. 

Organization of the Legal Division was begun immediately by the 
appointment of an Assistant General Counsel for the Bureau of In- 
ternal Revenue. Thereafter an Assistant to the General Counsel 
and four Assistant General Counsels were appointed, each Assistant 
General Counsel being made answerable to the General Counsel for 
the handling of all legal problems arising in, or pertaining to, the 
particular bureaus and agencies of the Treasury Department placed 
under his jurisdiction. 

The order of the Secretary of the Treasury of June 20, 1934, 
created a Legal Division, Department of the Treasury, under the 



REPORT OF THE SECRETARY OF THE TREASURY 119 

supervision and direct control of the General Counsel. All personnel, 
records, books, furniture, and supplies connected with the legal 
activities of the Treasury Department were transferred to this 
Division. 

Since organization, the Legal Division, in addition to the usual 
routine legal business of the Department, has engaged in the prepara- 
tion of legal opinions, briefs, and memoranda for the information and 
guidance of administrative officers; prepared and examined numerous 
contracts pertaining to the public building program of the Treasury; 
drafted proposed legislation deemed necessary or desirable for the 
more efficient operation of the Department, for the collection of reve- 
nue, and for the safeguarding of the national credit ; prepared Execu- 
tive orders, and departmental orders and regulations, particularly 
with reference to gold and silver; and handled numerous questions 
arising in connection with the Emergency Banking Act. 

BUREAU OF THE MINT 

Institutions of the Mint Service 

During the fiscal year ended June 30, 1934, six Mint Service insti- 
tutions were in operation: Coinage mints at Philadelphia, San Fran- 
cisco, and Denver; the assay office at New York, which makes large 
sales of fine gold bars; the mint at New Orleans conducted as an assay 
office; and the assay office at Seattle. The two last-named institutions 
are, in effect, bullion-purchasing agencies for the large institutions and 
also serve the public by making assays of ores and bullion. Electro- 
lytic refineries are located at the New York, Denver, and San Fran- 
cisco institutions. 

Gold operations 1 

Under the Executive order of August 29, 1933, providing that gold 
produced from domestic mines might be sold abroad at world-market 
prices, the United States mints and assay offices received, on consign- 
ment, newly produced gold, supported by affidavits evidencing 
eligibility, and delivered gold to buyers. The average sale price 
under this order was $30.99+ per fine ounce. 

An Executive order of October 25 authorized acquisition by the 
Reconstruction Finance Corporation of newly mined domestic gold 
received on consignment by United States mints and assay offices. 
Gold was received under this order at prices fixed by authorized Gov- 
ernment officials from day to day, ranging from $31.36 to $34.06, 
averaging through January 15, 1934, $33.59 per fine ounce. 

An Executive order of January 15, 1934, and regulations issued 
thereunder authorized purchase by the New York Federal Reserve 
Bank of gold received on consignment by the mints and assay offices, 
at prices fixed from day to day by the Secretary of the Treasury. 
Under this order the price was fixed at $34.45 per fine ounce and 
remained at that level until the President's proclamation of January 
31, 1934. 

The Presidential proclamation of January 31, 1934, authorized by 
the act of May 12, 1933, as amended by act of January 30, 1934, fixed 
the gold content of the dollar of the United States at 15%i grains of 
gold 0.9 fine. This compares with the previous gold dollar consisting 

1 For a more complete description of monetary legislation during the fiscal year, see p. 27; and for a table 
showing daily price quotations on newly mined gold in the United States from Sept. 8, 1933, to Jan. 31, 1934 , 
see exhibit 26, p. 206. 



120 REPORT OF THE SECRETARY OF THE TREASURY 

of 25.8 grains of gold 0.9 fine, and constitutes a reduction of about 41 
percent, making the present gold dollar equivalent to about 59.06 
cents of the former unit. Under this proclamation the United States 
mints and assay offices resumed the purchase of proffered eligible gold, 
at the price of $35 per fine ounce fixed by the proclamation, and 
revalued the gold they held, at the same figure. 

Gold purchased by the several Mint Service institutions during the 
fiscal year 1934, at $20.67+ per fine ounce amounted to $20, 114,858.02; 
gold purchased at $35 per fine ounce amounted to $800,047,115.02. 
Gold from the Federal Reserve banks and agents and gold coin, both 
received through other Treasury offices, valued at $35 per fine ounce, 
amounted to $107,290,767.68 and $10,207,157.47, respectively; and 
gold bullion originally consigned to the mint institutions, purchased 
by the Reconstruction Finance Corporation and finally received by 
the mint institutions as Government holdings through the Treasurer's 
office, amounted to $27,834,891.57 valued at $32.75. The increment 
resulting from the revaluation of amounts received at less than $35 
an ounce was $15,854,442.50. The total of direct purchases by the 
mints and acquisitions through other Treasury offices, valued at $35 
per fine ounce, was $981,349,232.26. In addition intermint service 
institution transfers, at $35 per fine ounce, amounted to $8,582,894.42. 
This constitutes a grand total of $989,932,126.68 at $35 a fine ounce. 

Silver operations 1 

Silver bullion acquired by the Mint Service institutions during the 
fiscal year 1934 totaled 32,578,359.12 fine ounces, the average cost of 
which was 54.377 cents per fine ounce, and the total cost $17,715,096.26. 
The items making up this total were: Silver received in exchange for 
bars bearing the Government stamp, 509,864.45 fine ounces; silver in 
gold deposits purchased at market rates, 354,825.84 fine ounces; silver 
received for credit on foreign debts at 50 cents per ounce (act of May 
12, 1933), 22,734,824.35 fine ounces; newly mined domestic silver 
acquired at 64+ cents per ounce (Presidential proclamation of Dec. 
21, 1933), 8,558,160.96 fine ounces; and silver received through other 
Treasury offices under the Silver Purchase Act of 1934 (act of June 19, 
1934), valued at market rates, 420,683.52 fine ounces. In addition, 
United States coin received for recoinage totaled 5,026,139.37 fine 
ounces, the recoinage value being $6,949,092.15, and silver deposited 
in trust by other governments totaled 16,062,294.32 fine ounces. Silver 
transfers between Mint Service offices totaled 2,040,305.16 fine ounces. 
The aggregate of the above items is 55,707,097.97 fine ounces. 

The market price of silver in New York (mean of bid and asked), 
during the fiscal year 1934, was at the lowest point on August 16, 

1933, $0.353125; the highest point, $0.470625, was effective for three 
different periods, February 19, 1934, March 12, 13, and 14, and 
April 10 and 11, 1934. The fiscal year average was $0.42540, which 
compares with the prior fiscal year average of $0.28714. The prior 
year's range was between $0.245625 and $0.375625. 

Coinage 

Resumption early in 1934 of coinage demand by the public was a 
factor in the increased output of domestic coin during the fiscal year 

1934. Total domestic pieces made in the fiscal year under review 

For a more complete description of monetary legislation during the fiscal year, see p. 27. 



REPORT OF THE SECRETARY OF THE TREASURY 121 

were 46,634,250 as compared with 32,154,300 in 1933. The 1934 
value was $3,499,125 as compared with the prior year's value of 
$27,861,420; the decrease is explained by the absence of gold coinage 
in 1934. The 1934 domestic coinage consisted of 10,414,250 silver 
pieces valued at $3,136,925, and 36,220,000 bronze pieces valued at 
$362,200. 

For foreign countries there were made during the fiscal year 1934, 
19,040,000 pieces, consisting of 10,540,000 silver, and 8,500,000 nickel 
pieces. These were all made at the Philadelphia mint, and were for 
Colombia, Cuba, Ecuador, and Honduras. The prior year's coinage 
for foreign countries consisted of 5,921,800 pieces. 

The total of domestic and foreign pieces coined in the fiscal year 
1934 amounted to 65,674,250, compared with the 1933 total of 
38,076,100. 

Bullion deposit transactions 

The number of bullion deposits again showed a large increase over 
recent prior years, the 1934 total being 115,870 as compared with 
73,238 in 1933, 54,105 in 1932, and 36,098 in 1931. Small parcels of 
newly mined gold from placer miners, and from secondary materials 
returned from industry to monetary use, continued in large volume. 

Refineries 

The refineries produced, during the year, 2,387,817 fine ounces 
(81.8 tons) of electrolytically refined gold, compared with 2,336,943 
fine ounces (80.1 tons) in the prior year; and 703,284 fine ounces 
(24.1 tons) of electrolytieally refined silver, compared with 872,249 
fine ounces (29.9 tons) in the prior year. 

The stock of gold and silver in unrefined bullion on hand at the close 
of the fiscal year 1934 was 929 tons, an increase of about 99 tons 
during the year as compared with the prior year's increase of 165 tons. 
Except for a very short period during the past fiscal year, the electro- 
lytic refinery at the New York assay office remained closed for the 
fourth successive year. 

Co mmemorative coins 

Silver 50-cent commemorative coins of special design were author- 
ized as follows: 



Event 



Date of law 



Pieces 



Texas, centennial of independence 

Maryland, tercentennial of founding. . . 
Connecticut, tercentennial of founding. 

Arkansas, centennial 0/ statehood 

Daniel Boone, bicentennial of birth 



June 15,1933 
May 5, 1934 
June 21,1934 
May 14,1934 
May 26,1934 



1, 500, 000 

25, 000 

25, 000 

500, 000 

600, 000 



Gold and silver in the United States 

Stock oj coin and monetary bullion. — On June 30, 1934, the estimated 
stock of domestic coin in the United States was $961,884,257, of which 
$540,006,894 was standard silver dollars, $294,770,252 subsidiary 
silver coin, and $127,107,111 minor coin. 

The stock of gold held in the Treasury on the same date was $7,856,- 
180,556 at $35 per fine ounce; the stock of silver bullion was 
59,476,956 fine ounces, an increase of 31,720,059 fine ounces. 



122 



REPORT OF THE SECRETARY OF THE TREASURY 



Production of gold and silver. — Domestic gold production during the 
calendar year 1933 was $52,842,300 (at $20.67+ per ounce), compared 
with $50,626,000 in 1932. The output was about 52 percent of that 
for the record year 1915, when the total was $101,035,700. 

Domestic silver production during 1933 totaled 23,002,629 ounces, 
valued at $8,050,920, compared with 23,980,773 ounces, valued at 
$6,762,578, for 1932. The record production of 1915 was 74,961,075 
fine ounces, valued at $37,397,300. 

Industrial consumption of gold and silver. — Gold consumption in the 
industrial arts during the calendar year 1933 is estimated at 
$17,013,260; the return from industrial use exceeded the estimated 
use by industry by $5,792,700, which is a reversal of the usual prac- 
tice. Silver used in the arts is estimated at 29,343,451 fine ounces, of 
which 10,810,571 fine ounces was new material. As compared with the 
prior year, silver consumption was about 5,100,000 ounces more and 
gold consumption about $3,000,000 less. 

Appropriations, expenses, and income 

Appropriations available for the Mint Service during the fiscal year 
1934 totaled $1,296,842, and reimbursements to appropriations for 
services rendered amounted to $148,132.50, maldng a total of 
$1 444 974.50. 

Expenses amounted to $1,246,355.64, of which $1,208,871.52 was 
chargeable to appropriations and $37,484.12 chargeable to income. 

The income realized by the Treasury from the Mint Service aggre- 
gated $3,116,524.81, of which $528,*886.32 was seigniorage. The 
seigniorage on subsidiary silver coin was $197,941.16, and on bronze 
coin, $330,945.16. 

The number and value of deposits, transfers, gross income, and 
expenses for the fiscal year 1934, and number of employees on June 30, 
1934, at each institution are shown in the following table: 

Deposits of gold and silver, income, expenses, and employees, by institutions, fiscal 

year 1934 



Institution 


Num- 
ber of 

de- 
posits 

of 
gold 
and 
silver 


Num- 
ber of 
mint 
serv- 
ice 
trans- 
fers 


Monetary value 
of gold and 
silver re- 
ceived > 


Gross in- 
come 3 


Gross ex- 
pense 2 


Excess of in- 
come (+) or 
of expense 
(-) 


Em- 
ploy- 
ees, 
June 
30, 
1934 




19, 462 

56,234 

9,415 

26, 149 

1,235 

3,375 




1,997 

901 

253 

24 



1 




$21, 878, 569. 96 

98, 106, 679. 23 

45, 546, 564. 01 

862, 075, 792. 85 

1,415,041. 15 

10,057,011.11 




$558, 629. 99 

204, 327. 57 

299, 612. 87 

2,037,251.05 

3, 980. 65 

15,116.25 




$505, 634. 84 
207, 164. 93 
170, 665. 47 
297, 047. 49 
9, 365. 39 
22, 480. 03 
25.22 


+$52, 995. 15 

-2,837.36 

+ 128,947.40 

+1,740,203.56 

-5, 384. 74 

-7, 363. 78 

-25. 22 


206 




124 




85 




140 




10 




12 


Discontinued field offices 





Total 


115,870 



3,176 



1,039,079,658. 31 



3,118,918.38 



1,212,383.37 
36, 365. 84 


+1,906,535.01 
-36, 365. 84 


577 




30 








115,870 


3,176 


1,039,079,658. 31 


3,118,918.38 


1,248,749.21 


+1,870,169.17 


607 






Prior fiscal year (10 field in- 


72, 125 


1,113 


487, 639, 103. 68 


1,670,128.04 


1,213,621.68 


+456, 506. 36 


538 











1 At monetary value. Includes interinstitution transactions amounting to $118,694,198.20. 

2 Includes interinstitution transactions amounting to $2,393.57. 



REPORT OF THE SECRETARY OF THE TREASURY 



123 



BUREAU OF NARCOTICS 

Enforcement activities 

The special attention which the Bureau has paid to eliminating 
the larger sources of supply of illicit narcotic drugs has unquestion- 
ably resulted in somewhat of a stringency in the illicit market. 
Prices of contraband narcotics have remained high, and the peddlers 
have found it necessary to adulterate the drug in an attempt to 
meet the market demand of addicts. Samples of drugs seized in the 
illicit traffic have been found upon analysis to contain as high as 
90 percent of nonnarcotic ingredients. 

Dearth of supply through the usual channels has also resulted 
in efforts by peddlers and addicts to divert narcotics from legiti- 
mate medical channels. Enforcement attention has been given to 
the methods of diversion, and the cooperation of State and munici- 
pal authorities has been solicited to supplement Federal action. 

An important factor in achieving State cooperation is the enact- 
ment by several more States of the uniform State narcotic law 
which was mentioned in the previous report. Four additional 
States, Kentucky, Rhode Island, South Carolina, and Virginia, have 
now adopted the uniform narcotic law with little or no amendment, 
making a total of eight States which have put into effect this model 
legislation. A number of States have already enacted narcotic 
legislation comparable to the uniform narcotic law, but the Bureau 
is conducting an educational campaign to secure a more widespread 
adoption of the uniform law to afford a complete enforcement basis 
for narcotic drug traffic control. 

The Convention for Limiting the Manufacture and Regulating the 
Distribution of Narcotic Drugs, to which the United States is a 
party, went into effect July 9, 1933. Pursuant to its obligation 
under this convention, the Bureau prepared and submitted for the 
first time, through the State Department, to the supervisory body 
at Geneva, estimates of the medical needs of the United States for 
manufactured narcotic drugs covered by the convention. These esti- 
mates formed the basis for limiting the manufacture of narcotic 
drugs in the United States during the calendar year 1934. 

The following table shows the number of cases of violation, by 
registered and nonregistered persons, of the narcotic laws and the 
cases disposed of during the year as reported by Federal narcotic 
enforcement officers: 

Violations of the narcotic laws and the cases disposed of during the fiscal 

year 193.', 





Registered persons 


Nonregistered persons 




Federal court 


State court 


Federal court 


State court 


Pending July 1, 1933 

Reported during 1934: 


466 

1,319 

54 

1,839 


1,247 
2,424 




846 


Total to be disposed 
of 


4,517 








124 



REPORT OF THE SECRETARY OF THE TREASURY 



Violations of the narcotic laws and the cases disposed of during the fiscal 
year 1934 — Continued 





Registered persons 


Nonregistered persons 




Federal court 


State court 


Federal court 


State court 


Convicted: 


120 
14 

3 

576 
18 


4 
2 

1 


1.453 
475 

58 
20 

794 
174 


166 




137 


Acquitted: 


3 




3 


Dropped: 


7 




14 


Compromised: ' 


181 
8 

927 


2 






Total disposed of 


3,306 


Pending June 30, 1934 


912 


1,211 




to 
u* 
03 
<a 


CO 

J3 

a 
o 


CO 

05 

p 


03 
CD 

I* 


CO 

XI 

a 
a 


S3 

Q 


CO 

s 

CD 


o 


CO 

>» 

03 

A 


CO 

a 

CD 

>< 


CO 

a 

o 


CO 

OS 

R 


Sentences imposed: 


285 
22 


9 



10 



1 

6 


4 







2,998 
853 


1 

3 


2 

5 


106 
122 


10 

11 


24 




21 






Total 


307 


9 


10 


7 


4 





3,851 


4 


7 


228 


21 


45 






Fines imposed: 


$13,005.00 
2, 677. 50 

lfi. 682 m 




$85, 520. 61 
34, 924. 00 

120. 444. 61 


$8, 940. 50 






3, 792. 25 








Total 




12. 732. 75 

























1 Represents 47 cases involving tax liability which were closed on payment of taxes and penalties in the 
sum of $441.20; and 144 cases which were compromised in the sum of $12,358.34. 

Note. — Federal cases are made by Federal officers working independently, while joint cases are made by 
Federal and State officers working in cooperation with each other. 

Extent and trend of narcotic traffic 

On June 30, 1934, there were 317,394 registrants under the Har- 
rison Narcotic Law, as amended, 218 as importers and manufacturers, 
1,426 as wholesale dealers, 49,907 as retail dealers, 144,643 as prac- 
titioners, and 121,200 as dealers in and manufacturers of untaxed 
narcotic preparations, the latter number including registrants not 
required to pay occupational tax under the act. 

During the year 131,194 pounds of opium were imported as com- 
pared with importations of 112,654 pounds during the previous year, 
or an increase of 18,540 pounds. Importations of coca leaves for 
medicinal purposes amounted to 246,679 pounds as compared with 
importations of 131,512 pounds during the previous year, or an in- 
crease of 115,166 pounds. A further quantity of 9,879 pounds of 
coca leaves was imported for manufacture of decocainized coca ex-* 
tracts as provided by section 6 of the act of June 14, 1930. 

Exports of narcotic drugs of all kinds amounted to 1,871 ounces in 
1933 and 2,834 ounces in 1934, or an increase of 963 ounces. The 
drugs exported during 1934 involved 50,959 taxable ounces of 
products. 



REPORT OF THE SECRETARY OF THE TREASURY 125 

The net quantity of pure drugs of all kinds sold to domestic pur- 
chasers by manufacturers amounted to 373.339 ounces as compared 
with sales of 338,759 ounces of such drugs during the previous year. 

PROCUREMENT DIVISION 

Provision for the creation of the Procurement Division was made in 
Executive Order No. 6166, dated June 10, 1933. The operation of this 
order, however, was delayed by Executive Order No. 6224 of July 27, 
1933, but made effective with regard to this Division by the order of 
the Secretary of the Treasury, approved by the President, October 9, 
1933. 

Under these orders the Procurement Division is charged with the 
determination of policies and methods involved in the procurement, 
warehousing, and distribution of property, facilities, structures, im- 
provements, machinery, equipment, stores, and supplies. The follow- 
ing functions and divisions were transferred to it under the same 
orders: The functions of the General Supply Committee of the Treas- 
ury Department; the functions of the Office of the Supervising Archi- 
tect of the Treasury Department (the administration of buildings 
containing major post-office activities, however, was transferred to the 
Post Office Department, and the administration of buildings contain- 
ing neither postal nor Treasury activities was transferred to the In- 
terior Department); the fuel yards of the Bureau of Mines, Depart- 
ment of Commerce; custody and control of the Federal warehouse; 
the functions of the Federal Coordinating Service relating to the dis- 
position of seized and surplus property, and to the procurement, ware- 
housing, and distribution of property as exercised by the area coordi- 
nators, by the Federal Real Estate Board, the Federal Specifications 
Board, the Federal Standard Stock Catalog Board, the Federal 
Traffic Board, and the Interdepartmental Board of Contracts and 
Adjustments. 

The Procurement Division is comprised of two main branches, the 
Branch of Supply and the Public Works Branch. 

Branch of Supply 

The Branch of Supply performs all those functions formerly vested 
in the General Supply Committee, the fuel yards of the Bureau of 
Mines, Department of Commerce, and those functions of the former 
Federal coordinating service relating to the disposition of seized and 
surplus property, and to the procurement, warehousing, and distri- 
bution of property. 

The order of the Secretary of the Treasury dated April 16, 1934, 
provided that the disposition of all property, including all motor 
vehicles, seized by the Government and made available for use by 
the Treasury Department shall be in charge of the Director of 
Procurement. 

By order of the Secretary of the Treasury, effective June 1, 1934, the 
authority and responsibility for the acquisition of all motor equipment 
of the Treasury Department and the assignment thereof to the 
various agencies of the Department were vested in the Director of 
Procurement. This order also charged the Branch of Supply with 
responsibility for the maintenance, repair, and garaging of all motor 
equipment of the Treasury Department in the District of Columbia, 
and transferred to it all garages, garage equipment, and records. 



126 REPORT OF THE SECRETARY OF THE TREASURY 

During the fiscal year 1934, 5,548 bids were received and 2,269 
contracts entered into, purchases by the departments thereunder 
aggregating approximately $20,000,000. In connection with the bids 
received, 30,357 samples were submitted. 

Material, supplies, and equipment received at the Federal ware- 
house during the year amounted to 14,736,365 pounds and deliveries 
to the departments and establishments amounted to 16,239,936 
pounds. 

The fuel yards issued and delivered to the departments and estab- 
lishments 286,727 tons of coal, 421 cords of wood, 22 tons of charcoal, 
58 tons of coke, and 22,072 tons of oil valued at $1,645,990. In 
addition, stowage and reimbursable work performed amounted to 
$36,610. 

Approximately 8,000 typewriters were overhauled or adjusted for 
the various Government activities in Washington, representing 
charges of $16,175. 

The Federal Real Estate Section acted upon 3,647 requests for 
clearance to lease property, 66 applications to purchase, 62 applica- 
tions for sales, and 6 transfers of land and/or buildings among the 
executive departments. 

The Federal Traffic Section, in addition to its general coordinating 
activities, issued 2,461 routing orders covering 39,709 cars and fur- 
nished 31,774 rate quotations. 

The Federal Specifications Board promulgated 72 new specifica- 
tions, 111 revisions, and 95 amendments to Federal specifications, 
and in addition submitted to the departments for criticism 61 pro- 
posed new Federal specifications and 88 proposed revisions. 

The Federal Standard Stock Catalog Board aided in bringing the 
general schedule of contracts into conformity with its catalog, and in 
securing the inclusion in the proposal forms revisions to Federal or 
departmental specifications to enable manufacturers or dealers to 
quote upon the requirements set forth. 

The Federal Contract Board, together with its studies and recom- 
mendations relating to Government contracts, contract forms, and 
procedure, acted upon numerous requests for deviation from existing 
standard forms. 

The Federal Surplus Property Section, in addition to its activities 
in the District of Columbia, handled 1,000 lists of surplus property 
in the field, effecting 1,170 transfers and granting 429 clearances for 
sale. 

Since March 1934 the Branch of Supply has been the general liaison 
office between the Government activities and the National Recovery 
Administration in matters arising from the application of Executive 
Order No. 6646. All requests for exceptions to this order are sub- 
mitted to the National Recovery Administration by the Director of 
Procurement. This procedure has materially expedited requests of 
the departments and has enabled the Director to maintain uniform- 
ity of applications. 

The 143 Federal business associations, whose memberships comprise 
Federal officials and employees, functioned actively as agents of the 
Director of Procurement. Efforts have been made to promote coop- 
eration among local Government activities, and economy and effi- 
ciency in transacting the routine business of the Government. The 
associations have been particularly active in the adjustment of office 



REPORT OF THE SECRETARY OF THE TREASURY 



127 



space and loan of property and equipment, consolidated procurement, 
and special surveys. The following table shows the financial status 
of the Branch of Supply at the close of the fiscal year 1934: 

Statement of the working assets of the Branch of Supply for the fiscal year 1934 

Inventory as of July 1, 1933 i $101, 698. 38 

Purchases during 1934.. 2,265,387.33 

$2, 367, 085. 71 

Inspection and breakage 808.88 

Cost of goods sold 2,085,268.58 

Cost of sales, not billed June 30, 1934 38,629.57 2,124,707.03 

Inventory as of June 30, 1934 

Revenue: 

Surcharge for delivery. 

Purchase discount 



Total. 



Balance sheet as of June 30, 1934 

ASSETS LIABILITIES AND CAPITAL 



242, 378. 68 



79, 696. 62 
14, 081. 84 



93, 778. 46 



Treasury cash $141,576.06 

Disbursing officer's cash 41,832.37 

Accounts receivable, old 334,018.73 

Purchases, old 328,444.19 

Purchases, inventory as of June 30, 

1934 242,378.68 

Price adjustment, loss.. 586. 65 

Deferred charges, 1933 44,464.60 

Deferred charges, 1934 41,190.56 



Total 1,174,491.84 



Price adjustment gain $691.01 

Sales, old 334, 018. 73 

Inventory mark-up 11, 541. 84 

Unvouchered invoices.— 328,444.19 

Unpaid audited vouchers 48, 507. 51 

Undistributed receipts 31, 372. 84 

General Fund revenue 119,915.72 



874, 491. 84 
Unencu mbered capital 300, 000. 00 



Total 1, 174,491. 84 



Public Works Branch 

Building activities. — On October 16, 1933, the Public Works Branch 
assumed the duties of the Office of the Supervising Architect. Under 
an order approved by the Secretary of the Treasury on January 18, 
1934, a temporary reorganization was effected, under an assistant 
director, with units headed, respectively, by a supervising engineer, a 
supervising architect, an office manager, a chairman of the Board of 
Award, and a chief of the Legal Section. The branch was moved in 
February, 1934, from the Treasury Building and rented quarters to 
the Federal Warehouse Building. 

The functions of the Public Works Branch are to collect and pre- 
pare for submission to Congress data and estimates for public build- 
ing projects; to acquire land for public building sites; to prepare plans, 
and specifications, and estimates for construction; to take bids and 
award contracts therefor; to supervise construction, remodeling, 
extension, etc. ; to repair all public buildings transferred from the 
Treasury Department under the Executive order of June 10, 1933, to 
the custody of the Post Office and Interior Departments; and to 
operate, repair, equip, and maintain all public buildings in the 
custody of the Treasury Department outside of the District of 
Columbia. 

Original public building program. — Under the act of March 31, 
1933, the unobligated funds, appropriated by Congress for public 
buildings under the Keyes-Elliott Act and subsequent acts, became 
unavailable, except for items necessary to the completion of projects 
already under contract. Consequently, no new contracts were 
awarded under these acts during the fiscal year, but 203 projects at a 
limit of cost of $38,830,400, previously contracted for, were completed. 

1 Represents inventory of the General Supply Committee. 
90353 — 35 10 



128 



REPORT OF THE SECRETARY OF THE TREASURY 



The status of the work under the original public building program 
was as follows at the end of the fiscal year 1934: 

Limit of cost 

Completed, 578 projects $170, 321, 221. 78 

Under contract, 157 projects 272, 358, 457. 00 

As of June 30, 1934, $494,642,437.31 had been specifically author- 
ized under this program. Of this amount, $426,544,426.54 in the 
aggregate was obligated as of that date, and expenditures to June 30, 
1934, under these obligations amounted to $396,612,828.91. Out- 
standing obligations at the end of the fiscal year were $29,931,597.63. 

Program under the Public Works Administrator. — Under the National 
Industrial Recovery Act, approved June 16, 1933, public building con- 
struction by the Treasury, not necessary to the completion of con- 
tracts made previous to that date, became subject to allotment by 
the Administrator of Public Works. 

At various times during the fiscal year 1934 allotments of funds for 
465 building projects in the sum of $67,410,788 were made to the 
Treasury Department by the Administrator of Public Works. 

The status of the work under this program on June 30, 1934, 
is shown in terms of limits of cost in the following table: 



Status 



Number 

of 
projects 



Limit of 
cost 



Authorized by the Public Works Administration 

Under contract 

Bids in, on market, or in specification stage 

Drawing stage - - -- 

Land owned, ready for drawings 

Sites selected, title not yet vested. 

Sites advertised for, examined, and awaiting selections 

Total - 



465 



$67, 410, 788 



52 
85 

172 

5 

46 

105 



465 



24, 594, 977 
7, 596, 901 

15, 283, 445 

456. 000 

4, 009, 745 

15, 469, 720 



67, 410, 788 



The following tabulation shows the value of contracts awarded both 
for land and construction plus certain administrative expenses 
incident thereto, as of June 30, 1934: 

Contracts awarded $21,239,351.20 

Total amount unobligated for land and buildings 46, 171,436.80 



67, 410, 788. 00 



The following table classifies the projects selected under the Public 
Works Administration program: 



Projects 


Number 


Limit of 
cost 




109 

83 

2 

45 

226 


$21, 456, 140 




5, 245, 525 




702, 904 




16, 486, 330 




23, 519, 889 






Total 


465 


67, 410, 788 







Control, administration, and repair 0/ Federal buildings. — In accord- 
ance with Executive Orders No. 6166, June 10, 1933, and No. 6224, 
dated July 27, 1933, the Treasury Department, during the fiscal year 
1934, transferred to the Post Office Department the administration 
of 1,629 buildings, and to the Interior Department the administra- 



EEPORT OF THE SECRETARY OF THE TREASURY 129 

tion of 11 buildings. The control of these buildings, however, is 
charged to the Procurement Division, as well as that of all other build- 
ings listed in the following table, which indicates, as of June 30, 
1934, the number, administration, and cost of the buildings (exclu- 
sive of land), for which repairs are payable from annual appropriations 
for repairs to public buildings: 



Buildings 


Number 


Cost 




1,629 
11 
84 
61 
14 
4 
>28 
25 


$332, 588, 862. 00 




4,419,013.11 




52, 577, 705. 77 




12, 236. 504. 33 




7, 155, 944. 08 


In Washington, D. C, administered by Chief Clerk Treasury Department 


10, 739, 303. 74 
16, 793, 169. 18 




5, 334, 445. 19 






Total 


1,846 


441, 844, 947. 40 







1 Includes 1 assay office and 3 mint buildings. 

3 Includes Public Health Building, Cincinnati, Ohio; Public Health Building, Philadelphia, Pa.; and 
National Institute of Health, Washington, D. C 

Relief program. — Under the Emergency Relief and Construction Act 
of 1932, approved July 21, 1932, $100,000,000 was authorized and 
appropriated for public building projects. Under the act of March 
31, 1933, providing for the emergency construction program of the 
Government, all moneys previously appropriated for public works, 
unless obligated in connection with projects on which actual construc- 
tion had been commenced or might be commenced within 90 days, 
were allocated to the conservation program. The following table 
gives an accounting of the appropriation for public building projects 
under the Emergency Relief and Construction Act to June 30, 1934: 

Appropriated $100,000,000.00 

Transferred to — 

Emergency Conservation fund $92,875,200.00 

Office appropriations.. 808,241.66 

93, 183, Ml. 66 

Not transferred 6,816,558.35 

Unobligated balance, June 30, 1933 1,336,037.80 

Obligated to June 30, 1933 5, 481, 520. 55 

Expended to June 30, 1933 2,849,432.21 

Outstanding, June 30, 1933 2,632,088.34 

Expended during fiscal year 1934 for purchase of 61 sites, etc 1,721,360.31 

Net cancelation during fiscal year 1934 353,505.66 

2,074,866.97 

Outstanding June 30, 1934 557,222.37 

Unobligated cash balance June 30, 1934 1,688,543.46 

Note.— Amounts in italics to be deducted. 

Emergency construction program.— -In the Emergency Appropriation 
Act approved June 19, 1934, Congress appropriated an additional sum 
of $65,000,000 for the emergency construction of public buildings 
throughout the country, to be selected by the Secretary of the Treas- 
ury and the Postmaster General from public building projects speci- 
fied in statements nos. 2 and 3 in House Report 1879, Seventy-third 
Congress. In accordance with this legislation, 303 projects at a total 
limit of cost of $60,228,700 had been selected and approved by the 
end of the fiscal year, including administrative expenses and one item 
of $1,540,000 for structural and mechanical equipment repairs to 



130 



REPORT OF THE SECRETARY OF THE TREASURY 



Federal buildings throughout the country. Congress also authorized 
$2,500,000 from Public Works Administration funds for the purpose 
of permitting increases up to 10 percent in limits of cost of Public 
Works Administration and emergency construction projects, when 
the bid of the lowest responsible bidder exceeds the amount previously 
available for any project. 

No expenditures were incurred, and no contracts were awarded 
under this legislation during the fiscal year 1934. 

Private architectural services. — Under the authorization by Congress 
for the employment of private architects to the extent deemed neces- 
sary by the Secretary of the Treasury, contracts had been made by 
the end of the fiscal year 1933 with architectural firms for 349 projects, 
having limits of cost amounting to approximately 50 percent of the 
aggregate specific authorizations at that time. During 1934, 8 
additional contracts were made, and 56 of those in force were termi- 
nated or settled, leaving 301 contracts in force at the end of the fiscal 
year 1934. 

Total expenditures. — Total expenditures for all purposes for the 
Public Works Branch during the fiscal year 1934, together with out- 
standing contract liabilities and remaining unencumbered balances 
of appropriations, are shown in the following table: 

Expenditures from July 1, 1933, to June 30, 1934, contract liabilities charged against 
appropriations, and unencumbered balances 



Expenditures 



Contract lia- 
bilities charged 
against appro- 
priations 



Unencum- 
bered balances, 
June 30, 1934 



Statutory roll 

Sites and additional land .. 

Construction of new buildings 

Extensions to buildings 

Miscellaneous special items 

Emergency construction of public buildings, acts June 

19, 1934 

Administrative expenses Public Works Administration 

projects 

Unallotted appropriation (lump sum) 

Remodeling and enlarging public buildings -. 

Lands and other property of the United States 

Repairs and preservation of public buildings- -. 

Mechanical equipment for public buildings 

Vaults and safes for public buildings.-, 

Furniture and repairs of same for public buildings 

Operating supplies for public buildings 

General expenses for public buildings 

Rent of temporary quarters 

Outside professional services 

Operating force for public buildings 



$385, 686. 15 

3, 483, 471. 84 

66, 135, 327. 94 

6, 120, 029. 68 

104, 521. 73 



$10, 877, 275. 92 

42,491,919.14 

4,413,165.13 

496, 046. 45 



939, 866. 79 
""13," 024." 19 



513,812.42 



i $350, 439. 98 

323, 636. 34 

37, 324, 545. 43 

6, 283, 935. 23 

636, 626 52 

65, 000, 000. 00 

5,970,550.61 
2, 354, 289. 66 



437, 099. 44 

377, 284. 46 
75,424.10 

887, 061. 10 
1, 624, 388. 47 
1, 652, 381. 96 

575, 172. 80 
1, 605, 936. 18 
2, 937, 899. 92 



180,971.28 

145, 261. 24 

8, 332. 54 

31, 822. 09 

219, 670. 33 

43, 175. 31 

44, 335. 31 

1, 893, 275. 79 

15, 225. 05 



1, 196. 71 

2 426, 542. 96 

3 427, 921. 79 
* 454, 972. 51 

5 3,511,832.71 

6 1,057,464.59 
' 1, 717, 493. 91 

8 839, 721. 86 

s 801,389.04 

>° 3, 009, 043. 74 



Total. 



87, 354, 576. 75 



61, 374, 288. 00 



130, 491, 603. 59 



1 Includes $10,000 reserve 1933; $215,000, 1934. 

2 Includes $350,000 reserve 1934. 

3 Includes $10,000 reserve 1933; $200,000, 1934. 
* Includes $254,355 reserve, 1934. 

8 Includes $2,660,043 reserve, 1934. 

6 Includes $20,000 reserve, 1932; $387,231.45, 1934. 

' Includes $8,000 reserve, 1932; $10,000, 1933; $1,043,525, 1934. 

8 Includes $372,063 reserve, 1934. 

8 Deficiency. 

10 Includes $2,920,000 reserve, 1934. 



The following table prepared pursuant to act approved June 6, 
1900 (31 Stat. 592), shows the total expenditures to June 30, 1934, 



REPORT OF THE SECRETARY OF THE TREASURY 



131 



for all purposes for buildings under the control of the Treasury 
Department: 

Classification of public buildings under the control of the Treasury Department, by 
titles, shoiving expenditures in each class to June 80, 193J h prepared pursuant to 
act approved June 6, 1900 (81 Stat. 592) 



Construction 



Extensions, al- 
terations, and 
special items 



Annual repairs 



Total expen- 
ditures, 
June 30, 1934 



Post-office, courthouse, customhouse build- 
ings, etc 

Courthouse buildings 

Customhouse buildings 

Marine hospital buildings 

Post-office buildings 

Quarantine station buildings 

M iscellaneous buildings 

Total 



$166, 958, 583. 33 

7, 594, 701. 6S 

24, 116, 289. 69 

13, 997, 348. 65 

171, 818, 969. 5S 

3, 682. 570. 1 1 

124, 624, 483. 79 



$34, 300, 299. 43 

601, 241. 89 

3, 483, 554. 95 

5, 440, 678. 23 
12, 547, 343. 73 

2, 432, 952. 01 

6, 094, 467. 64 



$21, 013, 203. 32 
608,014.15 
2, 826, 552. 31 
4, 032, 827. 45 
13, 027, 366. 42 
1, 862, 376. 07 
6,434,415.46 



$222, 
8, 
30, 
23, 
197, 
7, 
137, 



272, 086. 08 
S03, 957. 72 
426. 396. 95 
470, 854. 33 
393, 679. 73 
977, 898. 19 
153,366.89 



512, 792, 946. 83 



64, 900, 537. 8S 



49, 804, 755. 18 



627, 498, 239. 89 



Cost of sites 



Outstanding liabilities 
chargeable against appro- 
priations > 



Sites 



Buildings 



Unencum- 
bered balance 
of appro- 
priations 



Post-office, • courthouse, customhouse 

buildings, etc 

Courthouse buildings 

Customhouse buildings. _ 

Marine hospital buildings 

Post-office buildings 

Quarantine station buildings 

Miscellaneous buildings _.. 

Emergency construction of public build- 
ings, act, June 19, 1934 

Administrative expenses, Public Works 
Administration projects 

Unallotted appropriation (lumpsum) 



$46, 865, 436. 39 

4, 590, 834. 69 

3, 886, 922. 33 

889, 238. 97 

69, 705, 765. 44 

328, 837. 60 

56, 405, 424. 12 



$109, 941. 17 



10, 729, 199. 75 
"38,135.06 



$7, 997, 992. 97 
4, 441, 864. 59 
2, 696. 00 
3, 515, 026. 83 
16, 162, 546. 74 
440, 786. 34 
14, 830, 217. 25 



$1, 923, 879. 82 

60, 680. 23 

725, 104. 90 

407,369. 11 

33, 140, 808. 23 

543, 994. 86 

7, 766, 906. 37 

65, 000, 000. 00 

5, 970, 550. 61 
2, 354, 289. 66 



Total 182,672,459.54 10,877,275.92 



47, 391, 130. 72 



117,893,583.79 



1 Administrative expenses, Public Works Administration projects, $513,812.42. 

PUBLIC DEBT SERVICE 



Division of Loans and Currency 

This Division is the active agent of the Secretary for the issue of all 
public debt obligations of the United States and for conducting trans- 
actions in such obligations after issue. It is also responsible for the 
issue of bonds or other obligations of Puerto Rico and the Philippine 
Islands, for which the Treasury Department acts as fiscal agent. The 
Division undertakes the safe-keeping of public debt and insular loan 
securities for certain Government offices. It also counts and delivers 
to the Destruction Committee the United States currency canceled as 
unfit, and mutilated paper (spoilage, etc.) received from the Division 
of Paper Custody and the Bureau of Engraving and Printing. 

Issue and retirement of securities.- — The following is a summary of 
the issues and retirements of securities conducted through this Division 
during the fiscal year 1934. Complete details of all transactions in 
public debt securities are presented in formal statements elsewhere in 
the report. 



132 



REPORT OF THE SECRETARY OF THE TREASURY 



Issues, retirements, and transactions in stock of United States securities, fiscal year 

1934 

[Par value] 



Registered 



Nonregistered 



Total 



Stock shipments to Federal Reserve banks: 

For exchange transactions 

Allotment for original issue 

Original issues by the division 

Issues on exchange 



2 $621, 562, 230 
959, 752, 010 



$6, 494, 386, 850. 00 

i 24, 272, 724, 850. 00 

49, 042, 670. 00 

132, 508, 950. 00 



$6, 494, 386, 850. 00 

24, 272, 724, 850. 00 

670, 604, 900. 00 

1,092,260,960.00 



Total issued and shipped. 



1, 581, 314, 240 



30, 948, 663, 320. 00 



32, 529, 977, 560. 00 



RETIREMENTS 



Retired on exchange 

Cleared for redemption 

Retired on other accounts (i. e. claims, credit, and 
exchange authorization retirements) 



442,443,160 
2 499, 709, 965 



396,110,020 



649,817,800.00 
2, 210, 271. 75 



35, 630. 00 



1, 092, 260, 960. 00 
501, 920, 236. 75 



396, 145, 650. 00 



Total retired. 



1, 338, 263, 145 



652, 063, 701. 75 



1, 990, 326, 846. 76 



STOCK ACTIVITIES 

Received from Bureau of Engraving and Printing. 

Canceled and delivered to Register of Treasury: 

Securities... 

Detached matured coupons (10,047,325 
pieces— amount $629,308,440.08). 



' 2, 391, 712, 520 



34, 710, 966, 820. 00 
1,657,240,600.00 



37, 102, 679, 340. 00 
1, 657, 240, 600. 00 



> Includes Treasury bills available for either original issue or exchange, amounting to $11,891,118,000. 
2 Includes special 1-day certificates of indebtedness amounting to $3,000,000. 

Individual registered accounts.- — In connection with registered public 
debt issues, individual accounts are maintained and interest is paid 
periodically in the form of checks. The accounts open on June 30, 
1934, were as follows: 



Number of 
accounts 



Principal 



Interest-bearing loans: 

Pre-war loans. .. 

Liberty and Treasury loans 

Treasury notes and certificates of indebtedness.. . 

Total interest-bearing loans 

Matured loans (Liberty, Victory, and postal savings) 

Total open accounts 



34, 114 

804, 498 

16 



$805,551,030 

2, 747, 355, 700 

396, 239, 000 



838, 628 
3,909 



3, 949, 145, 730 
614, 500 



842, 537 



3, 949, 760, 230 



There were 223,389 individual accounts closed for registered Liberty 
bonds, Victory notes, and Treasury bonds, and 154,675 accounts were 
decreased, representing the retirement of securities amounting to 
$893,616,300 par value. In connection with the same loans, 173,251 
new accounts amounting to $1,048,430,800 principal were opened. 
Changes of address, aggregating 39,789 for the mailing of interest 
checks, were made on the registered accounts during the year. 

Interest on registered Liberty and Treasury bonds was paid on due 
dates in the form of 1,700,800 checks, amounting to $102,495,231.91. 
On registered securities of the pre-war loans 72,155 checks for 
$16,757,410.75 were issued and on registered Treasury notes and 
certificates of indebtedness interest payable amounting to $13,392,- 
982.36 was certified to the Treasurer. There were received from the 



REPORT OF THE SECRETARY OF THE TREASURY 



133 



Bureau of Engraving and Printing 2,153,550 checks as stock, and 
there were canceled and delivered to the Destruction Committee 
stock consisting of 193,424 checks, including 7,650 checks for the 
Home Owners' Loan Corporation. 

Claims. — Claims for relief on account of lost, stolen, destroyed, and 
mutilated securities handled by the Division during the fiscal year were 
as follows: 



Number of 
claims 



Number of 

securities 

(pieces) 



Par amount 
of securities 



Received 

Settled by- 
Reissue or redemption of securities 

Recovery of securities 

Disallowance of claims 

Other disposition ' 

Total settled 



3,423 



8,393 



$1, 160, 898. 34 



1,444 

925 

35 

111 



4,137 

1,745 

50 

549 



720, 955. 59 

552. 000. 00 

18, 650. 00 

2, 716. 50 



2,515 



6,481 



1, 294, 322. 09 



1 War savings cases sent to Surrenders Section for settlement because of question of ownership. 

Safe-keeping of securities .—At the beginning of the year securities 
amounting to $376,878,250 were in safe-keeping for various Govern- 
ment offices, against which formal audited receipts were outstanding. 
Throughout the year securities amounting to $286,350,200 were re- 
ceived for safe-keeping and receipts therefor issued, and securities 
amounting to $248,457,700 were delivered from safe-keeping upon 
the surrender of outstanding receipts, leaving a balance of securities 
amounting to $414,770,750 in safe-keeping June 30, 1934. 

Mutilated paper and redeemed currency. — Mutilated paper verified 
and delivered to the Destruction Committee consisted of 49,296,516 
sheets and coupons, of which 48,541,045 sheets and coupons were 
received from the Bureau of Engraving and Printing and 755,471 
sheets from the Division of Paper Custody. 

Redeemed currency, unfit for circulation, counted and delivered to 
the Destruction Committee during the year amounted to 594,403,973 
pieces, representing $1,182,208,693.02, detailed as follows: 

Number of pieces and amount of redeemed currency delivered to the Destruction 
Committee during the fiscal year 1934 





Old series 


New series 


Currency 


Number of 
pieces 


Face value 


Number of 
pieces 


Face value 


United States notes 


1,092,680 
2, 673, 136 


$3, 465, 668. 00 
3, 230, 799. 00 


57, 463, 433 

508, 522, 184 

24, 050 

23,705,116 


$240, 467, 444 




508,517,801 


Silver certificates (act of May 12, 1933)... 


240, 500 




913, 861 
2,397 
7,116 


21, 901, 730. 00 

13, 150. 00 

1, 631. 02 


404, 369, 970 


















Total 


4, 689, 190 


28, 612, 978. 02 


589, 714, 783 


1, 153, 595, 715 







134 



REPORT OF THE SECRETARY OF THE TREASURY 



Publicity. — The Division maintains a mailing list, in addition to its 
list of holders of registered securities, for the purpose of placing new 
public debt offerings, notices of redemption, and such matters before 
the public. Approximately 3,027,800 printed circulars were distrib- 
uted to the public during the year. 

Other activities. — In addition to the regular activities of the Division, 
securities of Government instrumentalities were received and issued 
by the Bureau of Engraving and Printing as follows: 

Securities of Government instrumentalities received and issued, fiscal year 1934 



Securities 


Received 


Issued 


Balance on band, 
June 30, 1934 


Number 
of pieces 


Amount 


Number 
of pieces 


Amount 


Number 
of pieces 


Amount 


HOME OWNERS' LOAN 
CORPORATION BONDS 


25, 700 
2, 949, 800 


$32, 500, 000 
1, 192, 025, 000 


4,114 
2, 231, 538 


$5, 886, 000 
836, 368, 725 


21,586 
718, 262 


$26, 614, 000 




355, 656, 275 






Total 


2, 975, 500 


1, 224, 525, 000 


2, 235, 652 


842, 254, 725 


739, 848 


382, 270, 275 






FEDERAL FARM MORTGAGE 
CORPORATION BONDS 


82, 060 
603, 000 


564, 500, 000 
329, 300, 000 


5,183 
577, 971 


132, 015, 300 

298, 818, 200 


76,877 
25, 029 


432, 484, 700 




30, 481, 800 






Total 


685, 060 


893, 800, 000 


583, 154 


430, 833, 500 


101, 906 


462, 966, 500 






CONSOLIDATED FEDERAL 
FARM LOAN BONDS 


112,200 


143, 500, 000 


110,973 


142, 385, 000 


1,227 


1,115,000 






RECONSTRUCTION FINANCE 
CORPORATION BONDS 


29, 850 


1, 749, 500, 000 


9,808 


276, 279, 500 


20,042 


1, 473, 220, 500 








3, 802, 610 


4,011,325,000 


2, 939, 587 


1, 691, 752, 725 


863, 023 


2, 319, 572, 275 







Register of the Treasury 

The Register of the Treasury is charged with the final audit and 
custody of all retired Federal securities, including interest coupons, 
and renders monthly certification to the Comptroller General of all 
public debt securities redeemed by the Treasurer of the United States. 
The Register also establishes credits due the Federal Reserve banks 
and the Division of Loans and Currency for securities forwarded by 
them on account of exchanges, replacements, transfers of registra- 
tion, etc. During the fiscal year 1934 the Register's Office has taken 
over the retirement and custody of securities issued by the Home 
Owners' Loan Corporation and the Farm Credit Administration. 

During the fiscal year 1934 more than 35,000,000 security docu- 
ments, aggregating over $27,000,000,000, were retired in the Register's 
Office, which represents an increase of over 5,500,000 pieces as 
compared with the previous fiscal year. This increase is due prin- 
cipally to the redemption of portions of the Fourth Liberty Loan and 
the retirement of securities issued by agencies of the Government. 

The following statement sets forth, by class of security, the total 
number of documents, together with the face value thereof, which 
were received, examined, and filed during the fiscal year 1934: 



REPORT OF THE SECRETARY OF THE TREASURY 



135 



Securities retired, fiscal year 193 4 



Security 



Bearer 



Number of 
pieces 



Amount 



Registered 



Number 
of pieces 



Redeemed 



United States securities: 

Pre-war loans - -.. 

Liberty loans. - . . 

Treasury bonds _.. 

Treasury notes 

Certificates of indebtedness.- 

Treasury bills 

Treasury (war) savings securities 

Interest coupons 

Interest checks . 

Standard full-paid interim certificates 

Other securities: Home Owners' Loan Corpora- 
tion interest coupons. 

Total. 



316 

1, 212, 159 

953 

28,977 

126, 584 

39, 392 

123,106 

18, 518, 741 



406, 974 



20, 457, 204 



$41, 180. 00 

1, 556, 852, 750. 00 

61, 113, 100. 00 

609, 151, 300. 00 

2, 299, 348, 650. 00 

3, 929, 416, 000. 00 

175, 310. 96 

619, 350, 856. 01 



14.64 
2, 352, 284. 50 



9,077,801,446.11 



4,746 
345, 976 



133 
157 



6,768 
..... 



$2, 200, 690. 00 
299, 913, 550. 00 



36, 306, 000. 00 
157, 300, 000. 00 



149, 465. 40 
3."l8 



357,781 495,869,708.58 



Retired on account of exchanges for other securities, etc. 



United States securities: 

Pre-war loans - 

Liberty loans 

Treasury bonds 

Treasury notes 

Certificates of indebtedness 

Treasury bills 

Treasury (war) savings securities 

First 3 ^percent Liberty loan interim cer- 
tificates. — 

Standard full-paid interim certificates 

Other securities: 

Insular possessions loans 

Home Owners' Loan Corporation securities 
Federal Farm Mortgage Corporation secur- 
ities 

Total 



United States securities: 

Liberty loans 

Treasury bonds 

Treasury notes 

Certificates of indebtedness 

Treasury bills 

Treasury (war) savings securities. 

Standard full-paid interim certificates 

Interest coupons 

Other securities: Home Owners' Loan Corpor- 
ation interest coupons 

Total 



United States securities: 

Pre-war loans 

Liberty loans.. 

Treasury bonds. 

Treasury notes 

Certificates of indebtedness.. 

Treasury bills 

Treasury (war) savings securities 

First 3Jr$ percent Liberty loan interim cer- 
tificates 

Standard full-paid interim certificates 

Interest coupons 

Interest checks 

Other securities: 

Insular possessi ons loans 

Home Owners' Loan Corporation: 

Securities 

Interest coupons 

Federal Farm Mortgage Corporation secur- 
ities 



2,836 
695, 601 
276, 257 
256, 021 
73, 840 
7,063 
1,542 

17 
24 

406 
634, 824 

73, 583 



2, 022, 014 



$924, 050. 00 

795, 540, 800. 00 

1, 433, 808, 050. 00 

3, 912, 279, 000. 00 

1,413,581,000.00 

545, 736, 000. 00 

7, 615. 00 

1, 000. 00 
20, 091, 481. 50 

406, 000. 00 
78, 960, 500. 00 

21, 218, 500. 00 



8, 222, 553, 996. 50 



39, 146 

190, 206 

44, 307 

5 

5 



-2, 51,5 



2,124 
56,007 



$207, 310, 910. 00 

249, 436, 150. 00 

344, 265, 850. 00 

24, 209, 000. 00 

9, 000, 000. 00 



-12,725.00 



4, 277, 000. 00 
24, 933, 050. 00 



36, 016, 500. 00 



899, 435, 735. 00 



Unissued stock retired 



20,322 

17, 339 

22, 599 

282, 928 

57, 761 

-894 

474 

11,148,845 



$99, 641, 100. 00 

199, 963, 950. 00 

166, 380, 600. 00 

2, 123, 903, 500. 00 

5, 354, 848, 000. 00 

-3, 292. 00 

0) 

734, 924, 239. 26 

2 11, 559, 995. 00 



8, 691, 218, 092. 26 



Recapitulation 



3,152 
1, 928, 082 
294, 549 
307, 597 
483, 352 
104, 216 
123, 754 

17 

500 

29,667,586 



406 



634, 824 
2 1, 913, 672 



73, 583 



Total. 



35, 535, 290 



$965, 230. 00 
2, 452, 034, 650. 00 
1,694,885,100.00 
4, 687, 810, 900. 00 
5, 836, 833, 150. 00 
9, 830, 000, 000. 00 
179, 633. 96 

1,000.00 

20,091,496.14 

1,354,275,095.27 



406, 000. 00 



78, 960, 500. 00 
2 13, 912, 279. 50 



21, 218, 500. 00 



25, 991, 573, 534. 87 



43, 892 
536, 182 

44, 307 
138 
162 



4,223 



1 

2,124 

56, 007 



78 



687,114 



$209,511,600.00 

549, 349, 700. 00 

344, 265, 850. 00 

60, 515, 000. 00 

166,300,000.00 



136, 740. 40 



3.18 
4, 277, 000. 00 
24, 933, 050 00 



36, 016. 500. 00 



1, 395, 305, 443. 58 



No value. 



2 Received figures used, which are in process of audit. 



136 REPORT OF THE SECRETARY OF THE TREASURY 

Division of Public Debt Accounts and Audit 

This Division maintains administrative control accounts for all 
official transactions in the public debt conducted by the various 
Treasury offices and the Federal Reserve banks as fiscal agents of 
the United States, and also for transactions involving paper used for 
printing public debt securities, United States currency, stamps, etc., 
and other miscellaneous securities and documents in the Bureau of 
Engraving and Printing. Numerous administrative audit functions 
are performed in connection with the foregoing. The Division also 
maintains control accounts for various classes of unissued currency 
in reserve stocks of the Treasurer of the United States and the 
Comptroller of the Currency, and conducts administrative examina- 
tions and physical audits of such unissued stocks of currency and of 
cash balances in custody and collateral securities held in trust in the 
offices of the Treasurer of the United States. 

During the fiscal year, 77 physical audits were conducted, involving 
securities, currency, paper, interest checks, etc., amounting to about 
$18,000,000,000 in face value and over 65,000,000 in number of 
pieces. 

The Division determined and certified credits to the cumulative 
sinking fund and amounts in the sinking fund available for expendi- 
ture from time to time, interest on all classes of public debt securities 
which became due and payable on their respective interest-payment 
dates, and the amount of each form of public debt securities and 
unpaid interest outstanding each month. It prepared estimates of 
interest to become payable on public debt securities in future fiscal 
years, and expenditures to be made on account of retirements for the 
sinking fund and other special accounts, and prepared statements 
showing the accountability of Federal Reserve banks for public debt 
securities for the use of Federal Reserve Board examiners in their 
periodical examinations of those banks. Numerous data pertain- 
ing to public debt transactions for various interested offices and 
individuals were also compiled. 

During the last half of the fiscal year the work of this Division was 
greatly increased on account of activities in connection with the 
various issues of bonds of the Home Owners' Loan Corporation and 
the Farm Credit Administration, which were handled by the Treasury 
Department under agreements entered into with those corporations. 
During this period about 350,000 shipments of these bonds were 
made, amounting to over 2,800,000 pieces with a face value of $1,270,- 
000,000. The work of this Division involved the securing of receipts 
in connection with all of these shipments and the transmission of 
copies of such receipts to the corporation which authorized the issue, 
in addition to the regular auditing and accounting work incident to 
the verification of all transactions in these bonds, and the maintenance 
of control and detail accounts reflecting this information. 

Division oj Paper Custody 

A summary of the operations of the Division of Paper Custody 
during the fiscal year 1934 is presented in the following tables: 



REPORT OF THE SECRETARY OF THE TREASURY 



137 



Receipts and issues of distinctive and nondistinctive paper during the fiscal year 1934 



Kind 



On hand Julv 
1, 1933 



Receipts 



Issues 



On hand 

June 30, 

1934 



Distinctive paper for United States currency, 
Federal Reserve notes, Federal Reserve bank 
notes, and national bank currency, new series, 
12 subjects 

Bank note paper, experimental 

United States bond paper 

Parchment, artificial parchment, and parchment 
deed paper 

Miscellaneous paper 

Philippine Islands, distinctive paper for Philip- 
pine currency 

Philippine Islands, postal card 

Total 



Sheets 
10, 986, 691 
9,995 
■ 7, 019, 677 

207, 007 
1,912,213 

285, 841 
4,901 



Sheets 
^58,115,934 
6,600 
2 10, 793, 223 

95,051 
688. 924 

1, 086, 400 



Sheets 
51, 025, 702 
16, 595 
12, 543, 784 

153, 787 
1,984,991 

888, 815 
4,028 



70, 786, 132 



Sheets 
18, 076, 923 



5,269,116 



148,271 
616, 146 



483, 426 
873 



24, 594, 755 



1 3,099,001 sheets transferred from United States currency paper to bond paper account. 
- 5,980,555 sheets transferred from United States currency paper to bond paper account. 

Federal Reserve notes, new series, and Federal Reserve bank notes, series 1929 
received and issued during the fiscal rjear 19S \ 

1000 omitted] 



Federal Reserve bank 



Boston 

New York 

Philadelphia. 

Cleveland 

Richmond... 

Atlanta 

Chicago 

St. Louis 

Minneapolis.. 
Kansas City.. 

Dallas 

San Francisco 

Total... 



Federal Reserve notes, new series 



On hand 

Julv 1, 

1933 



$326, 280 
336, 040 
449, 800 
380, 140 
245, 360 
202, 640 
675, 260 
136, 980 
102, 100 
169, 560 
108, 580 
202, 600 



3, 395, 340 



Re- 
ceived 



$53, 400 
165, 120 
68, 880 
51, 000 
28, 680 
36, 300 
77, 100 
25, 740 
27, 600 
23, 340 
9,600 
42, 720 



609, 480 



Issued 



$25, 000 

197, 400 

108, 000 

9,600 

34, 600 

33, 060 

12, 000 

23, 140 

8,400 

11,600 



24, SCO 



On hand 

June 30, 

1934 



$354, 680 
303, 760 
410,680 
421,540 
239, 440 
205, 880 
740, 360 
139, 580 
121,300 
181, 300 
178,180 
220, 460 



Federal Reserve bank notes, 
series 1929 



On 

hand 

Julv 1, 

1933 



$14, 760 
45, 400 
19, 840 
52, 920 
50, 040 
23, 540 
29, 620 
21.540 
42, 280 
36, 840 
17, 820 
16, 000 



487,660 3,517,160 370.600 221,760 141,560 



Re- 
ceived 



$15, 300 
57, 180 
21, 600 
39, 900 



8,040 
63, 720 



16, 020 



Issued 



515,000 
27, 000 
19.700 
23, 800 
2, 000 
5, 140 



14,380 
8, 120 

12, 680 

13, 740 



On 

hand 

June 30, 

1934 



$15,060 
75, 580 
21,740 
69, 020 
48. 040 
26, 440 
93, 340 

7,160 
34, 160 
40, 180 

4,080 
16, 000 



450. SIX) 



In addition to the receipts and issues of distinctive and nondistinc- 
tive paper and of Federal Reserve notes and Federal Reserve bank 
notes, the division counted 68,807,7S4 sheets of Government securities, 
Philippine currency, and cut paper. 

Destruction Committee 

The following table summarizes the number of pieces and the face 
amount of securities received from the various offices and destroyed 
by the Destruction Committee during the fiscal year 1934: 



Pieces ' 



Face value 



Division of Loans and Currency and 
Treasurer of the United States: 
New series: 

Silver certificates 

Silver certificates (act of May 12, 

1933) 

Gold certificates 

United States notes... 



506, 364, 184 

24, 050 
22, 979, 292 
57, 399, 763 



$506, 359, 801. 00 

240, 500. 00 
390, 754, 070. 00 
240, 178, 044. 00 



586, 767, 289 



$1,137,532,415.00 



'AH currency under the head of "Pieces" is expressed as whole notes. 



138 



REPORT OF THE SECRETARY OF THE TREASURY 



Pieces ' 



Face value 



Division of Loans and Currency and 
Treasurer of the United States— Con. 
Old series: 

Silver certificates 

Gold certificates 

United States notes 

Treasury notes 

Fractional notes 



2, 673, 136 
913, 861 

1, 092, 680 
2,397 
7,116 



4, 689, 190 



$3, 230, 799. 00 

21, 901, 730. 00 

3, 465, 668. 00 

13, 150. 00 

1,631.02 



Total — 

C omptroller of the Currency and national 
bank agents: 
New series: 

National bank notes (5 percent 

account) 

National bank notes (retired) 

Unissued vault stock 

Old series: 

National bank notes (5 percent 

account) 

National bank notes (retired) 

Federal Reserve bank notes (re- 
tired) 



591, 456, 479 



44, 676, 885^ 

11,524,731 

1,919,112 



381, 963^ 
290, 964 



58, 120, 728H 



757, 404H 



362, 706, 957. 50 
94, 660, 120. 00 
20, 244, 130. 00 



4, 993, 202. 50 
3, 627, 565. 00 



149, 171. 00 



Total 

Comptroller of the Currency and Federal 
Reserve bank agents: 

Federal Reserve notes (new series) 

Federal Reserve notes (old series) 

Federal Reserve bank notes (new 
series) 



58, 878, 133 



107, 135, 494 
1, 846, 775 



115,818,931 



1, 000, 941, 550. 00 
29, 203, 645. 00 



50, 426, 500. 00 



Internal Revenue Bureau: 

Miscellaneous stamps from Stamp 

Division 

Miscellaneous stamps from Stamp 

Division ("obsolete and surplus").. 
Miscellaneous stamps from Tobacco 

Division 

Refund, miscellaneous stamps, Tax 

Unit 

Alcohol Tax Unit 



52, 946, 424. 83 

6, 933, 070. 80 

871,851.28 

131, 605. 92 
17, 243. 61 



Register of the Treasury: 

Interest coupons, unissued 

Interest coupons, unissued Federal 
Reserve bank 

United States thrift stamps, redeemed. 

Coupon bonds and notes, Federal Re- 
serve (unissued) 

Registered bonds and notes (unissued) 

Bearer certificates of indebtedness 
(unissued) 

Farm loan bonds and coupons 



10, 275, 593 



593, 616 
189, 950 



73, 669 
321, 132 



1, 347, 400 
762, 855 



13, 564, 215 



559, 827, 384. 88 

34, 600, 082. 44 
47, 487. 50 

110,869,200.00 
326, 036, 500. 00 

6, 608, 952, 850. 00 
549, 924, 504. 81 



Public Debt Service, photostats 

Division of Loans and Currency (Security 
Section) interest checks 



184 



199, 631 



$28, 612, 978. 02 
1,166,145,393.02 



477,611,207.50 



8, 769, 938. 50 
486, 381, 146. 00 



1, 080, 571, 695. 00 



60, 900, 196. 44 



8, 190, 258, 009. 63 



Grand total. 



779, 917, 573 



10, 984, 256, 440. 09 



Sheets 



Division of Loans and Currency (Bureau 
of Engraving and Printing spoilage): 

Money of all kinds 

Postage stamps 

Internal revenue stamps 

Bonds and certificates of indebtedness 
Customs and miscellaneous stamps. . 

Postal savings certificates 

Experimental, bond paper 

Distinctive and nondistinctive paper 

(experimental) 

Void coupons 



1,482,384^ 

7,007,480H9%800 

2,372,31531^1 

989,623^2 
3, 166, 420% 

133, 802 
783 

1,143 



Division of Loans and Currency (Divi- 
sion of Paper Custody): 

Bond paper 

Experimental paper 



745, 476 
9,995 



15, 153,952i68»^ 0400 



755, 471 



Grand total 15,909,423 1 »s»% 04OO 



Coupons 



33, 387, 095 



33, 387, 095 



i All currency under the head of " Pieces " is expressed as whole notes. 



REPORT OF THE SECRETARY OF THE TREASURY 139 

PUBLIC HEALTH SERVICE 

Division of Sanitary Reports and Statistics 

Reports to the Public Health Service from 27 States indicate a 
general death rate for the calendar year 1933 of 10.5 per 1,000 popu- 
lation. The death rate in 1932 which was the lowest previously 
recorded rate for these States was 10.8 per 1,000. New low death 
rates for tuberculosis, typhoid fever, and diphtheria were recorded 
for 1933 in these States. 

Late in July 1933 there appeared in the suburban area of St. Louis, 
Mo., a type of encephalitis which had not heretofore made its ap- 
pearance in the United States in serious epidemic form. A total of 
approximately 1,100 cases was reported during the epidemic, with a 
mortality of about 20 percent. 

The Public Health Reports was issued regularly each week. In- 
formation on outbreaks of disease dangerous to the public health 
and on the prevalence of communicable diseases was collected, and 
the data wore made available to health officers and other sanitarians. 
Copies of publications distributed during the fiscal year 1934 num- 
bered 179,370, as compared with 130,802 during the preceding fiscal 
year. 

Division of Foreign and Insular Quarantine and Immigration 

Quarantine transactions. — During the fiscal year 14,796 vessels and 
1,737,416 persons from foreign ports were inspected by quarantine 
officers at continental and insular ports, as shown in the following 
table : 

Inspections oy quarantine officers during the fiscal year 193^ 



Inspection at— 


Vessels 


Passengers 


Seamen 




11, 576 

3,220 

211 


524, 283 
135, 125 
51, 574 


852 749 




225, 259 




8,198 






Total 


15, 007 


710, 982 


1, 086, 206 





In addition, 3,668 airplanes, carrying 26,951 persons, arrived at 
19 airports of entry in the United States from foreign ports, requir- 
ing quarantine inspection. Of the number of persons, 4,364 were 
aliens who were medically examined by medical officers of the Public 
Health Service. 

A total of 18,417 passengers who embarked at European ports for 
United States ports was vaccinated and 7,226 were deloused under 
the surveillance of medical officers of the Public Health Service, and 
17,818 pieces of baggage were disinfected to safeguard against the 
introduction of smallpox and typhus fever into United States 
territory. 

A total of 1,289 vessels was fumigated either because of the occur- 
rence of disease on board or for the destruction of rats as a plague- 
preventive measure. 

Six-thousand and seventy dead rats were retrieved following fumi- 
gation, 4,229 of which were examined for plague infection. 

None of the quarantinable diseases was imported into the United 
States or its dependencies during the year. 



140 REPORT OF THE SECRETARY OF THE TREASURY 

The regulations governing the importation of birds of the parrot 
family into ports of the United States were revised to prohibit the 
importation of birds under the age of 8 months (as young birds 
were found to be especially likely to transmit infection) and to 
provide for the laboratory examination of suspected birds upon 
arrival at ports of entry. 

The International Sanitary Convention for Aerial Navigation 
was signed on behalf of the United States by the American min- 
ister at The Hague on April 6, 1934. During the year ended April 
12, 1934, the latest date on which the convention was open for 
original signatures, 23 countries, including the United States, had 
signed the convention. Its ratification by the signatory countries is 
now pending. The ratifications of 10 countries must be deposited 
with the Government of the Netherlands before the convention will 
become effective. 

Medical examination of oldens. — There were 680,152, alien pas- 
sengers and 783,377 alien seamen examined by medical officers at 
the various ports of entry. Of this number 1,502 passengers and 
507 seamen were certified to the proper immigration officials, in 
accordance with the act of February 5, 1917, as being afflicted 
with one or more mental or physical defects or diseases calling for 
exclusion under the immigration laws. 

The work of the medical officers of the Public Health Service on 
duty in the Philippine Islands was increased by the acceptance by 
the Philippine Legislature, on May 1, 1934, of the Philippine Islands 
Independence Act, which provides for the application of the im- 
migration laws of the United States to citizens of the Philippine 
Islands and for the administration of such laws by Foreign Service 
officers of the United States. 

In order to facilitate the entry of Mexican citizens desirous of 
temporarily visiting the United States, officers of the Public Health 
Service on duty at quarantine stations on the Mexican border were 
authorized to pass without formal examination all persons holding 
identification cards issued to them by American consular officers 
in the interior of Mexico, provided they show no evidence of quar- 
antinable disease at time of entry. 

Examination of 'prospective immigrants abroad. — There were 
35,539 applicants for immigration visas examined by medical officers 
in American consulates in foreign countries. Of this number, 22,420 
were examined in Europe, and the remainder were examined in the 
Western Hemisphere. Of the number examined, 5,049 in Europe 
and 1,955 in the Western Hemisphere were reported by the medical 
officers to the American consuls as being afflicted with one or more 
mental or physical defects, and 1,446 in Europe and 881 in the 
Western Hemisphere were refused visas for medical reasons. None 
of the aliens to whom immigration visas had been issued was certi- 
fied upon arrival at a United States port as being afflicted with a 
defect or disease requiring mandatory deportation. 

Division of Domestic Quarantine 

The State health agencies continued their cooperation in connec- 
tion with the certification of sources of drinking water used by 
interstate railroads, busses, vessels, and airplanes. Of the 2,241 sup- 
plies used, 94 percent were inspected arid controlled. Of the vessels 



REPORT OF THE SECRETARY OF THE TREASURY 141 

engaged in interstate traffic, 52.6 percent were inspected and issued 
certificates of compliance with the regulations governing drinking- 
water systems, while 20 percent were issued temporary certificates 
pending inspection. 

Surveys and inspections of shellfish-growing areas and shipping 
establishments were continued in order to determine the efficiency 
of State control over the sanitation of the shellfish industry. A 
total of 1,498 State certificates was approved during the year. 

Assistance was rendered States engaged in stream pollution in- 
vestigations, and, with funds allotted by the Public Works Admin- 
istration at the request of the Chesapeake Bay Authority, a study 
was made of the pollution of the Hampton Roads area of Chesapeake 
Bay. 

Allotments from the Public Works Administration to other Fed- 
eral agencies for public works projects increased the public health 
engineering services rendered by the Public Health Service to such 
agencies considerably over the volume of service rendered in previous 
years. This work amounted to 43 percent of the time of the en- 
gineering field force, of which over 26 percent was time devoted to 
assisting the National Park Service and Bureau of Indian Affairs. 
As in previous years, assistance was rendered the Procurement Divi- 
sion, Public Works Branch (formerly the Supervising Architect's 
Office), the Bureau of Prisons, the Lighthouse Service, and others. 
The design of a sewage disposal plant for the Beltsville Experi- 
mental Station of the Department of Agriculture was also supervised. 

A spread of rodent plague to three additional counties in Cali- 
fornia necessitated more intensive work by the Public Health Service 
in cooperation with the State health authorities toward the close of 
the fiscal year. Rodent infection of a virulent type was discovered 
in Kern, Tulare, and Modoc Counties. Human cases occurred in 
Tulare County, Calif., and in Lake County, Oreg. It is possible 
that rodent infection has spread to other localities in the inland areas 
of the northwestern States. 

To protect the port of Honolulu from the possible introduction 
of plague infection from the Island of Maui, the Public Health 
Service inaugurated control activities in cooperation with the Terri- 
torial authorities of Hawaii. 

Studies of health problems in rural areas were continued. On 
account of the drastic reduction in the appropriation for rural health 
work, financial assistance to county health units was abandoned ; the 
maintenance of advisory service for State health authorities on rural 
health activities was continued, however. There was a decrease in 
the number of full-time county health units maintained in the several 
States from 581 in 1932 to 533 in 1933. 

Allotments for trachoma eradication work were reduced, but coop- 
erative activities were continued in Tennessee, Kentucky, and Mis- 
souri; 32,677 persons were examined, 6,329 treatments were given 
in field clinics and dispensaries, and 726 cases were admitted to 
hospitals. 

Division of Scientific Research 

The original systematic program of cancer research was continued 
in its major aspects. As in the past the investigations included 
studies of the biological effects of radiation, resistance and suscep- 



142 REPORT OF THE SECRETARY OF THE TREASURY 

tibility to malignant growths, and biochemical, cytological, physi- 
ological, and pathological studies. 

Epidemiological and laboratory studies of the St. Louis enceph- 
alitis epidemic were conducted by service officers working in coop- 
eration with State and local health authorities and the Washington 
University Medical School. 

Further attempts have been made by laboratory and field studies 
to determine the factors predisposing to rheumatic heart disease, 
with particular attention being given to a determination of the role 
which subclinical scurvy may play in the etiology of rheumatic 
carditis. 

Studies to determine the basic needs of the people in matters per- 
taining to public health practices in county health departments are 
being continued. The information thus gained will be of value in 
planning future rural health organizations. 

The personnel engaged in field investigations of malaria has 
planned and supervised the malaria control activities undertaken in 
connection with the Civil Works Administration emergency program 
which commenced in November 1933, and which were in progress at 
the close of the fiscal year. 

The study of the attempt to control malaria in tropical climates 
by the administration of atabrine alone was brought to a conclusion, 
the findings indicating that while the drug controls the clinical 
attack rate of malaria, it does not materially affect the infection rate. 
However, a combination of plasmochin and atabrine has produced 
encouraging results. 

Researches in the malaria therapy of paresis have been continued, 
and studies conducted to perfect methods for retaining the viability 
of sporozoites after dissection of infected mosquitoes have been very 
successful. 

Clinical studies of leprosy have been directed toward investigations 
of the early manifestations of the disease. Experimental studies 
have been concerned with attempts to determine the mode of entrance 
of the leprosy bacillus into the human body. 

It was felt that the correlation between blacktongue (canine pel- 
lagra) and human pellagra had been worked out thoroughly enough 
for sufficiently reliable results on the study of the pellagra-preventive 
value of foods to be obtained from experiments with dogs, and so the 
studies of human pellagra conducted at the Milledgeville State Hos- 
pital, Milledgeville, Ga., were discontinued. Considerable attention 
is being given to the development of a satisfactory rat method for 
testing pellagra-preventive activity. 

The incidence and mortality of psittacosis in the United States 
were greater than during the preceding fiscal year, due largely to 
an epidemic occurring in a Pittsburgh department store. From the 
studies conducted by the Public Health Service it is now apparent 
that psittacosis can be controlled by adequate control of breeding 
and commercial handling of psittacine birds. 

Construction work on the new laboratory unit at Hamilton, Mont., 
for the study of Rocky Mountain spotted fever and related diseases 
has been completed except for mechanical installations. Two hun- 
dred and twelve liters of vaccine were manufactured for the 1934 
season. The year-by-year increase in the demand for vaccine con- 
tinues. An additional 40.8 liters of vaccine were furnished for use 



REPORT OF THE SECRETARY OF THE TREASURY 143 

by the personnel in Civilian Conservation Camps located in sections 
where the danger of infection is greatest or the disease most fatal. 

A statistical analysis of data on weights of children, collected in 
May 1933, in studies of child health and development in relation to 
the economic crisis, indicates that in comparison with the average 
weight for age and sex obtained during the years 1923-28, there 
was no significant difference in the weights of boys during the last 
few years of the depression, but that there was a slight increase in 
the number of underweight girls. 

A dental health survey undertaken in cooperation with the Amer- 
ican Dental Association has been in progress and is designed to 
show existing facilities in State departments and institutions and 
to determine the dental needs of children of school age. 

In connection with studies of industrial dermatoses, investigations 
were made of processes of manufacture with reference to the skin 
hazards involved in 27 plants employing a total of 19,483 workers. 

Studies of the health of workers in dusty trades have included the 
effects of the respective dusts on anthracite coal miners and talc 
workers, the physiological response of the peritoneal tissue to dusts 
introduced as foreign bodies, silicosis among granite quarriers, pul- 
monary infection in pneumoconioses, and the effect of inhaled 
marble dust as observed in Vermont marble finishers. 

The study of atmospheric pollution in 14 cities, made to determine 
the average conditions and various fundamental relations which 
might prove of importance in programs for smoke abatement, has 
been completed and a report of the study is in progress. 

Research activities in connection with milk investigations have 
included laboratory studies on the chlorine and thermal resistance 
of the B. coli communior test organism, the bactericidal treatment of 
milk coolers, design of air- and foam-heating equipment, and the 
washing and bactericidal treatment of milk cans and milk bottles. 

The statistical analysis of the data collected on sickness and mor- 
tality among families of the unemployed was continued. The re- 
sults indicate higher sickness rates among the recent poor class and 
a rising mortality in the class most severely affected by the depres- 
sion in the face of a downward trend in the death rate in the general 
population. 

The efficiency of the activated sludge method of sewage purifica- 
tion and stream oxidation continue to be the major research studies 
at the stream pollution laboratory. 

Studies at the National Institute of Health included investigations 
of such diseases as typhus, Rocky Mountain spotted fever, epidemic 
encephalitis, relapsing fever, tularemia, poliomyelitis, and trachoma, 
as well as studies relating to the control of biologic products in 
accordance with the act of July 1, 1902. 

Work on the etiology of epidemic encephalitis which prevailed in 

St. Louis, Mo., in the summer of 1933 has led to the isolation, at 

the National Institute of Health, of a virus that is distinct, in its 

-animal symptomatology, pathology, and immunology, from the other 

viruses isolated from six fatal cases of the disease. 

On the basis of animal experiments a chemical method was dis- 
covered for the treatment of bichloride poisoning in human cases. 

90353—35 11 



144 REPORT OF THE SECRETARY OF THE TREASURY 

In connection with sugar researches the 5-carbon sugar xylose has 
been transformed to the 4-carbon sugar threose by a method which 
will permit its preparation in sufficient quantity for biochemical 
study. The basic problem of carbohydrate nutrition is being ad- 
vanced by such work. 

Following the outbreak of amoebic dysentery in Chicago in the 
summer of 1933, the Public Health Service, in conjunction with the 
Chicago city health department, undertook epidemiological and 
laboratory studies of this disease which are still in progress. 

Division of Marine Hospitals and Relief 

The daily average number of patients in hospitals was 4,455 ; the 
daily average number of out-patient treatments was 2,804; there 
were 42,611 patients in hospital during the year. A total of 305,155 
beneficiaries received treatment and other medical services at the 
marine hospitals and other relief stations, and on June 30, 1934, there 
were 4,531 in hospital, representing 599 more patients than were in 
hospital on June 30, 1933; and of this number 157 were old-line 
beneficiaries, 230 patients from the Civilian Conservation Corps, 113 
patients from the Civil Works Administration, and 99 patients from 
the Veterans' Administration. A total of 24,649 patients from the 
Civil Works Administration was treated during the year, the Serv- 
ice having been obliged to care for them without additional appro- 
priation, and, therefore, it was necessary to secure a release of $120,- 
000 of impounded funds for the purpose. 

The hospitals continued to work with reduced appropriations and 
personnel. In 1933 the personnel was reduced by 476 persons, fol- 
lowing the withdrawal of veterans from marine hospitals. How- 
ever, the enactment of Public No. 141 liberalized the benefits to 
veterans, and more of these patients have been admitted to marine 
hospitals; on June 30, 1934, there were 99 in hospital as compared 
with 37 on June 30, 1933, adding somewhat to the income and mak- 
ing it possible to employ a few additional persons. Throughout 
the year it was necessary to practice every economy, and it became 
apparent on January 2, 1934, that unless additional funds were se- 
cured some of the relief stations would have to be closed. Upon 
presenting the facts to the Director of the Budget, $150,000 of 
impounded funds was released. 

The per diem cost was forced down to the low figure of $3.05 
because of insufficient available appropriations. This was done by 
keeping personnel at the lowest practicable number and foregoing, 
for the time being, the replacement and repair of equipment in 
normal amount. 

Division of Venereal Diseases 

The program of disease control includes a study of methods of 
treatment and prevention of venereal diseases, dissemination of in- 
formation concerning these diseases, and cooperation with State 
boards of health for their control. In furthering this program, ex- 
perimental research work has been continued at the laboratory of the 
Stapleton Marine Hospital. The subjects of study during the year 
were the chemical prophylaxis of syphilis, the possibility of the 



KEPORT OF THE SECRETARY OP THE TREASURY 145 

existence of a syphilis carrier, culture of Treponema pallidum, and 
lymphogranuloma inguinale. 

Results of treatment for syphilis have been studied over a period 
of several years. This investigation is carried on in cooperation 
with several of the leading syphilologists of the United States, 
material from five large clinics being^ made available for study. 
Financial assistance was given by the Milbank Memorial Fund. In 
April of 1934, an article entitled " Standard Treatment Procedure 
in Early Syphilis : a Resume of Modern Principles " was published 
in Venereal Disease Information, issued by the Division. The find- 
ings of this important study were given further publicity by an 
exhibit of charts at the annual meeting of the American "Medical 
Association. Studies of other phases of clinical syphilis, part of this 
same undertaking, have also been published and have had wide 
circulation. 

Subscriptions to Venereal Disease Information have shown a grad- 
ual gain since January 1934, as a result, in part at least, of the 
circularization of the county medical societies through the coopera- 
tion of the State boards of health, and of fourth-year students of 
accredited medical schools. Reprints of six of the special articles 
have had wide distribution. The bulletin is a valuable contribution 
to the program for the control of venereal disease, as is attested by 
the increasing number of requests for further information received 
from subscribers. These requests come from syphilologists, social 
workers, and general practitioners in all sections of the country. 

Efforts directed toward the prevention of disease were carried on 
largely in cooperation with the State departments of health. In two 
States control activities were directed by Public Health Service 
officers. In North Carolina the plan of enlisting the aid of physi- 
cians throughout the State to act as cooperating clinicians was 
adopted. Thirty-three physicians were furnished with drugs for the 
free treatment of persons who were carried on the relief rolls and 
others who, in the judgment of the local relief officers, were unable 
to pay for treatment. In Tennessee, renewed activity in the eco- 
nomic life of the State made special provisions necessary. One re- 
quest for aid came from the medical director of the Tennessee Valley 
Authority, in response to which a comprehensive program for 
venereal disease control was prepared and put into effect. 

The clinic at Hot Springs, Ark., the only clinic which is main- 
tained by the Public Health Service, has faced the most trying year 
of its existence. The tremendous influx of transients into the city 
brought with it an enormous increase in the number of applicants 
for admission to the clinic. Additional personnel was necessary to 
handle the work, which has increased more than 50 percent over the 
preceding year. 

State boards of health have been urged to encourage private 
physicians and clinic directors to submit reports of all cases of 
venereal diseases. At the present time it is estimated that only 
about one-half of all cases under treatment are reported. Activities 
of 615 cooperating clinics were reported during the year. Approxi- 
mately 128,000 cases were admitted; more than 55,000 were dis- 
charged as cured, and more than 3,000,000 treatments were given. 
From 47 State departments of health approximately 385,000 cases 



146 REPOET OF THE SECRETARY OF THE TREASURY 

of venereal diseases were reported. More than 1,276,000 doses of 
arsphenamine were administered, and about 2,000,000 laboratory 
examinations made. 

Division of Mental Hygiene 

The activities of the Division of Mental Hygiene included studies 
of the nature and treatment of drug addiction and dissemination 
of information upon the subject; studies of the abusive uses of 
narcotic drugs; administrative functions incident to the establish- 
ment of narcotic farms; supervising and furnishing the medical 
and psychiatric services for the Federal penal and correctional 
system; and cooperating with other agencies interested in the va- 
rious phases of work with which the Division is concerned. 

Two additional medical units were established during the year, 
one at the United States Penitentiary, Alcatraz Island, Calif., and 
one at the Federal Prison Camp, Tucson, Ariz., making a total of 
17 medical units being operated by the Public Health Service in 
connection with the correctional institutions under supervision of 
the Department of Justice. 

Special studies of the nature of drug addiction were continued 
at the United States Penitentiary Annex, Fort Leavenworth, Kans., 
incident to the establishment of the first United States Narcotic 
Farm. Progress has been made in the construction of the latter 
institution, and it is anticipated that it will be completed and ready 
to receive admissions by April 1, 1935. Funds were made available 
through the Public Works Program for beginning construction of 
the second institution at Fort Worth, Tex. 

Further studies were made dealing with the addiction liability of 
codeine and other substances, including dihydrodesoxymorphine-D 
made from opium by a process discovered by Dr. Lyndon F. Small, 
consultant in alkaloid chemistry. Application for patenting this 
process was made by Dr. Small, the patent to become the property 
of the United States and to be lodged with the Secretary of the 
Treasury as ex officio custodian thereof. 

Division of Personnel and Accounts 

Personnel. — The operation of the marine hospitals and quarantine 
stations was attended by difficulty, due to the reduction of personnel 
made necessary by decreased appropriations. At the hospitals, for 
example, it was necessary in many instances to employ internes in 
place of the experienced physicians, which the character of the work 
required. 

On July 1, 1934, the regular commissioned corps of the Public 
Health Service consisted of 370 commissioned officers, of whom 48 
were on waiting orders. The reserve officers on active duty num- 
bered 37. Other personnel of the Service totaled 5,646, not including 
4,674 collaborating and assistant collaborating epidemiologists who 
served at nominal compensation and who were for the most part 
officers or employees of State and local health organizations. 



REPORT OF THE SECRETARY OF THE TREASURY 



147 



Financial statements. — Following is a statement of appropriations 
and expenditures for the fiscal year 1934 : 



Appropriation title 



Appropriated 



Expended 



Salaries, Office of Surgeon General 

Pay, etc., commissioned officers 

Pay of acting assistant surgeons _ 

Pay of other employees ... 

Freight, transportation, etc 

Maintenance, National Institute of Health 

Books 

Pay of personnel and maintenance of hospitals 

Quarantine service.. 

Preventing the spread of epidemic diseases 

Field investigations of public health 

Interstate quarantine service 

Studies of rural sanitation 

Control of biologic products 

Expenses: 

Division of venereal diseases 

Division of mental hygiene 

Educational exhibits. 

Total....- 



$307, 

1, 528, 

325, 

1, 017, 

36, 

54, 

5, 844, 
475, 
333, 
353, 

38, 
150, 

43, 

75, 

44, 

1, 



890. 00 
393. 00 
400. 00 
750. 00 
175. 00 
775. 00 
500. 00 
259. 00 
000. 00 
G50. 00 
564. 00 
454. 00 
000. 00 
900. 00 

000. 00 
377. 00 
500. 00 



$266, 314. 09 

1, 372, 666. 42 

253, 227. 61 

801, 194. 25 

25, 161. 00 

40, 982. 32 

406. 90 

5, 048, 340. 85 

308, 621. 46 

206, 893. 60 

210, 020. 00 

33, 255. 21 

24, 544. 94 

39, 657. 50 

58,268.71 

30, 938. 50 

957. 64 



2 10,630,587.00 



8, 721, 451. 00 



' Includes $244,259 reimbursement for care and treatment of beneficiaries of the Veterans' Administration 
and Civilian Conservation Corps. 

2 Statement does not include expenditure of $4,177.01 from trust fund "National Institute of Health, 
Conditional Gift Fund." 

Expenditures from allotments of funds from other bureaus and 
offices for direct expenditure during the fiscal year 1934 were as 
follows: 



Appropriation title 


Allotted 


Expended 




$72, 550. 00 

393, 278. 00 

1,726,863.00 

131, 124. 88 

1,800.00 


$72, 550. 00 


Department of Justice: Medical and Hospital Service, Penal Institutions 


393, 278. 00 
1, 726, 863. 00 




131, 124. 88 




1, 800. 00 






Total 


2,325,615.88 


2, 325, 615. 88 







The revenues derived from operations of the Public Health Service 
during the fiscal year 1934, and covered into the Treasury as miscel- 
laneous receipts, were as follows : 



Source 



Amount 



General fund receipts: 

Quarantine charges 

Hospitalization charges and expenses 

Sale of subsistence ■_ '. 

Sale of occupational therapy products 

Sale of obsolete, condemned, and unserviceable equipment 

Rents... 

Reimbursement for Government property lost or damaged 

Commissions on telephone pay stations installed in service buildings 

Sale of refuse, garbage, and other by-products 

Sale of livestock and livestock products 

Other revenues 

Total 

Trust fund receipts: 

Effects of deceased patients 

Grand total 



$220, 809. 33 

22, 639. 07 

10,334.31 

431.02 

5,112.21 

2, 582. 25 

02.57 

1,070.14 

712. 72 

352. 16 

125. 78 



264,231.56 
1,418.09 



265, 649. 65 



148 REPORT OF THE SECRETARY OF THE TREASURY 
PUBLIC WORKS OF ART PROJECT 

The Public Works of Art Project was organized on December 8, 
1933, as an emergency relief activity designed to aid those of artistic 
inclination who were in need of employment and qualified as artists 
to produce work of value. Policies were outlined by an advisory 
committee composed of 6 leading authorities, and 5 directors were 
named to coordinate and supervise procedure. The country was 
divided into 16 regions with a chairman named for each. More than 
600 private citizens contributed their services and expert knowledge 
without remuneration in administering the project. Artists given 
employment numbered 3,749. 

The project was financed by an allotment of $1,408,381 from the 
Federal Emergency Relief Administrator. A total of $1,184,748.32 
was paid out in the form of artists' pay rolls, and $127,429.61 on 
administrative pay roll, travel, and miscellaneous supplies, leaving 
an unexpended balance of $96,203.07 as of June 30, 1934. 

The project produced some 15,663 works of art, including 3,821 
oil paintings, 54 portraits, 1,076 etchings, 2,938 water colorings, and 
647 pieces of sculpture. A large proportion of these works of art 
has been allocated to publicly owned buildings throughout the 
country, such as public libraries, public schools, museums, Govern- 
ment offices, etc. The distribution is now being completed by the 
Federal Emergency Relief Administration. The allocations have 
been made with the understanding that the works of art remain the 
property of the Federal Government. 

Field reports indicate that the project was well received throughout 
the country. A complete report on the activities of the project has 
! been made to the Federal Emergency Relief Administrator. 

SECRET SERVICE DIVISION 

During the fiscal year 1934, 3,251 persons were arrested by agents 
of the Service, or by their direction, on charges involving counter- 
feiting of the obligations and coins of the United States and forgery, 
as well as miscellaneous offenses against the Federal statutes relating 
to the Treasury Department. Of this number, 1,724 were note 
counterfeiters and note passers, 86 were note raisers and passers of 
altered currency, 725 were coin counterfeiters and coin passers, 486 
were check forgers, 32 were apprehended for negotiating stolen or 
forged bonds, 10 were held for fraudulent negotiation of adjusted 
service certificates, and 188 arrests were made for miscellaneous 
offenses. 

Only two new counterfeit issues, both photo-mechanical produc- 
tions and warranting distribution of descriptive warning circulars, 
were detected during the year; 119 counterfeits of varying types and 
denominations were detected in circulation in different sections of 
the country for short periods, some being hand-drawn and photo- 
graphic specimens of extremely crude workmanship. 

Counterfeit notes aggregating $1,214,279 were seized by operatives 
of the Service. This total included altered notes aggregating $12,390, 
of which $6,345 were made and passed in foreign countries, and 
fractional currency amounting to $242. Counterfeit coins totaling 
$77,960 were confiscated by agents in connection with raids and 
subsequent arrests. 



REPORT OF THE SECRETARY OF THE TREASURY 149 

In connection with investigations and arrests, operatives seized 
312 metal plates, 834 film and glass negatives for printing counter- 
feit obligations and securities, together with 2 lithograph stones, 
371 plaster molds, 25y 2 metal molds, 51 steel dies for counterfeiting 
coins, together with a large quantity of miscellaneous materials 
and paraphernalia. 

Of the counterfeit notes seized during the year, a total of $469,368 
was used in evidence against the makers and passers, while altered 
notes aggregating $1,865 were used in evidence in the prosecution 
of note raisers and passers of altered notes. Counterfeit coins, 
totaling $6,438, were also used in evidence in cases of this character. 

Of the total number of persons arrested, 1,596 were convicted and 
sentenced; 121 acquitted; 1,027 are awaiting action of the courts, 
and various dispositions were made of others. 

Agents conducted investigations of 2,408 check cases, 57 bond cases, 
and 3 war-savings stamp cases. In check-case investigations $6,969 
was received in restitution and transmitted to the Department. 

The Veterans' Administration forwarded to the Service for investi- 
gation 87 cases involving violation of the World War Adjusted Com- 
pensation Act. Inquiries in 283 cases were received from the Pro- 
curement Division for information concerning prospective bidders on 
Government supplies. Three requests were transmitted by the Farm 
Loan Board for investigation of offenses against the Farm Loan Act, 
and 145 cases involving violation of the Gold Reserve Act of 1934 
were referred to the Service for investigation. 

DIVISION OF SUPPLY 

The Division of Supply is the central procuring or purchasing 
agenc}' of the Treasury Department, and as such does the purchasing 
for all local and field activities, with the exception of purchases from 
appropriations for the Bureau of Engraving and Printing (exempted 
by law), the Coast Guard, and, to some extent, the Bureau of the 
Mint. The Division is charged also with certain duties closely 
related to purchasing, such as accounting for funds appropriated 
or allotted to it; supervision over printing and binding for the 
Treasury Department and engraving work by the Bureau of Engrav- 
ing and Printing for all departments and establishments, unless 
money, bonds, or stamps are involved; control over newspaper and 
periodical advertising for the Department; routing of all freight, 
express, and parcel-post shipments; and warehousing and distribu- 
tion of stationery and miscellaneous supplies, including blank books 
and forms, to Washington and field offices of the Treasury Depart- 
ment. The appropriations to the Department for purchases of sta- 
tionery, and for printing and binding are under the administrative 
control of the Division. 

Expenditures from various appropriations 

The total cost of purchases made by the Division of Supply during 
each of the past two fiscal years from specified appropriations from 
which allotments were made to the Division to cover expenditures 



150 



REPORT OF THE SECRETARY OF THE TREASURY 



made by it, and also purchases chargeable to appropriations from 
which no allotments were made, are shown in the following table : 

Expenditures by Division of Supply for the fiscal years 1933 and 1934, f>V 

appropriations 



Bureaus and offices, and titles of appropriations 



Chief Clerk and Superintendent: 

Contingent expenses, Treasury Department. 

Library. 

Working fund, Civil Works Administration- 
Total 



Division of Supply: 

Stationery, Treasury Department 

Printing and binding, Treasury Department.. 

General Supply Committee, salaries and expenses. 

Total 



Division of Bookkeeping and Warrants, contingent expenses, public 
moneys 



Bureau of Customs, collecting the revenue from customs 

Public Health Service: 

Pay of personnel and maintenance of hospitals 

Quarantine service 

Interstate quarantine service 

Maintenance, National Institute of Health 

Field investigations 

Preventing the spread of epidemic diseases 

Expenses, Division of Venereal Diseases . 

Control of biologic products 

Books 

Studies of rural sanitation 

Educational exhibits 

Expenses, Division of Mental Hygiene 

Mosquito control in District of Columbia 

Working fund, Civil Works . 

Working fund, Beltsville, Md., Public Works. 

National Industrial Recovery 

Department of Justice transfers to Public Health Service: 
Medical and hospital services, penal institutions 



Total. 



Procurement Division: 

Branch of Supply 

Public Works Branch (account public buildings) : 

Repairs and preservation 

Mechanical equipment 

Vaults and safes 

General expenses 

Furniture and repairs 

Operating supplies 



Total. 



Bureau of Internal Revenue, collecting the internal revenue 

Advances to Agricultural Adjustment Administration (transfer to 
Internal Revenue, administrative expenses) 



Total. 



Bureau of Narcotics, salaries and expenses 

Bureau of Industrial Alcohol, salaries and expenses 

Public Debt Service: 

Expenses of loans (act Sept. 24, 1917, as amended and extended)... 
Public Debt Service 



Total. 



Division of Disbursement, salaries and expenses 

Total appropriations and allotments 

Purchases from appropriations from which no allotments were made *. 

Grand total. 



$117,082.88 
860.20 



117,943.08 



314, 809. 40 

556, 857. 70 

8, 872. 59 



227. 32 



304, 127. 92 



, 774, 537. 33 

176, 892. 59 

1, 203. 99 

32, 410. 33 

52, 708. 10 

48,950.52 

4, 702. 93 

18,881.38 

493. 51 

188. 85 

383. 65 

790. 55 

102.40 



86, 593. 68 



2, 198, 839. 81 



95, 171. 63 
111,717.21 
136, 000. 09 

95, 801. 33 
518, 329. 33 
031,300.23 



2, 988, 319. 82 



110, 324. 09 



110, 324. 09 



8, 303. 12 
20, 312. 24 



2, 701. 53 
24, 505. 27 



27, 206. 80 



6, 656, 143. 89 
103, 248. 09 



6, 759, 391. 98 



1 Includes receipts^from sales of customs forms (reimbursed to the appropriation). 

* Shown under Procurement Division, Branch of Supply. 

* Appropriation accounting by bureaus and offices for which purchases were made. 



REPORT OF THE SECRETARY OF THE TREASURY 



151 



The foregoing expenditures involved the preparation of specifica- 
<ions, the solicitation of quotations, the writing of 47,517 purchase 
orders, and the examination and audit of 102,272 vouchers for pay- 
ment through the disbursing clerk of the Treasury Department. 
The purchase orders in 1934 required the preparation of 7,791 sets of 
specifications and the circulation of 59,544 invitations to dealers to 
submit quotations, as compared with 9,365 sets of specifications in 
1933. 

Stationery supplies 

The appropriations, reimbursements, and expenditures for articles 
of stationery for the past two years are summarized in the following 
table : 

Appropriations, reimbursements, and expenditures for stationery for the fiscal 

years 1933 and 1934 





1933 


1934 




$350, 000. 00 
9, 247. 90 


$325, 000. 00 
34, 513. 08 






Available credits 


359, 247. 90 
324, 057. 30 


359,513 08 




359, 248. 74 






35, 190. 60 


264 34 







Printing and binding 

The appropriation for printing and binding for the fiscal year 
1934 was $575,000. The Bureau of the Budget restricted expendi-- 
tures from this appropriation to $500,000, but this sum was 
insufficient to meet the essential requirements of the Department, 
and the balance of the appropriation, $75,000, was released. .Reim- 
bursements to the amount of $23,715 from the sales of customs 
forms were made to the appropriation of $575,000, making a total 
of $598,715 available. Of this sum, $597,639 was expended, leaving 
a balance of $1,076. In addition, the sum of $282,421 was expended 
from funds other than the printing and binding appropriation made 
by Congress, making a total of $880,059. 

Expenditures for printing and binding, by bureaus, offices, and 
services, for each of the last two fiscal years are shown in the follow- 
ing table : 

Appropriations, expenditures, and reimbursements for printing and binding for 
the fiscal years 1933 and 1934 1 

SUMMARY 





1933 


1934 




$670, 000. 00 


$575. 000. 00 




23, 714. 50 




32, 358. 28 


282, 420. 69 








702, 358. 28 
582, 651. 23 


881, 135. 19 




880, 059. 20 








119,707.05 


1, 075. 99 







i Figures subject to slight variations, due to necessary delays in receiving bills from the Public Printer 
for certain items until pending work is completed after the close of each fiscal year. 



152 



REPORT OF THE SECRETARY OF THE TREASURY 



Appropriations, expenditures, and reimbursements for printing and binding for 
the fiscal years 1933 and 193J t ' — Continued 

EXPENDITURES FROM APPROPRIATIONS FOR PRINTING AND BINDING, BY 
BUREAUS, OFFICES, AND DIVISIONS 



Secretary, Under Secretary, and Assistant Secretaries 

Appointment Division 

Bookkeeping and Warrants Division 

Bureau of Engraving and Printing - 

Bureau of Industrial Alcohol 

Bureau of Narcotics --- 

Chief Clerk and Superintendent. . 

Coast Guard - 

Commissioner of Accounts and Deposits 

Comptroller of the Currency 

Custodians of public buildings 

Customs -. - - 

Disbursing Clerk.. 

Division of Supply - 

General Supply Committee... 

Government Actuary 

Internal Revenue - 

Mint 

National bank depositaries 

Public Debt Service 

Public Health 

Secret Service 

Supervising Architect 

Treasurer of the United States 

Miscellaneous 

Total : — 



$8, 

18. 

3, 
19, 

4, 

18, 

23, 

1, 

34, 

7, 
38, 

2, 
225, 

6. 

1, 
11, 
48, 



58, 



101. 93 
214.86 
459. 85 
623. 92 
371.90 
213. 21 
522. 41 
895. 26 
543. 93 
494. 48 
589.23 
703. 62 
410. 57 
759. 46 
546.96 
330.63 
831.63 
458. 21 
377. 38 
983. 15 
809.17 
484.19 
318. 33 
807. 97 
440.70 



550, 292. 95 



1934 



$8, 701. 77 

449. 45 

23, 684. 55 

4, 134 92 

19, 248. 21 

4, 474. 36 

1,562.17 

18, 151. 31 

394. 32 

27, 133. 20 

» 710. 33 

31,969.15 

595. 07 

7, 022. 75 

» 41, 652. 79 

1, 683. 39 

227, 325. 90 

5, 583. 85 

1, 787. 62 

10, 445. 35 

50, 477. 87 

723. 40 

' 3, 700. 65 

13, 818. 95 

68, 592. 68 



573, 924. 01 



REIMBURSED AND EXPENDED FROM OTHER APPROPRIATIONS 



1933 



1934 



Administration of the Cotton Act, 1934 (transferred to Internal Revenue, 
administrative expenses) 

Advances to Agricultural Adjustment Administration: 

Internal Revenue.. -._ 

Treasurer of the United States 

General expenses, Agricultural Adjustment Administration (tranferred to 
Treasury Department, Division of Disbursements) 

Bureau of Engraving and Printing 

Civil Works Administration 

Collecting the revenue from customs 

Contingent expenses, national currency 

Customs Service, blank forms 3 

Emergency conservation fund 

Expenses, Emergency Banking, Gold Reserve, and Silver Purchase Acts, 
1934-35. 



Expenses, National Banking Emergency Act of Mar. 9, 1933 

Expenses of loans (act of Sept. 24, 1917, as amended and extended). 

Expenses, Settlement of War Claims Act of 1928.. 

Federal Deposit Insurance Corporation 

Federal Farm Loan Bureau (miscellaneous expenses) 

Fuel yard, Procurement Division 

Insolvent national bank fund 

National bank examiners 

National Bank Redemption Agency.. 

National Industrial Recovery 

Salaries and expenses, Division of Disbursement 

Working fund, Emergency Relief 

Working fund, Home Owners' Loan Corporation 



Total. 



$5, 982. 57 



292.87 
~373.~60' 



2, 179. 31 
1, 285. 02 



6, 904. 72 



1, 599. 56 

11,940.49 

1,800.14 



32, 358. 28 



$5, 545. 07 

73, 174. 95 
809.01 

594.00 

704.99 

90, 475. 57 

268.75 

1, 636. 31 

23, 714. 50 

53.95 

1, 585. 74 
8, 917. 79 

34, 186. 36 
108.21 

33, 200. 20 



31.63 

215. 50 

9,945.71 

14, 190. 70 

851. 84 

2, 864. 67 

3, 028. 39 

31.35 



306, 135. 19 



> See footnote on preceding page. 

3 In October 1933 there was transferred to the Procurement Division the former Custodians of public 
buildings, General Supply Committee, and Office of Supervising Architect. 
3 Reimbursed to printing and binding appropriation. 



REPORT OF THE SECRETARY OF THE TREASURY 



153 



Department advertising 

Authorizations to publish advertising were issued to 2,605 news- 
papers and periodicals in the fiscal year 1934, compared with 3,480 
in 1933, a decrease of 875; while the expenditures thus authorized 
were $41,863.42 in 1933 and $37,911.20 in 1934, a decrease of 
$3,952.22. 

Engraving work 

A total of 142,025,685 certificates, checks, commissions, drafts, 
liquor permits, transportation requests, and warrants was approved 
by this office for execution by the Bureau of Engraving and Printing 
for the several departments and establishments of the Government 
during the fiscal year 1934, compared with 71,918,243 in the preced- 
ing year. 

TREASURER OF THE UNITED STATES 

Public moneys are received and disbursed through the accounts of 
the Treasurer of the United States with designated Government de- 
positaries and the Treasury at Washington. 

Funds appropriated by Congress for the use of the various depart- 
ments and establishments of the Government are advanced to dis- 
bursing officers as required and credited to their accounts on the books 
of the Treasurer, and all disbursements therefrom are made by checks 
drawn on the Treasurer. 

The total receipts and total expenditures of the Government are 
shown for the fiscal years 1933 and 1934 in the following table. The 
figures used in this table and throughout this section of the report 
(pp. 153 to 156, inclusive) are on the basis of daily Treasury state- 
ments, revised. (For explanation of accounts, see p. 274; and for 
explanation of bases, see p. 273.) 



Account 



1933 



1934 



General and special accounts: 

Receipts .. 

Expenditures ' 



Deficit i. 



Trust and contributed accounts: ! 

Receipts - 

Expenditures 



Surplus. 
Deficit.. 



$2, 083, 656, 464. 32 
5, 131, 692, 754. 49 



$3,121,431,991.22 
7,131,430,071.59 



3,048,036,290. 17 



4, 009, 998, 080. 37 



160, 597, 596. 76 
163, 255, 858. 66 



3 2, 972, 670, 581. 96 
* 2, 138, 224, 450. 87 



2, 658, 261. 90 



834, 446, 131. 09 



i Includes expenditures made by the Reconstruction Finance Corporation, which were not included in 
these items in preceding annual reports. 

2 The classification of receipts and expenditures on account of contributed funds prior to the fiscal year 
1934 is not available. Such receipts and expenditures were classified as special funds and are included in 
the receipts and general expenditures under General and Special Funds for the fiscal year 1933. 

3 Includes increment resulting from the reduction in the weight of the gold dollar of $2,811,397,066.15. 
* Includes $2,000,000,000 authorized to be credited to the exchange stabilization fund. 



154 



REPORT OF THE SECRETARY OF THE TREASURY 



The total receipts and expenditures on account of the principal of 
the public debt during the fiscal year 1934 were as follows: 



Class 



Receipts 



Expenditures 



Treasury bills..- - 

Certificates of indebtedness - — 

Certificates of indebtedness (adjusted service certificate fund 



series) . 



Treasury notes - --. 

Treasury notes (civil service retirement fund series) 

Treasury notes (foreign service retirement fund series) 

Treasury notes (Canal Zone retirement fund series) 

Treasury notes (Postal Savings System series) 

Treasury bonds - 

War savings securities 

Treasury savings securities - 

First Liberty bonds... 

Second Liberty bonds . 

Third Liberty bonds 

Fourth Liberty bonds - 

Victory notes 

Postal savings bonds.. . — - 

Other debt items -- 

Deposits for, and retirements of, national bank notes and Federal 
Reserve bank notes 



$4, 385, 975, 000. 00 

1, 695, 150, 500. 00 

180, 100, 000. 00 

2, 712, 686, 400. 00 

47, 700, 000. 00 

772,000.00 

97, 000. 00 

35, 000, 000. 00 

4, 177, 903, 164. 64 



$3, 929, 416, 000. 00 
2, 302, 348, 650. 00 

154,300,000.00 

609, 151, 300. 00 

35, 800, 000. 00 

454, 000. 00 

52, 000. 00 



990. 00 



27, 579, 500. 00 
319, 962, 860. 00 



Total. 



13, 582, 927, 414. 64 



61,113,114.64 

23, 120. 50 

120, 135. 00 

2, 100. 00 

410,150.00 

711,950.00 

1,855,531,150.00 

110,950.00 

2, 238, 200. 00 

5, 643. 92 

116,725,126.00 



9,068,513,590.06 



The public debt retirements included in the above public debt 
expenditures are as follows: 

Cumulative sinking fund $359,491,900.00 

Received from foreign governments under debt settlements 357,850.00 

Forfeitures, gifts, etc - -- 15,342.90 

Total - 359,865,092.90 

During the fiscal year 1934 the increase in the dollar value of the 
gold holdings of the Treasury was $4,621,967,544.94, on the basis 
of daily Treasury statements, revised. The amount held on June 30, 
1933, valued at $20.67 an ounce was $3,234,213,011.51, and the 
amount held on June 30, 1934, valued at $35 an ounce was $7,856,- 
180,556.45. 

The holdings as of the two dates are shown in the following table 
by liability accounts: 



Liability account 



June 30, 1933 

(gold valued at 

$20.67 per fine 

ounce) 



June 30, 1934 

(gold valued at 

$35 per fine 

ounce) 



Increase (+) or 
decrease (— ) 



Reserve against gold certificates outstanding.. 
Gold certificate fund, Federal Reserve Board '. 

Redemption fund, Federal Reserve notes 2 

Gold reserve 

Exchange stabilization fund 

Gold in General Fund 



$1,230,717,109.00 

1, 771, 485, 595. 89 

44, 066, 151. 32 

156, 039, 088. 03 



31,905,067.27 



$958,463,029.00 

3, 973, 332, 588. 66 

25, 722, 721. 73 

156, 039, 430. 93 

1, 800, 000, 000. 00 

942, 622, 786. 13 



-$272, 254, 080. 00 

+2, 201. 846, 992. 77 

-18,343,429.59 

+342. 90 

+ 1,800,000,000.00 

+910, 717, 718. 86 



Total. 



3,234,213,011.51 



7, 856, 180, 556. 45 



+4. 621, 967, 544. 94 



1 "Gold fund, Federal Reserve Board", in 1933. 

1 Carried as General Fund liability in 1933. In this table the 1933 figures have been revised to include 
this item as a gold account liability. 

The increase in these holdings during the fiscal year resulted chiefly 
from the gold held by the Federal Reserve banks and agents and the 



REPORT OF THE SECRETARY OF THE TREASURY 



155 



reduction in the weight of the gold dollar. The additions to the gold 
holdings during the fiscal year are analyzed by sources as follows: 



Source 


Gold at cost 


Gold at $35 an 
ounce 


Under the Secretary's order of Dec. 28, 1933 


$28, 446, 156. 49 

806, 302, 292. 87 

55, 564, 869. 10 

131,990,972.82 

776, 947, 428. 58 

11,318,758.93 


$48, 162, 898. 03 

1, 365, 170, 569. 65 

58, 218, 704. 19 

141, 059, 054. 94 

778, 671, 052. 06 

17,221,879.67 


From Federal Reserve banks and agents under the Gold Reserve 
Act of 1934 


Coin purchased under sec. 734, title 31, United States Code... 

Purchased from the Reconstruction Finance Corporation 

Net purchases by mints and assay offices on account of imports, etc. 
Purchases abroad as authorized by the President at various times. 


Total increase at cost _ . . 


1, 810, 570, 478. 79 
2,811,397,066.15 




Increment to June 30, 1934, resulting from the reduction in the 
weight of the gold dollar __ . 


1 2, 213, 463, 386 40 






Total 


4, 621, 967, 544. 94 


4,621,967 544 94 







1 On holdings in Treasury offices Jan. 29, 1934. 



Public moneys on deposit in designated Government depositaries on 
June 30, 1934, exclusive of items in transit on that date, amounted to 
$1,953,384,870.94 and were distributed as follows: 



Class of depositaries 



To credit of 
Treasurer 



To credit of 
other Govern- 
ment officers 



Federal Reserve banks and branches 

Special depositary banks (account of sales of Government securities). 

General depositary banks 

Limited depositary banks. 

Foreign depositary banks.. _ 

Treasury of the Philippine Islands.. 

Total 



$64, 185, 068. 68 

1, 854, 045, 099. 45 

6, 546, 830. 05 



1.338,468.05 
1,110.352.99 



$9, 479, 451. 18 
14, 929, 149. 34 
1, 750, 451. 20 



1, 927, 225, 819. 22 



26, 159, 051. 72 



United States paper currency issued and redeemed (including 
Treasury notes of 1890 redeemed) during the fiscal year 1934 amounted 
to $813,890,512 and $1,403,162,332, respectively, and the amount 
outstanding at the end of the fiscal year was $1,987,091,226. The 
amount of such currency shipped during the fiscal year 1934 from the 
Treasury in Washington to Treasury offices, Federal Reserve banks 
and branches, and others amounted to $792,165,080, as compared 
with $798,651,071 in the previous fiscal year. 

The proceeds of currency counted into the Treasurer's cash by the 
National Bank Redemption Agency amounted to $572,476,726.66, 
of which $470,466,290 was in national bank notes, $51,836,626 in 
Federal Reserve bank notes, $50,096,050 in Federal Reserve notes, 
and $77,760.66 in United States currency. 

Canceled Federal Reserve notes amounting to $989,356,700 were 
received from Federal Reserve banks and branches for credit of 
Federal Reserve agents. 

During the fiscal year the Treasurer's Office authorized and directed 
shipments or transfers of gold bars and of current gold, silver, and 
minor coins to or from the Treasury, the mints, the assay office in 
New York, and the Federal Reserve banks and branches for use in 
public disbursements and for special purposes in an aggregate amount 
of $29,054,270.64. Shipments and transfers of uncurrent and light- 
weight coins to the mints from the Treasury in Washington and from 
the Federal Reserve banks and branches were authorized in the 
amount of $22,340,095.70. 

Government and other securities held in custody by the Treasurer 
on June '30, 1934, amounted to $19,035,094,929, whereas the amount 



156 



REPORT OF THE SECRETARY OF THE TREASURY 



held on June 30, 1933, was $16,831,891,905, an increase of $2,203,074,- 
374. The purpose for which the securities were held and the amounts 
thereof as of June 30, 1933 and 1934, were as follows: 



Purpose for which held 



To secure national bank circulation 

To secure deposits of public moneys in depositary banks 

To secure Postal S ivings funds.. _. 

Held for special trust accounts 

Held for District of Columbia teachers' retirement fund 

Held for Longshoremen's and Harbor Workers' fund . 

Held for District of Columbia Workmen's Compensation fund 

Total 



June 30, 1933 



$856, 394, 230 

50, 876, 098 

1, 047, 883, 902 

14,871,516,365 

5, 108, 160 

102 150 

11,000 



16.831,891.905 



June 30, 1934 



$737, 023, 670 

52, 920, 506 

738. 868, 235 

17,500,558,708 

5, 595. 160 

107, 650 

21,000 

19, 035. 094. 929 



The number of pieces of public debt principal obligations examined, 
verified, and redeemed during the year was 1,888,858, as compared 
with 600,181 for the previous fiscal year. 

Checks in payment of interest on the registered obligations of the 
United States, verified and paid, numbered 1,765,541 and amounted 
to $119,249,060.62. Interest coupons detached from Government 
obligations and examined, verified, and paid, numbered 18,518,767 
and amounted to $619,351,763.67. 

The checks issued by the Treasurer of the United States in payment 
of interest on the registered obligations of the insular governments 
numbered 6,222 and amounted to $1,135,333.75. Coupons from 
obligations of the insular governments and Government corporations 
paid numbered 549,648 and amounted to $5,947,787. 

Funds were advanced to United States disbursing officers by ac- 
countable warrants issued in an aggregate amountof $5,321,665,626.38. 
Warrants, aggregating $11,543,615,384.74, were also issued covering 
public debt principal, interest, and premium payments by the Treas- 
urer and increases in the gold reserve. Treasurer's checks aggre- 
gating $2,232,304,541.21 were issued on settlement warrants in pay- 
ment of claims settled by the Comptroller General. 

Drafts were purchased in payment of claims settled in 45 different 
kinds of foreign currencies for the Comptroller General and for 
other departments and bureaus of the Government at a total cost of 
$102,319.43. 

Checks drawn on the Treasurer of the United States by Government 
disbursing officers and paid during the year numbered 104,616,644, 
an increase of 64,800,250 checks as compared with the previous year. 
Balances to the credit of disbursing officers and Government agencies 
in 4,467 accounts on June 30, 1934, amounted to $859,150,867.24, an 
increase of $538,923,400.53 over the total of such balances in 3,215 
accounts on June 30, 1933. The increases in the balances and in the 
number of checks paid were due principally to the emergency opera- 
tions of the Government. 



WAR FINANCE CORPORATION 

(In liquidation) 

The liquidation of the War Finance Corporation, which began on 
January 1, 1925, was continued during the year. By the act approved 
March 1, 1929, the liquidation of the Corporation's assets remaining 
at the close of April 4, 1929, and the winding up of the affairs of the 



REPORT OF THE SECRETARY OF THE TREASURY 157 

Corporation thereafter were transferred to the Secretary of the 
Treasury. 

Only $10,000 of the Corporation's original capital of $500,000,000 
is outstanding, $499,990,000 of capital stock having been canceled 
and retired at par. In addition, the Corporation has paid into the 
Treasury $64,631,271.70 on account of earnings. Of this amount 
the sum of $100,000, representing proceeds from liquidating activi- 
ties during the last few years, was paid into the Treasury on January 
26, 1934; the last preceding payment having been made on June 30, 
1931. 

The amount advanced by the Corporation for all purposes, from its 
creation, not including such part of new applications as represent 
proceeds used to retire other advances, was $690,431,100, of which 
$688,475,938, has been repaid. The amount carried on the Corpora- 
tion's books on June 30, 1934, was $132,201.80, of which $119,500 
represented war loans and $12,701.80, agricultural and livestock loans 
(including expense advances of $375). During the year ended June 
30, 1934, no expense advances were made. The repayments during 
this period aggregate $31,053.46, of which $553.46, applied on account 
of the Corporation's agricultural and livestock loans and $30,500 on 
account of war loans. 



EXHIBITS 



[Exhibits in this report are limited to circulars, press releases, proclamations, etc., issued during the 
fiscal year ended June 30, 1934, except those included in the report for the preceding year which in- 
cluded all such material released after June 30, 1933, and prior to the printing of the report] 



159 



90353- 



THE PUBLIC DEBT 

Issues and redemptions of bonds, notes, and certificates of indebtness 

Exhibit 1 

Allotments on exchange subscriptions, Treasury bonds of 191^-^5 {from press 

release, Dec. 5, 1933, revised l ) 

Acting Secretary Morgenthau announced on December 5, 1933, that the sub- 
scription books for 4 L 4 — 3>i percent Treasury bonds of 1943—45, dated October 15, 
1933, were closed on December 2, 1933, for the receipt of subscriptions in exchange 
for Fourth Liberty Loan bonds. The details of this issue of Treasury bonds 
were given in the annual report of the Secretary of the Treasury for 1933, pages 
176 to 183. 

Allotments on exchange subscriptions and the revised cash allotments to the 
several Federal Reserve districts and the Treasury were as follows: 



Federal Reserve district 



Total cash 

allotments 



Total exchange 
allotments 



Total allot- 
ments 



Boston 

Xew York 

Philadelphia.. 

Cleveland 

Richmond 

Atlanta 

Chicago. 

St. Louis 

Minneapolis. . 
Kansas City.. 

Dallas 

San Francisco 
Treasury 

Total... 



$70, 724, 300 

217,928,800 

29. 036, 300 

26, 554, 550 

13, 607. 850 

23,713.800 

44, 66S, 800 

9. 839, 550 

5. 217, 850 

5. 914. 250 

8, 137, 750 

45,050,150 

28,000 



500, 421, 950 



$55, 252. 050 

324, 466, 750 
50, 744. 550 

126,857,850 
38, 188, 700 
15. 667, 450 

108, 632. 650 
41, 534, 250 
16, 132, 050 
39, 095, 350 
14, 766, 400 
29, 6S5, 650 
41, 692, 850 

900, 716, 550 




1,401. 13S. 500 



Exhibit 2 



Offering of certificates of indebtedness, series TD-1984 (2}i percent) 

On December 7, 1933, the Treasury offered for subscription Treasury certifi- 
cates of indebtedness as described in the following circular. In the related press 
release it was stated that about $728,000,000 of Treasury certificates of indebted- 
ness and about $114,000,000 in interest payments on the public debt would 
become due and payable on December 15, 1933. 

[Department Circular No. 503] 

The Secretary of the Treasury offers for subscription, at par and accrued 
interest, through the Federal Reserve banks, under the authority of the act ap- 
proved September 24, 1917, as amended, Treasurv certificates of indebtedness of 
series TD-1934. The amount of the offering is $950,000,000, or thereabouts. 



DESCRIPTION OF CERTIFICATES 

The certificates will be dated December 15, 1933, and will bear interest from 
that date at the rate of 2}i percent per annum, payable semiannually. They will 
be payable on December 15, 1934. 

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 on June 15 and December 15, 1934. 



Revised Apr. 23, 1934. 



161 



162 REPORT OF THE SECRETARY OF THE TREASURY 

The certificates 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, or any of the possessions of the United States, or by 
any local taxing authority. 

The certificates 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 Treas- 
ury in payment of income and profits taxes payable at the maturity of the 
certificates. 

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

APPLICATION AND ALLOTMENT 

Applications will be received at the Federal Reserve banks and branches and 
at the Treasury Department, Washington. 

Subscriptions for which payment is to be tendered in Treasury certificates of 
indebtedness of series TD-1933 and TD2-1933, maturing December 15, 1933, will 
be given preferred allotment. All cash subscriptions for amounts over $5,000 
will be allotted on an equal percentage basis. 

The Secretary of the Treasury reserves the right to reject any subscription, in 
whole or in part, and to allot less than the amount of certificates applied for and 
to close the books as to any or all 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 is these respects shall be final. Allotment 
notices will be sent out promptly upon allotment, and the basis of the allotment 
will be publicly announced. 

PAYMENT 

Payment at par and accrued interest for certificates allotted must be made on 
or before December 15, 1933, or on later allotment. 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 TD-1933 and TD2-1933, maturing 
December 15, 1933, will be accepted at par in payment for any certificates which 
shall be subscribed for and allotted, with an adjustment of the interest accrued, 
if any, on the certificates so paid for. Applications, unless made by an incorpo- 
rated bank or trust company, or by a responsible and recognized dealer in Gov- 
ernment securities, must be accompanied by payment in full or by payment of 
10 percent of the amount of certificates applied for. The forfeiture of the 10 
percent payment may be declared by the Secretary of the Treasury if payment 
in full is not completed on the prescribed date in the case of subscriptions allotted. 

GENERAL 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. After allotment and upon payment 
Federal Reserve banks may issue interim receipts pending delivery of the defini- 
tive certificates. 

Henry Morgenthau, Jr., 
Acting Secretary of the Treasury. 
Treasury Department, December 7, 1933. 



Exhibit 3 



Subscriptions and allotments, certificates of indebtedness, series TD-1934 (from 
press releases, Dec. 8, 12, and 16, 1933) 

Acting Secretary of the Treasury Morgenthau announced that the subscrip- 
tion books for the current offering of 1-year, 2J4 percent Treasury certificates of 
indebtedness, series TD-1934, payable December 15, 1934, closed at the close 
of businessjDecember 7, 1933. 



REPORT OF THE SECRETARY OF THE TREASURY 



163 



Reports received from the Federal Reserve banks show that for this offering 
of certificates, which was for $950,000,000, or thereabouts, total subscriptions 
aggregated $2,806,779,500. Of these subscriptions, $607,610,500 represents 
exchange subscriptions, in payment for which Treasury certificates maturing 
December 15, 1933, were tendered. The exchange subscriptions, as well as cash 
subscriptions in amounts up to and including $5,000, were allotted in full. Cash 
subscriptions in amounts over $5,000 were allotted 17 percent, but not less than 
$5,000 on any one subscription. 

Subscriptions and allotments were divided among the several Federal Reserve 
districts and the Treasury as follows: 



Federal Reserve district 



Total cash sub- 
scriptions 
received 



Total ex- 
change sub- 
scriptions 
received 



Total subscrip- 
tions received 



Total sub- 
scriptions 
allotted 



Boston 

New York 

Philadelphia.. 

Cleveland 

Richmond 

Atlanta 

Chicago.. 

St. Louis 

Minneapolis.. 
Kansas City.. 

Dallas. 

San Francisco. 
Treasury 



$88, 396, 000 
1,131,946,000 

112,797,000 

134, 023. 500 
66. 142, 500 
83, 873, 000 

305, 527, 000 
34, 208, 000 
16, 257, 000 
35, 007, COO 
82, 928, 000 

108, 064, 000 



$8. 243, 500 

466, 782, 500 

7, 259, 500 

5, 695, 500 

1,724,000 

836, 000 

84, 538, 000 

6, 303, 000 

1, 877. 500 

12, 741, 500 

6. 631, 000 

4, 416, 500 

562, 000 



$96. 639, 500 
1, 598, 728, 500 

120, 056, 500 

139, 719, 000 
67, 866. 500 
84, 709, 000 

390, 065, 000 
40,511,000 
18, 134, 500 
47, 748, 500 
89, 559, 000 

112, 480, 500 
562. 000 



Total. 



2, 199, 169, 000 



607, 610, 500 



2, 806, 779, 500 



$23, 718, 500 
661, 401, 500 

27, 092, 500 

28, 948. 500 
13,215,000 
15,731,500 

138, 755, 500 
13, 056, 000 
5, 037, 500 
19, 260, 500 
22, 400, 500 
23, 317, 000 
562, 000 



» 992, 496, 500 



1 Includes $607,610,500 exchange subscriptions, which were allotted in full. 



Exhibit 4 

Offering of Treasury notes, series C-1935 {2 y /t percent), and certificates of indebted- 
ness, series TS-1934 (lYz percent) 

On January 24, 1934, the Treasury offered for subscription Treasury notes 
and Treasury certificates of indebtedness as described in the following circulars: 

[Department Circular No. 504] 

The Secretary of the Treasury offers for subscription, at par and accrued 
interest, through the Federal Reserve banks, under the authority of the act 
approved September 24, 1917, as amended, Treasury notes of scries C-1935. 
The amount of the offering is $500,000,000, or thereabouts. 

DESCRIPTION OF NOTES 

The notes will be dated January 29, 1934, and will bear interest from that date 
at the rate of 2\'i percent per annum, payable on a semiannual basis on March 15 
and September 15 in each year. They will mature March 15, 1935, and will not 
be subject to call for redemption prior to maturity. 

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 shall 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. 

The notes 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 notes. 

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

APPLICATION AND ALLOTMENT 

Applications will be received at the Federal Reserve banks and branches and 
at the Treasury Department, Washington. Banking institutions generally will 
handle applications for subscribers, but only the Federal Reserve banks and the 
Treasury Department are authorized to act as official agencies. 



164 REPORT OF THE SECRETARY OF THE TREASURY 

Subscriptions for amounts up to and including $10,000 will be allotted in full; all 
other subscriptions will be allotted on an equal percentage basis. 

The Secretary of the Treasury reserves the right to reject any subscription, in 
whole or in part, and to allot less than the amount of notes applied for and to 
close the books as to any or all 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 shall be final. Allotment 
notices will be sent out promptly upon allotment, and the basis of the allotment 
will be publicly announced. 

PAYMENT 

Payment at par and accrued interest for notes allotted must be made on or 
before January 29, 1934, or on later allotment. Any qualified depositary will 
be permitted to make payment by credit for notes 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. 

Applications, unless made by an incorporated bank or trust company, or by a 
responsible and recognized dealer in Government securities, must be accompanied 
by payment in full or by payment of 10 percent of the amount of notes applied for. 
The forfeiture of the 10 percent payment may be declared by the Secretary of the 
Treasury if payment in full is not completed on the prescribed date in the case 
of subscriptions allotted. 

GENERAL 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. After allotment and upon payment Federal 
Reserve banks may issue interim receipts pending delivery of the definitive notes. 

Henry Morgenthatj, Jr., 

Secretary of the Treasury. 
Treasury Department, January 24, 19S4- 

[Department Circular No. 505] 

The Secretary of the Treasury offers for subscription, at par and accrued 
interest, through the Federal Reserve banks, under the authority of the act 
approved September 24, 1917, as amended, Treasury certificates of indebtedness 
of series TS-1934. The amount of the offering is $500,000,000, or thereabouts. 

DESCRIPTION OF CERTIFICATES 

The certificates will be dated January 29, 1934, and will bear interest from that 
date at the rate of 1% percent per annum, payable on a semiannual basis. They 
will be payable on September 15, 1934. 

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 on March 15 and September 15, 1934. 1 * * * 

APPLICATION AND ALLOTMENT 

Applications will be received at the Federal Reserve banks and branches and 
at the Treasury Department, Washington. 

Subscriptions for amounts up to and including $10,000 will be allotted in full; 
all other subscriptions will be allotted on an equal percentage basis. * * * 

PAYMENT 

Payment at par and accrued interest for certificates allotted must be made on 
or before January 29, 1934, or on later allotment. 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 * * *. 

Henry Morgenthatj, Jr., 

Secretary of the Treasury. 
Treasury Department, January 24, 1984- 

> Omitted portions are similar to corresponding sections of Department Circular No. 503, p. 161. 



REPORT OF THE SECRETARY OF THE TREASURY 



165 



Exhibit 5 

Subscriptions and allotments, Treasury notes, series C-19S5, and certificates of 
indebtedness, series TS-1934 (from press releases Jan. 26 and Feb. 2, 1934) 

Secretary of the Treasury Morgenthau announced the subscription figures 
and the basis of allotment for the January 29 offering of 2% percent Treasury 
notes of series C-1935, maturing March 15, 1935, and of 1% percent Treasury 
certificates of indebtedness of series TS-1934, maturing September 15, 1934. 

Reports received from the Federal Reserve banks show that for the offering of 
notes, which was for $500,000,000, or thereabouts, total subscriptions aggregated 
$3,424,212,200. Subscriptions in amounts up to and including $10,000 were 
allotted in full, and all other subscriptions were allotted 14 percent, but not less 
than $10,000 on any one subscription. 

For the offering of certificates, which was for a like amount of $500,000,000, 
or thereabouts, total subscriptions aggregated $1,360,564,500. Subscriptions in 
amounts up to and including $10,000 were allotted in full, and all other subscrip- 
tions were allotted 38 percent, but not less than $10,000 on any one subscription. 

Subscriptions and allotments were divided among the several Federal Reserve 
districts and the Treasury as follows: 



Federal Reserve district 



Treasury notes, series C-1935 



Total sub- 
scriptions 
received 



Total sub- 
scriptions 
allotted 



Certificates of indebtedness, 
series TS-1934 



Total sub- 
scriptions 
received 



Total sub- 
scriptions 
allotted 



Boston 

New York 

Philadelphia . 

Cleveland 

Richmond 

Atlanta 

Chicago 

St. Louis 

Minneapolis.. 
Kansas City.. 

Dallas 

San Francisco 
Treasury 

Total.. 



$224, 601, 500 

1,674,552,000 

199, 640, 000 

173, 848, 700 

96, 177, 400 

140, 924, 200 

431, 744, 300 

58, 202, 000 

41, 460, 700 

85, 798, 500 

96, 384, 400 

199, 974, 500 

904,000 



$36, 835, 300 

243, 998, 000 

29, 672, 700 

26, 627, 600 

15, 145, 400 

22, 271, 800 

69. 263, 500 

11,214,100 

8, 327, 700 

15, 976, 200 

18,031,300 

30, 608, 000 

130, 000 



$111,372,500 

699, 703, 000 

28, 924, 000 

91, 266, 000 

38, 360, 000 

62, 410, 000 

114,819,000 

38, 777, 000 

4, 245, 500 

33, 254, 000 

33. 392, 500 

103,741,000 

300, 000 



3, 424, 212, 200 



528, 101, 600 



1, 360, 564, 500 



$43, 015, 500 

266, 929, 500 

11,227,000 

35, 085, 500 

14,714,500 

23, 830. 500 

44, 970, 000 

15, 356, 000 

2, 616, 000 

13, 420, 500 

13, 877, 000 

39, 592, 500 

114,000 



524, 748, 500 



Exhibit 6 

Offering of Treasury notes, series D-1935 (2% percent) and series C-1937 (3 percent) 

On February 13, 1934, the Treasury offered for subscription two series of 
Treasury notes as described in the following circular: 

[Department Circular No. 506] 

The Secretary of the Treasury offers for subscription, at par and accrued 
interest, through the Federal Reserve banks, under the authority of the act 
approved September 24, 1917, as amended, $800,000,000, or thereabouts, Treas- 
ury notes, in two series. The amount of each series is $400,000,000, or thereabouts. 



DESCRIPTION OF NOTES 

The notes of series D-1935 will be dated February 19, 1934, and will bear 
interest from that date at the rate of 2}i percent per annum, payable on a semi- 
annual basis on June 15 and December 15 in each year. They will mature 
December 15, 1935, and will not be subject to call for redemption prior to maturity. 

The notes of series C-1937 will be dated February 19, 1934, and will bear 
interest from that date at the rate of 3 percent per annum, payable on a semi- 
annual basis on August 15 and February 15 in each year. They will mature 
February 15, 1937, and will not be subject to call for redemption prior to ma- 
turity. 1 * * * 

1 Omitted portions are similar to corresponding sections of Department Circular No. 504, p. 163. 



166 



REPORT OF THE SECRETARY OF THE TREASURY 



APPLICATION AND ALLOTMENT 

* * * Subscriptions for amounts up to and including $10,000 will be given 
preferred allotment; all other subscriptions will be allotted on an equal percentage 

basis. * * * 

PAYMENT 

Payment at par and accrued interest for notes allotted must be made on or 
before February 19, 1934, or on later allotment. Any qualified depositary will be 
permitted to make payment by credit for notes 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. * * * 

Henry Morgenthatj, Jr., 

Secretary of the Treasury. 
Treasury Department, February 13, 1934. 



Exhibit 7 



Subscriptions and allotments, Treasury notes, series D-1935 and series C-19S7 
(from press releases, Feb. 14, 16, and 21, 1934, revised *) 

Secretary Morgenthau announced that the subscription books for the current 
offering of 2J4 percent Treasury notes of series D-1935, maturing December 15, 
1935, and 3 percent Treasury notes of series C-1937, maturing February 15, 1937, 
closed at the close of business February 13, 1934. 

Reports received from the Federal Reserve banks show that for the offering 
of notes of series D-1935, which was for $400,000,000, or thereabouts, total 
subscriptions aggregated $1,332,409,900. Subscriptions in amounts up to and 
including $10,000 were allotted in full, and all other subscriptions were allotted 
30 percent, but not less than $10,000 on any one subscription. 

For the offering of notes of series C-1937, which was for a like amount of 
$400,000,000, or thereabouts, total subscriptions aggregated $2,285,754,500. 
Subscriptions in amounts up to and including $10,000 were allotted in full, and 
all other subscriptions were allotted 16% percent, but not lessTEan $10,000 on 
any one subscription. 

Subscriptions and allotments were divided among the several Federal Reserve 
districts and the Treasury as follows: 



Federal Reserve district 



Treasury notes, series D-1935 



Total subscrip- 
tions received 



Total sub- 
scriptions 
allotted 



Treasury notes, series C-1937 



Total subscrip- 
tions received 



Total sub- 
scriptions 
allotted 



Boston.. 

New York 

Philadelphia .. 

Cleveland 

Richmond 

Atlanta 

Chicago 

St. Louis 

Minneapolis. . 
Kansas City.. 

Dallas 

San Francisco. 
Treasury 



Total. 



$80, 649, 

557, 316, 

79, 572, 

69, 980, 

53, 479, 

69, 702, 

215,631, 

38, 432, 

23, 674, 

34, 777, 

46, 999, 

55, 695, 

500, 



169, 
24, 
21, 
16, 
21, 
69, 
12, 
9, 
12, 
15, 
17, 



023,000 
037, 900 
540, 900 
789,000 
810, 000 
346, 200 
275, 200 
931, 700 
022, 500 
677,000 
404, 500 
284,000 
150, 000 



$144, 
1, 190, 

137, 

109, 
60, 
80, 

241, 
54, 
41, 
47, 
64, 

113, 



330, 400 
611, 100 
194, 000 
012, 600 
481, 000 
563, 100 
627,400 
876, 700 
632, 500 
451, 200 
661, 200 
098, 000 
215, 300 



1, 332, 409, 900 



418, 291, 900 



2, 285, 754, 500 



$29, 270, 300 
207, 231, 300 
25, 431, 500 
21, 480, 300 
12, 442, 200 
16, 204, 300 
48, 062, 300 
12, 104, 500 
10, 197, 600 
11,496,600 
14, 386, 800 
20, 374, 300 
48,700 



428, 730, 700 



Exhibit 8 

Offering of Treasury notes, series C-19S8 (3 percent) 

On March 8, 1934, the Treasury offered for subscription Treasury notes as 
described in the following circular. In the related press release it was stated that 
about $460,000,000 of Treasury certificates would become due on March 15, 1934. 

' Revised Mar. 6, 1934. 



REPORT OF THE SECRETARY OF THE TREASURY 



167 



[Department Circular No. 507] 

The Secretary of the Treasury offers for subscription, at par, through the 
Federal Reserve banks, under the authority of the act approved September 24, 
1917, as amended, Treasury notes of series C-1938, in exchange for Treasury 
certificates of indebtedness of series TM-1934, maturing March 15, 1934. The 
amount of the offering is limited to the amount of Treasury certificates of in- 
debtedness of series TM-1934, maturing March 15, 1934, tendered and accepted. 

DESCRIPTION OF NOTES 

The notes will be dated March 15, 1934, and will bear interest from that date 
at the rate of 3 percent per annum, payable semiannually, on September 15 and 
March 15 in each year. They will mature March 15, 1938, and will not be 
subject to call for redemption prior to maturity. 1 * * * 

APPLICATION AND ALLOTMENT 

* * * The Secretary of the Treasury reserves the right to reject any 
subscription, in whole or in part, and to allot less than the amount of notes 
applied for and to close the books as to any or all subscriptions at any time 
without notice; and his action in these respects shall be final. Allotment notices 
will be sent out promptly upon allotment, and the basis of the allotment will 
be publicly announced. 

PAYMENT 

Payment for notes allotted must be made on or before March 15, 1934, or on 
later allotment, and may be made only in % percent Treasury certificates of 
indebtedness of series TM-1934, maturing March 15, 1934, which will be accepted 
at par. * * * 

Henry Morgenthatj, Jr., 

Secretary of the Treasury. 
Treasury Department, March 8, 1934. 



Exhibit 9 



Subscriptions and allotments, Treasury notes, series C-19SS {from press releases, 

Mar. 10 and 15, 1934) 

Secretary of the Treasury Morgenthau announced that the subscription books 
for the current offering of 3 percent Treasury notes of series G-1938, maturing 
March 15, 1938, would close at the close of business March 10, 1934. 

Substantially all of the maturing certificates of indebtedness amounting to 
$455,175,500 were tendered in exchange for the new certificates and allotted 
in full. 

Subscriptions and allotments were divided among the several Federal Reserve 
districts and the Treasury as follows: 



Federal Reserve district 



Boston 

New York.. 
Philadelphia 
Cleveland.. _ 
Richmond.. 

Atlanta 

Chicago 

St. Louis 



Total sub- 
scriptions 
received 
and allotted 



$14, 276, 500 
335, 475, 500 
3, 940, 500 
9, 354, 500 
2, 447, 000 
3,341,000 
53, 193, 000 
7, 967, 500 



Federal Reserve district 



Minneapolis.. 
Kansas City.. 

Dallas 

San Francisco 
Treasury 

Total... 



Total sub- 
scriptions 
received 
and allotted 



$4, 592, 500 
9, 100, 500 
2, 842, 500 
7, 127, 000 
1, 517, 500 



455, 175, 500 



i Omitted portions are similar to corresponding sections of Department Circular No. 504, p. 163. 



168 REPORT OF THE SECRETARY OF THE TREASURY 

Exhibit 10 

Offering of Treasury bonds, 1944~46 (3}i percent) 

On April 4, 1934, the Treasury offered for subscription Treasury bonds as 
described in the following circular. In the related press release it was stated 
that the issue would be limited to the amount of called Fourth Liberty Loan 
bonds outstanding in the amount of $1,000,000,000 and Treasury notes of series 
A-1934 outstanding in the amount of $244,234,600, tendered in exchange and 
accepted. 

[Department Circular No. 508] 

Treasury Department, 

April 4, 1984. 
The Secretary of the Treasury invites subscriptions, from the people of the 
United States, at par, for 3J4 percent Treasury bonds of 1944-46, of an issue of 
bonds of the United States authorized by the Second Liberty Bond act, approved 
September 24, 1917, as amended, in payment of which only Fourth Liberty Loan 
4)4 percent bonds of 1933-38 (hereinafter referred to as Fourth 4J4's) called for 
redemption on April 15, 1934, and Treasury notes of series A-1934, maturing 
May 2, 1934, may be tendered. The amount of the issue will be limited to the 
amount of such called Fourth 4J4's and Treasury notes of series A-1934, tendered 
and accepted. Fourth 4%'s not called for redemption on April 15, 1934, may 
not be tendered under this circular. 

DESCRIPTION OF BONDS 

The bonds will be dated April 16, 1934, and will bear interest from that date 
at the rate of 2> X A percent per annum, payable on October 15, 1934, on a semiannual 
basis, and thereafter semiannually on April 15 and October 15 in each year until 
the principal amount becomes payable. They will mature April 15, 1946, but 
may be redeemed at the option of the United States on and after April 15, 1944, 
in whole or in part, at par and accrued interest, on any interest day or days, on 
4 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. 

Bearer bonds with interest coupons attached and bonds registered as to prin- 
cipal and interest will be issued in denominations of $50, $100, $500, $1,000, 
$5,000, $10,000, 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 under rules and regulations prescribed by the Secre- 
tary 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 in- 
heritance taxes, and (6) 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 authorized 
by said act approved September 24, 1917, as amended, the principal of which 
does not exceed $5,000, owned by any individual, partnership, association, or 
corporation, shall be exempt from the taxes provided for in clause (b) above. 

The bonds will be acceptable to secure deposits of public moneys, and will 
bear the circulation privilege only to the extent provided in the act approved 
July 22, 1932, as amended. They will not be entitled to any privilege of con- 
version. 

The bonds will be subject to the general regulations of the Treasury Depart- 
ment, now or hereafter issued, governing United States bonds. 

APPLICATION AND ALLOTMENT 

Applications will be received at the Federal Reserve banks and branches and 
at the Treasury Department, Washington. Banking institutions generally will 
handle applications for subscribers, but only the Federal Reserve banks and the 
Treasury Department are authorized to act as official agencies. 

Subject to the reservations contained in the next succeeding paragraph, all 
subscriptions will be allotted in full. 

The Secretary of the Treasury reserves the right to reject any subscription,[in 
whole or in part, and to allot less than the amount of bonds applied for fc and 4 to 



REPORT OF THE SECRETARY OF THE TREASURY 169 

close the books as to any or all subscriptions or classes of 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 and to make reduced 
allotments upon, or to reject, applications for larger amounts, to make classified 
allotments or to make allotments upon a graduated scale or to adopt any or all 
of said methods or such other methods of allotment and classification of allot- 
ments as shall be deemed by him to be in the public interest; and his action in 
these respects shall be final. Allotment notices will be sent out promptly upon 
allotment, and the basis of the allotment will be publicly announced. 



Payment for any bonds allotted may be made only in called Fourth 4%'s, 
which will be accepted at par, with no adjustment of interest, or in Treasury 
notes of series A-1934 (with coupon dated May 2, 1934, attached), which will be 
accepted at par with an adjustment of accrued interest as of April 16, 1934, and 
should be made when the subscription is tendered, except that Fourth 4%'s 
which have previously been surrendered for redemption on April 15, 1934, in 
accordance with the provisions of Department Circular No. 501, will be accepted 
as payment upon request in proper form of the owners thereof, such subscrip- 
tions to be presented through the same channels as were the called bonds when 
surrendered for redemption. If any subscription is rejected, in whole or in part, 
any called Fourth 4%'s which may have been tendered and not accepted will be 
held for redemption, and any Treasury notes of series A-1934 which may have 
been tendered and not accepted will be returned to the subscriber. 

SURRENDER OF CALLED FOURTH 4>4's ON EXCHANGE SUBSCRIPTIONS 

Surrender of coupon bonds. — Called Fourth 4}4's in coupon form tendered in 
exchange for Treasury bonds issued hereunder should be presented and surren- 
dered to a Federal Reserve bank or to the Treasurer of the United States and 
should accompany the application (unless such called Fourth 4^'s have already 
been presented for redemption on Apr. 15, 1934, in accordance with the provi- 
sions of Department Circular No. 501). The bonds must be delivered at the 
expense and risk of the holder. Facilities for transportation of bonds by regis- 
tered mail insured may be arranged between incorporated banks and trust com- 
panies and the Federal Reserve banks, and holders may take advantage of such 
arrangements when available, utilizing such incorporated banks and trust com- 
panies as their agents. Incorporated banks and trust companies are not agents 
of the United States under this circular. Coupons dated October 15, 1934, and 
all coupons bearing dates subsequent thereto, must be attached to coupon bonds 
when presented. 

Surrender of registered bonds. — Called Fourth 4j4's in registered form tendered 
in exchange for Treasury bonds issued hereunder should be assigned by the regis- 
tered payee or assigns thereof to "The Secretary of the Treasury for exchange 
for Treasury bonds of 1944-46", in accordance with the general regulations of 
the Treasury Department governing assignments for transfer or exchange, and 
thereafter should be presented and surrendered with the application to a Federal 
Reserve bank, or to the Treasury Department, Division of Loans and Currency, 
Washington (unless such called Fourth 4%'s have already been presented for re- 
demption on Apr. 15, 1934, in accordance with the provisions of Department 
Circular No. 501). The bonds must be delivered at the expense and risk of the 
holder. 

GENERAL 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. After allotment and upon payment 
Federal Reserve banks may issue interim receipts pending delivery of the defini- 
tive bonds. 

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 or branch, or to the Treasury Department, Washington. 
The Secretary of the Treasury may at any time, or from time to time, prescribe 
supplemental or amendatory rules and regulations governing the offering and the 
exchanges hereunder. 

Henry Morgenthau, Jr., 

Secretary of the Treasury. 



170 



REPORT OF THE SECRETARY OF THE TREASURY 



Exhibit 11 

Subscriptions and allotments, Treasury bo?ids of 1944~46 (from press releases, Apr. 
9, 10, and 21, 1934, revised ») 

On April 9, 1934, Secretary of the Treasury Morgenthau announced that ex- 
change subscriptions amounting to about $550,000,000 had been received up to 
the close of business on April 7 for the new series of 3% percent 10-12-year bonds 
to be issued on April 16 in exchange for Fourth Liberty Loan bonds which were 
called for redemption April 15 and Treasury notes of series A-1934 maturing 
May 2. 

On April 10, 1934, Secretary Morgenthau announced that the subscription 
books for the current offering of 3J4 percent Treasury bonds of 1944-46 would 
close April 12, 1934. Subscriptions amounting to about $625,000,000 had been 
received up to the close of business April 9. 

Subscriptions and allotments were divided among the several Federal Reserve 
banks and the Treasury as follows: 



Federal Reserve district 



Fourth Liberty 

Loan bonds 

tendered 



Treasury notes 
tendered 



Total allotted 



Boston 

New York 

Philadelphia.. 

Cleveland 

Richmond 

Atlanta 

Chicago 

St. Louis 

Minneapolis.. 
Kansas City.. 

Dallas 

San Francisco 
Treasury 

Total— 



$22, 090, 100 
484, 176, 850 
28, 889, 900 
36, 006, 750 
13, 172, 800 
12, 428, 500 
128, 943, 450 
25, 882, 800 
9, 613, 950 
21,071,850 
10, 268, 700 
17, 396, 250 
17, 554, 300 



$3, 
200, 



292, 900 
253, 100 
350, 700 
794, 000 
416, 100 
517, 000 
877, 500 
974, 400 
317, 800 
602, 400 
609, 200 
314, 200 
145, 000 



$25, 383, 000 

684, 429, 950 

29, 240, 600 

39, 800, 750 

17, 588, 900 

12, 945, 500 

134, 820, 950 

27, 857, 200 

9, 931, 750 

22, 674, 250 

10, 877, 900 

18, 710, 450 

27, 699, 300 



827, 496, 200 



234, 464, 300 



1, 061, 960, 500 



1 Revised Aug. 7 and 28, 1934. 



Exhibit 12 



Partial redemption of Fourth Liberty Loan bonds before maturity (second call) 

On April 13, 1934, the Treasury issued a call for two series of Fourth Liberty 
Loan 4> 4 percent bonds for redemption on October 15, 1934, as described in the 
following circular. There were outstanding about $4,300,000,000 of uncalled 
Fourth Liberty Loan bonds. The call included about $1,200,000,000 of bonds. 

[Department Circular No. 509] 

Treasury Department, 

April IS, 1984. 

To Holders of Fourth Liberty Loan 4 X A Percent Bonds of 1933-88, and Others 
Concerned: 



I. Notice of Second Call for Partial Redemption Before Maturity of 
Fourth Liberty Loan 4% Percent Bonds of 1933-38 (Fourth 4^'s) 1 

1. All outstanding Fourth Liberty Loan 4% percent bonds of 1933-38 (herein- 
after referred to as Fourth 4J4's) bearing serial numbers the final digit of which 
is 8 or 2 (such serial numbers in the case of permanent coupon bonds being 

1 Fourth 4}4's (temporary coupon, permanent coupon, and registered) are numbered serially beginning 
with no. 1 for each denomination; in the case of permanent coupon bonds each serial number is prefixed 
by a distinguishing letter, the letters A to X (omitting 1) being used, which letters, in order, rotate with 
and correspond to the final digits from 1 to 0, respectively. 

Fourth 4}4's called for redemption on Apr. 15, 1934, bear serial numbers ending in 9, 0, or 1 (in the case of 
permanent coupon bonds preceded by the distinguishing letter J, K, or A, respectively); Fourth 4^'s 
included in the second call for partial redemption on Oct. 15, 1934, bear serial numbers ending in 8 or 2 (in 
the case of permanent coupon bonds preceded by the distinguishing letter H or B, respectively); uncalled 
Fourth 4J4's bear serial numbers ending in 3, 4, 5, 6, or 7 (in the case of permanent coupon bonds preceded 
by the distinguishing letter C, D, E, F, or Q, respectively). 



REPORT OF THE SECRETARY OF THE TREASURY 171 

prefixed by the corresponding distinguishing letter H or B, respectively), are 
hereby called for redemption on October 15, 1934, on which date interest on such 
bonds called for redemption will cease. 

2. This second call for partial redemption is made pursuant to the provision 
for redemption contained in the bonds and in Treasury Department Circular 
No. 121, dated September 28, 1918, under which the bonds were originally 
issued, the bonds to be redeemed having been determined by lot in the manner 
prescribed by the Secretary of the Treasury. 

3. Outstanding Fourth 4%'s bearing serial numbers (and prefix letters) other 
than those designated are not included in or affected by this second call for 
partial redemption. 

II. Transactions in Called and Uncalled Bonds 

1. Pursuant to the first call for partial redemption on April 15, 1934 (see De- 
partment Circular No. 501, dated Oct. 12, 1933), all Fourth 4%'s outstanding 
October 12, 1933, were divided into two separate and distinct classes: Called 
bonds, and uncalled bonds. Hereafter such Fourth 4>i's called for redemption 
on April 15, 1934, shall be designated "first-called" bonds. Pursuant to the second 
call for partial redemption, and effective at the close of business on this date, all 
outstanding Fourth 4^'s included in the second call for partial redemption on 
October 15, 1934, will be included in the class of called bonds and shall be desig- 
nated "second-called" bonds. The Treasury Department, and the Federal 
Reserve banks as fiscal agents of the United States, will observe this division of 
Fourth 4^'s hito three classes — first-called, second-called, and uncalled bonds — 
and hereafter in all transactions affecting second-called and uncalled Fourth 4J4's, 
including exchanges of denominations, exchanges of coupon bonds for registered 
bonds, exchanges of registered bonds for coupon bonds, and transfers of registered 
bonds: (1) Only bonds bearing distinguishing serial numbers or letters falling 
within the class second-called bonds will be issued upon exchange or transfer of 
second-called bonds, and (2) only bonds bearing distinguishing serial numbers 
or letters falling within the class uncalled bonds will be issued upon exchange or 
transfer of uncalled bonds. Exchanges or transfers as between second-called 
and uncalled bonds will not be permitted. Denominational exchanges of coupon 
bonds within the class "called for redemption on October 15, 1934" (second- 
called bonds) will terminate on that date. Transfers and exchanges of registered 
bonds falling within the class "called for redemption on October 15, 1934" 
(second-called bonds) will terminate on September 15, 1934, the date of the 
closing of the transfer books. 

2. In accordance with the provisions of Treasury Department Circular No. 121, 
dated September 28, 1918, the provisions of Treasury Department Circular No. 
300, dated July 31, 1923, prescribing regulations with respect to United States 
bonds and notes, which were modified by Department Circular No. 501, dated 
October 12, 1933, are hereby further modified accordingly with respect to trans- 
actions in Fourth 4%'s. 

III. Payment or Exchange 

1. Payment of called bonds on October 15, 193 If.. — Holders of any outstanding 
Fourth 4%'s included in the second call for partial redemption on October 15, 
1934, will be entitled to have their bonds redeemed and paid at par on October 
15, 1934, with interest in full to that date. After October 15, 1934, interest will 
not accrue on any bonds included in this second call for partial redemption on 
that date. (See sees. IV and V of this circular for instructions for presentation 
of bonds for redemption on Oct. 15, 1934, under this second call.) 

2. Optional exchange offering. — Holders of any outstanding Fourth 4%'s in- 
cluded in the second call for partial redemption on October 15, 1934, may, in 
advance of October 15, 1934, be offered the privilege of exchanging all or part of 
their called bonds for other interest-bearing obligations of the United States. 
Holders who desire to avail themselves of an exchange privilege, if and when 
announced, should watch for an announcement thereof, and should request their 
bank or trust company to notify them when information regarding any exchange 
offering is received. (In case of an optional exchange offering, instructions then 
given in the public announcement should be followed in presenting called bonds 
for exchange.) 

IV. Rules and Regulations Governing Redemption 

Pursuant to the second call for partial redemption, as set forth in section I of 
this circular, the following rules and regulations are hereby prescribed to govern 
the surrender of Fourth 4^'s called for redemption on October 15, 1934: 



172 REPORT OF THE SECRETARY OF THE TREASURY 

1. Presentation and surrender of coupon bonds. — Any Fourth 4%'s in coupon 
form, which are included in the second call for partial redemption, should be pre- 
sented and surrendered to any Federal Reserve bank or branch, or to the Treas- 
urer of the United States, Washington, D. C, for redemption on October 15, 
1934. The bonds must be delivered at the expense and risk of holders (see par. 
8 of this section) and should be accompanied by appropriate written advice. 
(See form P. D. 1381 attached hereto.) Checks in payment of principal will be 
mailed to the address given in the form of advice accompanying the bonds 
surrendered. 

2. Coupons dated October 15, 1934, which become payable on that date, should 
be detached from any Fourth 4%'s included in the second call for partial redemp- 
tion before such bonds are presented for redemption on October 15, 1934, and 
such coupons should be collected in regular course when due. All coupons per- 
taining to such bonds bearing dates subsequent to October 15, 1934, must be 
attached to any such bonds when presented for redemption, provided, however, 
if any such coupons are missing from bonds so presented for redemption the 
bonds nevertheless will be redeemed, but the full face amount of any such missing 
coupons will be deducted from the payment to be made on account of such re- 
demption, and any amounts so deducted will be held in the Treasury to provide 
for adjustments or refunds on account of such missing coupons as may subse- 
quently be presented. 

3. The final coupon attached to temporary coupon bonds became due on 
October 15, 1920. The holders of any such temporary bonds which are included 
in the second call for partial redemption on October 15, 1934, will receive all past 
due interest from October 15, 1920, when the bonds are redeemed pursuant to 
such call. Any coupons now attached to any such temporary bonds should be 
detached and collected in regular course. 

4. Presentation and surrender of registered bonds. — Any Fourth 4^4's in regis- 
tered form, which are included in the second call for partial redemption, must be 
assigned by the registered payees or assigns thereof, or by their duly constituted 
representatives, in accordance with the general regulations of the Treasury 
Department governing assignments, in the form indicated in the next paragraph 
hereof, and should thereafter be presented and surrendered to any Federal 
Reserve bank or branch, or to the Division of Loans and Currency, Treasury 
Department, Washington, D. C, for redemption on October 15, 1934. The 
bonds must be delivered at the expense and risk of holders (see par. 8 of this 
section) and should be accompanied by appropriate written advice. (See form 
P. D. 1382 attached hereto.) In all cases checks in payment of principal will be 
mailed to the address given in the form of advice accompanying the bonds 
surrendered. 

5. If the registered holder of record, or an assignee holding under proper assign- 
ment from the registered holder of record, or a duly constituted representative of 
such registered holder or assignee, desires that payment of the principal be made 
to him, the bonds should be assigned to "The Secretary of the Treasury for 
redemption." In case it is desired to have payment of the registered bonds made 
to someone other than the registered holder of record, without intermediate 
assignment, the bonds may be assigned to "The Secretary of the Treasury for 

redemption for account of " and in such case the name and address 

of the payee for whose account the redemption is to be made must be inserted. 
Assignments in this form must be completed before acknowledgment and not 
left in blank. 

6. Assignment in blank, or other assignment having similar effect, will be 
recognized, but in that event payment will be made to the person surrendering 
the bond for redemption, since under such assignment the bonds become in effect 
payable to bearer. Assignments in blank or assignments having similar effect 
should be avoided, if possible, in order not to lose the protection afforded by 
registration. 

7. Final interest due on October 15, 1934, on any Fourth 4%'s in registered 
form, which are included in the second call for partial redemption and presented 
for redemption on October 15, 1934, will be paid by checks issued in regular 
course in the same manner as if such bonds had not been called for redemption. 

8. Transportation of bonds. — Bonds presented for redemption under this cir- 
cular must be delivered to a Federal Reserve bank or branch, or to the Treasury 
Department, Washington, D. C, at the expense and risk of the holder. Coupon 



REPORT OF THE SECRETARY OF THE TREASURY 173 

bonds should be forwarded by registered mail insured, or by express prepaid. 
Registered bonds bearing restricted assignments may be forwarded by registered 
mail, but registered bonds bearing unrestricted assignments should be forwarded 
by registered mail insured or by express. Facilities for transportation of bonds 
by registered mail insured may be arranged between incorporated banks and 
trust companies and the Federal Reserve banks, and holders may take advantage 
of such arrangements when available, utilizing such incorporated banks and trust 
companies as their agents. Incorporated banks and trust companies are not 
agents of the United States under this circular. 

V. Time of Presentation of Fourth 4J4's for Redemption 

1. In order to facilitate the redemption of Fourth 4j4's included in the second 
call for partial redemption on October 15, 1934, any such bonds may be pre- 
sented and surrendered in the manner herein prescribed in advance of that date 
but not before September 15, 1934. Such early presentation by holders, on and 
after September 15, 1934, and well in advance of October 15, 1934, will insure 
prompt payment of principal when due. This is particularly important with 
respect to registered bonds, for payment cannot be made until registration shall 
have been discharged at the Treasury Department. 

2. It will expedite redemption if bonds included in the second call for partial 
redemption are presented to Federal Reserve banks or branches, and not direct 
to the Treasury Department. 

3. As hereinbefore provided: (1) Coupons due October 15, 1934, should be 
detached from any permanent coupon bonds included in this second call for 
partial redemption when such bonds are presented for redemption on that date, 
such coupons to be collected when due; and (2) final interest due on any regis- 
tered bonds included in this second call for partial redemption will be paid by 
check issued in regular course. Accordingly, early presentation of bonds will not 
affect the payment of final interest due on October 15, 1934. 

VI. Further Information 

Any further information which may be desired regarding the partial redemp- 
tion of Fourth 4}4's under this circular may be obtained from any Federal Reserve 
bank or branch, or from the Treasury Department, Washington, D. C, where 
copies of the Treasury Department's regulations governing assignments may also 
be obtained. The Secretary of the Treasury may at any time, or from time to 
time, provide supplemental or amendatory rules and regulations governing the 
matters covered by this circular. 

Henry Morgenthau, Jr., 

Secretary of the Treasury. 

Important Note.— Fourth 4Ws called for redemption on October 15, 1934, should be presented well in 
advance of that date but not before September 15, 1934, and the instructions given in this circular should 
be followed. If an exchange opportunity is afforded, and Fourth 4H's are to be presented for exchange, the 
instructions given in subsequent announcement should be followed. Information concerning the partial 
redemption of Fourth 4H's on October 15, 1934, and information concerning an optional exchange if and 
when offered, may be obtained from the officers of banks and trust companies generally. As those banks 
and trust companies may offer their facilities in the matter of arranging redemption or exchange, it is sug- 
gested that holders of Fourth 4H's consult their own bank or trust company. 

FOR COUPON BONDS 

[Form P. D. 1381. For registered bonds use form P. D. 1382] 

Form of Advice to Accompany Called Fourth Liberty Loan 4% Percent 
Bonds (Fourth 4%'s) in Coupon Form Presented for Redemption On 
October 15, 1934 

To the Federal Reserve Bank of 

or 
Treasurer of the United States, Washington, D. C: 
Pursuant to the provisions of Treasury Department Circular No. 509, dated 
April 13, 1934, the undersigned presents and surrenders herewith for redemption 
on October 15, 1934, $ , face amount of Fourth Liberty Loan bonds in 



174 



REPORT OF THE SECRETARY OF THE TREASURY 



coupon form, with coupon due April 15, 1935, and all subsequent coupons 
attached, as follows: 



Number of bonds 


Denomina- 
tion 


Serial numbers of bonds 


Face 

amount 




$50 

100 

500 

1,000 

5,000 

10,000 

100,000 




$____ 












































Total --. 













and requests that remittance covering payment therefor be forwarded to the 
undersigned at the address indicated below. 

Signature 

Name (please print) 

Address in full 

Date: 



FOR REGISTERED BONDS 

[Form P. D. 1382. For coupon bonds use form P. D. 1381] 

Form of Advice to Accompany Called Fourth Liberty Loan 4# Percent 
Bonds (Fourth 4 1 4 'sj in Registered Form Presented for Redemption 
on October 15, 1934 

To the Federal Reserve Bank of 

or 
Treasury Department, Division of Loans and Currency, 

11 ashington, D. C: 

Pursuant to the provisions of Treasury Department Circular No. 509, dated 
April 13, 1934, the undersigned presents and surrenders herewith for redemption 

on October 15, 1934, S , face amount of Fourth Liberty Loan bonds 

in registered form, inscribed in the name of and duly 

assigned to "The Secretary of the Treasury for redemption", as follows: 



Number of bonds 


Denomina- 
tion 


Serial numbers of bonds 


Face 
amount 




$50 

100 

500 

1,000 

5,000 

10,000 

50,000 

100,000 




$ 


















































Total 











and requests that remittance covering payment therefor be forwarded to the 

undersigned at the address indicated below. 

Signature 

Name (please print) 

Address in full 

Date: 



REPORT OF THE SECRETARY OF THE TREASURY 175 

Exhibit 13 

Offering of Treasury bonds of 1946-48 (3 percent) and Treasury notes, 
series A-1939 (2% -percent) 

On June 4, 1934, the Treasury offered for subscription Treasury bonds and 
Treasury notes as described in the following circulars. In the related press 
release it was stated that about $175,000,000 of Treasury certificates would 
mature on June 15, 1934, and about $345,000,000 of Treasury notes would ma- 
ture on August 1, 1934, and about $117,000,000 in interest payments on the 
public debt would become due and payable on June 15, 1934. 

[Department Circular No. 512] 

Treasury Department, 

June 4, 1934. 
The Secretary of the Treasury, pursuant to the authority of the Second Liberty 
Bond Act, approved September 24, 1917, as amended, invites subscriptions, at 
par and accrued interest, from the people of the United States, for 3 percent 
bonds of the United States, designated Treasury bonds of 1946-48. The amount 
of the offering is $300,000,000, or thereabouts, with the right reserved to the 
Secretary of the Treasury to increase the offering by an amount sufficient to 
accept all subscriptions for which % percent Treasury certificates of indebtedness 
of series TJ-1934, maturing June 15, 1934, or 2}{ percent Treasury notes of 
series B-1934, maturing August 1, 1934, are tendered in payment. 

DESCRIPTION OP BONDS 

The bonds will be dated June 15, 1934, and will bear interest from that date 
at the rate of 3 percent per annum, payable semiannually, on December 15, 1934, 
and thereafter on June 15 and December 15 in each year until the principal 
amount becomes payable. They will mature June 15, 1948, 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 4 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 Treas- 
ury. From the date of redemption designated in any such notice, interest on 
the bonds called for redemption shall cease. 1 * * * 

APPLICATION AND ALLOTMENT 

Applications will be received at the Federal Reserve banks and branches and 
at the Treasury Department, Washington, and unless made by an incorporated 
bank or trust company, must be accompanied by payment in full or by payment 
of 5 percent of the amount of bonds applied for. Banking institutions generally 
will handle applications for subscribers, but only the Federal Reserve banks and 
the Treasury Department are authorized to act as official agencies. The Secre- 
tary of the Treasury reserves the right to close the books as to any or all sub- 
scriptions or classes of subscriptions at any time without notice. 

The Secretary of the Treasury reserves the right to reject any subscription, 
in whole or in part, to allot less than the amount of bonds applied for, to make 
allotments in full upon applications for smaller amounts and to make reduced 
allotments upon, or to reject, applications for larger amounts, to make classified 
allotments or to make allotments upon a graduated scale, or to adopt any or all 
of said methods or such other methods of allotment and classification of allot- 
ments as shall be deemed by him to be in the public interest; and his action in 
any or all of these respects shall be final. Allotment notices will be sent out 
promptly upon allotment, and the basis of allotment will be publicly announced. 

Subject to the reservations contained in the next preceding paragraph, allot- 
ments will be made as follows: Cash subscriptions for amounts up to and includ- 
ing $10,000 will be given preferred allotment, all other cash subscriptions will be 
allotted on an equal percentage basis, and subscriptions for which payment is to 
be tendered in Treasury certificates of indebtedness of series TJ-1934 or in 
Treasury notes of series B-1934 will be allotted in full. 

1 Omitted portions are similar to corresponding sections of Department Circular No. 5C8, p. 168. 
90353—35 13 



176 REPORT OF THE SECRETARY OF THE TREASURY 

PAYMENT 

Payment at par and accrued interest, if any, for bonds allotted must be made 
or completed on or before June 15, 1934, or on later allotment. In every case 
where payment is not so completed, the 5 percent payment with application shall, 
upon declaration made by the Secretary of the Treasury in his discretion, be 
forfeited to the United States. Any qualified depositary will be permitted to 
make payment by credit for bonds allotted on cash subscriptions 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-1934, maturing June 15, 1934, 
will be accepted at par in payment for any bonds subscribed for and allotted. 
Treasury notes of series B-1934, maturing August 1, 1934, with coupon dated 
August 1, 1934, attached, will be accepted at par with an adjustment of accrued 
interest as of June 15, 1934, in payment for an} 7 bonds subscribed for and allotted. 
Payment through surrender of Treasury certificates of indebtedness of series 
TJ-1934 or Treasury notes of series B-1934 should be made when the subscrip- 
tion is tendered. 

GENERAL PROVISIONS 

As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to receive subscriptions, to make allotments on the basis and up 
to the amounts indicated by the Secretary of the Treasury to the Federal Reserve 
banks of the respective districts, to issue allotment notices, to receive payment 
for bonds allotted, to make delivery of bonds on full-paid subscriptions allotted, 
and they may issue interim receipts pending delivery of the definitive bonds. 

The Secretary of the Treasury may at any time, or from time to time, prescribe 
supplemental or amendatory rules and regulations governing the offering, which 
will be communicated promptly to the Federal Reserve banks. 

Henry Morgenthatj, Jr., 

Secretary of the Treasury. 

[Department Circular No. 513] 

Treasury Department, 

June 4, 1934. 
The Secretary of the Treasury, pursuant to the authority of the Second Liberty 
Bond Act, approved September 24, 1917, as amended, offers for subscription, at 
par and accrued interest, through the Federal Reserve banks, 2}i percent notes 
of the United States, designated Treasury notes of series A-1939. The amount 
of the offering is $500,000,000, or thereabouts. 

DESCRIPTION OF NOTES 

The notes will be dated June 15, 1934, and will bear interest from that date 
at the rate of 2}i percent per annum, payable semiannually, on December 15, 
1934, and thereafter on June 15 and December 15 in each year. They will 
mature June 15, 1939, and will not be subject to call for redemption prior to 
maturity. 

The notes shall 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. 

The notes 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 notes. 

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

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. 

APPLICATION AND ALLOTMENT 

Applications will be received at the Federal Reserve banks and branches and 
at the Treasury Department, Washington, and unless made by an incorporated 
bank or trust company, must be accompanied by payment in full or by payment 
of 5 percent of the amount of notes applied for. Banking institutions generally 
will handle applications for subscribers, but only the Federal Reserve banks and 
the Treasury Department are authorized to act as official agencies. The Secre- 



REPORT OF THE SECRETARY OF THE TREASURY 177 

tary of the Treasury reserves the right to close the books as to any or all sub- 
scriptions or classes of subscriptions at any time without notice. 

The Secretary of the Treasury reserves the right to reject any subscription, in 
whole or in part, to allot less than the amount of notes applied for, to make allot- 
ments in full upon applications for smaller amounts and to make reduced allot- 
ments upon, or to reject, applications for larger amounts, to make classified 
allotments or to make allotments upon a graduated scale, or to adopt any or all 
of said methods or such other methods of allotment and classification of allot- 
ments as shall be deemed by him to be in the public interest; and his action in any 
or all of these respects shall be final. Allotment notices will be sent out promptly 
upon allotment, and the basis of allotment will be publicly announced. 

Subject to the reservations contained in the next preceding paragraph, allot- 
ments will be made as follows: Subscriptions for amounts up to and including 
$10,000 will be given preferred allotment, and all other subscriptions will be 
allotted on an equal percentage basis. 

PAYMENT 

Payment at par and accrued interest, if any, for notes allotted must be made 
or completed on or before June 15, 1934, or on later allotment. In every case 
where payment is not so completed, the 5 percent payment with application shall, 
upon declaration made by the Secretary of the Treasury in his discretion, be for- 
feited to the United States. Any qualified depositary will be permitted to make 
payment by credit for notes allotted on cash subscriptions 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. 

GENERAL PROVISIONS 

As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to receive subscriptions, to make allotments on the basis and up to 
the amounts indicated by the Secretary of the Treasury to the Federal Reserve 
banks of the respective districts, to issue allotment notices, to receive payment 
for notes allotted, to make delivery of notes on full-paid subscriptions allotted, 
and they may issue interim receipts pending delivery of the definitive notes. 

The Secretary of the Treasury may at any time, or from time to time, prescribe 
supplemental or amendatory rules and regulations governing the offering, which 
will be communicated promptly to the Federal Reserve banks. 

Henry Morgenthau, Jr., 

Secretary of the Treasury. 



Exhibit 14 



Subscriptions and allotments, Treasury bonds of 1946-^8 and Treasury notes, series 
A-1939 (from press releases, June 6, 8, and 12, 1934, revised, 1 ) 

Secretary Morgenthau announced that the subscription books for the current 
offering of 2 l / s percent Treasury notes of series A-1939 closed at the close of busi- 
ness June 5, 1934. 

The subscription books for the offering of 3 percent Treasury bonds of 1946-48 
also closed at the close of business June 5 for the receipt of cash subscriptions, but 
remained open through June 8 for the receipt of subscriptions for which payment 
was tendered in Treasury certificates of indebtedness of series TJ-1934, maturing 
June 15, 1934, or in Treasury notes of series B-1934, maturing August 1, 1934. 

Reports received from the Federal Reserve banks show that cash subscriptions 
for the Treasury bonds aggregated $2,514,503,500. Cash subscriptions in 
amounts up to and including $10,000 were allotted in full, and those in amounts 
over $10,000 were allotted 10 percent, but not less than $10,000 on any one sub- 
scription. In addition to such allotments on cash subscriptions, all subscriptions 
for which payment was tendered in Treasury certificates of indebtedness of series 
TJ-1934, maturing June 15, 1934, or Treasury notes of series B-1934, maturing 
August 1, 1934, were allotted in full. 

For the offering of Treasury notes, which was for $500,000,000, or thereabouts, 
total subscriptions aggregated $4,931,830,600. Subscriptions in amounts up to 
and including $10,000 were allotted in full and those in amounts over $10,000 were 
allotted 9 percent, but not less than $10,000 on any one subscription. 

' Revised July 12, 1934. 



178 



REPORT OF THE SECRETARY OF THE TREASURY 



Subscriptions and allotments were divided among the several Federal Reserve 
districts and the Treasury as follows: 



Federal Reserve district 



Total cash 
subscrip- 
tions re- 
ceived 



Exchange 
subscrip- 
tions re- 
ceived (June 
certificates) 



Exchange 
subscrip- 
tions re- 
ceived 
(August 
notes) 



Total sub- 
scriptions 
received 



Total sub- 
scriptions 
allotted 



TREASURY BONDS OF 1946-48 





$147, 178, 300 

1, 099, 970, 950 

108, 265, 350 

148,941,800 

73. 129, 950 

111, 458, 750 

299, 215, 950 

77, 459, 750 

24, 797, 000 

45. 276, 350 

125, 996, 250 

240, 552, 700 

12, 260, 400 


$1, 284, 000 

123. 040, 500 

799, 500 

1,113,500 

205, 000 

775, 000 

35, 376, 000 

3, 676, 500 

609, 000 

2, 950, 000 

892, 500 

284, 000 

923, 000 


$5, 555, 500 

247, 674, 400 

2, 804, 000 

2, 043, 000 

1. 401, 800 

821, 000 

38, 737, 100 
4, 291, 700 
4, 143, 600 
2, 772, 400 
1, 591, 000 
1, 088, 600 
4, 106, 000 


$154. 017, 800 

1,470,685,850 

111,868,850 

152, 098, 300 

74, 736. 750 

113,054,750 

373, 329, 050 

85, 427, 950 

29, 549, 600 

50, 998, 750 

128, 479, 750 

241, 925, 300 

17, 289, 400 


$27,941,800 




495, 250, 900 




18, 121, 350 




26, 660, 800 




12, 955, 250 




16, 166, 750 




119,170,850 




22, 892, 350 




10, 278, 600 




17, 350, 400 




22, 246, 800 


San Francisco 


29, 149, 800 




6, 322, 400 






Total 


2, 514, 503, 500 


171, 928, 500 


317, 030, 100 


3, 003, 462, 100 


i 824, 508, 050 







TREASURY NOTES, SERIES A-1939 











$262,781,000 

2,411,373,400 

256, 327, 100 

271. 261, 100 

190, 524, 200 

232. 441, 500 

561. 442, 500 
139, 727, 000 

67, 570, 000 

96, 854, 700 

215, 679, 700 

225, 840, 400 

8,000 


$30, 139, 100 










235,910,300 










27, 771, 500 










28, 434, 200 










20, 209, 400 










28, 9 IS, 300 










65, 893, 000 










18, 029, 500 










9, 170, 500 










14, 795, 600 










26,381,900 










22, 860, 400 










8,000 












Total .. 








4, 931, 830, 600 


528, 521, 700 













i Includes $171,928,500 allotted on exchange subscriptions (June certificates) and $317,030,100 allotted on 
exchange subscriptions (August notes) . 



Issues of Treasury bills 

Exhibit 15 

Inviting tenders for Treasury bills dated November 1, 1938, and maturing January 
81, 1934 (press release, Oct. 26, 1983) 

The Secretary of the Treasury gives notice that tenders are invited for Treas- 
ury bills 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 2 p. m., 
Eastern Standard time, on Monday, October 30, 1933. Tenders will not be 
received at the Treasury Department, Washington. 

The Treasury bills will be dated November 1, 1933, and will mature on Janu- 
ary 31, 1934, 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 denomina- 
tions 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 envelops 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. 



REPORT OF THE SECRETARY OF THE TREASURY 179 

Tenders will be accepted without cash deposit from incorporated banks and 
trust companies and from responsible and recognized dealers in investment securi- 
ties. Tenders from others must be accompanied by a deposit of 10 percent of 
the face amount of Treasury bills applied for, unless the tenders are accom- 
panied by an express guaranty of payment by an incorporated bank or trust 
company. 

Immediately after the closing hour for receipt of tenders on October 30, 1933, 
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 November 1, 1933. 

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 conditions of their issue. Copies 
of the circular may be obtained from any Federal Reserve bank or branch thereof. 



Exhibit 16 



Acceptance of lenders for Treasury bills dated November 1, 1933, and maturing 
January 31, 193 If. (press release, Oct. 31, 1933) 

Acting Secretary of the Treasury Acheson announced today that the tenders 
for $60,000,000, or thereabouts, of 91-day Treasury bills, dated November 1, 
1933, and maturing January 31, 1934, which were offered on October 26, were 
opened at the Federal Reserve banks on October 30, 1933. 

The total amount applied for was $232,713,000, of which $60,180,000 was 
accepted. The accepted bids ranged in price from 99.955, equivalent to a rate 
of about 0.18 percent per annum, to 99.939, equivalent to a rate of about 0.24 
percent per annum, on a bank discount basis. Only part of the amount bid for 
at the latter price was accepted. The average price of Treasury bills to be 
issued is 99.945 and the average rate is about 0.22 percent per annum on a bank 
discount basis. 



180 



REPORT OF THE SECRETARY OF THE TREASURY 



Exhibit 17 

Press releases pertaining to Treasury bill issues subsequent to October 25, 
1933, were similar in form to the foregoing and are, therefore, not here repro- 
duced. The essential details regarding each issue are summarized in the following 
table: 



Summary of information contained in press releases issued in connection with 
Treasury bills offered from Nov. 1, 1933, to June SO, 1934 





Date of maturity 


Days to 
matu- 
rity 


Total 
amount 
applied for 
(in thou- 
sands) 


Bids accepted 


Date of issue 


Highest 


Lowest 




Price (per 
hundred) 


Equivalent 

rate ■ 

(percent) 


Price (per 
hundred) 


Equivalent 

rate l 

(percent) 


1933 
Nov. 1 


1934 
Jan. 31 


91 
91 
91 
91 
91 
91 
91 
91 

91 
91 
91 
91 
91 
91 

182 
91 

182 
91 

182 

182 
91 
91 

182 
90 

182 
91 

182 
91 

182 
91 

182 
91 

182 
91 

182 
91 

182 
91 

182 

182 

182 


$232, 713 
181,015 
170, 682 
207, 445 
187, 069 
182, 760 
282, 143 
271, 832 

384, 619 
252, 825 
289, 397 
303, 560 
381, 422 
302, 858 
244, 427 
230, 078 
178, 326 
307, 110 
420,115 
393, 054 
344, 987 
194, 789 
138, 221 
184, 356 
117,990 
182, 226 
147,811 
164, 508 
150, 815 
184, 572 
145, 331 
193, 076 
198, 699 
156, 841 
199, 266 
172, 335 
153, 646 
190, 788 
164, 466 
234, 994 
251, 941 


$99. 955 

2 99. 949 
99. 939 

3 99. 907 
99. 907 

< 99. 894 

99. 851 

« 99. 874 

99. 848 
99. 900 
99. 862 

« 99. 863 
99. 860 
99. 900 
99. 650 
99. 850 
99. 723 
99. 864 

^ 99. 750 
99. 809 
99. 987 
99. 987 
99. 929 

8 99. 983 
99. 924 

» 99. 987 

99. 914 

99. 987 

i"99.914 

99. 987 

"99.915 

99. 990 

12 99. 920 

99. 987 

99. 935 

100 
99. 940 

100 

99. 949 
99. 976 
99. 976 


0.178 
.202 
.241 
.368 
.368 
.419 
.589 
.498 

.601 
.396 
.546 
.542 
.554 
.396 
.692 
.593 
.547 
.538 
.495 
.378 
.051 
.051 
.140 
.068 
.150 
.051 
.170 
.051 
.170 
.051 
.168 
.040 
.158 
.051 
.129 


$99. 939 
99.937 
99. 876 
99. 884 
99. 886 
99.811 
99. 808 
99. 815 

99. 843 
99. 824 
99. 822 
99. 820 
99.811 
99. 826 
99. 510 
99. 826 
99. 469 
99. 849 
99. 676 
99. 773 
99. 975 
99. 977 
99. 890 
99. 978 
99. 895 
99. 980 
99.903 

99. 977 
99. 900 

99. 978 
99. 903 
99. 980 
99. 915 
99. 980 

99. 925 

99. 982 

99. 926 

99. 983 
99. 931 
99. 956 
99. 958 


0.241 


Nov. 8 


Feb. 7 


.249 


Nov 15 


Feb. 14 


.491 


Nov 22 


Feb. 21 


.459 


Nov 29 


Feb. 28 


.451 


Dec 6 


Mar. 7 


.748 


Dec. 20 


Mar. 21 


.760 


Dec. 27 


Mar. 28 


.732 


1934 
Jan. 3 


Apr. 4 


.621 


Jan. 10 


Apr. 11 


.696 




Apr. 18 


.704 


Jan. 24.. 


Apr. 25 


.712 


Jan 31 


May 2 


.748 


Feb. 7 


May 9.. 


.688 


Do 


Aug. 8 


.969 


Feb. 14 


May 16 


.688 


Do 




.050 


Feb. 21 


May 23 


.597 


Feb. 28 


Aug. 29 


.641 


Mar 7 


Sept. 5 


.449 


Mar. 21... 


June 20 


.099 


Mar 28 




.091 


Do 


Sept. 26 


.218 




July 3 


.088 


Do 


Oct. 3 


.208 


Apr. 11 


July 11 


.079 


Do 


Oct. 10. 


.192 


Apr. 18 


July 18 


.091 


Do 


Oct. 17 


.198 


Apr. 25 


July 25. 


.087 


Do 


Oct. 24 


.192 


May 2 




.079 


Do 


Oct. 31 


.168 


May 9. 


Aug. 8 


.079 


Do 


Nov. 7 


.148 


May 16 




.071 


Do. 


Nov. 14 


.119 


.146 


May 23 


Aug. 22 


.067 


Do 


Nov. 21 


.101 
.047 
.047 


.136 


June 20 


Dec. 19 


.087 




Dec. 26- 


.083 









i Bank discount rate. 

2 Except for 1 bid of $25,000 at i 

3 Except for 1 bid of $200,000 at 
< Except for 1 bid of $50,000 at S 
» Except for 1 bid of $10,000 at i 
• Except for 1 bid of $10,000 at i 
7 Except for 1 bid of $3,000 at $! 
s Except for 2 bids aggregating 
» Except for 1 bid of $505,000 at 
i° Except for 2 Bids totaling $55 
ii Except for 2 bids totaling $65 
12 Except for 1 bid of $5,000 at $ 



599.975, equivalent to an interest rate of 0.099. 
$99,950, equivalent to an interest rate of 0.198. 

599.975, equivalent to an interest rate of 0.099. 
599.950, equivalent to an interest rate of 0.198. 

599.976, equivalent to an interest rate of 0.095. 
)9.861, equivalent to an interest rate of 0.275. 
$21,000, at an average price of $100. 

$100. 

,000 at an average price of $99,925, equivalent to an interest rate of 0. 147. 
,000 at an average price of $99,949, equivalent to an interest rate of 0.101. 
99.935, equivalent to an interest rate of 0.129. 



REPORT OF THE SECRETARY OF THE TREASURY 



181 



Summary of information contained in press releases issued in connection with 
Treasury bills offered from Nov. 1, 1983, to June 80, 1984 



Date of issue 



1933 



Nov. 1__ 
Nov. S.- 
Nov. 15- 
Nov. 22. 
Nov. 29. 
Dec. 6.. 
Dec. 20. 
Dec. 27.. 



Bids accepted 



Amount (in 
thousands) 



Jan. 3. 



Jan. 10.. 
Jan. 17.. 
Jan. 24.. 
Jan. 31.. 
Feb. 7.. 

Do.. 
Feb. 14. 

Do-. 
Feb. 21. 
Feb. 28. 
Mar. 7._ 
Mar. 21. 
Mar. 28. 

Do_. 
Apr. 4... 

Do.. 
Apr. 11.. 

Do.. 
Apr. 18-. 

Do.. 
Apr. 25.. 

Do_. 
May 2... 

Do.. 
May 9... 

Do.. 
May 16.. 

Do.. 
May 23.. 

Do.. 
June 20.. 
June 27.. 



$60, 180 
75, 335 
75, 295 
60, 063 
100, 027 
100, 050 
100, 263 
100, 890 



100, 990 



100, 050 
125, 340 
125, 126 
150. 320 
125, 493 
50, 078 
75,007 
75, 044 
74, 955 
75, 088 
100, 236 
100,110 
50,091 
50, 525 
50. 151 
50, 096 
50, 257 
50, 225 
75, 047 
50, 033 
75, 325 
50, 040 
75, 056 
50, 037 
75,114 
50, 173 
50, 254 
50.080 
50, 457 
50, 140 
75, 226 
75, 353 



Average 



Price (per 
hundred) 



$99. 945 
99. 940 
99. ^99 
99. 892 
99. 892 
99. 847 
99. 814 
99. 816 



99. 843 



99. 843 
99. 831 
99. 831 
99. 819 
99. 834 
99. 524 
99. 833 
99. 501 
99. 855 
99. 688 
99. 781 
99. 978 
99. 9S0 
99. 904 
99. 981 
99. 902 
99. 982 
99. 908 
99. 980 
99. 906 

99. 980 
99. 907 

99. 981 
99.918 

99. 983 
99. 926 

99. 984 
99. 929 
99. 9S5 
99. 936 
99. 963 
99. 966 



Equivalent 

rate ' 

(percent) 



0.216 
.236 
.398 
.426 
.429 
.604 
.735 
.729 



.622 
.670 
.669 
.717 
.650 
.942 
.662 
.988 
.575 
.617 
.434 
.089 
.080 
.190 
.077 
.194 
.073 
.182 
.079 
.187 
.078 
.185 
.074 
.162 
.068 
.146 
.063 
.140 
.058 
.127 
.074 
.067 



Date of press releases 



1933 



Oct. 26 and 31 

Nov. 1 and 4_ 

Nov. 9 and 14 

Nov. 16 and 21 

Nov. 23 and 28 

Nov. 29 and Dec. 5. 

Dec. 14 and 19 

Dec. 20 and 23 



Dec. 27 and 30. 



Jan. 4 and 9... 
Jan. 11 and 16. 
Jan. 18 and 23. 
Jan. 25 and 30. 
Feb. 1 and 6... 

do 

Feb. 7 and 10.. 
.do. 



Feb. 16 and 20.. 
Feb. 23 and 27.. 
Mar. 2 and 5... 
Mar. 16 and 20. 
Mar. 23 and 27. 
.do- 



Mar. 30 and Apr. 3. 

....do 

Apr. 6 and 10 

....do 

Apr. 13 and 17 

do. 



Apr. 20 and 24. 

....do 

Apr. 27 and May 1. 
do. 



May 4 and 8... 

....do 

May 11 and 15. 
..-do 



May 18 and 22. 

.—do 

June 15 and 19. 
June 22 and 26. 



Date of 
closing 



1933 

Oct. 30. 
Nov. 3. 
Nov. 13. 
Nov. 20. 
Nov. 27. 
Dec. 4. 
Dec. 18. 
Dec. 22. 



Dec. 29. 



Jan. 8. 
Jan. 15. 
Jan. 22. 
Jan. 29. 
Feb. 5. 

Do. 
Feb. 9. 

Do. 
Feb. 19. 
Feb. 26. 
Mar. 5. 
Mar. 19. 
Mar. 26. 

Do. 
Apr. 2. 

Do. 
Apr. 9. 

Do. 
Apr. 16. 

Do. 
Apr. 23. 

Do. 
Apr. 30. 

Do. 
May 7. 

Do. 
Mav 14. 

Do. 
May 21. 

Do. 
June 18. 
June 25. 



1 Bank discount rate. 



Exhibit 18 



General circular governing the sale and issue of Treasury bills 
[Department Circular No. 418, as amended] 

Treasury Department, 

May 8, 1984. 
1. The Secretary of the Treasury is authorized by section 5 of the Second 
Liberty Bond Act, as amended, 1 to issue Treasury bills on a discount basis and 
payable at maturity without interest, and to fix the form, terms, and conditions 
thereof, and to offer them for sale on a competitive basis, under such regulations 
and upon such terms and conditions as he may prescribe. Pursuant to said 
authorization, the Secretary of the Treasury, by public notice, may from time 
to time offer Treasury bills for sale and invite tenders therefor, through the 
Federal Reserve banks. The Treasury bills so offered and the tenders made 

i The statute appears in T. D. 4431 on pp. 3 and 4 of this circular. (See p. 184 of this report.) 



182 REPORT OF THE SECRETARY OF THE TREASURY 

will be subject to the terms and conditions and to the general rules and regulations 
herein contained and also to the terms and conditions stated in the public notices 
as issued by the Secretary of the Treasury from time to time in connection with 
particular offerings. 

DESCRIPTION OF TREASURY BILLS 

2. Treasury bills are bearer obligations of the United States, promising to 
pay a specified amount without interest on a specified date. They are to be 
issued on a discount basis. Each Treasury bill, prior to its issue, must be vali- 
dated by a Federal Reserve bank as fiscal agent of the United States, and the 
dates of the original issue and the maturity thereof will be stated thereon. Treas- 
ury bills are payable at maturity upon presentation to the Treasurer of the 
United States in Washington or to any Federal Reserve bank. 

3. Treasurv bills will be issued in denominations (maturity value) of $1,000, 
$10,000, $100,000, $500,000, and $1,000,000. Exchanges of denominations of 
Treasury bills of the same series (bearing the same issue and maturity dates) 
will be permitted at Federal Reserve banks. 

4. Treasury bills will be exempt, as to principal and interest, and any gain 
from the sale or other disposition of Treasury bills shall also be exempt, 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; and no loss from the sale or other disposition of 
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. 2 However, taxpayers making income tax returns are required 
to report in their returns, for information purposes, the number and amount of 
obligations and securities of the United States owned by them and the income 
received therefrom. In reporting in their income tax returns the amount of 
Treasury bills owned by them and the income received therefrom, taxpayers will 
be governed by the provisions of Treasury Decision 4431 which appears on pages 
3 and 4 of this circular. It will be noted from that Treasury Decision that (1) 
the "amount of such obligations and securities" to be so reported is the face or 
maturity value of the Treasury bills, and that (2) the "income received there- 
from" to be reported is the net excess of the amount realized during the taxable 
year from the sale or other disposition of the bills over the cost or other basis 
thereof, no separate computation of discount being necessary. 

5. Treasury bills will be acceptable at maturity value to secure deposits of 
public moneys, but they will not bear the circulation privilege. Treasury bills 
will be acceptable at maturity, but not before, and under such rules and regula- 
tions 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 Treasury 
bills. Notes secured by Treasury bills are eligible for discount or rediscount at 
Federal Reserve banks by member banks, as are notes secured by bonds and notes 
of the United States, under the provisions of section 13 of the Federal Reserve 
Act. Treasury bills will be acceptable at maturity, but not before, in payment of 
interest or of principal on account of obligations of foreign governments held by 
the United States. 

PUBLIC NOTICE 

6. When tenders are to be invited, public notice thereof will be given by the 
Secretary of the Treasury prior to the date of issue of the Treasury bills. In 
such public notice there will be set forth (a) the amount of the Treasury bills 
for which tenders are then invited, (b) the date or dates of issue, (c) the date or 
dates when such bills will become due and payable, (d) the closing hour and date 
for the receipt of tenders at the Federal Reserve banks, and (e) the date or dates 
on which payment for accepted tenders must be made. 



7. Tenders, in response to any such public notice, will be received only at the Federal 
Reserve banks, or branches thereof, and unless received before the fixed time of closing 
will be disregarded. — No tender will be accepted for an amount less than $1,000 
(maturity value), and each tender must be for an amount in multiples of $1,000 
(maturity value). The price or prices offered by the subscriber for the amount or 
amounts (at maturity value) applied for must be stated, and 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. 



2 For Treasury bills issued prior to June 17, 1930, see Department Circular No. -118, dated Nov. 22, 1929, 
and T. D. 4276 annexed to that circular. 



REPORT OF THE SECRETARY OE THE TREASURY 183 

8. Tenders should be submitted on the prescribed forms and inclosed in special 
envelops, securely sealed. On application, the forms and special envelops will be 
supplied by the Federal Reserve bank of the district in which the subscriber is 
located. If a special envelop is not available, the inscription "Tender for Treas- 
ury Bills" should be placed on the envelop used. The instructions of the Federal 
Reserve banks with respect to the submission of tenders should be observed. 
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 10 percent payment of the face 
amount of the Treasury bills applied for; provided, however, that such deposit 
will not be required if the tender is accompanied by an express guaranty of pay- 
ment in full by an incorporated bank or trust company. The forfeiture of the 
10 percent cash deposit may be declared by the Secretary of the Treasury if 
payment in full is not made, in the case of accepted tenders, on the prescribed 
date. 

9. The time of closing will be specified in the public notice. At the time fixed 
for closing, all tenders received by the Federal Reserve banks ; or branches, will 
be opened. The Secretary of the Treasury will determine the acceptable prices 
offered and will make public announcement thereof as soon as possible after the 
opening of bids, probably on the following morning. Those submitting tenders 
will be advised by the Federal Reserve banks of the acceptance or rejection thereof, 
and payment on accepted tenders must be made on the date specified in the public 
notice. 

10. In considering the acceptance of tenders, the highest prices offered will be 
accepted in full down to the amount required, and if the same price appears in 
two or more tenders and it is necessary to accept only a part of the amount offered 
at such price, the amount accepted at such price will be prorated in accordance 
with the respective amounts applied for. However, the Secretary of the Treasury 
expressly reserves the right on any occasion to reject any or all tenders or parts 
of tenders; and to award less than the amount applied for; and any action he may 
take in any such respect or respects shall be final. 

11. All payments which may be due on account of accepted tenders must be 
made to the appropriate Federal Reserve bank in cash or other funds that will 
be immediately available on the date specified: Provided, however, That the 
Secretary of the Treasury, in his discretion, on any occasion inviting tenders for 
Treasury bills, may permit any qualified depositary to make such payments by 
credit 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. 

12. Federal Reserve banks as fiscal agents of the United States are authorized 
to perform such acts as may be necessary to carry out the provisions of this 
circular and of the public notice or notices issued in connection with any offering 
of Treasury bills. 

DESTROYED, MUTILATED, OR DEFACED TREASURY BILLS 

13. No relief will be granted on account of the loss or theft of Treasury bills 
issued hereunder. Relief will be granted on account of the destruction, mutila- 
tion, or defacement thereof under the conditions and in accordance with the 
procedure prescribed in paragraphs 80 and 81 of Treasury Department Circular 
No. 300, dated July 31, 1923, so far as applicable. 



14. The Secretary of the Treasury reserves the right to withdraw, amend, or 
supplement this circular at any time, or from time to time. 

Henry Morgenthau, Jr., 

Secretary of the Treasury. 



184 REPORT OF THE SECRETARY OF THE TREASURY 

(T. D. 4431) 

Income Tax — Exemption of Treasury Bills 

Treasury Department, 
Office of Commissioner of Internal Revenue, 

Washington, D. C, May 3, 193 4. 

To Collectors of Internal Revenue and others concerned: 

Attention is invited to the act entitled "An act providing certain exemptions 
from taxation for Treasury bills", approved June 17, 1930 (46 Stat. L. 775), 
which amends section 5 of the Second Liberty Bond Act, as amended (46 Stat. 
L. 19), by adding at the end thereof a new subdivision known as subdivision (d). 
This new subdivision provides that any gain from the sale or other disposition of 
Treasury bills issued after the enactment of the act approved June 17, 1930, shall 
be exempt from all Federal, State, and local taxation (except estate or inherit- 
ance taxes) , and that no loss from the sale or other disposition of such Treasury 
bills shall be allowed as a deduction, or otherwise recognized, for the purposes of 
any tax imposed by the United States or any of its possessions. Section 5 of the 
Second Liberty Bond Act, as so amended, reads as follows, the tax-exemption 
provisions being contained in subdivisions (b) and (d) thereof: 

"Sec. 5. (a) That in addition to the bonds and notes authorized by sections 
1 and 18 of this act, as amended, the Secretary of the Treasury is authorized to 
borrow from time to time, on the credit of the United States, for the purposes of 
this act, to provide for the purchase or redemption before maturity of any certif- 
icates of indebtedness or Treasury bills issued hereunder, and to meet public 
expenditures authorized by law, such sum or sums as in his judgment may be 
necessary, and to issue therefor (1) certificates of indebtedness of the United 
States at not less than par and at such rate or rates of interest, payable at such 
time or times as he may prescribe; or (2) Treasury bills on a discount basis and 
payable at maturity without interest. Treasury bills to be issued hereunder shall 
be offered for sale on a competitive basis, under such regulations and upon such 
terms and conditions as the Secretary of the Treasury may prescribe, and the 
decisions of the Secretary in respect of any issue shall be final. Certificates of 
indebtedness and Treasury bills issued hereunder shall be in such form or forms 
and subject to such terms and conditions, shall be payable at such time not ex- 
ceeding 1 year from the date of issue, and may be redeemable before maturity 
upon such terms and conditions as the Secretary of the Treasury may prescribe. 
Treasury bills issued hereunder shall not be acceptable before maturity in pay- 
ment of interest or of principal on account of obligations of foreign governments 
held by the United States of America. The sum of the par value of such certifi- 
cates and Treasury bills outstanding hereunder and under section 6 of the First 
Liberty Bond Act shall not at any one time exceed in the aggregate $10,000,000,000. 

"(b) All certificates of indebtedness and Treasury bills issued hereunder (after 
the date upon which this subdivision becomes law) 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, or any of the posses- 
sions of the United States, or by any local taxing authority; and the amount 
of discount at which Treasury bills are originally sold by the United States shall 
be considered to be interest within the meaning of this subdivision. 

"(c) Wherever the words 'bonds and notes of the United States', or 'bonds 
and notes of the Government of the United States', or 'bonds or notes of the 
United States' are used in the Federal Reserve Act, as amended, they shall be 
held to include certificates of indebtedness and Treasury bills issued hereunder. 

"(d) Any gain from the sale or other disposition of Treasury bills issued here- 
under (after the date upon which this subdivision becomes law) shall be exempt 
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; and no loss from the sale or other disposition 
of such 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." 

The report of the Committee on Ways and Means (H. Rept. No. 1759, ac- 
companying H. R. 12440, 71st Cong.) shows that it is the purpose of the act 
approved June 17, 1930, to obviate the necessity, which existed under the law 
prior to its amendment by such act, of keeping a complicated system of book- 



REPORT OF THE SECRETARY OF THE TREASURY 185 

keeping records in order to ascertain gain or loss from the sale or other disposi- 
tion of Treasury bills as differentiated from the discount received on such bills. 

Attention is also invited to section 22 (b) (4) of the Revenue Act of 1932, which 
provides in part: 

"Sec. 22. * * * (b) Exclusions from Gross Income * * * The fol- 
lowing items shall not be included in gross income and shall be exempt from taxa- 
tion under this title: * * * (4) * * * Interest upon (A) the obligations 
of a State, Territory, or any political subdivision thereof, or the District of 
Columbia; or (B) securities issued under the provisions of the Federal Farm 
Loan Act, or under the provisions of such act as amended; or (C) the obligations 
of the United States or its possessions. Every person owning any of the obli- 
gations or securities enumerated in clause (A), (B), or (C), shall, in the return 
required by this title, submit a statement showing the number and amount of 
such obligations and securities owned by him and the income received there- 
from, in such form and with such information as the Commissioner may require. 
In the case of obligations of the United States issued after September 1, 1917 
(other than postal savings certificates of deposit), the interest shall be exempt 
only if and to the extent provided in the respective acts authorizing the issue 
thereof as amended and supplemented, and shall be excluded from gross income 
only if and to the extent it is wholly exempt to the taxpayer from the taxes 
imposed by this title; * * *." 

Article 81 of regulations 77 promulgated under the Revenue Act of 1932, 
provides that "Every person owning obligations of a State, Territory, any 
political subdivision thereof, or the District of Columbia; securities issued under 
the provisions of the Federal Farm Loan Act or of such act as amended; or obli- 
gations of the United States or its possessions, must, however, submit in his 
income tax return a statement showing the number and amount of such obli- 
gations and securities owned and the income received therefrom. 

Under the above-quoted provisions of the Revenue Act of 1932 and regula- 
tions 77, in the case of Treasury bills issued after June 17, 1930, (1) the "amount 
of such obligations and securities" is their par (maturity) value and (2) the 
"income received therefrom" is the net excess of the amount realized during 
the taxable year from the sale or other disposition of the bills over the cost or 
other basis thereof, no separate computation of discount being necessary. 

Guy T. Helvering, 
Commissioner of Internal Revenue. 

Approved: 

Henry Morgenthau, Jr., 

Secretary of the Treasury. 



Miscellaneous 
Exhibit 19 



Receipt of Liberty bonds, Treasury bonds, and Treasury notes for Federal estate or 

inheritance taxes 

[Sixth supplement to Department Circular No. 225] 

Treasury Department, 

January 12, 1934. 
1. Department Circular No. 225. dated January 31, 1921, prescribes the regu- 
lations governing the receipt of bonds and notes of the United States for Federal 
estate or inheritance taxes pursuant to the provisions of section 14 of the Second 
Liberty Bond Act, approved September 24, 1917, as amended (U. S. C, title 31, 
sec. 765). Said circular has been supplemented on June 30, 1922, July 31, 1923, 
October 15, 1925, October 30, 1926, and February 14, 1931, to show the bonds 
and notes on such dates, respectively, outstanding and receivable for such pay- 
ments. Said circular is hereby further supplemented to show the bonds at this 
date outstanding bearing interest at a higher rate than 4 percent per annum 
which come within the provisions of said Department Circular No. 225, dated 



186 



REPORT OF THE SECRETARY OF THE TREASURY 



January 31, 1921. Treasury notes outstanding at this time do not come within 
the provisions of said circular. The bonds receivable are as follows: 



Description 


Date of issue 


Short title 


(al First Liberty Loan converted 4J4 percent bonds of 1932-47- 
(b) First Liberty Loan second converted 4J4 percent bonds of 
1932-47. 


May 9, 191S 
Oct. 24,1918 

do 


First 4H's. 

First second 4J4's. 

Fourth 4H's. 




Oct. 16, 1922 
Oct. 15,1933 


Treasury bonds of 1947-52. 


(e) 4M-3H percent Treasury bonds of 1943-45, until Oct. 15, 
1934. 


Treasury bonds of 1943-45. 



2. Treasury bonds of 1943-45 are dated October 15, 1933, and bear interest 
at the rate of 4)4 percent per annum until October 15, 1934, and thereafter at 
Z l A percent. The computing of the required period of ownership will begin on 
such date, on or after October 15, 1933, as the decedent acquired such bonds, 
and they will be receivable for Federal estate or inheritance taxes under Depart- 
ment Circular No. 225, dated January 31, 1921, as supplemented, only between 
the termination of any such required period of ownership and October 15, 1934. 

3. For the calculation of accrued interest on the current coupons of bonds 
tendered in payment of estate or inheritance taxes under this circular, the method 
outlined in Exhibit B to Department Circular No. 225, dated January 31, 1921, 
should be followed. 

Henry Morgenthau, Jr., 

Secretary of the Treasury. 



Exhibit 20 

Sections 4 and 5 of the Federal Farm Mortgage Act (Public No. 88, 73d Cong., 
approved Jan. 81, 1984), guaranteeing principal and interest of Federal Farm 
Mortgage Corporation bonds by the United States 

Sec. 4. (a) With the approval of the Secretary of the Treasury, the Corpora- 
tion is authorized to issue and have outstanding at any one time bonds in an 
aggregate amount not exceeding $2,000,000,000. Such bonds shall be in such 
forms and denominations, shall have such maturities, shall bear such rates of 
interest, shall be subject to such terms and conditions, and shall be issued in such 
manner and sold at such prices, as may be prescribed by the Corporation, with the 
approval of the Secretary of the Treasury. Such bonds shall be fully and un- 
conditionally guaranteed both as to interest and principal by the United States 
and such guaranty shall be expressed on the face thereof, and such bonds shall be 
lawful investments, and may be accepted as security, for all fiduciary, trust, and 
public funds the investment or deposit of which shall be under the authority or 
control of the United States or any officer or officers thereof. In the event that 
the Corporation shall be unable to pay upon demand, when due, the principal of 
or interest on, such bonds, the Secretary of the Treasury shall pay to the holder 
the amount thereof which is hereby authorized to be appropriated, out of any 
moneys in the Treasury not otherwise appropriated, and thereupon to the 
extent of the amount so paid the Secretary of the Treasury shall succeed to all 
the rights of the holders of such bonds. The Secretary of the Treasury, in his 
discretion, is authorized to purchase any bonds of the Corporation issued here- 
under, and for such purpose the Secretary of the Treasury is authorized to use 
as a public debt transaction the proceeds from the sale of any securities hereafter 
issued under the Second Liberty Loan Act, as amended, and the purposes for 
which securities may be issued under such act, as amended, are extended to 
include any purchases of the Corporation's bonds hereunder. The Secretary of 
the Treasury may, at any time, sell any of the bonds of the Corporation acquired 
by him under this section. All redemptions, purchases, and sales by the Secretary 
of the Treasury of the bonds of the Corporation shall be treated as public debt 
transactions of the United States. Such bonds shall be fully and adequately 
secured by such assets of the Corporation and in such manner as shall be pre- 
scribed by its board of directors. The Corporation shall have power to purchase 
such bonds in the open market at any time and at any price. On such terms and 
conditions as may be agreed upon, the Corporation may exchange such bonds, 
upon application of any Federal land bank for consolidated farm loan bonds of 
equal face value issued under the Federal Farm Loan Act, as amended, and may 
exchange such consolidated farm loan bonds held by it for bonds of the Corpora- 
tion of equal face value. 



REPORT OF THE SECRETARY OP THE TREASURY 187 

(b) The Corporation is further authorized to purchase from time to time, 
for cash, such consolidated farm loan bonds at such prices and upon such terms 
as may be approved by the board of directors of the Corporation, to make loans 
to Federal land banks on the security of such consolidated bonds, and to invest 
its funds in mortgage loans made under section 32 of the Emergency Farm Mort- 
gage Act of 1933, as amended. 

(c) In order to furnish bonds for delivery by the Federal Farm Mortgage 
Corporation, the Secretary of the Treasury is hereby authorized to prepare 
suitable bonds in such form, subject to the provisions of this act, as the board 
of directors may approve, such bonds when prepared to be held in the Treasury 
subject to delivery upon order of the Corporation. The engraved plates, dies, 
bedpieces, and so forth, executed in connection therewith shall remain in the 
custody of the Secretary of the Treasury. The Corporation shall reimburse the 
Secretary of the Treasury for any expenditures made in the preparation, custody, 
and delivery of such bonds. 

Sec. 5. After 90 days after the enactment of this act, no Federal land bank 
shall issue any bonds under the provisions of the last paragraph of section 32 of 
the Federal Farm Loan Act, as amended, subject to the guarantee of interest on 
such bonds by the United States except for the purpose of refinancing any bond 
which is or has been issued subject to such guarantee of interest. 



Exhibit 21 



Section 1 of Public No. 178, Seventy-third Congress, approved April 27, 1984. 
guaranteeing principal and interest of the Home Owners' Loan Corporation bonds by 
the United States 

Be it enacted by the Senate and House of Representatives of the United States of 
America in Congress assembled, That (a) section 4 (c) of the Home Owners' Loan 
Act of 1933 is amended to read as follows: 

"(c) The Corporation is authorized to issue bonds in an aggregate amount 
not to exceed $2,000,000,000, which may be sold by the Corporation to obtain 
funds for carrying out the purposes of this section, or exchanged as hereinafter 
provided. Such bonds shall be in such forms and denominations, shall mature 
within such periods of not more than eighteen years from the date of their issue, 
shall bear such rates of interest not exceeding 4 per centum per annum, shall be 
subject to such terms and conditions, and shall be issued in such manner and sold 
at such prices, as may be prescribed by the Corporation, with the approval of the 
Secretary of the Treasury. Such bonds shall be fully and unconditionally guar- 
anteed both as to interest and principal by the United States, and such guaranty 
shall be expressed on the face thereof, and such bonds shall be lawful investments, 
and may be accepted as security, for all fiduciary, trust, and public funds, the 
investment or deposit of which shall be under the authority or control of the 
United States or any officer or officers thereof. In the event that the Corpora- 
tion shall be unable to pay upon demand, when due, the principal of, or interest 
on, such bonds, the Secretary of the Treasury shall pay to the holder the amount 
thereof which is hereby authorized to be appropriated out of any moneys in the 
Treasury not otherwise appropriated, and thereupon to the extent of the amount 
so paid the Secretary of the Treasury shall succeed to all the rights of the holders 
of such bonds. The Secretary of the Treasury, in his discretion, is authorized to 
purchase any bonds of the Corporation issued under this subsection which are 
guaranteed as to interest and principal, and for such purpose the Secretary of 
the Treasury is authorized to use as a public debt transaction the proceeds from 
the sale of any securities hereafter issued under the Second Liberty Bond Act, 
as amended, and the purposes for which securities may be issued under such act, 
as amended, are extended to include any purchases of the Corporation's bonds 
hereunder. The Secretary of the Treasury may, at any time, sell any of the 
bonds of the Corporation acquired by him under this subsection. All redemp- 
tions, purchases, and sales by the Secretary of the Treasury of the bonds of the 
Corporation shall be treated as public debt transactions of the United States. 
The bonds issued by the Corporation under this subsection shall be exempt, both 
as to principal and interest, from all taxation (except surtaxes, estate, inheritance, 
and gift taxes) now or hereafter imposed by the United States or any District, 
Territory, dependency, or possession thereof, or by any State, county, munici- 
pality, or local taxing authority. The Corporation, including its franchise, its 
capital, reserves and surplus, and its loans and income, shall likewise be exempt 



188 REPORT OF THE SECRETARY OF THE TREASURY 

from such taxation; except that any real property of the Corporation shall be 
subject to taxation to the same extent, according to its value, as other real prop- 
erty is taxed. No such bonds shall be issued in excess of the assets of the Cor- 
poration, including the assets to be obtained from the proceeds of such bonds, 
but a failure to comply with this provision shall not invalidate the bonds or the 
guaranty of the same. The Corporation shall have power to purchase in the open 
market at any time and at any price not to exceed par any of the bonds issued 
by it. Any such bonds so purchased may, with the approval of the Secretary of 
the Treasury, be sold or resold at any time and at any price. For a period of six 
months after the date this subsection, as amended, takes effect, the Corporation 
is authorized to refund any of its bonds issued prior to such date or any bonds 
issued after such date in compliance with commitments of the Corporation out- 
standing on such date, upon application of the holders thereof, by exchanging 
therefor bonds of an equal face amount issued by the Corporation under this 
subsection as amended, and bearing interest at such rate as may be prescribed 
by the Corporation with the approval of the Secretary of the Treasury; but such 
rate shall not be less than that first fixed after this subsection, as amended, takes 
effect on bonds exchanged by the Corporation for home mortgages. For the 
purpose of such refunding the Corporation is further authorized to increase its 
total bond issue in an amount equal to the amount of the bonds so refunded. 
Nothing in this subsection, as amended, shall be construed to prevent the Cor- 
poration from issuing bonds in compliance with commitments of the Corporation 
on the date this subsection, as amended, takes effect." 

(b) The amendments made by subsection (a) of this section (except with 
respect to refunding) shall not apply to any bonds heretofore issued by the Home 
Owners' Loan Corporation under such section 4 (c), or to any bonds hereafter 
issued in compliance with commitments of the Corporation outstanding on the 
date of enactment of this act. 



Exhibit 22 

[Public No. 144, 73d Cong., S. 1528] 
An act to amend section 8702, Revised Statutes 

Be it enacted by the Senate and House of Representatives of the United 
States of America in Congress assembled, That section 3702 of the Revised 
Statutes is hereby amended by adding at the end thereof the following para- 
graphs : 

"(2) Whenever it appears to the Secretary of the Treasury by clear and 
unequivocal proof that any interest-bearing bond of the United States, fully 
identified by number and description, has, without bad faith on the part of the 
owner, been lost to such owner under such circumstances and for such period 
of time after it has matured or has become redeemable pursuant to a call for 
redemption as in the judgment of the Secretary would indicate that it had been 
destroyed or irretrievably lost, is not held by any person as his own property, 
and will not be presented by a bona fide holder for value, the Secretary of the 
Treasury is authorized to make payment of the amount which would have been 
due on such bond had it been presented at the time it became due and payable. 
But no payment shall be made on account of interest represented by coupons 
claimed to have been attached to a missing coupon bond at the time of its loss 
or destruction, unless the Secretary of the Treasury is satisfied that such 
coupons have not been paid and are in fact destroyed or can never be made 
the basis of a claim against the United States : Provided, That where relief is 
authorized under the provisions of this paragraph the bond of indemnity re- 
quired by section 3703 of the Revised Statutes shall be in a penal sum of 
double the amount to be paid and shall be executed by an approved corporate 
surety. The Secretary of the Treasury is further authorized to make from 
time to time such regulations and restrictions as he may prescribe with respect 
to the administration of this paragraph. 

"(3) The term 'bond' wherever used in this section and in sections 3703, 
3704, and 3705 of the Revised Statutes shall be deemed, for the purposes of 
these sections, to include any interest-bearing obligation of the United States 
or those issued on a discount basis." 

Approved, April 9, 1934. 



REPORT OF THE SECRETARY OF THE TREASURY 189 

MONEY AND BANKING 

Exhibit 23 

[Public No. 87, 73d Cong., H.R. 6976] 

An act to protect the currency system of the United States, to provide for the 
better use of the monetary gold stock of the United States, and for other 
purposes 

Be it enacted by the Senate and House of Representatives of the United 
States of America in Congress assembled, That the short title of this act shall 
be the " Gold Reserve Act of 1934." 

Sec. 2. (a) Upon the approval of this act all right, title, and interest, and 
every claim of the Federal Reserve Board, of every Federal Reserve bank, 
and of every Federal Reserve agent, in and to any and all gold coin and gold 
bullion shall pass to and are hereby vested in the United States; and in 
payment therefor credits in equivalent amounts in dollars are hereby estab- 
lished in the Treasury in the accounts authorized under the sixteenth para- 
graph of section 16 of the Federal Reserve Act, as heretofore and by this act 
amended (U. S. C, title 12, sec. 467). Balances in such accounts shall be 
payable in gold certificates, which shall be in such form and in such de- 
nominations as the Secretary of the Treasury may determine. All gold so 
transferred, not in the possession of the United States, shall be held in custody 
for the United States and delivered upon the order of the Secretary of the 
Treasury; and the Federal Reserve Board, the Federal Reserve banks, and 
the Federal Reserve agents shall give such instruction and shall take such 
action as may be necessary to assure that such gold shall be so held and de- 
livered. 

(b) Section 16 of the Federal Reserve Act, as amended, is further amended 
in the following respects : 

(1) The third sentence of the first paragraph is amended to read as fol- 
lows : " They shall be redeemed in lawful money on demand at the Treasury 
Department of the United States, in the city of Washington, District of 
Columbia, or at any Federal Reserve bank." 

(2) So much of the third sentence of the second paragraph as precedes the 
proviso is amended to read as follows : " The collateral security thus offered 
shall be notes, drafts, bills of exchange, or acceptances acquired under the 
provisions of section 13 of this act, or bills of exchange endorsed by a member 
bank of any Federal Reserve district and purchased under the provisions of 
section 14 of this act, or bankers' acceptances purchased under the provisions 
of said section 14, or gold certificates :". 

(3) The first sentence of the third paragraph is amended to read as follows: 
" Every Federal Reserve bank shall maintain reserves in gold certificates or 
lawful money of not less than 35 per centum against its deposits and reserves 
in gold certificates of not less than 40 per centum against its Federal Reserve 
notes in actual circulation : Provided, hoivever, That when the Federal Reserve 
agent holds gold certificates as collateral for Federal Reserve notes issued to 
the bank such gold certificates shall be counted as part of the reserve which 
such bank is required to maintain against its Federal Reserve notes in actual 
circulation." 

(4) The fifth and sixth sentences of the third paragraph are amended to read 
as follows : " Notes presented for redemption at the Treasury of the United 
States shall be paid out of the redemption fund and returned to the Federal 
Reserve banks through which they were originally issued, and thereupon 
such Federal Reserve bank shall, upon demand of the Secretary of the Treas- 
ury, reimburse such redemption fund in lawful money or, if such Federal 
Reserve notes have been redeemed by the Treasurer in gold certificates, then 
such funds shall be reimbursed to the extent deemed necessary by the Secre- 
tary of the Treasury in gold certificates, and such Federal Reserve bank shall, 
so long as any of its Federal Reserve notes remain outstanding, maintain 
with the Treasurer in gold certificates an amount sufficient in the judgment of 
the Secretary to provide for all redemptions to be made by the Treasurer. 
Federal Reserve notes received by the Treasurer otherwise than for redemption 
may be exchanged for gold certificates out of the redemption fund hereinafter 
provided and returned to the Reserve bank through which they were originally 
issued, or they may be returned to such bank for the credit of the United 
States." 



190 REPORT OF THE SECRETARY OF THE TREASURY 

(5) The fourth, fifth, and sixth paragraphs are amended to read as follows: 
" The Federal Reserve Board shall require each Federal Reserve bank to 

maintain on deposit in the Treasury of the United States a sum in gold 
certificates sufficient in the judgment of the Secretary of the Treasury for the 
redemption of the Federal Reserve notes issued to such bank, but in no event 
less than 5 per centum of the total amount of notes issued less the amount of 
gold certificates held by the Federal Reserve agent as collateral security ; but 
such deposit of gold certificates shall be counted and included as part of the 40 
per centum reserve hereinbefore required. The Board shall have the right, 
acting through the Federal Reserve agent, to grant in whole or in part, or to 
reject entirely the application of any Federal Reserve bank for Federal Reserve 
notes ; but to the extent that such application may be granted the Federal 
Reserve Board shall, through its local Federal Reserve agent, supply Federal 
Reserve notes to the banks so applying, and such bank shall be charged with 
the amount of the notes issued to it and shall pay such rate of interest as may 
be established by the Federal Reserve Board on only that amount of such notes 
which equals the total amount of its outstanding Federal Reserve notes less 
the amount of gold certificates held by the Federal Reserve agent as collateral 
security. Federal Reserve notes issued to any such bank shall, upon delivery, 
together with such notes of such Federal Reserve bank as may be issued under 
section 18 of this act upon security of United States 2 per centum Government 
bonds, become a first and paramount lien on all the assets of such bank. 

"Any Federal Reserve bank may at any time reduce its liability for out- 
standing Federal Reserve notes by depositing with the Federal Reserve agent 
its Federal Reserve notes, gold certificates, or lawful money of the United 
States. Federal Reserve notes so deposited shall not be reissued, except upon 
compliance with the conditions of an original issue. 

" The Federal Reserve agent shall hold such gold certificates or lawful money 
available exclusively for exchange for tbe outstanding Federal Reserve notes 
when offered by the Reserve bank of which he is a director. Upon the request 
of the Secretary of the Treasury the Federal Reserve Board shall require 
the Federal Reserve agent to transmit to the Treasurer of the United States 
so much of the gold certificates held by him as collateral security for Federal 
Reserve notes as may be required for the exclusive purpose of the redemption 
of such Federal Reserve notes, but such gold certificates when deposited with 
the Treasurer shall be counted and considered as if collateral security on 
deposit with the Federal Reserve agent." 

(6) The eighth paragraph is amended to read as follows: 

"All Federal Reserve -notes and all gold certificates and lawful money 
issued to or deposited with any Federal Reserve agent under the provisions of 
the Federal Reserve Act shall hereafter be held for such agent, under such 
rules and regulations as the Federal Reserve Board may prescribe, in the joint 
custody of himself and the Federal Reserve bank to which he is accredited. 
Such agent and such Federal Reserve bank shall be jointly liable for the safe- 
keeping of such Federal Reserve notes, gold certificates, and lawful money. 
Nothing herein contained, however, shall be construed to prohibit a Federal 
Reserve agent from depositing gold certificates with the Federal Reserve Board, 
to be held by such Board subject to his order, or with the Treasurer of the 
United States for the purposes authorized by law." 

(7) The sixteenth paragraph is amended to read as follows: 

" The Secretary of the Treasury is hereby authorized and directed to receive 
deposits of gold or of gold certificates with the Treasurer or any Assistant 
Treasurer of the United States when tendered by any Federal Reserve bank or 
Federal Reserve agent for credit to its or his account with the Federal Re- 
serve Board. The Secretary shall prescribe by regulation the form of receipt 
to be issued by the Treasurer or Assistant Treasurer to the Federal Reserve 
bank or Federal Reserve agent making the deposit, and a duplicate of such 
receipt shall be delivered to the Federal Reserve Board by the Treasurer at 
Washington upon proper advices from any Assistant Treasurer that such de- 
posit has been made. Deposits so made shall be held subject to the orders of 
the Federal Reserve BoTTrdluiorshint bo payable in gold certificates on the order 
of the Federal Reserve Board to any Federal Reserve bank or Federal Reserve 
agent at the Treasury or at the Subtreasury of the United States nearest the 
place of business of such Federal Reserve bank or such Federal Reserve agent. 
The order used by the Federal Reserve Board in making such payments shall 
be signed by the governor or vice governor, or such other officers or members 
as the Board may by regulation prescribe. The form of such order shall be 
approved by the Secretary of the Treasury." 



REPORT OF THE SECRETARY OF THE TREASURY 191 

(8) The eighteenth paragraph is amended to read as follows: 

" Deposits made under this section standing to the credit of any Fedei'al Re- 
serve bank with the Federal Reserve Board shall, at the option of said bank, 
be counted as part of the lawful reserve which it is required to maintain against 
outstanding Federal Reserve notes, or as a part of the reserve it is required 
to maintain against deposits." 

Sec. 3. The Secretary of the Treasury shall, by regulations issued hereunder, 
with the approval of tbe President, prescribe the conditions under which gold 
may be acquired and held, transported, melted or treated, imported, exported, 
or earmarked: (a) for industrial, professional, and artistic use; (b) by the 
Federal Reserve banks for the purpose of settling international balances ; and 
(c) for such other purposes as in his judgment are not inconsistent with the 
purposes of this act. Gold in any form may be acquired, transported, melted 
or treated, imported, exported, or earmarked or held in custody for foreign 
or domestic account (except on behalf of the United States) only to the extent 
permitted by, and subject to the conditions prescribed in, or pursuant to, such 
regulations. Such regulations may exempt from the provisions of this section, 
in whole or in part, gold situated in the Philippine Islands or other places 
beyond tbe limits of the continental United States. 

Sec. 4. Any gold withheld, acquired, transported, melted or treated, imported, 
exported, or earmarked or held in custody, in violation of this act or of any 
regulations issued hereunder, or licenses issued pursuant thereto, shall be 
forfeited to the United States, and may be seized and condemned by like 
proceedings as those provided by law for the forfeiture, seizure, and condemna- 
tion of property imported into the United States contrary to law; and in addi- 
tion any person failing to comply with the provisions of this act or of any such 
regulations or licenses, shall be subject to a penalty equal to twice the value of 
the gold in respect of winch such failure occurred. 

Sec. 5. No, gold shall hereafter be coined, and no gold coin sball hereafter 
be paid out or delivered by the United States: Provided, however, That coinage 
may continue to be executed by the mints of the United States for foreign 
countries in accordance with the act of January 29, 1874 (U. S. C, title 31, 
sec. 367). All gold coin of the United States shall be withdrawn from circula- 
tion, and, together with all other gold owned by the United States, shall be 
formed into bars of such weights and degrees of fineness as the Secretary of 
the Treasury may direct. 

Seo. 6. Except to the extent permitted in regulations which may be issued 
hereunder by the Secretary of the Treasury with the approval of the President, 
no currency of the United States shall be redeemed in gold: Provided, however, 
That gold certificates owned by the Federal Reserve banks shall be redeemed at 
such times and in such amounts as, in the judgment of the Secretary of the 
Treasury, are necessary to maintain the equal purchasing power of every kind 
of, currency of the Un ited States: And provided further. That the reserve for 
United States notes and for Treasury notes of 1890, and the security for gold 
certificates (including the gold certificates held in the Treasury for credits 
payable therein) shall be maintained in gold bullion equal to the dollar amounts 
required by law, and the reserve for Federal Reserve notes shall be maintained 
in gold certificates, or in credits payable in gold certificates maintained with 
the Treasurer of the United States under section 16 of the Federal Reserve Act, 
as heretofore and by this act amended. 

No redemptions in gold shall be made except in gold bullion bearing the stamp 
of a United States mint or assay office in an amount equivalent at the time of 
redemption to the currency surrendered for such purpose. 

Sec. 7. In the event that the weight of the gold dollar shall at any time be 
reduced, the resulting increase in value of the gold held by the United States 
(including the gold held as security for gold certificates and as a reserve for 
any United States notes and for Treasury notes of 1S90) shall be covered into 
the Treasury as a miscellaneous receipt; and. in the event that the weight of 
the gold dollar shall at any time be increased, the resulting decrease in value 
of the gold held as a reserve for any United States notes and for Treasury 
notes of 1890. and as security for gold certificates shall be compensated by 
transfers of gold bullion from the general fund, and there is hereby appropri- 
ated an amount sufficient to provide for such transfers and to cover the decrease 
in value of the gold in the general fund. 
90353—35 14 



192 REPORT OF THE SECRETARY OP THE TREASURY 

Sec. 8. Section 3700 of the Revised Statutes (U. S. C, title 31, sec. 734) is 
amended to read as follows: 

" Sec. 3700. With the approval of the President, the Secretary of the Treasury 
may purchase gold in any amounts, at home or abroad, with any direct obli- 
gations, coin, or currency of the United States, authorized by law, or with any 
funds in the Treasury not otherwise appropriated, at such rates and upon such 
terms and conditions as he may deem most advantageous to the public interest ; 
any provision of law relating to the maintenance of parity, or limiting the 
purposes for which any of such obligations, coin, or currency, may be issued, 
or requiring any such obligations to be offered as a popular loan or on a com- 
petitive basis, or to be offered or issued at not less than par, to the contrary 
notwithstanding. All gold so purchased shall be included as an asset of the 
general fund of the Treasury." 

Sec. 9. Section 3699 of the Revised Statutes (U. S. C, title 31, sec. 733) is 
amended to read as follows: 

" Sec. 3699. The Secretary of the Treasury may anticipate the payment of 
interest on the public debt, by a period not exceeding one year, from time to 
time, either with or without a rebate of interest upon the coupons, as to him 
may seem expedient; and he may sell gold in any amounts, at home or abroad, 
in such manner and at such rates and upon such terms and conditions as he 
may deem most advantageous to the public interest, and the proceeds of any 
gold so sold shall be covered into the general fund of the Treasury : Provided, 
however, That the Secretary of the Treasury may sell the gold which is re- 
quired to be maintained as a reserve or as security for currency issued by the 
United States, only to the extent necessary to maintain such currency at a 
parity with the gold dollar." 

Sec. 10. (a) For the purpose of stabilizing the exchange value of the dollar, 
the Secretary of the Treasury, with the approval of the President, directly or 
through such agencies as he may designate, is authorized, for the account of 
the fund established in this section, to deal in gold and foreign exchange and 
such other instruments of credit and securities as he may deem necessary to 
carry out the purpose of this section. An annual audit of such fund shall be 
made and a report thereof submitted to the President. 

(b) To enable the Secretary of the Treasury to carry out the provisions of 
this section there is hereby appropriated, out of the receipts which are directed 
to be covered into the Treasury under section 7 hereof, the sum of $2,000,000,000, 
which sum when available shall be deposited with the Treasurer of the United 
States in a stabilization fund (hereinafter called the "fund") under the ex- 
clusive control of the Secretary of the Treasury, with the approval of the 
President, whose decisions shall be final and not be subject to review by any 
other oflicer of the United States. The fund shall be available for expenditure, 
under the direction of the Secretary of the Treasury and in his discretion, for 
any purpose in connection with carrying out the provisions of this section, in- 
cluding the investment and reinvestment in direct obligations of the United 
States of any portions of the fund which the Secretary of the Treasury, with 
the approval of the President, may from time to time determine are not cur- 
rently required for stabilizing the exchange value of the dollar. The proceeds 
of all sales and investments and all earnings and interest accruing under the 
operations of this section shall be paid into the fund and shall be available 
for the purposes of the fund. 

(c) All the powers conferred by this section shall expire two years after the 
date of enactment of this act, unless the President shall sooner declare the 
existing emergency ended and the operation of the stabilization fund termi- 
nated ; but the President may extend such period for not more than one addi- 
tional year after such date by proclamation recognizing the continuance of such 
emergency. 

Sec. 11. The Secretary of the Treasury is hereby authorized to issue, with the 
approval of the President, such rules and regulations as the Secretary may 
deem necessary or proper to carry out the purposes of this act. 

Sec. 12. Paragraph (b) (2) r of section 43, title III, of the act approved May 
12, 1933 (Public, Numbered 10, Seventy-third Congress), is amended by adding 
two new sentences at the end thereof reading as follows : 

" Nor shall the weight of the gold dollar be fixed in any event at more than 
60 per centum of its present weight. The powers of the President specified in 
this paragraph shall be deemed to be separate, distinct, and continuing powers, 
and may be exercised by him, from time to time, severally or together, when 



REPORT OF THE SECRETARY OF THE TREASURY 193 

ever and as the expressed objects of this section in his judgment may require ; 
except that such powers shall expire two years after the date of enactment of 
the Gold Reserve Act of 1934 unless the President shall sooner declare the 
existing emergency ended, but the President may extend such period for not 
more than one additional year after such date by proclamation recognizing the 
continuance of such emergency." 

Paragraph (2) of subsection (b) of section 43, title III, of an act entitled 
"An act to relieve the existing national economic emergency by increasing agri- 
cultural purchasing power, to raise revenue for extraordinary expenses in- 
curred by reason of such emergency, to provide emergency relief with respect 
to agricultural indebtedness, to provide for the orderly liquidation of joint stock 
land banks, and for other purposes ", approved May 12, 1933, is amended by 
adding at the end of said paragraph (2) the following: 

" The President, in addition to the authority to provide for the unlimited 
coinage of silver at the ratio so fixed, under such terms and conditions as he 
may prescribe, is further authorized to cause to be issued and delivered to the 
tenderer of silver for coinage, silver certificates in lieu of the standard silver 
dollars to which the tenderer would be entitled and in an amount in dollars 
equal to the number of coined standard silver dollars that the tenderer of such 
silver for coinage would receive in standard silver dollars. 

" The President is further authorized to issue silver certificates in such 
denominations as he may prescribe against any silver bullion, silver, or standard 
silver dollars in the Treasury not then held for redemption of any outstanding 
silver certificates, and to coin standard silver dollars or subsidiary currency for 
the redemption of such silver certificates. 

" The President is authorized, in his discretion, to prescribe different terms 
and conditions and to make different charges, or to collect different seigniorage, 
for the coinage of silver of foreign production than for the coinage of silver 
produced in the United States or its dependencies. The silver certificates herein 
referred to shall be issued, delivered, and circulated substantially in conformity 
with the law now governing existing silver certificates, except as may herein be 
expressly provided to the contrary, and shall have and possess all of the 
privileges and the legal tender characteristics of existing silver certificates now 
in the Treasury of the United States, or in circulation. 

" The President is authorized, in addition to other powers, to reduce the 
weight of the standard silver dollar in the same percentage that he reduces 
the weight of the gold dollar. 

" The President is further authorized to reduce and fix the weight of sub- 
sidiary coins so as to maintain the parity of such coins with the standard silver 
dollar and with the gold dollar." 

Sbo. 13. All actions, regulations, rules, orders, and proclamations heretofore 
taken, promulgated, made or issued by the President of the United States or the 
Secretary of the Treasury, under the act of March 9, 1933, or under section 43 
or section 45 of title III of the act of May 12, 1933, are hereby approved, ratified, 
and confirmed. 

Sec. 14. (a) The Second Liberty Bond Act, as amended, is further amended 
as follows : 

(1) By adding at the end of section 1 (U. S. C, title 31, sec. 752; Supp. VII, 
title 31, sec. 752), a new paragraph as follows: 

Notwithstanding the provisions of the foregoing paragraph, the Secretary of 
the Treasury may from time to time, when he deems it to be in the public 
interest, offer such bonds otherwise than as a popular loan and he may make 
allotments in full, or reject or reduce allotments upon any applications whether 
or not the offering was made as a popular loan." 

(2) By inserting in section 8 (U. S. C, title 31, sec. 771), after the words 
" certificates of indebtedness ", a comma and the words " Treasury bills." 

(3) By striking out the figures "$7,500,000,000" where they appear in sec- 
tion 18 (U. S. C, title 31, sec. 753) and inserting in lieu thereof the figures 
" $10,000,000,000." 

(4) By adding thereto two new sections, as follows: 

" Sec. 19. Notwithstanding any other provisions of law, any obligations au- 
thorized by this act may be issued for the purchase, redemption, or refunding, 
at or before maturity, of any outstanding bonds, notes, certificates of indebted- 
ness, or Treasury bills, of the United States, or to obtain funds for such pur- 
chase, redemption, or refunding, under such rules, regulations, terms, and 
conditions as the Secretary of the Treasury may prescribe. 



194 REPORT OF THE SECRETARY OF THE TREASURY 

" Sec. 20. The Secretary of the Treasury may issue any obligations authorized 
by this act and maturing not more than one year from the date of their issue 
on a discount basis and payable at maturity without interest. Any such obli- 
gations may also be offered for sale on a competitive basis under such regula- 
tions and upon such terms and conditions as the Secretary of the Treasury 
may prescribe, and the decisions of the Secretary in respect of any issue shall 
be final." 

(b) Section 6 of the Victory Liberty Loan Act (U. S. C, title 31, sec. 767; 
Supp. VII, title 31, sees. 767-767a) is amended by striking out the words "for 
refunding purposes ", together with the preceding comma, at the end of the 
first sentence of subsection (a). 

(c) The Secretary of the Treasury is authorized to issue gold certificates, in 
such form and in such denominations as he may determine, against any gold 
held by the Treasurer of the United States, except the gold fund held as a 
reserve for any United States notes and Treasury notes of 1890. The amount 
<>r gold certificates issued and outstanding shall at no time exceed the value, at 
the legal standard, of the gold so held against gold certificates. 

Sec. 15. As used in this act the term " United States " means the Government 
of the United States ; the term " the continental United States " means the 
States of the United States, the District of Columbia, and the Territory of 
Alaska ; the term " currency of the United States " means currency which is 
legal tender in the United States, and includes United States notes, Treasury 
notes of 1890, gold certificates, silver certificates, Federal Reserve notes, and 
circulating notes of Federal Reserve banks and national banking associations ; 
and the term " person " means any individual, partnership, association, or cor- 
poration, including the Federal Reserve Board, Federal Reserve banks, and 
Federal Reserve agents. Wherever reference is made in this act to equivalents 
as between dollars or currency of the United States and gold, one dollar or one 
dollar face amount of any currency of the United States equals such a number 
of grains of gold, nine-tenths fine, as, at the time referred to, are contained in 
the standard unit of value, that is, so long as the President shall not have 
altered by proclamation the weight of the gold dollar under the authority of 
section 43, title III, of the act approved May 12, 1933, as heretofore and by 
this act amended, twenty-five and eight-tenths grains of gold, nine-tenths fine, 
and thereafter such a number of grains of gold, nine-tenths fine, as the President 
shall have fixed under such authority. 

Sec. 16. The right to alter, amend, or repeal this act is hereby expressly 
reserved. If any provision of this act, or the application thereof to any person 
or circumstances, is held invalid, the remainder of the act, and the application 
of such provision to other persons or circumstances, shall not be affected 
thereby. 

Sec. 17. All acts and parts of acts inconsistent with any of the provisions 
of this act are hereby repealed. 

Approved, January 30, 1934. 



Exhibit 24 

V 

Proclamations, Executive orders, Treasury orders, and instructions relating to 

gold 

ORDER OF THE SECRETARY OF THE TREASURY, DECEMBER 2 8, 1933, REQUIRING THE 
DELIVERY OF GOLD COIN, GOLD BULLION, AND GOLD CERTIFICATES TO THE TREASURER 
OF THE UNITED STATES * 

Whereas section 11 of the Federal Reserve Act of December 23, 1913, as 
amended by section 3 of the act of March 9, 1933, entitled "An act to provide 
relief in the existing national emergency in banking, and for other purposes ", 
provides in subsection (n) as follows: 

" Whenever in the judgment of the Secretary of the Treasury such action is 
necessary to protect the currency system of the United States, the Secretary of 
the Treasury, in his discretion, may require any or all individuals, partnerships, 
associations, and corporations to pay and deliver to the Treasurer of the United 
States any or all gold coin, gold bullion, and gold certificates owned by such 

Amended Jan. 11, 1934, and supplemented Jan. 15, 1934. (See pp. 196 and 197.) 



REPORT OF THE SECRETARY OF THE TREASURY 195 

individuals, partnerships, associations, and corporations. Upon receipt of such 
gold coin, gold bullion or gold certificates, the Secretary of the Treasury shall 
pay therefor an equivalent amount of any other form of coin or currency coined 
or issued under the laws of the United States. The Secretary of the Treasury 
shall pay all costs of the transportation of such gold bullion, gold certificates, 
coin, or currency, including the cost of insurance, protection, and such other 
incidental costs as may be reasonably necessary. Any individual, partnership, 
association, or corporation failing to comply with any requirement of the Secre- 
tary of the Treasury made under this subsection shall be subject to a penalty 
equal to twice the value of the gold or gold certificates in respect of which such 
failure occurred, and such penalty may be collected by the Secretary of the 
Treasury by suit or otherwise " ; and 

Whereas in my judgment such action is necessary to protect the currency 
system of the United States ; 

Now, therefore, I, Henry Morgenthau, Jr., Acting Secretary of the Treasury, 
do hereby require every person subject to the jurisdiction of the United States 
forthwith to pay and deliver to the Treasurer of the United States all gold 
coin, gold bullion, and gold certificates situated in the United States, owned by 
such person, except as follows : 

(a) Gold bullion owned by a person now holding such gold under a license 
heretofore granted by or under authority of the Secretary of the Treasury, 
pursuant to the Executive order of Au gust 28, 19 33, relating to the hoarding, 
export, and earmarking of gold coinTTmllion, or currency and to transactions 
in foreign exchange ; 

(ft) Gold coin having a recognized special value to collectors of rare and 
unusual coin (but not including quarter eagles, otherwise known as $2.50 
pieces) ; 

(c) Unmelted scrap gold and gold sweepings in an amount not exceeding in 
the aggregate $100 belonging to any one person; and gold which has been put 
through a process of fabrication for a specific and customary industrial, 
professional, or ornamental use ; 

(d) Gold coin, gold bullion, and gold certificates owned by a Federal Reserve 
bank or the Reconstruction Finance Corporation ; and 

(e) Gold bullion and foreign gold coin now situated in the Philippine Islands, 
American Samoa, Guam, Hawaii, Panama Canal Zone, Puerto Rico, or the 
Virgin Islands of the United Slates, owned by a person not domiciled or doing 
business in the continental United States. 

Sec. 2. Delivery. — The gold coin, gold bullion, and gold certificates herein 
required to be paid and delivered to the Treasurer of the United States shall 
be delivered by placing the same forthwith in the custody of a Federal Reserve 
bank or branch or a bank member of the Federal Reserve System for the 
account of the United States and by forwarding confirmation that the gold 
coin, gold bullion, and gold certificates have been so placed in custody for the 
account of the United States and are held subject to the order of the Treasurer 
of the United States, signed by such bank and the person making the delivery 
(or the authorized agent of such person) to the Treasurer of the United States, 
Washington, D. C, in a postage-prepaid envelop bearing a postmark dated 
prior to midnight of the day the gold coin, gold bullion, and gold certificates are 
so placed in custody. 

Sec. 3. Payment and reimbursement of coats. — Upon receipt of the confirma- 
tion signed and delivered as required under section 2, the Secretary of the 
Treasury will pay for the gold coin, gold bullion, and gold certificates placed 
in custody for the account of the United States in accordance with section 
2, an equivalent amount of any form of coin or currency coined or issued 
under the laws of the United States designated by the Secretary of the 
Treasury. The Secretary of the Treasury will pay all costs of the transporta- 
tion of such gold coin, gold bullion, and gold certificates to the Federal Reserve 
bank or branch or bank member of the Federal Reserve System in the city 
or town nearest to the place where such gold coin, gold bullion, and gold 
certificates are now situated, including the cost of insurance, protection, and 
such other incidental costs as may be reasonably necessary. Persons desiring 
reimbursement for such costs actually incurred shall submit their accounts 
on voucher forms which may be obtained by writing to the Treasurer of the 
United States, Washington, D. C. 

Sec. 4. Definitions. — As used in this order, the term " person " means any 
individual, partnership, association, or corporation ; the term " United States " 






196 REPORT OF THE SECRETARY OF THE TREASURY 

means the United States and any place subject to the jurisdiction thereof; the 
term " continental United States " means the States of the United States, 
the District of Columbia, and the Territory of Alaska ; the term " gold coin " 
means any coin containing gold, including foreign gold coin; and the term 
" gold bullion " means any gold which has been put through a process of 
smelting or refining that is in such form that its value depends upon the gold 
content and not upon the form, but does not include gold coin or metals 
containing less than five troy ounces of fine gold per short ton. 

Sec. 5. Auy individual, partnership, association, or corporation failing to 
comply with any requirement hereof or of any rules or regulations issued 
by the Secretary of the Treasury hereunder shall be subject to the penalty 
provided in section 11 (n) of the Federal Reserve Act as amended. 
This order may be modified or revoked at any time. 

Henry Morgenthau, Jr., 
Acting Secretary of the Treasury. 
Approved : 

Franklin D. Roosevelt, 

The White House, December 28, 1933. 

ORDER OF THE SECRETARY OF THE TREASURY, JANUARY 11, 1934, AMENDING THE 
ORDER OF DECEMBER 28, 1933, REQUIRING THE DELIVERY OF GOLD COIN, GOLD 
BULLION, AND GOLD CERTIFICATES TO THE TREASURER OF THE UNITED STATES 

Whereas, in my judgment, the order of December 28, 1933, requiring the 
delivery of gold coin, gold bullion, and gold certificates to the Treasurer of the 
United States, may be amended as hereinafter provided without adversely 
affecting the purposes thereof, 

Now, therefore, I, Henry Morgenthau, Jr., Secretary of the Treasury, do 
hereby amend said order of December 28, 1933, by inserting after the word 
"pieces" in the parenthetical phrase in paragraph (B) of the first section 
thereof a comma and the following: 

" unless held, together with rare and unusual coin, as part of a collection for 
historical, scientific, or numismatic purposes, containing not more than four 
quarter eagles of the same date and design, and struck by the same mint." 
This order may be modified or revoked at any time. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 
Approved : 

Franklin D. Roosevelt, 

The White House, January 11, 1934. 



EXECUTIVE ORDER, JANUARY 12, 1934, AMENDING EXECUTIVE ORDER OF AUGUST 28, 
1933, RELATING TO THE ACQUISITION OF GOLD COIN AND BULLION 

The first paragraph of section 4 of Executive Order No. 6260 of August 28, 
1933, relating to the hoarding, export, and earmarking of gold coin, bullion, or 
currency, and to transactions in foreign exchange is hereby amended to read 
as follows : 

" Sec. 4. Acquisition of gold coin and gold bullion. — No person other than a 
Federal Reserve bank shall, after the date of this order, acquire in the 
United States any gold coin, gold bullion, or gold certificates except under 
license therefor issued pursuant to this Executive order, provided that member 
banks of the Federal Reserve System may accept delivery of such coin, bullion, 
and certificates for surrender promptly to a Federal Reserve bank, and pro- 
vided further that persons requiring gold for use in the industry, profession, or 
art in which they are regularly engaged may replenish their stocks of gold up 
to an aggregate amount of $100, by acquisitions of gold bullion held under 
licenses issued under section 5 (b) without necessity of obtaining a license for 
such acquisitions, and provided further that collectors of rare and unusual coin 
may acquire from one another and hold without necessity of obtaining a license 
therefor gold coin having a recognized special value to collectors of rare and 
unusual coin (but not including quarter eagles, otherwise known as $2.50 
pieces, unless held, together with rare and unusual coin, as part of a collection 
for historical, scientific, or numismatic purposes, containing not more than four 
quarter eagles of the same date and design and struck by the same mint)." 



REPORT OF THE SECRETARY OF THE TREASURY 197 

Section 6 of the aforesaid order is hereby amended by adding thereto the 
following subparagraph : 

"(e) Through any agency that he may designate, the export of gold coin 
having a recognized special value to collectors of rare and unusual coin (but not 
including quarter eagles, otherwise known as $2.50 pieces, unless held, together 
with rare and unusual coin, as part of a collection for historical, scientific, or 
numismatic purposes, containing not more than four quarter eagles of the 
same date and design and struck by the same mint)." 

Franklin D. Roosevelt. 
The White House, 

January 12, 1984. 



EXECUTIVE ORDER, JANUARY 15, 1934, RELATING TO RECEIPT OF GOLD ON CONSIGNMENT 
BY THE MINTS AND ASSAY OFFICES 

By virtue of the authority vested in me by section 5 (b) of the act of 
October 6, 1917, as amended by section 2 of the act of March 9, 1933, entitled 
"An act to provide relief in the existing national emergency in banking, and 
for other purposes ", I, Franklin D. Roosevelt, President of the United States 
of America, do declare that a period of national emergency exists, and by virtue 
of said authority and of all other authority vested in me, do hereby prescribe 
the following regulations for receiving gold on consignment for sale : 

Section 1. The United States mints and assay offices are hereby authorized, 
subject to such regulations as may from time to time be prescribed by the 
Secretary of the Treasury, to receive on consignment gold which the mint or 
assay office concerned is satisfied has not been held in noncompliance with the 
Executive orders or the orders of the Secretary of the Treasury, issued under 
sections 2 and 3 of the act of March 9, 1933, or in noncompliance with any 
regulations or rulings made thereunder or licenses issued pursuant thereto. 

Sec. 2. The Secretary of the Treasury is hereby authorized and empowered 
to issue such regulations as he may deem necessary to carry out the purposes 
of this Executive order. 

Sec. 3. This Executive order and any regulations issued hereunder may be 
modified or revoked at any time. 

Franklin D. Roosevelt. 

The White House, January 15, 193J/. 



ORDER OF THE SECRETARY OF THE TREASURY, JANUARY 15, 1934, SUPPLEMENTING 
THE ORDER OF DECEMBER 28, 1933, REQUIRING THE DELIVERY OF GOLD COIN, GOLD 
BULLION, AND GOLD CERTIFICATES TO THE TREASURER OF THE UNITED STATES 

Whereas on December 28, 1933, I, Henry Morgenthau, Jr., as Acting Secretary 
of the Treasury, issued an order under authority of section 11 of the Federal 
Reserve Act of December 23, 1913, as amended by section 3 of the Act of March 
9, 1933, entitled "An act to provide relief in the existing national emergency 
in banking, and for other purposes " ; 

Whereas said order, as amended by an order of January 11, 1934, required 
every person subject to the jurisdiction of the United States forthwith to pay 
and deliver to the Treasurer of the United States all gold coin, gold bullion, 
and gold certificates situated in the United States, owned by such person, except 
as follows : 

(a) Gold bullion owned by a person now holding such gold under a license 
heretofore granted by or under authority of the Secretary of the Treasury, pur- 
suant to the Executive order of August 28, 1933, relating to the hoarding, export, 
and earmarking of gold coin, bullion, or currency and to transactions in foreign 
exchange ; 

(&) Gold coin having a recognized special value to collectors of rare and 
unusual coin (but not including quarter eagles, otherwise known as $2.50 pieces, 
unless held, together with rare and unusual coin, as part of a collection for 
historical, scientific, or numismatic purposes, containing not more than four 
quarter eagles of the same date and design, and struck by the same mint) ; 

(c) Unmelted scrap gold and gold sweepings in an amount not exceeding in 
the aggregate $100 belonging to any one person ; and gold which has been put 
through a process of fabrication for a specific and customary industrial, pro- 
fessional, or ornamental use; 



198 REPORT OF THE SECRETARY OF THE TREASURY 

(d) Gold coin, gold bullion, and gold certificates owned by a Federal Reserve 
bank or the Reconstruction Finance Corporation ; and 

(e) Gold bullion and foreign gold coin now situated in the Philippine Islands, 
American Samoa, Guam, Hawaii, Panama Canal Zone, Puerto Rico, or the 
Virgin Islands of the United States, owned by a person not domiciled or doing 
business in the continental United States ; 

Whereas a reasonable time has elapsed within which any person required 
to deliver gold coin, gold bullion, and gold certificates could pay and deliver 
to the Treasurer of the United States in the manner provided in said order of 
December 28, 1933, the gold coin, gold bullion, and gold certificates situated in 
the United States, owned by such person ; and 

Whereas in my judgment such action is necessary to protect the currency 
system of the United States; 

Now, therefore, I, Henry Morgenthau, Jr., Secretary of the Treasury, do 
hereby fix midnight of Wednesday, January 17, 1934, as the expiration of the 
period within which any gold coin, gold bullion, or gold certificates may be 
paid and delivered to the Treasurer of the United States in compliance with 
the requirements contained in such order of December 28, 1933, as amended. 

In the event that any gold coin, gold bullion, or gold certificates withheld 
in noncompliance with said order and of this order are offered after January 
17, 1934, to the Secretary of the Treasury, the Treasurer of the United States, 
any United States mint or assay office, or to any fiscal agent of the United 
States, there shall be paid therefor only such part or none of the amount 
otherwise payable therefor as the Secretary of the Treasury may from time 
to time prescribe and the whole or any balance shall be retained and applied to 
the penalty payable for failure to comply with the requirements of such order 
and of this order. The acceptance of any such coin, bullion, or certificates 
after January 17, 1934, whether or not a part or all of the amount otherwise 
payable therefor is so retained, shall be without prejudice to the right to collect 
by suit or otherwise the full penalty provided in section 11 (n) of the Federal 
Reserve Act, as amended, less such portion of the penalty as may have been 
retained as hereinbefore provided. 

The definitions of the terms " person ", " United States ", " gold coin ", and 
" gold bullion " contained in section 4 of said order of December 28, 1933, apply 
equally to such terms as used in this order. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 

Approved. 

Franklin D. Roosevelt. 

The White House, January 15, 1934. 



INSTRUCTIONS SENT BY THE SECRETARY OF THE TREASURY ON JANUARY 17, 1934, 
TO THE TREASURER OF THE UNITED STATES, THE UNITED STATES MINTS AND ASSAY 
OFFICES, AND THE FISCAL AGENTS OF THE UNITED STATES, CONCERNING WRONG- 
FULLY WITHHELD GOLD COIN, GOLD BULLION, AND GOLD CERTIFICATES DELIVERED 
AFTER JANUARY 17, 1934 

The order of the Secretary of the Treasury dated January 15, 1934, supple- 
menting the order of December 28, 1933, requiring the delivery of gold coin, 
gold bullion, and gold certificates to the Treasurer of the United States pro- 
vides, in part, as follows : 

" * * * I, Henry Morgenthau, Jr., Secretary of the Treasury, do hereby 
fix midnight of Wednesday, January 17, 1934, as the expiration of the period 
within which any gold coin, gold bullion, or gold certificates may be paid and 
delivered to the Treasurer of the United States in compliance with the require- 
ments contained in such order of December 28, 1933, as amended. 

" In the event that any gold coin, gold bullion, or gold certificates withheld 
in noncompliance with said order and of this order are offered after Janu- 
ary 17, 1934, to the Secretary of the Treasury, the Treasurer of the United 
States, any United States mint or assay office, or to any fiscal agent of the 
United States, there shall be paid therefor only such part or none of the 
amount otherwise payable therefor as the Secretary of the Treasury may from 
time to time prescribe and the whole or any balance shall be retained and 
applied to the penalty payable for failure to comply with the requirements 
of such order and of this order. The acceptance of any such coin, bullion, 



REPORT OF THE SECRETARY OF THE TREASURY 199 

or certificates after January 37, 1934, whether or not a part or all of the 
amount otherwise payable therefor is so retained, shall be without prejudice 
to the right to collect by suit or otherwise the full penalty provided in section 
11 (n) of the Federal Reserve Act, as amended, less such portion of the 
penalty as may have been retained as hereinbefore provided." 

Subject to the rights reserved in said order of January 15, 1934, supple- 
menting the order of December 28, 1933, requiring tbe delivery of gold coin, 
gold bullion, and gold certificates to the Treasurer of the United States, and 
without prejudice to the right to alter or amend these instructions from time 
to time by notice to the Treasurer of the United States, the United States 
mints and assay offices, and the Federal Reserve banks, I do hereby prescribe 
that in the event that any gold coin, gold bullion, or gold certificates held in 
noncompliance with said order of December 28, 1933, as amended, and said 
order of January 15, 1934, are offered after January 17, 1934, to the Secre- 
tary of the Treasury, the Treasurer of the United States, any United States 
mint or assay office, or to any fiscal agent of the United States, the Secretary 
of the Treasury, the Treasurer of the United States, any United States 
mint or assay office, and the fiscal agents of the United States shall pay 
for such gold coin and gold certificates the dollar face amount thereof, and 
for gold bullion $20.67 an ounce. Member banks of the Federal Reserve System 
may receive such gold coin, gold bullion, and gold certificates for account of 
the Treasurer of the United States and forthwith forward the same to the 
Secretary of the Treasury, the Treasurer of the United States, any United 
States mint or assay office, or any fiscal agent of the United States, whichever 
is nearest. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 



PROCLAMATION, JANUARY 31, 1934, REDUCING THE WEIGHT OF THE GOLD DOLLAR 

Whereas, by virtue of section 1 of the act of Congress approved March 14, 
1900 (31 Stat. L. 45), the present weight of the gold dollar is fixed at twenty-five 
and eight-tenths grains of gold nine-tenths fine; and 

Whereas, by section 43, title III of the act approved May 12, 1933 (Public 
No. 10, 73d Cong.), as amended by section 12 of the Gold Reserve Act of 1934, 
it is provided in part as follows: 

" Whenever the President finds, upon investigation, that (1) the foreign 
commerce of the United States is adversely affected by reason of the deprecia- 
tion in the value of the currency of any other government or governments in 
relation to the present standard value of gold, or (2) action under this section 
is necessary in order to regulate and maintain the parity of currency issues 
of the United States, or (3) an economic emergency requires an expansion of 
credit, or (4) an expansion of credit is necessary to secure by international 
agreement a stabilization at proper levels of the currencies of various govern- 
ments, the President is authorized, in his discretion — 

"(a) To direct the Secretary of the Treasury to enter into agreements with 
the several Federal Reserve banks and with the Federal Reserve Board whereby 
the Federal Reserve Board will, and it is hereby authorized to, notwithstanding 
any provisions of law or rules and regulations to the contrary, permit such 
reserve banks to agree that they will, (1) conduct, pursuant to existing law, 
throughout specified periods, open-market operations in obligations of the 
United States Government or corporations in which the United States is the 
majority stockholder, and (2) purchase directly and hold in portfolio for an 
agreed period or periods of time Treasury bills or other obligations of the 
United States Government in an aggregate sum of $3,000,000,000 in addition to 
those they may then hold, unless prior to the termination of such period or 
periods the Secretary shall consent to their sale. No suspension of reserve re- 
quirements of the Federal Reserve banks, under the terms of section 11 (c) of 
the Federal Reserve Act, necessitated by reason of operations under this section, 
shall require the imposition of the graduated tax upon any deficiency in reserves 
as provided in said section 11 (c). Nor shall it require any automatic increase 
in the rates of interest or discount charged by any Federal Reserve bank, as 
otherwise specified in that section. The Federal Reserve Board, with the ap- 
proval of the Secretary of the Treasury, may require the Federal Reserve banks 
to take such action as may be necessary, in the judgment of the Board and of 
tbe Secretary of the Treasury, to prevent undue credit expansion. 



200 REPORT OF THE SECRETARY OF THE TREASURY 

"(b) If the Secretary, when directed by the President, is unable to secure 
the assent of the several Federal Reserve banks and the Federal Reserve 
Board to the agreements authorized in this section, or if operations under the 
above provisions prove to be inadequate to meet the purposes of this section, or 
if for any other reason additional measures are required in the judgment of the 
President to meet such purposes, then the President is authorized — 

"(2) By proclamation to fix the weight of the gold dollar in grains nine- 
tenths fine and also to fix the weight of the silver dollar in grains nine-tenths 
fine at a definite fixed ratio in relation to the gold dollar at such amounts as 
he finds necessary from his investigation to stabilize domestic prices or to 
protect the foreign commerce against the adverse effect of depreciated foreign 
currencies, and to provide for the unlimited coinage of such gold and silver at 
the ratio so fixed, or in case the Government of the United States enters into 
an agreement with any government or governments under the terms of which 
the ratio between the value of gold and other currency issued by the United 
States and by any such government or governments is established, the Presi- 
dent may fix the weight of the gold dollar in accordance with the ratio so 
agreed upon, and such gold dollar, the weight of which is so fixed, shall be the 
standard unit of value, and all forms of money issued or coined by the United 
States shall be maintained at a parity with this standard and it shall be the 
duty of the Secretary of the Treasury to maintain such parity, but in no event 
shall the weight of the gold dollar be fixed so as to reduce its present weight 
by more than 50 per centum. Nor shall the weight of the gold dollar be fixed 
in any event at more than 60 per centum of its present weight. The powers 
of the President specified in this paragraph shall be deemed to be separate, 
distinct, and continuing powers, and may be exercised by him, from time to 
time, severally or together, whenever and as the expressed objects of this sec- 
tion in his judgment may require; except that such powers shall expire two 
years after the date of enactment of the Gold Reserve Act of 1934, unless the 
President shall sooner declare the existing emergency ended, but the President 
may extend such period for not more than one additional year after such date 
by proclamation recognizing the continuance of such emergency " ; and 

Whereas, I find, upon investigation, that the foreign commerce of the United 
States is adversely affected by reason of the depreciation in the value of the 
currencies of other governments in relation to the present standard value of 
gold, and that an economic emergency requires an expansion of credit ; and 

Whereas, in my judgment, measures additional to those provided by sub- 
section (a) of said section 43 are required to meet the purposes of such section ; 
and 

Whereas, I find, from my investigation, that, in order to stabilize domestic 
prices and to protect the foreign commerce against the adverse effect of depre- 
ciated foreign currencies, it is necessary to fix the weight of the gold dollar at 
15%i grains nine-tenths fine, 

Now, therefore, be it known that I, Franklin D. Roosevelt, President of the 
United States, by virtue of the authority vested in me by section 43, title III 
of said act of May 12, 1933, as amended, and by virtue of all other authority 
vested in me, do hereby proclaim, order, direct, declare and fix the weight of the 
gold dollar to be 15% i grains nine-tenths fine, from and after the date and 
hour of this proclamation. The weight of the silver dollar is not altered or 
affected in any manner by reason of this proclamation. 

This proclamation shall remain in force and effect until and unless repealed 
or modified by act of Congress or by subsequent proclamation; and notice is 
hereby given that I reserve the right by virtue of the authority vested in me to 
alter or modify this proclamation as the interest of the United States may seem 
to require. 

In witness whereof I have hereunto set my hand and have caused the seal 
of the United States to be affixed. 

. Done in the city of Washington at 3 : 10 o'clock in the afternoon, eastern 
standard time, this 31st day of January, in the year of our Lord one thousand 
nine hundred and thirty-four, and of the independence of the United States 
the one hundred and fifty-eighth. 

[seal] Franklin D. Roosevelt. 

By the President: 
Coedell Hull, 

Secretary of State, 



REPORT OF THE SECRETARY OF THE TREASURY 201 

STATEMENTS BY SECRETARY OF THE TREASURY MORGENTHAU. JANUARY 31 AND FEB- 
ruary 1, 1934, relating to the purchase and sale of gold by the treasury 

January 31, 1934. 

In connection with the announcement today (Jan. 31) that the Treasury will 
buy gold, the Secretary of the Treasury states that, until further notice, he will 
also sell gold for export to foreign central banks whenever our exchange rates 
with gold standard currencies reach gold export point. Like the purchases, all 
such sales of gold will be made through the Federal Reserve Bank of New 
York as fiscal agent of the United States upon the following terms and condi- 
tions which the Secretary of the Treasury deems most advantageous to the 
public interest : 

Sales of gold will be made at $35 per fine ounce plus one-quarter percent 
handling charge and will be governed by the regulations issued under the Gold 
Reserve Act of 1934. 



February 1, 1934. 

Amplifying his statement issued yesterday, * * * the Secretary of the 
Treasury today made public the following announcement : 

" Beginning Thursday, February 1, 1934, and until further notice, I will buy 
imported fine gold bars through the Federal Reserve Bank of New York as 
fiscal agent of the United States; and other gold, foreign or domestic, through 
any United States Mint or the United States Assay Ofiices at New York or 
Seattle, both at the following rate and upon the following terms and conditions 
deemed by me most advantageous to the public interest : 

" Purchases will be made at the rate of $35 per fine troy ounce, less the usual 
mint charges and less one-quarter of one percent for handling charges, all sub- 
ject to compliance with the regulations issued under the Gold Reserve Act of 
1934." 

It was explained that the phrase " fine gold bars " means gold bars of a fine- 
ness of 0.S99 or finer, such as are ordinarily used in the settlement of inter- 
national balances, carrying a recognized stamp indicating the weight and degree 
of fineness. The mints will purchase imported gold in other condition, such as 
unrefined gold and gold in other forms than in stamped bars, along with the 
domestic gold specified in section 35 of the regulations issued yesterday. 

Regulations as to hoarded gold are unchanged. 



Exhibit 25 

Chronology of action tcith respect to gold from March 6, 1933, to February 1, 

193J, 

1. On March 6, 1933, the President of the United States issued a proclamation 
declaring a banking holiday from March 6 to March 9, 1933, both dates inclu- 
sive, and directing that during the holiday, except as provided in said procla- 
mation, no banking institution should " pay out, export, earmark, or permit the 
withdrawal or transfer in any manner or by any device whatsoever of any gold 
or silver coin or bullion or currency or take any other action which might 
facilitate the hoarding thereof, nor pay out deposits, make loans or discounts, 
deal in foreign exchange, transfers of credit from the United States to any place 
abroad, or transact any other banking business whatsoever." The Secretary of 
the Treasury, with the approval of the President, was authorized to permit any 
bank to perform any or all of the usual banking functions. This action of the 
President was based upon the authority of section 5 (b) of the act of October 
6, 1917 (40 Stat. L. 411) as amended. 

The Treasurer of the United States and the Director of the Mint were 
instructed by separate orders of March 6, 1933, signed by the President and 
the Secretary of the Treasury, to make payments in gold in any form during 
the continuance of the bank holiday only under license issued by the Secretary 
of the Treasury. 

2. On March 9, 1933, a message sent by the President to the Congress trans- 
mitted for enactment the Emergency Banking Act. It was enacted into law 
the same day. Title I of that act approved and confirmed the action taken by 
the President March 6, and amended the act of October 6, 1917. In addition 



202 REPORT OF THE SECRETARY OF THE TREASURY 

section 11 of the Federal Reserve Act was amended by adding a new subsection 
(n), authorizing the Secretary of the Treasury to "require any or all indi- 
viduals, partnerships, associations, and corporations to pay and deliver to the 
Treasurer of the United States any or all gold coin, gold bullion, and gold 
certificates " owned by them. An equivalent amount of any other form of coin 
or currency coined or issued under the laws of the United States was directed 
to be given in exchange for the surrendered gold and gold certificates. 

3. On March 9, after the passage of the Emergency Banking Act, the Presi- 
dent issued a proclamation continuing in full force and effect the provisions of 
the proclamation of March 6, 1933, and the regulations and orders issued there- 
under " until further proclamation by the President." 

4. On March 10 the President issued an Executive order which, among other 
things, prohibited until further order any individual, partnership, association. 
or corporation from exporting or otherwise removing or permitting to be with- 
drawn from the United States or any place subject to the jurisdiction thereof 
any gold coin, gold bullion, or gold certificates, except in accordance with 
regulations prescribed by or under license issued by the Secretary of the 
Treasury. The order provided that permission given to banking institutions to 
perform banking functions should not include authorization to pay out any 
gold coin, gold bullion, or gold certificates, except as authorized by the Secretary 
of the Treasury. 

5. On April 5 the President issued an Executive order forbidding the hoard- 
ing of gold coin, gold bullion, and gold certificates. All persons were required 
to deliver to a Federal Reserve bank or branch or agency thereof or to a mem- 
ber bank all gold coin, gold bullion, and gold certificates, with certain excep- 
tions, including reasonable amounts for use in industry and the arts, and rare 
coins, and a maximum of $100 per person in gold coin and gold certificates. 
Member banks were required to deliver all gold coin, gold bullion, and gold 
certificates owned or received by them (with the same exceptions as afore- 
mentioned) to the Federal Reserve banks of their respective districts. 

6. On April 19, 1933, the Secretary of the Treasury advised that until further 
notice no further licenses would be granted for the export of gold from the 
United States for the purpose of supporting the dollar in foreign exchange. On 
April 20, the President issued an Executive order relating to foreign exchange 
and the earmarking and export of gold coin or bullion or currency. It prohib- 
ited the earmarking for foreign account and the export of gold coin, gold 
bullion, or gold certificates, but authorized the Secretary of the Treasury to 
issue licenses permitting such export under certain conditions. 

7. On April 29, the Secretary of the Treasury issued regulations relating to 
the Executive orders of April 5 and 20 with respect to gold hoarding and the 
gold export embargo. On the previous day Acting Secretary of the Treasury 
Ballantine ruled that " Until further notice the Secretary of the Treasury will 
grant no licenses for the acquisition of gold, gold coin, or bullion by persons 
making application for the same under the Executive order of April 5, 1933, for 
the purpose of meeting maturing obligations calling for payment in gold coin 
or bullion, within the United States or elsewhere, except where such applicants 
have surrendered gold coin, gold bullion, or gold certificates in obedience to the 
Executive order of April 5, 1933." No licenses to acquire gold or gold coin to 
meet maturing gold clause obligations in the United States were, in fact, issued, 
none of the applicants having surrendered gold, gold coin, or gold certificates. 

8. On May 12, the President approved an act of Congress dealing primarily 
with agricultural purchasing power and farm indebtedness, title III of which 
dealt with currency and monetary matters. The act authorized the President 
under certain conditions — 

A. To direct the Secretary of the Treasury to enter into agreements with 
the Federal Reserve banks and Board under which such banks would con- 
duct open-market operations in United States securities, and purchase 
directly from the Treasury and hold in portfolio Treasury bills or other 
Government obligations in an aggregate amount of $3,000,000,000 in addition 
to those they might then hold. 

B. To direct the Secretary of the Treasury to cause to be issued United 
States notes, the aggregate amount of which outstanding at any one time 
should not be more than $3,000,000,000. Such notes and all other coins and 
currency theretofore or thereafter coined or issued by or under the authority 
of the United States were declared to be legal tender for all debts. 



REPORT OF THE SECRETARY OF THE TREASURY 203 

C. By proclamation to fix the weight of the gold dollar and to fix the 
weight of the silver dollar at a definite fixed ratio to the gold dollar and to 
provide for unlimited coinage of gold and silver at the ratio so fixed, or, 
in case the United States enters into an agreement with any government 
under the terms of which the ratio between the value of the gold and other 
currency issued by the United States and by any such government is estab- 
lished, to fix the weight of the gold dollar in accordance with the ratio so 
agreed upon, but in no event was the weight of the dollar to he fixed so as to 
reduce its then existing weight by more than 50 per centum. The gold 
dollar as thus fixed was to be the standard unit of value and all forms of 
money issued by the United States were to be maintained at a parity with 
such standard. 

D. To accept silver at a price not to exceed 50 cents an ounce in payment 
of the debts of foreign governments, up to $200,000,000, and to cause it to be 
coined into silver dollars to be retained in the Treasury for the redemption 
of silver certificates which the act directed to be issued. 

9. By Public Resolution No. 10, approved June 5, 1933, all " gold clauses " con- 
tained in dollar obligations, excepting currency, were declared to be against pub- 
lic policy ; and such obligations, whether or not they contained a " gold clause ", 
were declared to be discharged upon payment, dollar for dollar, in any coin or 
currency which was legal tender at the time of payment. All coins and curren- 
cies of the United States were declared to be legal tender. 

10. On July 2, the President sent a message to the London Economic Confer- 
ence. In it he spoke of " efforts to plan national currencies with the objective 
of giving to those currencies a continuing purchasing power which does not 
greatly vary in terms of the commodities and need of modern civilization." He 
stated that " the United States seeks the kind of a dollar which a generation 
hence will have the same purchasing and debt-paying power as the dollar we 
hope to attain in the near future." 

11. On August 28, the President issued an Executive order, revoking the 
Executive orders of April 5 and April 20, referred to above, and containing more 
complete provisions with respect to the hoarding, export, and earmarking of 
gold coin, bullion, or currency and to transactions in foreign exchange. Returns 
of gold and gold certificate holdings were required and the acquisition, holding, 
and export of gold and gold certificates were regulated. This order was amended 
in a minor respect by the Executive order of January 12, 1934. 

12. On August 29, the President issued an Executive order relating to the sale 
and export of gold recovered from natural deposits. The Secretary of the Treas- 
ury was authorized to receive such gold on consignment for sale (a) to persons 
licensed to acquire gold for use in the arts, industries, and professions, or (6) 
by export to foreign purchasers. 

13. On September 12, 1933, the Secretary of the Treasury issued regulations 
under said Executive orders of August 28 and 29. 

14. On October 22, in a radio address, the President reiterated that the definite 
policy of the Government " has been to restore commodity price levels." He 
stated that when the price level had been restored, " we shall seek to establish 
and maintain a dollar which will not change its purchasing and debt-paying 
power during the succeeding generation." Stating that " it becomes increasingly 
important to develop and apply the further measures which may be necessary 
from time to time to control the gold value of our own dollar at home ", and that 
" the United States must take firmly in its own hands the control of the gold 
value of our dollar ", the President announced the establishment of a Govern- 
ment market for gold in the United States. He stated that he was authorizing 
the Reconstruction Finance Corporation to buy gold newly mined in the United 
States at prices to be determined from time to time after consultation with the 
Secretary of the Treasury and the President. " Whenever necessary to the end 
in view ", the President added, " we shall also buy or sell gold in the world 
market." He continued, " Government credit will be maintained and a sound 
currency will accompany a rise in the American commodity price level." 

15. On October 25, the President issued an Executive order revoking the 
Executive order of August 29 and amending that of August 28 referred to above. 
The order of October 25 authorized the Reconstruction Finance Corporation to 
acquire and to hold, earmark for foreign account, export, or otherwise dispose 
of gold newly mined in the United States and received by the mints and assay 
offices on consignment for such purpose. The Reconstruction Finance Corpora- 
tion announced on the same day that it would receive subscriptions for its 



204 REPORT OF THE SECRETARY OF THE TREASURY 

90-day notes payable in the gold so received. The circular for such notes 
was issued on October 26. The rate at which newly mined gold was to be taken 
was announced from time to time. The rate for gold other than newly mined 
sold was not changed by the orders of August 29 or October 25, or the act of 
the Reconstruction Finance Corporation ; but remained at $20.67 an ounce. 

16. On November 1, the Chairman of the Reconstruction Finance Corporation 
announced that the Corporation had authorized the Federal Reserve Bank of 
New York to dispose of the notes of the Corporation and take therefor certain 
foreign gold. 

17. On December 28. the Secretary of the Treasury issued an order com- 
plementing the President's orders of April 5 and August 28. This order 
required every person subject to the jurisdiction of the United States to deliver 
to the Treasurer of the United States all gold coin, gold bullion, and gold 
certificates situated in the United States, with certain stated exceptions. This 
order did not contain the exception of the earlier orders with respect to holdings 
in amounts of less than $100. An exception relating to rare coin was amended 
in a minor respect on January 11, 1934. 

18. On January 15, the President issued an Executive order authorizing the 
mints and assay offices to receive gold on consignment provided the gold had 
not been withheld unlawfully; and on the same day the Secretary of the 
Treasury directed the mints and assay offices to receive gold newly mined in 
the United States on consignment for the Federal Reserve Bank of New York. 
The rate for gold other than newly mined gold was not changed by the order of 
January 15, or by the purchases by the Federal Reserve bank. 

19. The Secretary of the Treasury, on January 15, supplemented his order of 
December 28 by fixing midnight of January 17, 1934, as the expiration of the 
period within which deliveries of gold coin, gold bullion, and gold certificates 
could be made in compliance with the order of December 28. 

20. On January 17, the Secretary of the Treasury sent instructions to the 
Treasurer of the United States, the United States mints and assay offices, and 
the fiscal agents of the United States, concerning wrongfully withheld gold 
coin, gold bullion, and gold certificates delivered after January 17, 1934. 

21. On January 30, 1934, the Gold Reserve Act of 1934 was approved, and 
the Secretary of the Treasury, with the approval of the President, issued the 
provisional regulations thereunder. This act transferred to the United States 
title to all gold of the Federal Reserve System. It amended the act of May 12, 
1933, so as to provide that the weight of the gold dollar should not be fixed 
in any event at more than 60 per centum of the weight then existing. Gold 
coin was ordered withdrawn from circulation and formed into bars. It was 
provided that redemption of currency in gold should be made only to the 
extent permitted in regulations issued by the Secretary of the Treasury with 
the approval of the President, and in such cases should be made only in gold 
bullion. The act provided that gold in any form might be acquired, trans- 
ported, melted or treated, imported, exported, or earmarked or held in cus- 
tody for foreign or domestic account (except on behalf of the United States) 
only to the extent permitted by the regulations issued under the act. The act 
made provision for a fund for the purpose of stabilizing the exchange value of 
the dollar. 

22. On January 31, the President issued a proclamation fixing the weight 
of the gold dollar at 15 5/21 grains nine-tenths fine. At this weight, the 
statutory value of gold is $35 per fine ounce. 

23. On January 31, the provisional regulations under the Gold Reserve Act 
were amended by adding new articles authorizing the mints (1) to purchase 
newly mined gold, unmelted scrap gold, gold imported after January 30, and 
such other gold as might be authorized from time to time by rulings of the 
Secretary of the Treasury, and (2) to sell gold to licensed persons for indus- 
trial, professional, or artistic use. The purchase price payable by the mints 
was fixed at $35 (less one-fourth of 1 percent), and the sales price at $35 
(plus one-fourth of 1 percent) per troy ounce of fine gold. 

24. The Secretary of the Treasury issued statements with respect to the 
purchase and sale of gold, which are as follows : 

" Beginning Thursday, February 1, 1934, and until further notice, I will buy 
imported fine gold bars through the Federal Reserve Bank of New York as 
fiscal agent of the United States ; and other gold, foreign or domestic, through 
any United States mint or the United States assay offices at New York or 



REPORT OF THE SECRETARY OF THE TREASURY 



205 



Seattle, both at the following rate and upon the following terms and conditions 
deemed by me most advantageous to the public interest : Purchases will be made 
at the rate of $35 per fine troy ounce, less the usual mint charges and less one- 
quarter of 1 percent for handling charges, all subject to compliance with the 
regulations issued under the Gold Reserve Act of 1934." ( Statement of Jan. 31, 
as amplified by statement of Feb. 1.) 

"In connection with the announcement today (Jan. 31) that the Treasury 
will buy gold, the Secretary of the Treasury states that, until further notice, 
he will also sell gold for export to foreign central banks whenever our exchange 
rates with gold standard currencies reach gold export point. Like the pur- 
chases, all such sales of gold will be made through the Federal Reserve Bank of 
New York as fiscal agent of the United States upon the following terms and 
conditions which the Secretary of the Treasury deems most advantageous to 
the public interest : 

" Sales of gold will be made at $35 per fine ounce plus one-quarter percent 
handling charge and will be governed by the regulations issued under the 
Gold Reserve Act of 1934." (Statement of Jan. 31.) 



Exhibit 26 



Daily price quotations for newly mined domestic gold in the United State* 
from Sept. 8, 1933, to Jan. 31, 1934 * 

[Per fine ounce] 



Day of 
month 


Sep- 
tember 


Octo- 
ber 


No- 
vember 


De- 
cember 


Janu- 
ary 


Day of 
month 


Sep- 
tember 


Octo- 
ber 


No- 
vember 


De- 
cember 


Janu- 
ary 


1. „ 






$32. 26 
32.36 
32.57 
32.67 

32.84 

33.05 
33.15 
33.20 
33.32 


$34. 01 
34.01 

34.01 
34. 01 
34.01 
34.01 
34.01 
34.01 

34.01 
34.01 
34.01 
34.01 
34.01 
34.01 


$34.06 
34.06 
34.06 
34.06 
34.06 

34.06 
34.06 
34.06 
34.06 
34.06 
34.06 

34.06 
34.45 


17 




$29. 86 
30.33 
29.18 
29.13 
29.01 

29.59 
29.80 
31.36 
31.54 
31.76 
31.82 

31.96 
32.12 


$33. 56 
33.56 

33.66 
33.76 
33.76 
33.76 
33.76 
33.76 

33.76 
33.85 
33.93 


$34.06 
34.06 
34.06 
34.06 
34.06 
34.06 

34.06 
34.06 
34.06 
34.06 
34.06 


$34. 45 


2 




$31. 88 
32.12 
31.79 
31.55 
31.72 
31.20 

31. 14 
31.26 
30.91 


18 

19 

20 

21 

22. 

23 

24 


$31. 44 
31.64 
32.28 
31.33 
31.75 
31.86 


34.45 


3 




34.45 


4 




34.45 


5 






6 




34.45 


7 




34.45 


8 


$29. 62 
29.12 


34.45 


9 

10 


25 

26 

27 

28.. 

29 

30 

31 . 


31.30 
31.49 
31.35 
31.05 
31.33 
31.46 


34.45 
34.45 


11 

12 


29.10 
29.21 
29.48 
29.77 
30.41 
30.49 


34.45 


13 

14 

15 


30.62 
29.83 

29.00 


33.45 
33.56 
33.56 
33.56 


34.45 
34.45 
34.45 


16-- 













1 Prices shown from Sept. 8 through Oct. 24, 1933, represent the price at which the Secretary of the Treas- 
ury was authorized to sell newly mined domestic gold received on consignment under authority of Execu- 
tive order of Aug. 29, 1933. Quotations from Oct. 25, 1933, through Jan. 15, 1934, represent the price fixed 
for newly mined domestic gold by the Reconstruction Finance Corporation in consultation with the Secre- 
tary of the Treasury and the President, which was offered in payment for notes of the Reconstruction Fi- 
nance Corporation, under authority of Executive order of Oct. 25^1933. (This order revoked the Executive 
order of Aug. 29.) Quotations from Jan. 15, to Jan. 31, 1934, represent the price at which the Federal 
Reserve Bank of New York as fiscal agent purchased newly mined domestic gold consigned to the mints and 
assay offices. Payment for this gold when coined was made by the Treasury with a special issue of 
Treasury bonds, series of Apr. 16, 1934 (see note 1 on p. 8). Under regulations issued by the Treasury 
Department Jan. 31, 1934, the mints are authorized to purchase newly mined domestic gold, unmelted 
scrap gold, and gold imported into the United States after Jan. 30, 1934, at $35 less one-fourth of 1 percent 
and less mint charges. 



An act to 



Exhibit 27 

[Public No. 438, 73d Cong., H. R. 9745] 

authorize the Secretary of the Treasury to purchase silver, issue 
silver certificates, and for other purposes 

Be it enacted by the Senate and House of Representatives of the United 
States of America in Congress assembled, That the short title of this Act shall 
be the " Silver Purchase Act of 1934." 



206 REPORT OF THE SECRETARY OF THE TREASURY 

Sec. 2. It is hereby declared to be the policy of the United States that the 
proportion of silver to gold in the monetary stocks of the United States should 
be increased, with the ultimate objective of having and maintaining, one-fourth 
of the monetary value of such stocks in silver. 

Sec. 3. Whenever and so long as the proportion of silver in the stocks of gold 
and silver of the United States is less than one-fourth of the monetary value 
of such stocks, the Secretary of the Treasury is authorized and directed to 
purchase silver, at home or abroad, for present or future delivery with any 
direct obligations, coin, or currency of the United States, authorized by law, 
or with any funds in the Treasury not otherwise appropriated, at such rates, 
at such times, and upon such terms and conditions as he may deem reasonable 
and most advantageous to the public interest: Provided, That no purchase of 
silver shall be made hereunder at a price in excess of the monetary value 
thereof: And provided further, That no purchases of silver situated in the 
continental United States on May 1, 1934, shall be made hereunder at a price in 
excess of 50 cents a fine ounce. 

Sec. 4. Whenever and so long as the market price of silver exceeds its mon- 
etary value or the monetary value of the stocks of silver is greater than 25 
per centum of the monetary value of the stocks of gold and silver, the Secretary 
of the Treasury may, with the approval of the President and subject to the 
provisions of section 5, sell any silver acquired under the authority of this 
act, at home or abroad, for present or future delivery, at such rates, at such 
times, and upon such terms and conditions as he may deem reasonable and 
most advantageous to the public interest. 

Sec 5. The Secretary of the Treasury is authorized and directed to issue 
silver certificates in such denominations as he may from time to time prescribe 
in a face amount not less than the cost of all silver purchased under the 
authority of section 3, and such certificates shall be placed in actual circulation. 
There shall be maintained in the Treasury as security for all silver certificates 
heretofore or hereafter issued and at the time outstanding an amount of silver 
in bullion and standard silver dollars of a monetary value equal to the face 
amount of such silver certificates. All silver certificates heretofore or here- 
after issued shall be legal tender for all debts, public and private, public 
charges, taxes, duties, and dues, and shall be redeemable on demand at the 
Treasury of the United States in standard silver dollars ; and the Secretary of 
the Treasury is authorized to coin standard silver dollars for such redemption. 

Sec. 6. Whenever in his judgment such action is necessary to effectuate the 
policy of this act, the Secretary of the Treasury is authorized, with the approval 
of the President, to investigate, regulate, or prohibit, by means of licenses or 
otherwise, the acquisition, importation, exportation, or transportation of silver 
and of contracts and other arrangements made with respect thereto ; and to 
require the filing of reports deemed by him reasonably necessary in connection 
therewith. Whoever willfully violates the provisions of any license, order, rule, 
or regulation issued pursuant to the authorization contained in this section 
shall, upon conviction, be fined not more than $10,000 or, if a natural person, 
may be imprisoned for not more than ten years, or both ; and any officer, direc- 
tor, or agent of any corporation who knowingly participates in such violation 
may be punished by a like fine, imprisonment, or both. 

Sec 7. Whenever in the judgment of the President such action is necessary 
to effectuate the policy of this act, he may by Executive order require the 
delivery to the United States mints of any or all silver by whomever owned or 
possessed. The silver so delivered shall be coined into standard silver dollars 
or otherwise added to the monetary stocks of the United States as the Presi- 
dent may determine; and there shall be returned therefor in standard silver 
dollars, or any other coin or currency of the United States, the monetary value 
of the silver so delivered less such deductions for seigniorage, brassage, coinage, 
and other mint charges as the Secretary of the Treasury with the approval of 
the President shall have determined : Provided, That in no case shall the value 
of the amount returned therefor be less than the fair value at the time of such 
order of the silver required to be delivered as such value is determined by the 
market price over a reasonable period terminating at the time of such order. 
The Secretary of the Treasury shall pay all necessary costs of the transporta- 
tion of such silver and standard silver dollars, coin, or currency, including 
the cost of insurance, protection, and such other incidental costs as may be 
reasonably necessary. Any silver withheld in violation of any Executive order 
issued under this section or of any regulations issued pursuant thereto shall be 
forfeited to the United States, and may be seized and condemned by like pro- 



REPORT OF THE SECRETARY OF THE TREASURY 207 

ceedings as those provided by law for the forfeiture, seizure, and condemnation 
of property imported into the United States contrary to law ; and, in addition, 
any person failing to comply with the provisions of any such Executive order ox- 
regulation shall be subject to a penalty equal to twice the monetary value of 
the silver in respect of which such failure occurred. 

Sec. 8. Schedule A of title VIII of the Revenue Act of 1926, as amended 
(relating to stamp taxes), is amended by adding at the end thereof a new 
subdivision to read as follows : 

" 10. Silver, and so forth, sat.es and transfers. — On all transfers of any 
interest in silver bullion, if the price for which such interest is or is to be 
transferred exceeds the total of the cost thereof and allowed expenses, 50 per 
centum of the amount of such excess. On every such transfer there shall be 
made and delivered by the transferor to the transferee a memorandum to which 
there shall be affixed lawful stamps in value equal to the tax thereon. Every 
such memorandum shall show the date thereof, the names and addresses of 
the transferor and transferee, the interest in silver bullion to which it refers, 
the price for which such interest is or is to be transferred, and the cost thereof 
and the allowed expenses. Any person liable for payment of tax under this 
subdivision (or anyone who acts in the matter as agent or broker for any such 
person) who is a party to any such transfer, or who in pursuance of any such 
transfer delivers any silver bullion or interest therein, without a memorandum 
stating truly and completely the information herein required, or who delivers 
any such memorandum without having the proper stamps affixed thereto, with 
intent to evade the foregoing provisions, shall be deemed guilty of a misde- 
meanor, and upon conviction thereof shall pay a fine of not exceeding $1,000 
or be imprisoned not more than six months, or both. Stamps affixed under 
this subdivision shall be canceled (in lieu of the manner provided in section 
S04) by such officers and in such manner as regulations under this subdivision 
shall prescribe. Such officers shall cancel such stamps only if it appears that 
the proper tax is being paid, and when stamps with respect to any transfer 
are so canceled, the transferor and not the transferee shall be liable for any 
additional tax found due or penalty with respect to such transfer. The Com- 
missioner shall abate or refund, in accordance with regulations issued here- 
under, such portion of any tax hereunder as he finds to be attributable to 
profits (1) realized in the course of the transferor's regular business of furnish- 
ing silver bullion for industrial, professional, or artistic use and (a) not result- 
ing from a change in the market price of silver bullion, or (b) offset by con- 
temporaneous losses incurred in transactions in interests in silver bullion 
determined, in accordance with such regulations, to have been specifically related 
hedging transactions; or (2) offset by contemporaneous losses attributable to 
changes in the market price of silver bullion and incurred in transactions in 
silver foreign exchange determined, in accordance with such regulations, to 
have been hedged specifically by the interest in silver bullion transferred. The 
provisions of this subdivision shall extend to all transfers in the United States 
of any interest in silver bullion, and to all such transfers outside the United 
States if either party thereto is a resident of the United States or is a citizen 
of the United States who has been a resident thereof within three months 
lief ore the date of the transfer or if such silver bullion or interest therein is 
situated in the United States ; and shall extend to transfers to the United 
States Government (the tax in such cases to be payable by the transferor), 
but shall not extend to transfers of silver bullion by deposit or delivery at a 
United States mint under proclamation by the President or in compliance with 
any Executive order issued pursuant to section 7 of the Silver Purchase Act 
of 1934. The tax under this subdivision on transfers enumerated in subdivision 
4 shall be in addition to the tax under such subdivision. This subdivision shall 
apply (1) with respect to all transfers of any interest in silver bullion after 
the enactment of the Silver Purchase Act of 1934, and (2) with respect to all 
transfers of any interest in silver bullion on or after May 15, 1934, and prior 
to the enactment of the Silver Purchase Act of 1934, except that in such cases 
it shall be paid by the transferor in such manner and at such time as the 
Commissioner, with the approval of the Secretary of the Treasury, may by 
regulations prescribe, and the requirement of a memorandum of such transfer 
shall not apply. 

"As used in this subdivision — 

" The terms * cost ' means the cost of the interest in silver bullion to the 
transferor, except that (a) in case of silver bullion produced from materials 

90353—35 15 



208 REPORT OF THE SECRETARY OF THE TREASURY 

containing silver which has not previously entered into industrial, commercial, 
or monetary use, the cost to a transferor who is the producer shall be deemed 
to be the market price at the time of production determined in accordance 
with regulations issued hereunder; (b) in the case of an interest in silver 
bullion acquired by the transferor otherwise than for valuable consideration, 
the cost shall be deemed to be the cost thereof to the last previous transferor 
by whom it was acquired for a valuable consideration; and (c) in the case 
of any interest in silver bullion acquired by the transferor (after April 15, 1934) 
in a wash sale, the cost shall be deemed to be the cost to him of the interest 
transferred by him in such wash sale, but with proper adjustment, in accord- 
ance with regulations under this subdivision, when such interests are in silver 
bullion for delivery at different times. 

" The term ' transfer ' means a sale, agreement of sale, agreement to sell, 
memorandum of sale or delivery of, or transfer, whether made by assignment 
in blank or by any delivery, or by any paper or agreement or memorandum 
or any other evidence of transfer or sale ; or means to make a transfer as so 
defined. 

" The term ' interest in silver bullion ' means any title or claim to, or interest 
in, any silver bullion or contract therefor. 

" The term ' allowed expenses ' means usual and necessary expenses actually 
incurred in holding, processing, or transporting the interest in silver bullion 
as to which an interest is transferred (including storage, insurance, and trans- 
portation charges but not including interest, taxes, or charges in the nature 
of overhead), determined in accordance with regulations issued hereunder. 

" The term ' memorandum ' means a bill, memorandum, agreement, or other 
evidence of a transfer. 

" The term ' wash sale ' means a transaction involving the transfer of an 
interest in silver bullion and, within thirty days before or after such transfer, 
the acquisition by the same person of an interest in silver bullion. Only so 
much of the interest so acquired as does not exceed the interest so transferred, 
and only so much of the interest so transferred as does not exceed the interest 
so acquired, shall be deemed to be included in the wash sale. 

" The term ' silver bullion ' means silver which has been melted, smelted, 
or refined and is in such state or condition that its value depends primarily 
upon the silver content and not upon its form." 

Sec. 9. The Secretary of the Treasury is hereby authorized to issue, with the 
approval of the President, such rules and regulations as the Secretary of the 
Treasury may deem necessary or proper to carry out the purposes of this Act, 
or of any order issued hereunder. 

Sec. 10. As used in this Act — 

The term " person " means* an individual, partnership, association, or 
corporation ; 

The term " the continental United States " means the States of the United 
States, the District of Columbia, and the Territory of Alaska ; 

The term " monetary value " means a value calculated on the basis of $1 
for an amount of silver or gold equal to the amount at the time contained 
in the standard silver dollar and the gold dollar, respectively ; 

The term " stocks of silver " means the total amount of silver at the time 
owned by the United States (whether or not held as security for outstanding 
currency of the United States) and of silver contained in coins of the United 
States at the time outstanding; 

The term " stocks of gold " means the total amount of gold at the time owned 
by the United States, whether or not held as a reserve or as security for any 
outstanding currency of the United States. 

Seo. 11. There is authorized to be appropriated, out of any money in the 
Treasury not otherwise appropriated, the sum of $500,000, which shall be avail- 
able for expenditure under the direction of the President and in his discretion, 
for any purpose in connection with the carrying out of this act; and there 
are hereby authorized to be appropriated annually such additional sums as 
may be necessary for such purposes. 

Sec. 12. The right to alter, amend, or repeal this act is hereby expressly 
reserved. If any provision of this act, or the application thereof to any 
person or circumstances, is held invalid, the remainder of the act, and the 
application of such provision to other persons or circumstances shall not be 
affected thereby. 



REPORT OF THE SECRETARY OF THE TREASURY 209 

Sec. 13. All acts and parts of acts inconsistent with any of the provisions 
of this act are hereby repealed, but the authority conferred in this act upon 
the President and the Secretary of the Treasury is declared to be supplemental 
to the authority heretofore conferred. 

Approved, June 19, 1934, 9 p. in. 



Exhibit 28 

Proclamation and orders relating to silver 

PROCLAMATION, DECEMBER 21, 1933, RELATING TO THE COINAGE OF SILVER 

Whereas, by paragraph (2) of section 43, title III, of the act of Congress, 
approved May 12, 1933 (Public No. 10), the President is authorized "By 
proclamation to fix the weight of the gold dollar in grains nine-tenths fine and 
also to fix the weight of the silver dollar in grains nine-tenths fine at a definite 
fixed ratio in relation to the gold dollar at such amounts as he finds necessary 
from his investigation to stabilize domestic prices or to protect the foreign 
commerce against the adverse effect of depreciated foreign currencies, and to 
provide for the unlimited coinage of such gold and silver at the ratio so 
fixed, * * * " ; and 

Whereas, from investigations made by me, I find it necessary, in aid of the 
stabilization of domestic prices and in accordance with the policy and program 
authorized by Congress, which are now being administered, and to protect our 
foreign commerce against the adverse effect of depreciated foreign currencies, 
that the price of silver be enhanced and stabilized ; and 

Whereas a resolution presented by the delegation of the United States of 
America was unanimously adopted at the World Economic and Monetary Con- 
ference in London on July 20, 1933, by the representatives of sixty-six govern- 
ments, which in substance provided that said governments will abandon the 
policy and practice of melting up or debasing silver coins ; that low valued 
silver currency be replaced with silver coins and that no legislation should be 
enacted that will depreciate the value of silver; and 

Whereas a separate and supplemental agreement was entered into, at the 
instance of the representatives of the United States, between China, India, 
and Spain, the holders and users of large quantities of silver, on the one hand, 
and Australia, Canada, Mexico, Peru, and the United States on the other hand, 
as the chief producers of silver, wherein China agreed not to dispose of any 
silver derived from the melting up or debasement of silver coins, and India 
agreed not to dispose of over 35,000,000 ounces of silver per annum during a 
period of four years commencing January 1, 1934, and Spain agreed not to 
dispose of over 5,000,000 ounces of silver annually during said period, and 
both of said governments agreed that at the end of said period of four years 
they would then subject themselves to the general resolution adopted at the 
London Conference, and in consideration of such limitation it was agreed that 
the governments of the five producing countries would each absorb from the 
mines in their respective countries a certain amount of silver, the total amount 
to be absorbed by said producing countries being 35,000,000 ounces per annum 
during the four years commencing the 1st day of January, 1934 ; that such silver 
so absorbed would be retained in each of said respective countries for said 
period of four years, to be used for coinage purposes or as reserves for currency, 
or to otherwise be retained and kept off the world market during such period of 
time, it being understood that of the 35,000,000 ounces the United States was to 
absorb annually at least 24,421,410 ounces of the silver produced in the United 
States during such period of time. 

Now, therefore, finding it proper to cooperate with other governments and 
necessary to assist in increasing and stabilizing domestic prices, to augment the 
purchasing power of peoples in silver-using countries, to protect our foreign 
commerce against the adverse effect of depreciated foreign currencies, and to 
carry out the understanding between the sixty-six governments that adopted the 
resolution hereinbefore referred to ; by virtue of the power in me vested by the 
act of Congress above cited, the other legislation designated for national 
recovery, and by virtue of all other authority in me vested ; 

I, Franklin D. Roosevelt, President of the United States of America, do pro- 
claim and direct that each United States coinage mint shall receive for coinage 



210 REPORT OF THE SECRETARY OF THE TREASURY 

into standard silver dollars any silver which such mint, subject to regulations 
prescribed hereunder by the Secretary of the Treasury, is satisfied has been 
mined, subsequently to the date of this proclamation, from natural deposits in 
the United States or any place subject to the jurisdiction thereof. The Director 
of the Mint, with the voluntary consent of the owner, shall deduct and retain 
of such silver so received fifty percent as seigniorage and for services performed 
by the Government of the United States relative to the coinage and delivery of 
silver dollars. The balance of such silver so received, that is, fifty percent 
thereof, shall be coined into standard silver dollars and the same, or an equal 
number of other standard silver dollars, shall be delivered to the owner or 
depositor of such silver. The fifty percent of such silver so deducted shall be 
retained as bullion by tbe Treasury and shall not be disposed of prior to the 
thirty-first day of December, 1937, except for coining into United States coins. 

The Secretary of the Treasury is authorized to prescribe regulations to carry 
out the purposes of this proclamation. Such regulations shall contain provi- 
sions substantially similar to the provisions contained in the regulations made 
pursuant to the act of Congress, approved April 23, 1918, (40 Statutes at Large, 
page 535), known as the Pittman Act, with such changes as he shall determine, 
prescribing how silver mined, subsequently to the date of this proclamation, 
from natural deposits in the United States or any place subject to the jurisdic- 
tion thereof, shall be identified. 

This proclamation shall remain in force and effect until the thirty-first day 
of December, 1937, unless repealed or modified by act of Congress or by 
subsequent proclamation. 

The present ratio in weight and fineness of the silver dollar to the gold 
dollar shall, for the purposes of this proclamation, be maintained until changed 
by further order or proclamation. 

Notice is hereby given that I reserve the right by virtue of the authority 
vested in me to revoke or modify this proclamation as the interest of the United 
States may seem to require. 

In witness whereof, I have hereunto set my hand and caused the seal of the 
United States to be affixed. 

Done at the city of Washington this 21st day of December, in the year of 
our Lord nineteen hundred and thirty-three, and of the Independence of the 
United States of America the one hundred and fifty-eighth. 

Franklin D. Roosevelt. 

By the President : 

William Phillips, 

Acting Secretary of State. 

official order, june 14, 1934, relating to the issuance of silver cer t ifi cates 

June 14, 1934. 

My Dear Mr. Secretary : Pursuant to the authority vested in me by the act 
approved May 12, 1933, as amended by the Gold Reserve Act of 1934, approved 
January 30, 1934, I hereby authorize and direct the issuance of silver certifi- 
cates, pursuant to law, in any or all of the following denominations, $1. $5, $10, 
$20, and $100, against any and all silver bullion or standard silver dollars now 
in the Treasury not held for redemption of any outstanding silver certificates. 
Sincerely yours, 

(Signed) Franklin D. Roosevelt. 

The honorable the Secretary of the Treasury. 



ORDER OF THE SECRETARY OF THE TREASURY, JUNE 28, 1934, FORBIDDING THE EXPORT 
OF SILVER EXCEPT UNDER LICENSE 

Whereas, section 6 of the Silver Purchase Act of 1934 provides as follows : 
[Section 6 omitted here, see p. 206.] 

Whereas, in my judgment, such action is necessary to effectuate the policy 
of said Silver Purchase Act of 1934 ; 

Now, therefore, I, Henry Morgenthau, Jr., Secretary of the Treasury, do 
hereby prescribe the following provisions for the investigation, regulation, and 
prohibition of the acquisition, importation, exportation, or transportation of 



REPORT OF THE SECRETARY OF THE TREASURY 2H 

silver and of contracts and arrangements made with respect thereto, and re- 
quirements concerning the tiling of reports deemed by the Secretary of the 
Treasury reasonably necessary in connection therewith. 

Section 1. Definitions. — As used in this order the term " person " means an 
individual, partnership, association, or corporation ; and the term " continental 
United States " means the States of the United States, the District of Columbia, 
and the Territory of Alaska. 

Sec. 2. Exportation or transportation from the continental United States. — 
Except as otherwise specifically provided in sections 4, 5, and 6 hereof, no per- 
son shall export or transport from the continental United States, any silver ex- 
cept under license issued pursuant to section 3 of this order. 

Sec. 3. Licenses. — The Secretary of the Treasury, subject to such regulations 
as he may prescribe, acting directly or through such agency or agencies as he 
may designate, may issue licenses authorizing the exportation or transportation 
from the continental United States of silver which the Secretary of the Treas- 
ury, or the designated agency, is satisfied : 

(a) Is required to fulfill an obligation to deliver such silver outside of the 
continental United States, incurred or assumed by the applicant on or before 
the date of this order ; 

(6) Has been owned on and continuously after the date of this order by a 
recognized foreign government, foreign central bank, or the Bank for Inter- 
national Settlements ; 

(o) Was imported for prompt reexport, or was imported in silver-bearing 
materials under an agreement to refine such materials and export the silver 
so refined ; 

(d) Is of a fineness of O.S or less; or 

(e) With the approval of the President, for other purposes not inconsistent 
with the purposes of the Silver Purchase Act of 1934. 

Sec. 4. Fabricated silver. — Silver contained in articles fabricated and held 
in good faith for a specific and customary use and not for their value as 
silver bullion may be exported, or transported from the continental United 
States, without the necessity of obtaining a license : Provided, That a state- 
ment containing such information as may be required by the Secretary of 
the Treasury shall have been executed, sworn to, and filed in duplicate with 
the collector of customs at the port of shipment from the continental United 
States or with the postmaster at the place of mailing; and such collector or 
postmaster shall have endorsed on the duplicate copy of such affidavit that 
he is satisfied that the shipment from the continental United States is not 
being made for the purpose of holding or disposing of such articles outside 
of the continental United States primarily for their silver content : Provided, 
That persons leaving the continental United States may carry with them such 
articles owned by them and for their personal use in their fabricated form, 
of a fine silver content not exceeding 100 troy ounces without the necessity 
of filing such affidavit or obtaining an export license under this order. 

Sec. 5. Metals containing silver. — Metals containing not more than 50 troy 
ounces of fine silver per short ton may be exported or transported from the 
continental United States without the necessity of obtaining a license under 
this order : Provided, That the collector of customs at the port of export or 
the postmaster at the place of mailing may require the furnishing, of such 
evidence and the execution of such affidavits as are necessary to satisfy him 
as to the silver content of the metals. 

Sec. 6. Silver coin. — Silver coins may be exported or transported from the 
continental United States without the necessity of obtaining a license under 
this order. 

Sec. 7. Collectors of customs and postmasters. — At the time any license is 
issued under section 3, the issuing agency shall transmit a copy thereof to the 
collector of customs at the port of export designated in the license. The collec- 
tor of customs shall not permit the exportation or transportation from the 
continental United States of silver in any form except upon surrender of a 
license issued under section 3, a copy of which has been received by him from 
the agency authorized to issue such license : Provided, That a license under 
this order shall not be required to export or transport from the United States 
silver described in sections 4, 5, and 6, if the provisions of such sections 
respectively are complied with. In the event that the shipment is to be made 
by mail, a copy of the license shall be sent to the postmaster of the post 
office designated in the application, who will act under the instructions of 
the Postmaster General in regard thereto. 



212 REPORT OF THE SECRETARY OF THE TREASURY 

Sec. 8. Exports prohibited by other orders, etc. — The provisions of sections 
3, 4, 5, and 6 shall not be construed to authorize any exportation or transpor- 
tation from the continental United States prohibited by any other order or by 
any law, ruling, or regulation. 

Sec. 9. Reports.— The Secretary of the Treasury shall require the filing of 
such reports, in such manner, at such times, and containing such information, 
as is deemed by him reasonably necessary in connection with the investigation, 
regulation, or prohibition of acquisitions, importations, exportations, or trans- 
portations of silver and of contracts and arrangements made with respect 
thereto. 

Sec. 10. Regulations. — The Secretary of the Treasury is hereby authorized 
and empowered to issue such regulations as he may deem necessary to carry 
out the purposes hereof. Licenses and permits granted in accordance with the 
provisions of this order and such regulations may be issued through such officers 
and agencies as the Secretary of the Treasury may designate. 

Sec. 11. Penalties. — All persons are hereby informed that section 7 of the 
Silver Purchase Act of 1934 prescribes penalties for willful violation of any of 
the provisions hereof or of any license, order, rule or regulations issued or pre- 
scribed under the authority hereof. 

This order and any regulations, rules, and licenses prescribed or issued here- 
under may be modified or revoked at any time. 



Approved : 

Franklin D. Roosevelt, 

The White House, June 2S, 1934. 



Henry Morgenthatt, Jr., 
Secretary of the Treasury. 



Exhibit 29 

Proclamation and Executive orders relating to banking, foreign exchange, and 

related matters 

PROCLAMATION, DECEMBER 30, 1933, RELATIVE TO THE CONTROL OVER STATE BANKING 

INSTITUTIONS 

Whereas, on March 6, 1933, I, Franklin D. Roosevelt, President of the United 
States of America, by virtue of authority vested in me by the act of October 
6. 1917 (40 Stat. L. 411), as amended, issued a proclamation declaring that 
an emergency existed and that a national banking holiday be observed ; 

Whereas, on March 9, 1933, I issued a proclamation continuing the terms 
and conditions of said proclamation of March 6, 1933, in full force and effect 
until further proclamation by the President : 

Whereas, on March 10, 1933, I issued an Executive order authorizing the 
appropriate authority having immediate supervision of banking institutions 
in each State or any place subject to the jurisdiction of the United States 
to permit any banking institution not a member of the Federal Reserve System 
to perform any or all of its usual banking functions except as otherwise 
provided ; 

Whereas, the Secretary of the Treasury, pursuant to authority granted by 
other provisions of the said Executive order of March 10, 1933, has acted upon 
all requests for licensing of banks members of the Federal Reserve System ; 

Whereas, the Federal Deposit Insurance Corporation has acted upon all 
applications to it for membership in the Temporary Federal Deposit Insurance 
Fund as provided for in section 12B (y) of the Federal Reserve Act as amended 
by section 8 of the act of June 16, 1933, Public No. 66, Seventy-third Congress, 
and has admitted to the said fund all applicant banks which are duly and 
properly qualified; and 

Whereas, it is now appropriate that the banking authority in each State 
and any place subject to the jurisdiction of the United States should have 
and exercise the sole responsibility for, and control over, banking institutions 
not members of the Federal Reserve System ; 

Now, therefore, I, Franklin D. Roosevelt, President of the United States, 
in order to assure that the banking authority in each State and in any place 
subject to the jurisdiction of the United States shall have and exercise the sole 



REPORT OF THE SECRETARY OF THE TREASURY 213 

responsibility for, and control over, banking institutions which are not members 
of the Federal Reserve System, do hereby proclaim, order, direct, and declare 
that the proclamations of March 6, 1933, and March 9, 1933, and the Executive 
order of March 10, 1933, and all orders and regulations pursuant thereto, are 
amended, effective the first day of January, nineteen hundred and thirty-four, 
to exclude from their scope banking institutions which are not members of 
the Federal Reserve System : Provided, hoicever, That no banking institutions 
shall pay out any gold coin, gold bullion, or gold certificates, except as author- 
ized by the Secretary of the Treasury, nor allow the withdrawal of any 
currency for hoarding, nor engage in any transactions in foreign exchange 
except such as may be undertaken for legitimate and normal business require- 
ments, for reasonable traveling and other personal requirements, and for the 
fulfillment of contracts entered into prior to March 6, 1933. 1 

In witness whereof I have hereunto set my hand and caused the seal of 
the United States to be affixed. 

Done in the city of Washington this 30th day of December in the year 
of our Lord one thousand nine hundred and thirty-three, and of 
[seal] the Independence of the United States the one hundred and fifty- 
eighth. 

Franklin D. Roosevelt. 
By the President : 

William Phillips, 

Acting Secretary of State. 



EXECUTIVE ORDER, JANUARY 15, 1934, AMENDING THE EXECUTIVE ORDER OF MARCH 10, 
1933, AND THE PROCLAMATION OF DECEMBER 30, 1933, CONCERNING THE OPERATION 
OF BANKS 

By virtue of the authority vested in me by section 5 (b) of the act of 
October 6, 1917 (40 Stat. L. 411), as amended by the act of March 9, 1933, and 
by section 4 of said act of March 9, 1933, and by virtue of all other authority 
vested in me, I, Franklin D. Roosevelt, President of the United States of 
America, do hereby issue the following Executive order : 

Section 1. The last two paragraphs of the Executive order of March 10, 
1933, concerning the operation of banks, are amended, effective from the date 
of this order, by striking out the following: 

" nor to engage in any transaction in foreign exchange except such as may be 
undertaken for legitimate and normal business requirements, for reasonable 
traveling and other personal requirements, and for the fulfillment of contracts 
entered into prior to March 6, 1933. 

" Every Federal Reserve bank is authorized and instructed to keep itself 
currently informed as to transactions in foreign exchange entered into or con- 
summated within its district and shall report to the Secretary of the Treasury 
all transactions in foreign exchange which are prohibited." 

The Secretary of the Treasury is authorized to amend the licenses heretofore 
issued with his approval by the Federal Reserve banks under the Executive 
order of March 10, 1933, by issuing through the Federal Reserve banks amenda- 
tory licenses removing the restriction upon transactions in foreign exchange 
contained in the licenses heretofore issued. 

Seo. 2. The proclamation of December 30, 1933, relating to the licensing of 
banking institutions which are not members of the Federal Reserve System 
is amended, effective from the date of this order, by striking out the following : 
" nor to engage in any transaction in foreign exchange except such as may be 
undertaken for legitimate and normal business requirements, for reasonable 
traveling and other personal requirements, and for the fulfillment of contracts 
entered into prior to March 6, 1933." 

Sec. 3. The amendment of such Executive order of March 10, 1933, or of any 
licenses issued thereunder, and the amendment of such proclamation of Decem- 
ber 30, 1933, shall not affect any act done, or any order, decision, or finding 
made, or relieve any person from the consequences of any unauthorized act 
committed prior to the date of this Executive order ; nor shall the amendment 
of the Executive order of March 10, 1933, or the proclamation of December 30, 

1 Amended by Executive order of Jan. 15, 1934, see below. 



214 REPORT OF THE SECRETARY OF THE TREASURY 

1933, relieve any person from the obligation of complying with the terms of 
the Executive order of January 15, 1934, relating to the export of coin and 
currency and transactions in foreign exchange, or the regulations or licenses 
issued thereunder, or of any other provision of law affecting transactions in 
foreign exchange. 

Franklin D. Roosevelt. 
The White House, 

January 15, 1934- 

EXECUTIVE ORDER, JANUARY 15, 1934, REGULATING TRANSACTIONS IN FOREIGN 
EXCHANGE, TRANSFERS OF CREDIT, AND THE EXPORT OF COIN AND CUKRENCY 

Bv virtue of the authority vested in me by section 5 (b) of the act of October 
6, 1917 (40 Stat. L. 411), as amended by section 2 of the act of March 9, 1933, 
entitled "An act to provide relief in the existing national emergency in 
banking, and for other purposes ", I, Franklin D. Roosevelt, President of the 
United States of America, do declare that a period of national emergency con- 
tinues to exist, and by virtue of said authority and of all other authority vested 
in me, do hereby prescribe the following regulations for the investigation, regu- 
lation, and prohibition of transactions in foreign exchange, transfers of credit 
between or payments by banking institutions as herein defined, and export of 
currency or silver coin, by any person within the United States or any place 
subject to the jurisdiction thereof: 

Section 1. Every transaction in foreign exchange, transfer of credit between 
any banking institution within the United States and any banking institution 
outside of the United States (including any principal, agent, home office, branch, 
or correspondent outside of the United States of a banking institution within 
the United States), and the export or withdrawal from the United States of 
any currency or silver coin which is legal tender in the United States, by any 
person within the United States, is hereby prohibited, except under license 
therefore issued pursuant to this Executive order : Provided, hoicever, That, 
except as prohibited under regulations prescribed by the Secretary of the Treas- 
ury, foreign exchange transactions and transfers of credit may be carried out 
without a license for (a) normal commercial or business requirements, (b) 
reasonable traveling and other personal requirements, or (c) the fulfillment of 
legally enforceable obligations incurred prior to March 9, 1933. 

Sec 2. Possessions of the United States. — Except as prohibited in regulations 
prescribed by the Secretary of the Treasury, transfers of credit between bank- 
ing institutions in the continental United States and banking institutions in 
other places subject to the jurisdiction of the United States (including princi- 
pals, agents, home offices, branches, or correspondents in such other places, of 
banking institutions within the continental United States), may be carried out 
without a license. 

Seo. 3. Licenses. — The Secretary of the Treasury, acting directly or through 
any agencies that he may designate, and the Federal Reserve banks acting in 
accordance with such rules and regulations as the Secretary of the Treasury 
may from time to time prescribe, are hereby designated as agencies for the 
granting of licenses as hereinafter provided. Licenses may be granted author- 
izing such transactions in foreign exchange, transfers of credit, and exports of 
currency (other than gold certificates), or silver coin in such specific cases or 
classes of cases as the Secretary of the Treasury may determine in regulations 
prescribed hereunder and rulings made pursuant thereto. 

Sec. 4. Reports. — The Federal Reserve banks shall keep themselves currently 
informed as to foreign exchange transactions entered into or consummated, 
and transfers of credit made between banking institutions outside of the conti- 
nental United States and banking institutions, in their districts, and report to 
the Secretary of the Treasury all transactions in foreign exchange and all such 
transfers of credit not permitted under sections 1 or 2 hereof which are effected 
or attempted in their districts without a license. 

Sec. 5. Regulations. — The Secretary of the Treasury is authorized and em- 
powered to prescribe from time to time regulations to carry out the purposes 
of this order, and to provide in such regulations or by rulings made pursuant 
thereto, the conditions under which licenses may be granted by the Federal 
Reserve banks and by such other agencies as the Secretary of the Treasury 
may designate; and the Secretary of the Treasury may require any person 
engaged in any transaction, transfer, export, or withdrawal referred to in 



REPORT OF THE SECRETARY OF THE TREASURY 215 

this Executive order to furnish under oath complete information relative thereto, 
including the production of any books of account, contracts, letters, or other 
papers, in connection therewith in the custody or control of such person either 
before or after such transaction, transfer, export, or withdrawal is completed. 

Sec. 6. Penalties. — Whoever willfully violates or knowingly participates in 
the violation of any provision of this Executive order or of any license, order, 
rule, or regulation issued or prescribed hereunder, shall be subject to the pen- 
alties provided in section 5 (b) of the act of October 6, 1917, as amended by 
section 2 of the act of March 9, 1933. 

Seo. 7. Definitions. — As used in this Executive order, the term " United 
States" means the United States and any place subject to the jurisdiction 
thereof ; the term " continental United States " means the States of the United 
States, the District of Columbia, and the Territory of Alaska ; the term " per- 
son " means an individual, partnership, association, or corporation ; and the 
term " banking institution " includes any person engaged primarily or inci- 
dentally in the business of banking, of granting or transferring credits, or of 
purchasing and selling foreign exchange or procuring purchasers and sellers 
thereof, as principal or agent ; and, for the purposes of this order, each home 
office, branch, principal, agent, or correspondent of any person so engaged 
shall be regarded as a separate " banking institution." 

Sec. 8. Section 8 of the Executive order of August 28, 1933, relating to the 
hoarding, export, and earmarking of gold coin, bullion, or currency, and to 
transactions in foreign exchange, is hereby revoked. 

This Executive order and any rules, regulations, or licenses prescribed or 
issued hereunder may be modified or revoked at any time. 

Franklin D. Roosevelt. 

The White House, 

January 15, 1934. 



TAXATION i 
Exhibit 30 

[Public No. 83, 73d Cong., H. R. 6131] 

An act to raise revenue by taxing certain intoxicating liquors, and for other 

purposes 

Be it enacted by the Senate and House of Representatives of the United 
States of America in Congress assembled, 

Title I 

Section 1. This act may be cited as the " Liquor Taxing Act of 1934." 

Sec 2. Paragraphs (3) and (4) of subdivision (a) of section 600 of the 
Revenue Act of 1918, as amended (relating to the tax on distilled spirits gen- 
erally and the tax on distilled spirits diverted for beverage purposes) [U. S. C, 
Sup. VI, title 26, sec. 1150 (a) (1) and (2)], are amended to read as follows: 

"(3) On and after January 1, 1928, and until the effective date of title I of 
the Liquor Taxing Act of 1934, $1.10 on each proof gallon or wine gallon when 
below proof and a proportionate tax at a like rate on all fractional parts of 
such proof or wine gallon ; and 

"(4) On and after the effective date of title I of the Liquor Taxing Act of 
1934, $2.00 on each proof gallon or wine gallon when below proof and a pro- 
portionate tax at a like rate on all fractional parts of such proof or wine 
gallon." 

Seo. 3. Subdivision (c) of section 600 of the Revenue Act of 1918 (relating 
to the internal revenue tax on imported perfumes containing distilled spirit) 
[U. S. C, Sup. VI. title 26, sec. 1150 (a) (4)], is amended by striking out 
" $1.10 per wine gallon " and inserting in lieu thereof " $2.00 per wine gallon." 



1 These exhibits do not include the following laws which modify the tax system : 
Public 216, May 10, 1934, Revenue Act of 1934 ; amendments to the Agricultural Adjust- 
ment Act of May 12. 1933, so as to include cattle and other products (Public 142, 
April 7, 1934) and sugar beets and sugar cane (Public 213, May 9, 1934) as basic 
agricultural commodities ; Public 169. April 21, 1934, to place the cotton industry on a 
sound commercial basis ; Public 483, June 28, 1934, to place the tobacco-growing 
industry on a sound financial and economic basis ; and section 8 of Public 438, June 19, 
1934, Silver Purchase Act. This section appears on page 207 of this report. 



216 REPORT OF THE SECRETARY OF THE TREASURY 

Sec 4. In lieu of the rate of drawback provided in section 3329 of the Re- 
vised Statutes, as amended [U. S. C, Sup. VI, title 26, sec. 1239], the rate of 
drawback allowed upon the exportation of distilled spirits exported on or after 
the effective date of this title shall be equal to the rate of the internal revenue 
tax paid in respect of the distilled spirits exported but shall not exceed a rate 
of $2.00 per proof gallon. 

Sec. 5. Section 3309 of the Revised Statutes, as amended (relating to the 
tax on deficiencies in distilled spirits production) [U. S. C, Sup. VI, title 26, 
sec. 1197], is amended by striking out "at the rate of $1.10" wherever such 
phrase appears and inserting in lieu thereof " at the rate of tax imposed by 
law." 

Sec. 6. So much of section 611 of the Revenue Act of 1918, as amended (re- 
lating to the tax on still wines) [U. S. C, Sup. VI, title 26, sec. 1300 (a) (1)], 
as reads : 

" On wines containing not more than 14 per centum of absolute alcohol, 4 
cents per wine gallon, the per centum of alcohol taxable under this section to be 
reckoned by volume and not by weight ; 

" On wines containing more than 14 per centum and not exceeding 21 per 
centum of absolute alcohol, 10 cents per wine gallon ; 

" On wines containing more than 21 per centum and not exceeding 24 per 
centum of absolute alcohol, 25 cents per wine gallon ; 

"All such wines containing more than 24 per centum of absolute alcohol by 
volume shall be classed as distilled spirits and shall pay tax accordingly." 
is amended to read as follows : 

" On wines containing not more than 14 per centum of absolute alcohol, 10 
cents per wine gallon, the per centum of alcohol under this section to be reck- 
oned by volume and not by weight ; 

" On wines containing more than 14 per centum and not exceeding 21 per 
centum of absolute alcohol, 20 cents per wine gallon ; 

" On wines containing more than 21 per centum and not exceeding 24 per 
centum of absolute alcohol, 40 cents per wine gallon ; 

"All such wines containing more than 24 per centum of absolute alcohol by 
volume shall be classed as distilled spirits and shall be taxed accordingly." 

Sec. 7. So much of section 613 of the Revenue Act of 1918 [U. S. C, Sup. VI, 
title 26, sec. 1300 (a) (2)] as reads: 

" On each bottle or other container of champagne or sparkling wine, 12 cents 
on each one-half pint or fraction thereof ; 

" On each bottle or other container of artificially carbonated wine, 6 cents on 
each one-half pint or fraction thereof; 

" On each bottle or other container of liqueurs, cordials, or similar compounds, 
by whatever name sold or offered for sale, containing sweet wine fortified with 
grape brandy, 6 cents on each one-half pint or fraction thereof." 
is amended to read as follows : 

" On each bottle or other container of champagne or sparkling wine, 5 cents 
on each one-half pint or fraction thereof ; 

" On each bottle or other container of artificially carbonated wine, 2% cents 
on each one-half pint or fraction thereof ; 

" On each bottle or other container of liqueurs, cordials, or similar compounds, 
by whatever name sold or offered for sale, containing sweet wine fortified with 
grape brandy, 2% cents on each one-half pint or fraction thereof ; 

"Any of the foregoing articles containing more than 24 per centum of absolute 
alcohol by volume shall be classed as distilled spirits and shall be taxed 
accordingly." 

Sec. 8. Section 612 of the Revenue Act of 1918, as amended (relating to the 
tax on grape brandy and wine spirits withdrawn and used in the fortification of 
wines) [U. S. C, Sup. VI, title 26, sec. 1301], is amended by striking out "10 
cents per proof gallon " and inserting in lieu thereof " 20 cents per proof 
gallon." 

Sec. 9. (a) Section 608 of the Revenue Act of 1918, as amended (relating to 
the tax on malt liquors) [U. S. C, Sup. VI, title 26, sec. 1330 (a)], is amended 
by striking out " a tax of $6.00 " and inserting in lieu thereof " a tax of $5.00." 

(b) Subsection (a) of section 1 of the act entitled "An act to provide reve- 
nue by the taxation of certain nonin toxica ting liquor, and for other purposes ", 
approved March 22, 1933, is hereby repealed. 

(c) Paragraph "First" of section 3244 of the Revised Statutes, as amended, 
is amended to read as follows : 



REPORT OF THE SECRETARY OF THE TREASURY 217 

"First. Brewers shall pay $100 in respect of each brewery: Provided, That 
any brewer of less than 500 barrels a year shall pay the sum of $50. Every 
person who manufactures fermented liquors of any name or description for 
sale, from malt, wholly or in part, or from any substitute therefor, shall be 
deemed a brewer." 

Sec. 10. (a) Upon all distilled spirits produced in or imported into the 
United States upon which the internal revenue tax imposed by law has been 
paid, and which, on the day this title takes effect, are held by any person and 
intended for sale or for use in the manufacture or production of any article 
intended for sale, there shall be levied, assessed, collected, and paid a floor 
tax equal to the amount, if any, by which the tax provided for under this title 
exceeds the tax so paid, not including in the computation of the tax so paid 
the 30-cent tax imposed by section 605 of the Revenue Act of 1918. 

(b) Upon all articles specified in section 6 or 7 of this title produced in or 
imported into the United States upon which the internal revenue tax imposed 
by law has been paid, and which, on the day this title takes effect, are held 
by any person and intended for sale or for use in the manufacture or produc- 
tion of any article intended for sale, there shall be levied, assessed, collected, 
and paid a floor tax equal to the amount, if any, by which the tax provided 
for under such sections of this title exceeds the tax so paid, not including in 
the computation of the tax so paid the 30-cent tax imposed by section 605 of 
the Revenue Act of 1918. 

(c) Upon all wines held by the producer thereof upon the day this title takes 
effect and intended for sale or for use in the manufacture or production of any 
article intended for sale, there shall be levied, assessed, collected, and paid 
a floor tax equal to the amount, if any, by which the tax provided for under 
section 8 of this title exceeds the tax paid upon the grape brandy or wine 
spirits used in the fortification of such wine. 

(d) The person required by this section to pay any floor tax shall, within 
thirty days after the effective date of this title, make return under oath, in 
such form and under such regulations as the Commissioner of Internal Reve- 
nue, with the approval of the Secretary of the Treasury, shall prescribe. Pay- 
ment of the tax shown to be due may be extended to a date not exceeding 
seven months after the effective date of this title, upon the filing of a bond 
for payment in such form and amount and with such sureties as the Commis- 
sioner of Internal Revenue, with the approval of the Secretary of the Treasury, 
may prescribe. All provisions of law (including penalties) applicable in re- 
spect of internal revenue taxes on distilled spirits or wines shall, insofar as 
applicable and not inconsistent with this section, be applicable in respect of 
the taxes imposed by this section. 

(e) As used in this section and in title II, the term "person" includes an 
individual, a partnership, an association, and a corporation: and the term 
" distilled spirits " includes products produced in such manner that the person 
producing them is a rectifier within the meaning of section 3244 of the Revised 
Statutes, as amended. 

Sec. 11. As used in this act, the term " internal revenue taxes" does not 
include taxes imposed under the Agricultural Adiustment Act. 

Sec. 12. That section 5 of the act entitled "An act making appropriations 
for the Post Office Department for the year ending June 30, 1918", approved 
March 3. 1917. as amended, is amended to read as follows: 

" Seo. 5. Whoever shall order, purchase, or cause intoxicating liquors to be 
transported in interstate commerce, except for scientific sacramental, medici- 
nal, and mechanical purposes, into any State, Territory, or the District of 
Columbia, the laws of which prohibit the manufacture or sale therein of 
intoxicating liquors for beverage purposes, shall be fined not more than $1,000 
or imprisoned not more than six months, or both ; and for any subsequent 
offense shall be imprisoned not more than one year." 

Nothinsr in this act shall be construed to amend or repeal any provision of 
section 1110 of the Revenue Act of 1917. 

Sec. 13. This title shall take effect on the day following its enactment. 

Title II 

Sec. 201. No person shall (except as provided in section 202) transport, 
possess, buy, sell, or transfer any distilled spirits, unless the immediate con- 
tainer thereof has affixed thereto a stamp denoting the quantity of distilled 
spirits contained therein and evidencing payment of all internal revenue taxes 
imposed on such spirits. The provisions of this title shall not apply to — 



218 REPORT OF THE SECRETARY OF THE TREASURY 

(a) Distilled spirits placed in a container for immediate consumption on 
the premises or for preparation for such consumption ; 

(b) Distilled spirits in bond or in customs custody; 

(c) Distilled spirits in immediate containers required to be stamped under 
existing law; 

(d) Distilled spirits in actual process of rectification, blending, or bottling, 
or in actual use in processes of manufacture; 

(e) Distilled spirits on which no internal revenue tax is required to be 
paid; 

(f) Distilled spirits not intended for sale or for use in the manufacture or 
production of any article intended for sale ; or 

(g) Any regularly established common carrier receiving, transporting, de- 
livering, or holding for transportation or delivery distilled spirits in the 
ordinary course of its business as a common carrier. 

Sec. 202. Every person who, on the effective date of this title, holds for sale 
(or use in the manufacture or production of an article intended for sale) any 
distilled spirits in containers required to be stamped by section 201, on which 
all internal revenue taxes have been paid, may possess such spirits, but shall, 
not later than the tenth day after such date, apply for, and shall be sold (in 
accordance with section 203) the requisite stamps. Such stamps shall be 
promptly affixed to the immediate containers of such spirits, except that when 
such spirits contained in bottles in closed cases are held for sale or sold 
otherwise than at retail, such stamps need not be affixed until the cases are 
opened or sold at retail, when such stamps shall be immediately affixed to the 
bottles, but such stamps shall be sold or transferred in connection with any 
sale or transfer of such spirits and the person in possession of such spirits 
shall be in possession of such stamps therefor. 

Sec. 203. Any person placing or intending to place any distilled spirits xipon 
which all internal revenue taxes have been paid into any container upon 
which a stamp is required by this title, or withdrawing or intending to with- 
draw any imported spirits in such containers from customs custody, shall be 
entitled to purchase sufficient stamps for stamping such containers. Such 
stamps shall be issued by the Commissioner of Internal Revenue to each 
collector of internal revenue, upon his requisition, in such numbers as may 
be necessary in his district, and shall be sold by the collectors to persons en- 
titled thereto upon application therefor and compliance with regulations under 
this title, at a price of 1 cent for each stamp, except that in the case of stamps 
for containers of less than one-half pint the price shall be one-quarter of 1 cent 
for each stamp. When in his judgment there is no danger to the revenue, 
and upon the giving of such bonds or other security as he may deem necessary, 
the Commissioner may authorize (1) the sale prior to the effective date of this 
title of such stamps and (2) the sale of such stamps to importers for stamping 
containers in the country from which imported. 

Sec. 204. Every person emptying any container stamped under the provisions 
of this title shall at the time of emptying such container destroy the stamp 
thereon. 

Sec. 205. The Commissioner, with the approval of the Secretary of the 
Treasury, shall prescribe (a) regulations with respect to the time and manner 
of applying for. issuing, affixing, and destroying stamps required by this title, 
the form and denominations of such stamps, proof that applicants are entitled 
to such stamps, and the method of accounting for receipts from the sale of 
such stamps, and (b) such other regulations as be shall deem necessary for 
the enforcement of this title. 

Sec. 206. All distilled spirits found in any container required to bear a stamp 
by this title, which container is not stamped in compliance with this title and 
regulations issued thereunder, shall be forfeited to the United States. Dis- 
tilled spirits placed in such containers prior to the effective date of this title 
shall not be subject to this section until the expiration of 10 days after the 
effective date of this title, nor (when it is established that application for 
stamps therefor was made within the proper time) until such stamps are 
received by the applicant. 

Sec. 207. Any person who violates any provision of this title, or who. with 
intent to defraud.^ falsely makes, forges, alters, or counterfeits any stamp made 
or used under this title, or who uses, sells, or has in his possession any such 
Gorged, altered, or counterfeited stamp, or any plate or die used or which may 
beused in the manufacture thereof, or any stamp required to be destroyed by 
this title, or who makes, uses, sells, or has in his possession any paper in 



REPORT OF THE SECRETARY OF THE TREASURY 219 

imitation of the paper used in the manufacture of any such stamp, or who re- 
uses any stamp required to be destroyed by this title, or who places any dis- 
tilled spirits in any bottle which has been filled and stamped under this title 
without destroying the stamp previously affixed to such bottle, or who affixes 
any stamp issued under this title to any container of distilled spirits on which 
any tax due is unpaid, or who makes any false statement in any application for 
stamps under this title, or who has in his possession any such stamps obtained 
by him otherwise than as provided in sections 202 and 203, or who sells or 
transfers any such stamp otherwise than as provided in section 202, shall, on 
conviction, be punished by a fine not exceeding $1,000, or by imprisonment at 
hard labor not exceeding five years, or by both. Any officer authorized to en- 
force any provisions of law relating to internal revenue stamps is authorized to 
enforce the provisions of this section and the provisions of section 7 of the 
act of March 3, 1897, relating to the bottling of distilled spirits in bond. 

Sec. 20S. This title shall take effect on the thirtieth day following the date 
of the enactment of this act, except that if on or before the twentieth day fol- 
lowing the date of the enactment of this act the Secretary of the Treasury finds 
that it is impracticable to put this title into effect on the thirtieth day following 
the date of the enactment of this act and so proclaims, specifying the date, 
not later than the sixtieth day following the date of the enactment of this 
act on which it will be practicable to put this title into effect, this title shall 
take effect on the date specified in such proclamation. Notwithstanding the 
previous provisions of this section, this section and sections 202, 203, and 
205 shall take effect on the date of the enactment of this act. 

Approved, January 11, 1934, 11.50 p. m. 



Exhibit 31 

[Public No. 474, 73d Cong., H. R. 9741] 

An act to provide for the taxation of manufacturers, importers, and dealers in 
certain firearms and machine guns, to tax the sale or other disposal of such 
weapons, and to restrict importation and regulate interstate transportation 
thereof 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled, That for the purposes of this act — 

(a) The term " firearm " means a shotgun or rifle having a barrel of less than 
eighteen inches in length, or any other weapon, except a pistol or revolver, from 
which a shot is discharged by an explosive if such weapon is capable of being 
concealed on the person, or a machine gun, and includes a muffler or silencer for 
any firearm whether or not such firearm is included within the foregoing 
definition. 

(b) The term " machine gun " means any weapon which shoots, or is designed 
to shoot, automatically or semiautomatically, more than one shot, without 
manual reloading, by a single function of the trigger. 

(c) The term "person" includes a partnership, company, association, or 
corporation, as well as a natural person. 

(d) The term "continental United States" means the States of the United 
States and the District of Columbia. 

(e) The term "importer" means any person who imports or brings firearms 
into the continental United States for sale. 

(f) The term "manufacturer" means any person who is engaged within the 
continental United States in the manufacture of firearms, or who otherwise pro- 
duces therein any firearm for sale or disposition. 

(g) The term "dealer" means any person not a manufacturer or importer 
engaged within the continental United States in the business of selling firearms. 
The term " dealer " shall include wholesalers, pawnbrokers, and dealers in used 
firearms. 

(h) The term "interstate commerce" means transportation from any State 
or Territory or District, or any insular possession of the United States (includ- 
ing the Philippine Islands), to any other State or to the District of Columbia. 

(i) The term "Commissioner" means the Commissioner of Internal Revenue. 

(j) The term "Secretary" means the Secretary of the Treasury. 

(k) The term "to transfer" or "transferred" shall include to sell, assign, 
pledge, lease, loan, give away, or otherwise dispose of. 



220 REPORT OF THE SECRETARY OF THE TREASURY 

Sec. 2. (a) Within fifteen days after the effective date of this act, or upon 
first engaging in business, and thereafter on or before the 1st day of July of 
each year, every importer, manufacturer, and dealer in firearms shall register 
with the collector of internal revenue for each district in which such business 
is to be carried on. his name or style, principal place of business, and places of 
business in such district, and pay a special tax at the following rates: Im- 
porters or manufacturers, $500 a year; dealers, other than pawnbrokers, $200 
a year: pawnbrokers, $300 a year. Where the tax is payable on the 1st day 
of July in any year it shall be computed for one year ; where the tax is payable 
on any other day it shall be computed proportionately from the 1st day of 
the month in which the liability to the tax accrued to the 1st day of July 
following. 

(b) It shall be unlawful for any person required to register under the pro- 
visions of this section to import, manufacture, or deal in firearms without 
having registered and pnid the tax imposed by this section. 

Sec. 3. (a) There shall be levied, collected, and paid upon firearms trans- 
ferred in the continental United States a tax at the rate of $200 for each 
firearm, such tax to be paid by the transferor, and to be represented by appro- 
priate stamps to be provided by the Commissioner, with the approval of the 
Secretary ; and the stamps herein provided shall be affixed to the order for 
such firearm, hereinafter provided for. The tax imposed by this section shall 
be in addition to any import duty imposed on such firearm. 

(b) All provisions of law (including those relating to special taxes, to the 
assessment, collection, remission, and refund of internal revenue taxes, to the 
engraving, issuance, sale, accountability, cancelation, and distribution of tax- 
paid stamps provided for in the internal revenue laws, and to penalties) 
applicable with respect to the taxes imposed by section 1 of the act of Decem- 
ber 17. 1914, as amended (U. S. C, Supp. VII, title 26, sees. 1040 and 1383), 
and all other provisions of the internal revenue laws shall, insofar as not 
inconsistent with the provisions of this act, be applicable with respect to the 
taxes imposed by this act. 

(c) Under such rules and regulations as the Commissioner, with the approval 
of the Secretary, may prescribe, and upon proof of the exportation of any 
firearm to any foreign country (whether exported as part of another article 
or not) with respect to which the transfer tax under this section has been paid 
by the manufacturer, the Commissioner shall refund to the manufacturer the 
amount of the tax so paid, or, if the manufacturer waives all claim for the 
amount to be refunded, the refund shall be made to the exporter. 

Sec. 4. (a) It shall be unlawful for any person to transfer a firearm except 
in pursuance of a written order from the person seeking to obtain such article, 
on an application form issued in blank in duplicate for that purpose by the 
Commissioner. Such order shall identify the applicant by such means of 
identification as may be prescribed by regulations under this act : Prmnded, 
That, if the applicant is an individual, such identification shall include finger- 
prints and a photograph thereof. 

(b) The Commissioner, with the approval of the Secretary, shall cause 
suitable forms to be prepared for the purposes above mentioned, and shall 
cause the same to be distributed to collectors of internal revenue. 

(c) Every person so transferring a firearm shall set forth in each copy of 
such order the manufacturer's number or other mark identifying such firearm, 
and shall foward a copy of such order to the Commissioner. The original 
thereof with stamps affixed, shall be returned to the applicant. 

(d) No person shall transfer a firearm which has previously been transferred 
on or after the effective date of this act, unless such person, in addition to 
complying with subsection (c), transfers therewith the stamp-affixed order 
provided for in this section for each such prior transfer, in compliance with 
such regulations as may be prescribed under this act for proof of payment of 
all taxes on such firearms. 

(e) If the transfer of a firearm is exempted from the provisions of this 
act as provided in section 13 hereof, the person transferring such firearm shall 
notify the Commissioner of the name and address of the applicant, the number 
or other mark identifying such firearm, and the date of its transfer, and shall 
file with the Commissioner such documents in proof thereof as the Com- 
missioner may by regulations prescribe. 

(f) Importers, manufacturers, and dealers who have registered and paid 
the tax as provided for in section 2 (a) of this act shall not be required to 
conform to the provisions of this section with respect to transactions in fire- 



REPORT OF THE SECRETARY OP THE TREASURY 221 

arms with dealers or manufacturers if such dealers or manufacturers have 
registered and have paid such tax, but shall keep such records and make such 
reports regarding such transactions as may be prescribed by regulations under 
this act. 

Sec. 5. (a) Within sixty days after the effective date of this act every 
person possessing a firearm shall register, with the collector of the district in 
which he resides, the number or other mark identifying such firearm, together 
with his name, address, place where such firearm is usually kept, and place of 
business or employment, and, if such person is other than a natural person, the 
name and home address of an executive officer thereof : Provided, That no 
person shall be required to register under this section with respect to any 
firearm acquired after the effective date of and in conformity with the pro- 
visions of this act. 

(b) Whenever, on trial for a violation of section 6 hereof, the defendant is 
shown to have or to have had possession of such firearm at any time after 
such period of sixty days without having registered as required by this section, 
such possession shall create a presumption that such firearm came into the 
possession of the defendant subsequent to the effective date of this act, but 
this presumption shall not be conclusive. 

Sec. 6. It shall be unlawful for any person to receive or possess any firearm 
which has at any time been transferred in violation of section 3 or 4 of this act. 

Sec. 7. (a) Any firearm which has at any time been transferred in violation 
of the provisions of this act shall be subject to seizure and forfeiture, and 
(except as provided in subsection (b)) all the provisions of internal revenue 
laws relating to searches, seizures, and forfeiture of unstamped articles are 
extended to and made to apply to the articles taxed under this act and the 
persons to whom this act applies. 

(b) In the case of the forfeiture of any firearm by reason of a violation of 
this act : No notice of public sale shall be required ; no such firearm shall be 
sold at public sale; if such firearm is in the possession of any officer of the 
United States except the Secretary, such officer shall deliver the firearm to the 
Secretary ; and the Secretary may order such firearm destroyed or may sell 
such firearm to any State, Territory, or possession (including the Philippine 
Islands), or political subdivision thereof, or the District of Columbia, or retain 
it for the use of the Treasury Department or transfer it without charge to any 
Executive department or independent establishment of the Government for use 
by it. 

Sec. 8. (a) Each manufacturer and importer of a firearm shall identify it 
with a number or other identification mark approved by the Commissioner, 
such number or mark to be stamped or otherwise placed thereon in a manner 
approved by the Commissioner. 

(b) It shall be unlawful for anyone to obliterate, remove, change, or alter 
such number or other identification mark. Whenever on trial for a violation 
of this subsection the defendant is shown to have or to have had possession 
of any firearm upon which such number or mark shall have been obliterated, 
removed, changed, or altered, such possession shall be deemed sufficient evi- 
dence to authorize conviction, unless the defendant explains such possession to 
the satisfaction of the jury. 

Sec. 9. Importers, manufacturers, and dealers shall keep such books and 
records and render such returns in relation to the transactions in firearms 
specified in this act as the Commissioner, with the approval of the Secretary, 
may by regulations require. 

Sec. 10. (a) No firearm shall be imported or brought into the United States 
or any territory under its control or jurisdiction (including the Philippine 
Islands), except that, under regulations prescribed by the Secretary, any fire- 
arm may be so imported or brought in which (1) the purpose thereof is shown to 
be lawful and (2) such firearm is unique or of a type which cannot be obtained 
within the United States or such territory. 

(b) It shall be unlawful (1) fraudulently or knowingly to import or bring 
any firearm into the United States or any territory under its control or juris- 
diction (including the Philippine Islands), in violation of the provisions of 
this act; or (2) knowingly to assist in so doing; or (3) to receive, conceal, buy, 
sell, or in any manner facilitate the transportation, concealment, or sale of 
any such firearm after being imported or brought in, knowing the same to have 
been imported or brought in contrary to law. Whenever on trial for a violation 
of this section the defendant is shown to have or to have had possession of such 
firearm, such possession shall be deemed sufficient evidence to authorize convic- 



222 REPORT OF THE SECRETARY OF THE TREASURE 

tion unless the defendant explains such possession to the satisfaction of the 
jury. 

Sec. 11. It shall be unlawful for any person who is required to register as 
provided in section 5 hereof and who shall not have so registered, or any other 
person who has not in his possession a stamp-affixed order as provided in sec- 
tion 4 hereof, to ship, carry, or deliver any firearm in interstate commerce. 

Sec. 12. The Commissioner, with the approval of the Secretary, shall pre- 
scribe such rules and regulations as may be necessary for carrying the pro- 
visions of this act into effect. 

Sec. 33. This act shall not apply to the transfer of firearms (1) to the 
United States Government, any State, Territory, or possession of the United 
States, or to any political subdivision thereof, or to the District of Columbia ; 
(2) to any peace officer or any Federal officer designated by regulations of the 
Commissioner; (3) to the transfer of any firearm which is unserviceable and 
which is transferred as a curiosity or ornament. 

Sec. 14. Any person who violates or fails to comply with any of the require- 
ments of this act shall, upon conviction, be fined not more than $2,000 or be 
imprisoned for not more than five years, or both, in the discretion of the court. 

Sec. 15. The taxes imposed by paragraph (a) of section 600 of the Revenue 
Act of 1926 (U. S. C, Supp. VII, title 26, sec. 1120) and by section 610 of the 
Revenue Act of 1932 (47 Stat. 169, 264), shall not apply to any firearm on which 
the tax provided by section 3 of this act has been paid. 

Sec. 16. If any provision of this act, or the application thereof to any person 
or circumstance, is held invalid, the remainder of the act, and the application of 
such provision to other persons or circumstances, shall not be affected thereby. 

Sec. 17. This act shall take effect on the thirtieth day after the date of its 
enactment. 

Sec. 18. This act may be cited as the " National Firearms Act." 

Approved, June 26, 1934. 

OBLIGATIONS OF FOREIGN GOVERNMENTS 

Exhibit 32 

Statement by Acting Secretary of the Treasury Morgenthau, announcing the 
postponement of the payment due from Austria, on January 1, 1934, on 
account of its indebtedness to the United States (press release, Dec. 13, 1933) 

The Treasury has been notified by the Department of State that a note dated 
December 1, 1933, was received from the Austrian Minister stating that the 
Austrian Government received on November 29, 1933, a communication from 
the trustees of the guaranteed Austrian loan of 1923-1943, in which objections 
are raised by the trustees against the payment to the creditor governments 
signatory to the agreements relative to the settlement of the relief debts, of the 
amounts due to them on January 1, 1934. In view of these objections the 
Austrian Government has notified the United States- that no remittance can 
be made to cover the sixth installment due on January 1, 1934, on account of 
its relief debt to the United States. 

The lien upon the assets and revenues of Austria pledged for the payment of 
the Austrian relief bonds has been subordinated to the lien upon such assets 
and revenues pledged for the payment of the Austrian reconstruction loan of 
1923. The objections by the trustees to the payments due from Austria on 
account of the relief bonds is in accordance with the agreements concluded 
between Austria and the International Relief Bonds Committee and the agree- 
ment of May 8, 1930, between Austria and the United States. The debt-funding 
agreement between Austria and the United States provides that : 

u * * * £k e obligation of Austria to pay annuities during the years 1929 
to 1943 will in the case of each annuity not arise if the trustees of the recon- 
struction loan of 1923 prior to the preceding December first have raised 
objection to the payment of the annuity in question on the due date." 

In accordance with the provisions of the debt-funding agreement between 
the Republic of Austria and the United States bond no. 6 in the face amount 
of $460,093, due January 1, 1934, will be postponed, which, together with 
interest at the rate of 5 percent per annum compounded annually to December 
31, 1943, shall be repaid, together with further interest at 5 percent per annum, 
in twenty-five equal annuities on January 1 of each of the years 1944 to 1968, 
inclusive. 



REPORT OF THE SECRETARY OF THE TREASURY 223 

Exhibit 33 

Correspondence exchanged between the Government of the United States and 
various foreign governments concerning foreign debts owing to the United 
States (Department of State press releases) 



To the Acting Secretary of State from the Belgian Ambassador, December 12, 

1933 (translation) 

(1) In a note of December 6, 1932, the Belgian Ambassador informed the 
Government of the United States of the reasons why the Belgian Government 
was not in a position to resume the payments which had been suspended pur- 
suant to the agreement entered into in July 1931. The Belgian Government is 
obliged to point out that the circumstances which motivated its attitude have 
not changed and that the arguments it invoked have retained all their force. 

(2) The solemn engagements of the Allied and Associated Powers and the 
spontaneous promises of Germany concerning tbe entire restoration of Belgium 
create a moral right which nothing can destroy and place Belgium in a special 
situation among the Powers which took part in the war of 1914^18. 

(3) Relying upon the declaration of President Wilson which had made the 
restoration of Belgium one of the conditions of peace, the Belgian representa- 
tives in 1919 did not consent to sign the Treaty of Versailles until they had 
received formal assurance of the cancelation of their war debts. 

(4) When the Belgian Government signed the Washington agreement of 
August 20, 1925, it did so because it had been assured by the statements of the 
American representatives themselves that the payments due to the United 
States would be amply covered by the payments of Germany on reparations 
account. 

(5) In June 1931 when President Hoover proposed to suspend for a year the 
service of intergovernmental debts, the Belgian Government in its reply to the 
American Government recalled the recognized special rights of Belgium. In 
a spirit of international solidarity it consented to give up temporarily a claim 
which the country regarded as sacred, but it took pains to affirm that it did not 
intend that an action taken with a view to international recovery should become 
a cause of ruin for Belgium. 

(6) Later, in consenting at Lausanne to make definitive the sacrifice which 
the Hoover proposal imposed on it, Belgium assumed the cancelation of its 
claim to reparations to be inconceivable without the parallel suppression of its 
intergovernmental debts. 

(7) By its note of December 5, 1932, the Belgian Government set forth the 
effects on Belgium of the interruption of German payments and of the general 
economic depression. Tbe difficulties pointed out at that time have continuously 
increased. 

In these circumstances the Belgian Government, while reaffirming its good 
will and its desire to collaborate in a comprehensive settlement of the debt 
question, finds itself unable to make on December 15 next the payment provided 
for in the agreement of 1925. 

Belgian Embassy. 



To the Belgian Ambassador, December 13, 1933 

Excellency : 

In acknowledging the receipt of the note transmitted under your no. 4095, of 
December 12, 1933, I take note of Your Excellency's statement that the Belgian 
Government finds itself unable to make the payment falling due December 15, 
1933, on account of the indebtedness of Belgium to the United States. 
Accept [etc.], 

William Phillips, 
Acting Secretary of State. 



90353—35 16 



224 REPORT OF THE SECRETARY OF THE TREASURY 

To the Secretary of State from the Belgian Ambassador, June 8, 1934 

(translation) 

I have the honor to acknowledge the receipt of Your Excellency's letter dated 
May 26, 1934. I immediately transmitted the text thereof to my Government. 

The latter has just charged me to bring to Your Excellency's knowledge the 
following communication : 

" By a note of the 6th of December last the Ambassador of Belgium at Wash- 
ington recalled to the Government of the United States the reasons for which 
the Belgian Government was not in a position to resume, on the date of Decem- 
ber 15, 1933, the service of its debts to America. 

" Since the last due date no new factor has intervened which would permit 
Belgium to modify her attitude. 

" She therefore sees herself under the impossibility of effecting, on June 15th 
next, the payment contemplated by the Belgian-American agreement of August 
18, 1925." 

I avail myself [etc.]. 

Paul May. 



CZEC H OSLOV AKIA 

To the Acting Secretary of State from the Minister of Czechoslovakia, Decem- 
ber 9, 1933 

Excellency : 

In the note of June 15, 1933, I had the honor to express the hope of the 
Czechoslovak Government that a final settlement of the Czechoslovak debt due 
to the United States would be reached in the near future and offered at the 
same time a partial payment of the due installment as an expression of its 
utmost willingness to meet its obligations in the limits of the budgetary and 
monetary equilibrium of Czechoslovakia. 

As the next installment of the payment is due on the fifteenth of this month, 
both the short span of time and the present complex and difficult economic and 
monetary conditions do not permit the hope of reaching a final settlement, I am 
directed to offer again a partial payment amounting to $150,000 (one hundred 
and fifty thousand dollars) on account of the due obligations and to confirm 
these existing obligations until a final settlement will be made possible. 

Accept [etc.]. 

Ferdinand Veverka. 



To the Minister of Czechoslovakia, December 11, 1933 

Sir: 

The President directs me to acknowledge the receipt of your note of Decem- 
ber 9, 1933, in which you set forth that you are instructed by your Govern- 
ment, with reference to the payment due December 15 on the indebtedness of 
your Government to the United States, to offer a partial payment of $150,000 
on account of the due obligations and to confirm these existing obligations. 

Note is taken of your reference to the willingness of your Government to meet 
its obligations in the limits of the budgetary and monetary equilibrium of 
Czechoslovakia. 

This Government will receive the partial payment of $150,000 as confirma- 
tion of existing obligations. 

Accept [etc.]. 

William Phillips, 
Acting Secretary of State. 



REPORT OF THE SECRETARY OF THE TREASURY 225 



To the Secretary of State from the Estonian Minister for Foreign Affairs, 

November 16, 1933 

Excellency : 

By notes dated November 28, 1932, December 15, 1932, and June 13, 1933, the 
Estonian Government had the honour to inform the Government of the United 
States of America of tbe economic and financial reasons on account of which 
it had not been in a position to effect the payment of the installments due on 
December 15, 1932. and on June 15, 1933, under the terms of the debt-funding 
agreement of 1925, and to request the Government of the United States of 
America to agree to a friendly exchange of views regarding the possibility of 
a reconsideration of the debt agreement of 1925. 

In view of the circumstance that the economic and financial conditions in 
Estonia have up to now not shown any improvement, I have the honour to 
inform Your Excellency that the Government of Estonia will unfortunately 
not be able to effect the payment of the installment falling due on December 
15. 1933. 

I avail myself [etc.]. 

Jul. Seljamaa. 



To the Estonian Acting Consul General at Neto York City, December 9, 1933 

Sib: 

In acknowledging receipt of the note (12-R) addressed to the Secretary 
of State on November 16, 1933, by the Minister for Foreign Affairs of Estonia, 
I take note of the Minister's statement that the Government of Estonia will 
not be able to effect the payment falling due December 15, 1933, on account of 
the indebtedness of Estonia to the United States. 
Accept [etc.]. 

William Phillips, 
Acting Secretary of State. 



To the Secretary of State from the Estonian Minister for Foreign Affa/irs, 

May 31, 193 V, 
Excellency : 

The Estonian Government view with great concern the continuation of the 
economic depression which still dominates the world and which hinders to 
develop such intercourse between nations which would be normal and which, 
granted reciprocal trade relations, would allow them to discharge their obliga- 
tions towards each other. The Estonian Government have likewise and with 
the greatest of interest followed the steps taken by the United States Govern- 
ment towards recovery and on their part have not spared, within their limited 
possibilities, any efforts to do their share in the same spirit. 

But unfortunately the courageous policy adopted by the United States and the 
steps taken elsewhere have not yet brought about an improvement in the fields 
of international cooperation between nations, and Estonia, dependent in her 
economic intercourse with the outside world only on her foreign trade, having 
no capital reserves and no foreign investments, cannot abandon her position 
of defense of her economic selfpreservation. 

In view of the fact that economic and financial conditions in Estonia have 
not improved, I have the honor to inform you that the Estonian Government, 
after a mature consideration of the debt question to the United States Govern- 
ment, will unfortunately not be able under the terms of the Debt Funding 
Agreement of 1925, to effect the payment of the installment falling due on June 
15th, 1934. 

I sincerely hope that this decision of the Estonian Government prescribed by 
necessity will be understood and appreciated by the United States Government. 

I avail myself [etc.]. 

J. Seljamaa. 



226 REPORT OF THE SECRETARY OF THE TREASURY 

FINLAND 

Department of State, for the press, December 1-i, 1933 

The Minister of Finland has informed the Acting Secretary of State that the 
full amount due on account of the Finnish debt to the United States will be 
paid in the ordinary routine to the Federal Reserve Bank in New York on 
December 15th. This installment amounts to $229,623. 



Department of State, for the press, June If, 193J/ 

The Finnish Minister, Mr. L. Astrom, called at the Department of State today 
to advise the Acting Secretary of State, Mr. William R. Phillips, that he had 
received instructions to make full payment of the installment due on the Finnish 
debt owing to the United States and that payment accordingly would be made 
in cash as usoial in New York. 

The call relates to the installment on the Finnish debt due on June 15 next 
of $166,538, of which $147,507.50 is interest and $19,030.50 principal. 



To the Charge" d' Affaires ad interim of Finland, July 7, 1934 

Sir: 

I am requested by the Secretary of the Treasury to notify you that the Federal 
Reserve Bank of New York received on June 15, 1934, the sum of $166,538.00, 
representing a payment made for the account of the Government of Finland ; 
and that this amount has been deposited in the Treasury as a payment of semi- 
annual interest due June 15, 1934, in the amount of $147,507.50 on the funded 
indebtedness of the Government of Finland to the United States pursuant to 
the funding agreement of May 1, 1923, and as the semiannual payment of the 
annuity due June 15, 1934, in the amount of $19,030.50 under the agreement 
of May 23, 1932. 

I take the occasion to express my recognition of the effort on the part of the 
people of Finland which this payment has required and to associate myself with 
the manifest appreciation with which the attitude of the Government of Finland 
has been greeted in this country. At a time when contractual obligations have 
been widely disregarded or are too easily subordinated to considerations of 
brief expediency, and to a degree which threatens one of the most important 
bases of human relations, the consistent steadfastness with which Finland has 
unhesitatingly met its obligations has been enheartening. 

While this Government in its role of creditor is ever mindful of leniency, or 
equity, or ability to pay, and of other considerations to which debtor gov- 
ernments are entitled, it was never more important than at present that debtor 
governments should make every reasonable effort to meet their financial obliga- 
tions, and in doing so to preserve for the future their credit and the international 
credit structure. 

Therefore, in keeping faith with its financial obligations, the Government of 
Finland has set a timely and valuable example. 

Accept [etc.]. 

Coedell Hull. 



To the Secretary of State from the French Ambassador, December 15, 1933 

(translation) 

I have the honor to acknowledge the receipt of your letter of November 28 
last, and in reply to transmit herewith the following communication from my 
Government : 

" Inasmuch as no new factor has developed with respect to war debts since 
the resolution voted by the Chamber of Deputies on December 13, 1932, the 
French Government regrets that it is not in a position usefully to initiate 
a new debate on the question, and is obliged to postpone the payments due 
December 15 next. 



REPORT OF THE SECRETARY OF THE TREASURY 227 

" Nevertheless, in order to remove any possibility of misunderstanding it 
desires to recall the tenor of this resolution. 

" The French Government has never contemplated the unilateral violation of 
undertakings freely entered into, which would have been contrary to the 
invariable traditions of France. But it judged that the decisions which were 
taken on both sides in 1931 and 1932 in the hopes of facilitating the economic 
recovery of the world had modified conditions which formerly existed, and now 
justify new arrangements which take into account the changes thus brought 
about. 

" The French Government cannot of course fail to recognize the difficulties 
which the achievement of such a new arrangement would involve. Neverthe- 
less it hopes that such difficulties may be overcome and that in the near 
future a solution of the problem of war debts acceptable to both countries may 
be anticipated. 

" For its part it will consider it a duty not to neglect any of the possibilities 
which may arise in order to attain this end." 

Accept [etc.]. 

Andre de Laboulaye. 



To the French Ambassador, December 15, 1938 

Excellency : 

In acknowledging the receipt of your communication of December 15, 1933, I 
take note of the statement that the Government of France will not be able to 
effect the payment falling due December 15, 1933, on account of the indebted- 
ness of France to the United States. 
Accept [etc.]. 

William Phillips, 
Acting Secretary of State. 



To the Secretary of State from the French Ambassador, June 12, lDS-'f 

Mr. Secretary : 

I have the honor to acknowledge the receipt of the letter which Your Excel- 
lency was pleased to address to me on May 26 transmitting a statement of the 
sums due by France to the United States on June 15, 1934, under the terms of 
the agreements of April 29, 1926, and July 6, 1931. 

In compliance with instructions which I have just received, I have the honor 
to inform Your Excellency that as there has been no new development in 
regard to intergovernmental debts since the month of December 1932, the 
French Government is not in a position to resume, on the 15th of the present 
month, the payments which, since December 15, 1932, it has found itself con- 
strained to postpone as the result of the consequences of the moratorium of 
that year. 

On this occasion my Government desires to reaffirm that it does not contest 
the validity of its debts and that it is still prepared to seek an agreement with 
the American Government in regard to that debt upon a basis which in exist- 
ing circumstances may be acceptable to both countries. 

The Government of the Republic hopes that such an agreement may be 
reached in the near future and it desires to reaffirm to the American Govern- 
ment the assurance that it will consider it a duty to neglect no opportunity 
which may arise to attain that result. 

I take this occasion [etc.]. 

Andre de Laboulaye. 



GREAT BRITAIN 

To the Secretary of State from the British Ambassador, June %, 193.'/ 

In their note of December 1st, 1932, His Majesty's Government gave a full 
statement of the reasons which convinced them that the existing system of 
intergovernmental war debt obligations had broken down. They pointed out 
the difference between these war-debt obligations and normal credit operations 
for development purposes: They showed the economic impossibility of making 



228 REPORT OF THE SECRETARY OF THE TREASURY 

transfers on the scale required by these obligations and the disastrous effect 
which any further attempt to do so would have on trade and prices. They em- 
phasized the sacrifices which the British Nation had made in this matter and j 
the injustice of the difference between their funding settlement and those ac- 
corded to other debtors. They concluded that a revision of the existing settle- 
ments was essential in the interests of world revival, and they urged that fur- 
ther payments should be postponed pending such a revision. Nothing that has 
since occurred has led His Majesty's Government in the United Kingdom to , 
change the views they then expressed. 

2. That the present settlement imposes upon the people of the United King- 
dom a burden which is both unreasonable in itself and inequitable in relation 
to the treatment accorded to other countries may be clearly seen from the 
following figures. 

In respect of the war advances totaling 4,277,000,000 dollars payments total- | 
ing 2,025,000,000 dollars have been made up to date by His Majesty's Govern- , 
ment to the United States Government. Yet despite these payments the nomi- , 
nal amount of the debt still outstanding as at June 15th, 1934, amounts to . 
4,713,785,000 dollars. 

Meanwhile in respect of war advances totaling 5,773,300,000 dollars made by 
the United States Government to other European Governments, aggregate pay- i 
ments made up to date amount to only 678,500,000 dollars. Thus though the 
war advances to these other Governments exceed by one-quarter the advances 
made to the United Kingdom, payments made by the United Kingdom amount 
to three times what the United States Government has received from those other 
powers. ' 

On the other hand, His Majesty's Government are creditors as well as debtors 
in respect of these intergovernmental obligations. While, as stated above, they 
borrowed 4,277,000,000 dollars from the United States, they themselves made I 
war advances to the allied governments totalling £1,600,000,000 (7,800,000,000 
dollars at par). These loans were raised by His Majesty's Government from 
the people of the United Kingdom and the annual interest thereon, and , 
eventually their capital repayment, must, in the absence of payments by debtor 
governments, be met out of the general taxation of their own people. In this 
respect the position of the United Kingdom is precisely similar to that of the 
United States, but whereas the United States have received very substantial 
payments against the domestic charges involved, His Majesty's Government 
have had to meet the domestic charges of their war loans to allied governments 
in full, as they have paid over to the United States Government all that they 
have received both from war debts and war reparations, and they have in 
addition paid nearly as much again out of their own resources. 

If the United States feel the burden of their war advances of 10,050,000,000 
dollars, against which they have received 2,703,000,000 dollars, how much 
heavier is the burden of the United Kingdom, which with one-third of the 
population of the United States has had to meet the full charges on its war 
advances of 7,800,000,000 dollars without any net receipts against these charges, 
and has in addition made large payments out of its own resources on account of 
its war debt to the United States. ' 

None the less, convinced that any resumption of payments on the past scale 
could not but intensify the world crisis and might provoke financial and 
economic chaos, His Majesty's Government have suspended their claims on 
their debtors in the hope that a general revision of these intergovernmental 
obligations may be effected in the interest of world recovery. But it would be 
impossible for them to contemplate a situation in which they would be called 
on to honour in full their war obligations to others while continuing to suspend 
all demands for payment of war obligations due to them. 

3. The improvement which has taken place in the budgetary situation of 
the United Kingdom in no way invalidates this conclusion. This improve- 
ment is due entirely to unprecedented sacrifices made by the people of this 
country. Since the war they have been carrying a burden of indebtedness 
amounting to approximately £8,000,000,000 (40,000,000,000 dollars) or £178 
(850 dollars) per head of their population, about one-fifth of which represents 
war loans made to allied governments. They have balanced their budget and 
even realised a surplus by the painful process of reducing expenditure and 
increasing taxation. For fifteen years they have been paying taxation on a 
scale for which it would be hard to find a parallel elsewhere. During the 
whole of this period the burden of taxation has been higher in the United 
Kingdom, and for a considerable part of the period twice as high as in the 



REPORT OF THE SECRETARY OF THE TREASURY 229 

United States, including all Federal, State, and local taxation. This taxation 
amounting to close on one-quarter of the national income, has aggravated the 
depression over a long period and the necessity of maintaining an army of 
unemployed resulting from this depression has constituted a formidable prob- 
lem to the national finances ever since the war ended. Yet in order to restore 
the national credit in 1931 the people of the United Kingdom accepted further 
and heavy increases in taxation, accompanied by rigorous control of expendi- 
ture, and cuts in salaries and allowances of all kinds; and despite all these 
measures the budget would have again shown a deficit last year had it not 
been possible to secure by the conversion operation carried through in 1932 
a reduction in the rate of interest paid on a large proportion of the public 
debt. This reduction has enabled His Majesty's Government to remit a part 
of the emergency sacrifices imposed in 1931 and to restore part of the cuts 
on salaries and the whole cut in unemployment allowances, the continuance 
of which was imposing a severe strain on the national conscience. It would 
have been a gross act of social injustice to have denied this relief to the 
people of this country in order to pay war debts to the United States while 
suspending war debt payments clue to the United Kingdom. 

4. But although it is desirable that the internal budgetary position of this 
country should not be misunderstood, it is really irrelevant to the question of 
intergovernmental debt, the payment of which has to be related to the balance 
of trade and not to the volume of internal revenue. The revenues of the 
United Kingdom are sterling revenues, whereas the debt payments to America 
have to be made in dollars or in gold. In order to secure the means to pay, 
therefore, any sums available in sterling would have to be transferred across 
the exchange. The attempt to transfer amounts of this magnitude would as its 
immediate effect cause a sharp depreciation of sterling against the dollar, which 
as His Majesty's Government understands would not be consistent with the 
monetary policy of the United States Government. And in the long run such 
international transfers would be impossible without a radical alteration in the 
economic policies of the United States. Payment of debts implies the willing- 
ness of the creditor to accept goods and services sufficient to cover the debts 
due to him over and above the goods and services required to cover his exports : 
and to make it possible for the United States to receive payment of their 
claims, it would be necessary to effect a complete reversal of the existing 
favourable balance of trade between their country and the rest of the world. 
In tbe case of tbe United Kingdom the balance of trade is heavily unfavorable, 
and the balance of accounts is not such that His Majesty's Government could 
contemplate tbe transfer of any substantial sum across the exchange, unless it 
was compensated by equivalent receipts from the foreign debts of this country. 
If this were done, sterling would not be affected by the payments to America, 
but the burden would be thrown on the currencies of the European debtor coun- 
tries, thereby aggravating the present crisis, which it is the object of both 
the United States and His Majesty's Government to alleviate. 

5. Thus the question of the British war debt is only a part of the wider 
question of intergovernmental obligations resulting from the World War. As 
has already been pointed out, the United Kingdom, while it was a debtor to 
the United States, was itself a creditor for larger amounts from France, Italy, 
and other ex-Allied Powers in respect of war debts, and these in turn are co- 
creditors with the United Kingdom of Germany in respect of reparations. 
These intergovernmental debts, as stated in the British note of December 
1, 1931, are radically different from commercial loans raised by foreign gov- 
ernments on the markets for productive purposes. War debts are neither 
productive nor self-liquidating, and the unnatural transfers required for their 
payment would involve a general collapse of normal international exchange and 
credit operations. The administration of the United States under President 
Hoover recognized this fact and initiated a moratorium on intergovernmental 
payments in 1931 in order to avert an immediate collapse. But the mora- 
torium of 1931 caused another change in the situation ; it made any resumption 
of the preexisting reparation and war debt settlements impossible, and the 
revision of reparations embodied in the Lausanne Agreement was made subject 
to conclusion of a subsequent agreement for the revision of war debts. 

6. It was with these facts in mind that His Majesty's Government approached 
the United States Government in December 1932, and the United States Gov- 
ernment in their note of December 7th welcomed their suggestion for a close 
examination between the two countries of the whole subject. After this ex- 
change of notes His Majesty's Government paid the instalment due on December 



230 REPORT OF THE SECRETARY OF THE TREASURY 

15th, 1932, in gold, explaining that this payment was not to be regarded as a 
resumption of the annual payments contemplated by the existing agreement, 
and that it was made because there had not been time for discussion with 
regard to that agreement to take place, and because the United States Govern- 
ment had stated that in their opinion such a payment would greatly increase I 
the prospects of a satisfactory approach to the whole problem. In accordance 
with the arrangement then made, discussions took place first in the spring and | 
later in the autumn of last year between representatives of the two countries, 
and His Majesty's Government appreciate the sympathetic manner in which 
their representatives were listened to. But on both occasions it was found i 
impossible to arrive at a settlement acceptable to the two Governments in face I 
of the unprecedented state of world economic and financial conditions. Accord- 
ingly the discussions were adjourned and on June 15th and December 15th, 
1933, His Majesty's Government made token payments in acknowledgment of | 
the debt and the President expressed the personal view that he would not 
regard His Majesty's Government as in default. 

7. In their note of November 6th last, His Majesty's Government expressed 
their readiness to resume negotiations on the general question whenever, after 
consultation with the President, it might appear that this could usefully be 
done, and His Majesty's Government are glad to note that the President in his j 
message to Congress on June 1st has again stated that each of the debtor 
governments concerned has full and free opportunity to discuss this problem 
with the Government of the United States. But unfortunately recent events 
have shown that discussions on the whole question with a view to a final 
settlement cannot at present usefully be renewed. In these circumstances His i 
Majesty's Government would have been quite prepared to make a further pay- 
ment on June 15th in acknowledgment of the debt and without prejudice to 
their right again to present the case of its readjustment, on the assumption 
that they would again have received the President's declaration that he would 
not consider them in default. They understand, however, that in consequence 
of recent legislation no such declaration would now be possible, and if this be 
the case the procedure adopted by common agreement in 1933 is no longer 
practicable. 

8. His Majesty's Government are, in fact, faced with a choice between only 
two alternatives, viz, to pay in full the sum of 262,000,000 dollars, as set forth in 
the communication from the United States Treasury, dated May 25th, or to 
suspend all interim payments pending a final revision of the settlement, which 
has been delayed by events beyond the control of the two Governments. Deeply 
as they regret the circumstances which have forced them to take such a decision, 
His Majesty's Government feel that they could not assume the responsibility of 
adopting a course which would revive the whole system of intergovernmental 
war-debt payments. 

As already pointed out, the resumption of full payments to the United States 
would necessitate a corresponding demand by His Majesty's Government from 
their own war debtors. It would be a re-creation of the conditions which existed 
prior to the world crisis and were in a large measure responsible for it. Such 
procedure would throw a bombshell into the European arena which would have 
financial and economic repercussions over all five continents and would post- 
pone indefinitely the chances of world recovery. 

9. Accordingly His Majesty's Government are reluctantly compelled to take 
the only other course open to them. But they wish to reiterate that, while 
suspending further payments until it becomes possible to discuss an ultimate 
settlement of intergovernmental war debts with a reasonable prospect of agree- 
ment, they have no intention of repudiating their obligations, and will be pre- 
pared to enter upon further discussion of the subject at any time when in the 
opinion of the President such discussion would be likely to produce results of 
value. 

I have [etc.]. 

R. C. Lindsay. 



To the British Ambassador, June 12, 1934 
Excellency : 

The observations contained in your note of June 4, 1934, concerning the 
indebtedness of His Majesty's Government to the United States have been 
studied with close attention. 



REPORT OF THE SECRETARY OF THE TREASURY 231 

This Government is sensible of the elements of the situation set forth by 
His Majesty's Government, the heavy war expenditures undertaken in its own 
behalf and in behalf of its- Allies, the burden of taxation that has been borne 
by the British people, and the transfer difficulties that under certain circum- 
stances may arise in the foreign exchanges. With certain observations, how- 
ever, and the inferences drawn therefrom, I regret that the American Govern- 
ment is UDable to concur and in three instances it feels that, for the purpose 
of record, it should make its own attitude clear. 

First, His Majesty's Government states in effect that, unless payments were 
made in full in the sum of .$262,000,000 as set forth in the communication from 
the United States Treasury dated May 25, 1934, the United Kingdom would 
fall within the effects of the recent legislation mentioned in paragraph seven 
of your note, so that the payment of this amount is regarded as the only alter- 
native to suspension of all payment. The Attorney General has advised me 
that, in his opinion, the debtor governments which, under the ruling of his 
Office of May 5, 1034, are not at present considered in default because of partial 
payments made on earlier installments, would have to pay only the amount of 
the installment due June 15, 1934— for Great Britain $S5,670,765.05— in order 
to remain outside the scope of the act. 

Second, in regard to the record cited by the British Government of its loans 
to its Allies and the fact that His Majesty's Government has given up great 
sums due to it under those loan contracts, this Government must emphasize the 
complete independence between the aforementioned transactions and the debt 
contracted by His Majesty's Government to this Government. The British 
Government undertook to borrow under its own name and on its own credit 
standing, and repayment was not made contingent upon the fate of debts due 
to ihe British Government. 

Third, this Government notes with disappointment the declaration of His 
Majesty's Government that " while suspending further payments until it be- 
comes possible to discuss an ultimate settlement of intergovernmental war 
del >ts with a reasonable prospect of agreement, they have no intention of re- 
pudiating their obligations, and will be prepared to enter upon further dis- 
cussion of the subject at any time when, in the opinion of the President, such 
discussion would be likely to produce results of value." 

In effect, this Government reads the declaration of His Majesty's Govern- 
ment to mean that it will fail to meet any further payments on the debt due 
to th > United States as evidenced by the settlement of June 19. 1923, until 
this Government shall first scale down this debt to an unascertained sum to 
which His Majesty's Government might be willing to accede. This declaration 
appears to represent insistence by His Majesty's Government that before it 
makes any payment whatsoever it must be assured of a settlement satisfactory 
to it and not necessarily in accordance with any accepted standards of pay- 
ment or readjustment of the amounts due. The only indications before this 
Government of the extent to which His Majesty's Government has proposed 
to meet its obligations are the small fractions of the sums due mentioned by 
His Majesty's representative in the course of the discussions in the spring and 
autumn of last year referred to in your note of June 4. Adhering to the 
opinion so often expressed by the United States Government a situation of 
this kind necessarily calls for the initiation of proposals by the debtor and 
not by the creditor. 

Should His Majesty's Government wish to put forward proposals for the 
resumption of payments, this Government would be glad to entertain and 
discuss them informally. For instance, no proposal has ever been presented 
to this Government looking towards payments in kind to an extent that might 
be found mutually practicable and agreeable. Any proposals of this or a 
similar character which promise mutual benefit will be carefully considered 
for eventual submission to the American Congress. 

In conclusion, may I refer to the statement made by the President in his 
message to the Congress on June 1 : " The American people would not be dis- 
posed to place an impossible burden upon their debtors, but are nevertheless 
in a just position to ask that substantial sacrifices be made to meet these 
debts." 

Accept [etc.]. 

Cordell Hull. 



232 REPORT OF THE SECRETARY OF THE TREASURY 

To the Secretary of State from the British Charge" d'Affaires, June 27, 193f t 

Sir: 

After careful consideration of the note which you addressed to Sir Ronald 
Lindsay on June 12th, His Majesty's Government in the United Kingdom feel 
that there are two questions to which it may be useful to make further 
reference. 

In the first place, His Majesty's Government would observe that in their 
note of June 4th they did not state that payment of the British war debt was 
legally contingent upon payment of the debts due to them. What they said 
was that it would be impossible for them to contemplate a situation in which 
they would be called on to honour in full their war debt obligations to others 
while continuing to suspend all demands for payment of the war obligations 
due to them. This was a statement not of law but of fact. 

Secondly, as regards the suggested payments in kind, His Majesty's Govern- 
ment would recall that the experience of German reparations showed that 
transfer difficulties are not solved by a system of deliveries in kind. As the 
committee presided over by General Dawes pointed out in 1924: "In their 
financial effects deliveries in kind are not really distinguishable from cash 
payments." In fact, the economic objections to cash payments would apply 
with equal force to deliveries in kind, unless those deliveries were to consist 
of indigenous products of the debtor country (excluding reexports) and unless 
they were to be accepted by the creditor country and consumed by it in addi- 
tion to the goods taken from the debtor country in the normal course of trade. 
If the United Kingdom were not to receive payment for goods exported on 
commercial account, her exchange resources available to purchase cotton and 
other goods from America would be still further diminished. Therefore, 
while not unwilling to give further consideration to possibilities in this direc- 
tion, His Majesty's Government do not at present see any method of putting 
such a plan into practice which would be likely to commend itself to the 
Government of the United States of America. 

In the view of His Majesty's Government, the primary question for settlement 
is the amount that should be paid, having regard to all the circumstances of 
these debts. They regret that up to the present it has not been possible to 
make further progress in this matter, but they will welcome the opportunity of 
resuming the discussion whenever it may appear that the present abnormal 
conditions have so far passed away as to offer favourable prospects for a settle- 
ment, since they are always anxious to remove from the sphere of controversy 
all or any matters which might disturb the harmonious relations between the 
two countries. 

I have [etc.]. 

D. G. OSBORNE. 



HUNGARY 



To the Acting Secretary of State from the Hungarian Minister, December 12, 

1933 
Sib: 

With reference to your note of November 28, 1933, I have the honor to inform 
you that I have been instructed by my Government to advise the Government 
of the United States that owing to continued unfavorable economic conditions, 
the Hungarian Government regrets exceedingly its inability to pay the amount 
due on December 15th. However, on that date my Government will deposit to 
the foreign creditors' account at the Hungarian National Bank, a Hungarian 
Treasury Certificate in the pengo equivalent of the dollar amount due bearing 
interest at the rate of two per centum per annum. 

I wish to add that my Government's figures show the amount due on Decem- 
ber 15th to be $114,260.09. 

Accept [etc.]. 

V£gh. 



REPORT OF THE SECRETARY OF THE TREASURY 233 

To the Secretary of State from the Hungarian Charge & Affaires, June 11, 1931, 
Sir: 

I have the honor to inform you that I have been instructed by my Government 
to advise tbe Government of the United States that owing to continued un- 
favorable economic conditions, the Hungarian Government regrets exceedingly 
its inability to pay the amount of $36,971.93 due on June 15, 1934. under the 
funding agreement, or to deposit its pengo equivalent at the Hungarian National 
Bank. However, on that date my Government will deposit to the foreign 
creditors' account at the Hungarian National Bank, a Hungarian Treasury 
certificate in the pengo equivalent of the amount due bearing interest at the 
rate of two per centum per annum. 

Accept [etc.]. 

A. Balasy. 

ITALY 

To the Acting Secretary of State from the Italian Ambassador, December 7, 1983 

Sir: 

I have been instructed to inform you that, referring to the contents of the 
communication which this Embassy has addressed to the Department of State 
on the 14th of June last, with regard to the war debt, the Italian Government 
proposes to make on the 15th of December next a further payment of one mil- 
lion dollars in acknowledgment of the debt pending a final settlement. 

Accept [etc.]. 

Rosso. 



To the Italian Ambassador, December 12, 1933 

Excellency : 

In reply to Your Excellency's note of the seventh instant, and to your pre- 
vious oral communications dealing with the question of indebtedness of the 
Italian Government to the United States, I am directed by the President to say 
that due note has been taken of the intention of your Government to make a 
further payment on December 15 next, as on June 15 last, in acknowledgment 
of the debt pending a final settlement, in the sum of $1,000,000. 

The President points out that it is not within his discretion to reduce or 
cancel the existing debt owed to the United States, nor is it within his power 
as President to alter the schedule of debt payments contained in the existing 
settlement. Such power rests with the Congress. The President states, how- 
ever, that in view of your representations, of the payment, and of the acknowl- 
edgment of the debt, he has no personal hesitation in saying that he does not 
regard the Italian Government as in default. 

Accept [etc.]. 

William Phillips, 
Acting Secretary of State. 



To the Secretary of State from the Italian Ambassador, June 14, 1934 
Sir: 

With reference to your note of May 28th, containing a statement of the 
amount due from Italy under the provisions of the debt agreement of November 
14th, 1925, and the moratorium agreement of June 3, 1932, my Government has 
instructed me to address to you the following communication : 

" By the token payments made on the 15th of June and on the 15th of Decem- 
ber 1933 the Italian Government has shown its good will and at the same time 
the limitations imposed upon it by the actual situation. 

" This situation, both in the economic and financial fields, not only has not im- 
proved since then, but has become even worse. In fact, while tariff barriers 
and other hindrances to the exchange of goods, which is the chief source of 
international transfers, have further increased, there is practically no hope 
that Italy may be able again to collect those payments from German reparations 
which in 1925 have been taken as a basis for determining Italy's ability to put 
aside and transfer the amounts indicated by the debt agreement of November 
14, 1925. 



234 REPORT OF THE SECRETARY OF THE TREASURY 

"The Italian Government, which has always been and is still willing to 
acknowledge its obligation in view of a final settlement, would have been pre- 
pared to reaffirm its good will by another token payment. It has been informed, 
however, that, under a law recently enacted, the nations which do not make 
full payment of the amounts due on the 15th of June will be considered as 
being in default. 

" In these circumstances and since, for the reasons mentioned above, the pay- 
ment and transfer of the full amount duo on the said date cannot be effected, 
the Italian Government regrets to have to abandon the intention of making a 
token payment. 

" The Italian Government feels confident that, when the question might be re- 
examined by the two Governments, the very foundations of the settlement of 
November 1925 will, in the light of tbe new situation which has developed since 
then, help to bring about a satisfactory solution." 

I avail myself [etc.]. 

Rosso. 



Note from the Latvian Minister for Foreign Affairs to tJw American Charge 
d? Affaires, Riga, November .-',.'. 1933 

Monsieur le Charge d'affaires : 

With reference to the correspondence exchanged between our Governments 
concerning the indebtedness of Latvia to the United States, I have the honour 
to inform you that my Government have followed with the closest attention 
the negotiations between the American and the British Governments on the 
question of war debts, which were temporarily suspended on November 6th 
last. From the notes exchanged on this occasion between the United States 
Secretary of State and the Ambassador of Great Britain it results that " the 
present unsettled economic and financial situations " have " made an adjourn- 
ment advisable." 

In this connection I should like to point out that, so far, the Latvian Gov- 
ernment have had no opportunity for discussing with the United States Gov- 
ernment the revision of the debt-funding agreement of September 24th, 1925, 
which was proposed in the correspondence between our Governments and con- 
firmed in the Aide-Memoire of January 26, 1933, in which the United States 
Secretary of State announced that " the President would be glad to receive 
separately at Washington a representative or representatives of the Latvian 
Government for discussions having a similar scope and purpose (as those 
conducted with the British Government) after the proposed discussions with 
the British Government had been completed." 

These latter negotiations having now been suspended in the circumstances 
described above, my Government are of the opinion that the negotiations 
between Latvia and the United States must of necessity be postponed, since 
they were made dependent on the completion of the discussions between the 
United States and Great Britain. 

In view of the foregoing, I am authorized by my Government to propose 
to the American Government to accept on December 15 next a " token pay- 
ment " of $S,r,0O, constituting approximately 5 percent of the payment due on 
that date, in acknowledgment of the debt pending the revision of the existing 
agreement, in which respect my Government maintain the point of view exposed 
in the previous correspondence on this subject. 

Please accept [etc.]. 

M. V. Salnais. 



Telegram from Acting Secretary of State to the American Legation at Riga, 

December 14, 1933 

With reference to note enclosed your despatch 1725, November 24, 1933, ad- 
vise authorities that this Government will receive (repeat receive) the partial 
payment of $8,500 as confirmation of existing obligations. 

Phillips, Acting. 



REPORT OF THE SECRETARY OF THE TREASURY 235 

To the Acting Secretary of State from the Consul General of Latvia in New 
York City, in Charge of Legation, December 13, 1933 

Sir: 

I am authorized and directed by my Government to advise you that by order 
of the Government of Latvia $8,500 (eight thousand five hundred dollars) have 
been transferred to the Federal Reserve Bank of New York, for the Account 
of the Treasury of the United States. My Government requests the Government 
of the United States of America to accept the said amount in token of acknowl- 
edgment of the indebtedness of Latvia to the United States, in connection with 
the payment due on December 15, 1933, pending the revision of the existing 
agreement. 

On behalf of my Government, I beg, sir, to express sincere regret that the 
financial situation of the country and the actual state of the Treasury of Latvia 
do not permit of a larger partial payment at this time. 

I have permitted myself to forward a similar notification to the Secretary 
of the Treasury of the United States. 

Please accept [etc.]. 

Arthur B. Luxe. 



To the Secretary of State from the Consul General of Latvia in New York 
City, in Charge of Legation, June 13, 1934 

Sir: 

With reference to the note of the Department of State of May 28, 1934, 
stating the amount due the United States Government from the Government of 
Latvia, under the debt-funding agreement of September 24, 1925, and the 
moratorium agreement of June 11, 1932, I am directed and authorized to advise 
you that, to their great regret, the Government of Latvia feel compelled to 
suspend all payments due under the aforementioned agreements, pending a 
final revision of the debt-funding agreement. 

Although, as I am authorized to declare, my Government have no intention of 
repudiating their obligations to the United States of America, and although 
they do acknowledge again their indebtedness to the Government of the United 
States, the Government of Latvia find that their offering a further token pay- 
ment on June 15 would not serve the desired purpose since, under the Johnson 
Act of April 13, 1934, and in accordance with the note of the Department of 
State dated May 19, 1934, the Government of Latvia would not be relieved of 
being regarded as in default on their obligations to the United States. While 
my Government would be prepared to make a further token payment on June 
15, if assured that in such case they would not be considered in default, it is 
felt that the procedure of making token payments, as adopted in 1933, upon 
common agreement, has become no longer practicable in view of a changed 
situation, as referred to above, and on account of a modified viewpoint of the 
United States Government, as a result of this situation. 

Upon a conscientious scrutiny of the present economic and financial situation 
of Latvia, my Government find, to their sincere regret, that there is nothing 
to warrant the resumption in full of payments under the debt-funding agree- 
ment of September 1925. I understand that the Minister President of Latvia. 
in a note delivered on June 12, 1934, has revealed the situation to the Charge 
d'Affaires of the United States in Latvia. The Government of Latvia have 
repeatedly requested the United States for a revision of the existing debt- 
funding agreement and have expressed their desire to send a delegate or 
delegates to Washington to discuss the entire matter of Latvia's indebtedness 
at such time as might be regarded as opportune and convenient by the United 
States Government. 

While an opportunity for such discussion has not yet been offered to the 
Government of Latvia, I have the honor to assure you, sir, that my Govern- 
ment are prepared to enter further discussions concerning Latvia's indebtedness 
whenever this may be agreeable to the Government of the United States. 

Please accept [etc.]. 

Arthur B. Lule. 



236 REPORT OF THE SECRETARY OP THE TREASURY 

LITHUANIA 

To the Secretary of State from the Lithuanian Charge - d'Affai7-es, June Ik, 1984 

Sib: 

Replying to your note of May 28, 1934, transmitting a statement of the sums 
due to the United States Government by the Lithuanian Government on June 15, 
1934, under the provisions of the debt-funding agreement of September 22, 1924, 
and the moratorium agreement of June 9, 1932, I have the honor to inform 
you that I have been instructed by my Government to submit to you the 
following : 

" In December 1932 the Minister of Lithuania, on behalf of the Lithuanian 
Government, addressed a note to the Secretary of State transmitting a memo- 
randum giving a detailed account of the economic and financial situation in 
Lithuania, and stating the reasons which compelled the Lithuanian Government 
to request a reexamination of the debt-funding agreement of September 22, 
1924, with a view of its more proper adjustment to the new and changed eco- 
nomic and financial conditions. The Lithuanian Government also expressed a 
hope that the December 15, 1932, payment might be postponed or other ade- 
quate relief might be arranged, because of the extreme difficulties it would 
encounter in meeting this payment. 

" In reply to the above-mentioned note, the United States Government stated 
that the President of the United States was prepared to cooperate with the 
Lithuanian Government in surveying the entire situation. 

" Since the United States Government could not reach the conclusion enabling 
it to grant the postponement of the December payment the Lithuanian Gov- 
ernment made a supreme effort entailing great sacrifices and paid the Decem- 
ber installment in full. 

" On January 24, 1933, the United States Government informed the Lithuanian 
Government that it would be glad to receive separately at Washington a repre- 
sentative or representatives of the Lithuanian Government for discussions 
having a similar scope and purpose after the proposed discussions with the 
British Government had been completed. 

" Deeply grateful for this attitude of the United States Government, the Lithu- 
anian Government was prepared to begin the reexamination of the debt problem 
as suggested by the United States Government, and hoped that these discus- 
sions would take place at an early date. However, in reply to a verbal inquiry 
as to the prospects of such discussions, the Lithuanian Government, through 
its Minister in Washington, was informed by the Secretary of State that as far 
as the debt problem was concerned no material change of the situation had 
taken place. 

" The Lithuanian Government, because of the prevailing adverse economic 
and financial conditions, was unable to meet in full the payments due to the 
United States Government on June 15 and December 15, 1933. But, desiring 
to give tangible proof of its determination to meet its obligations commensurate 
with its ability and capacity, the Lithuanian Government made part payments 
on account of the installments due on the above-mentioned dates. 

" Since the last payment was made, there have been no indications of better- 
ment of the adverse economic and financial situation of Lithuania. On the 
contrary, in many instances, conditions have become even more aggravated. 
Consequently, it was imperative to make further reductions in the state budget 
and to resort to the most stringent measures of national economy. 

"A thorough survey of the existing economic and financial conditions forced 
the Lithuanian Government to come to the conclusion that it is unable to meet 
the installment due to the United States Government on June 15, 1934, as pro- 
vided under the terms of the debt-funding agreement of September 22, 1924, 
and the moratorium agreement of June 9, 1932. 

" The Lithuanian Government, expressing its most sincere regret that it was 
obliged to arrive at the above-mentioned conclusion, desires to reaffirm the 
assurance that it continues to acknowledge its indebtedness to the United 
States Government, and entertains an earnest hope that an opportunity to enter 
upon discussions of the debt problem, with a view of its more proper adjust- 
ment to the new and changed economic and financial conditions, will be pre- 
sented in the near future." 

Accept [etc.]. 

Mikas Baqdonas. 



REPORT OF THE SECRETARY OF THE TREASURY 237 



To the Department of State from the Polish Charge d'Affaires, ad interim, 

December 14, 1933 

[Memorandum] 

The Chargg d'Affaires ad interim of Poland has been instructed by his 
Government to inform the Government of the United States that for reasons 
analogous to those stated in the Embassy's note of December 8, 1932, and con- 
firmed by later declarations, they are obliged to request similarly a deferment 
of payment of the installment of capital and interest payable on December 15th. 
The Polish Government are still not in a position to resume, towards the 
United States, the service of the debt. 

Referring to their previous memoranda, the latest of which is dated June 24, 
1933, the Polish Government confirm their readiness to negotiate this matter. 



To the Polish Charge" d'Affaires ad interim, December H, 1933 

Sib: 

In acknowledging receipt of your memorandum dated December 14, 1933, 
regarding the payment due December 15, 1933, on account of the indebtedness 
of the Government of Poland to the United States, note is taken of the state- 
ment of the Polish Government that it will not be able to effect the payment 
falling due on that date. 
Accept [etc.]. 

William Phillips, 
Acting Secretary of State. 

To the Secretary of State from the Polish Ambassador, June 13, 1934 

[Memorandum] 

The Ambassador of Poland has been instructed by his Government to inform 
the Government of the United States that for reasons analogous to those stated 
in the note of December 8, 1932, and confirmed by later declarations, they are 
obliged to request similarly a deferment of payment of the installment of the 
interest payable on June 15, 1934. 

The Polish Government are still not in a position to resume, towards the 
United States, the service of the debt. 



To the Secretary of State from the Rumanian Minister, June 12, 1934 

Sir: 

Referring to my notes of June 15, 1933, setting forth the unprecedented eco- 
nomic and financial difficulties facing the Rumanian Government — difficulties 
which have since further increased — and in reply to your note of May 28, 1934, 
I have the honor to recall to your attention the fact that the payment made by 
the Rumanian Government on June 15, 1933, was subsequent to the declaration 
of the President of the United States, on the occasion of the token payment made 
by the Government of Great Britain, that in accepting such payment it was his 
personal view that he would not regard the British Government as in default. 

The Rumanian Government understands that a law recently passed by the 
Congress of the United States would render impossible a similar declaration by 
the President. 

Under these circumstances the Rumanian Government is reluctantly obliged 
to suspend all further payments on its indebtedness to the Government of the 
United States pending a rediscussion of the entire problem, and trusts that, as 
requested in my notes above referred to, a date may be set for this purpose at 
the early convenience of the Government of the United States. 

Accept [etc.]. 

Davila. 



238 REPORT OF THE SECRETARY OF THE TREASURY 

Exhibit 34 

[Public No. 151, 73d Cong., S. 682] 

An act to prohibit financial transactions with any foreign government in 
default un its obligations to the United States 

Be it enacted by the Senate and House of Representatives of the United 
States of America in Congress assembled, That hereafter it shall be unlawful 
within the United States or any place subject to the jurisdiction of the United 
States for any person to purchase or sell the bonds, securities, or other obliga- 
tions of, any foreign government or political subdivision thereof or any 
organization or association acting for or on behalf of a foreign government 
or political subdivision thereof, issued after the passage of this act, or to make 
any loan to such foreign government, political subdivision, organization, or 
association, except a renewal or adjustment of existing indebtedness while 
such government, political subdivision, organization, or association is in de- 
fault in the payment of its obligations, or any part thereof, to the Government 
of the United States. Any person violating the provisions of this act shall 
upon conviction thereof be fined not more than $10,000 or imprisoned for not 
more than five years, or both. 

Sec. 2. As used in this act the term " person " includes individual, partner- 
ship, corporation, or association other than a public corporation created by 
or pursuant to special authorization of Congress, or a corporation in which the 
Government of the United States has or exercises a controlling interest through 
stock ownership or otherwise. 

Approved, April 13, 1934. 

Exhibit 35 

Statement for the press by the Department of State concerning an opinion of 
the Attorney General requested by the Secretary of State upon various ques- 
tions under the act of April 13, 1934, entitled "An act to prohibit financial 
transactions ivith any foreign government in default on its obligations to the 
United States " 

The Secretary of State has received an opinion upon various questions per- 
taining to the act of April 13, 1934, entitled "An act to prohibit financial 
transactions with any foreign government in default on its obligations to the 
United States ", known as the Johnson Act. The Department of State concurs 
in the interpretation of the act expressed in the Attorney General's opinion. 

Following is the full text of the Attorney General's opinion : 

Department of Justice, 

Washington, May 5, 1934- 
Sir: 

I have the honor to refer to your letter of April 17 requesting my opinion 
upon various questions under the act of April 13, 1934, entitled "An act to 
prohibit financial transactions with any foreign government in default on its 
obligations to the United States ", which reads as follows : 

[Tt'xt of act is here omitted, see exhibit 34.] 

Your questions, in the order in which they are set forth, and my views 
thereon are stated below : 

"(1) What governments, political subdivisions, or associations are in default 
on their obligations to the United States? " 

" Default " is a common word which conveys at once a known meaning, but 
as applied to particular situations, it is often a matter of uncertainty whether 
or not or when a " default " has occurred. Concerning it, Chief Justice Eyre 
declared in Doe v. Dacre, 1 B. & P. 250, 258 ; 126 Reprint S87, 891, " I do not 
know a larger or looser word than ' default ' " ; but as to civil liability the 
following definitions are enlightening: 

"As used in such an instrument (a contract), it can mean only the nonper- 
formance of a contract — a failure upon the part of one of the contracting 
parties to do that which he had contracted to do." (Sixteen hundred Tons 
of Nitrate of Soda v. McLeod, 61 Fed. 849, 851.) 

" In one sense, any failure is a default, whether it arises from the omission 
to perform a contract, or from a neglect of duty. In many reported cases 



REPORT OF THE SECRETARY OF THE TREASURY 239 

the omission to pay a debt or to perform a contract is spoken of as a default." 
(Bumll v. Grossman, 69 Fed. 749, 752.) 

However, the word cannot safely be accepted as importing so inclusive a 
significance when it is used as a penal statute, as pointed out by the Supreme 
Court of Nebraska in State v. Moores, 52 Neb. 770, 787, upon consideration of 
a constitutional provision which rendered ineligible to public office " any person 
who is in default as collector and custodian of public money or propertv " 
which the court declared to be " penal in its nature." 

Lipman v. Equitable Life Assur. Soc. of the United States, 58 F (2d) 15 and 
Hartsuff v. Hall, 58 Neb. 417, each dealing with written instruments providing 
for payment at a stated time with grace, reached contrary conclusions upon 
consideration of the context and probable intention as to whether " default " 
occurred at the time specified for payment or at the end of the grace period, 
thereby indicating that no absolute or rigid meaning is to be assumed in a civil 
case, and a fortiori in a criminal case. 

In view, therefore, of the flexibility of the term, and bearing in mind that 
a penal statute is to be strictly construed against the imputation of criminality 
to an act which is not malum in se, I think it is required that we seek carefully 
from authorized sources the probable intent of Congress. In connection there- 
with your letter indicates particular concern as to Great Britain and other 
countries which have made so-called " token payments ", and as to the Soviet 
Government, which has not yet, as you informed me, recognized as binding 
upon it the obligations incurred by prior governments in Russia. I shall, 
therefore, indicate to the extent that I properly can my views in these instances. 

On November 7, 1933, the President issued the following statement : 

" For some weeks representatives of the British Government have been con- 
ferring with representatives of this Government on the subject of the British 
debt to this country growing out of the World War. * * * 

" It has, therefore, been concluded to adjourn the discussions until certain 
factors in the world situation — commercial and monetary — become more clari- 
fied. In the meantime, I have as Executive noted the representations of the 
British Government. I am also assured by that Government that it continues 
to acknowledge the debt without, of course, prejudicing its right again to 
present the matter of its readjustment, and that on December 15, 1933, it will 
give tangible expression of this acknowledgment by the payment of seven and 
one-half million dollars in United States currency. 

" In view of these representations, of the payment, and of the impossibility, 
at this time, of passing finally and justly upon the request for a readjustment 
of the debt, I have no personal hesitation in saying that I shall not regard the 
British Government as in default." 

On the same day the Chancellor of the Exchequer addressed the House of 
Commons to the same effect, concluding with the President's statement that he 
would not regard the British Government as in default. 

A statement of similar import had been made by the President in June 1933, 
shortly before certain installments upon the debts were due. It is unnecessary 
to repeat here the statement then made or to treat further of later statements 
by the President and their acceptance in good faith, except to say that Great 
Britain and certain other countries made partial payments on installments due 
in June 1933, and in December 1933, with the expectation and belief that they 
would thereby avoid a default. 

In his annual message to Congress delivered at a joint meeting of the two 
Houses on January 3, 1934, the President stated : 

" I expect to report to you later in regard to debts owed the Government and 
people of this country by the governments and peoples of other countries. 
Several nations, acknowledging the debt, have paid in small part ; other nations 
have failed to pay. One nation — Finland — has paid the installments due this 
country in full." (Cong. Rec, v. 78, p. 5.) It does not appear, however, that 
any further report in regard to these debts was transmitted to Congress prior 
to the enactment of the statute. 

I find no record of the expression of any views in the Senate upon the mean- 
ing of the word " default " when the bill was under consideration, but the 
matter was considered in the House, as indicated by the following excerpts 
from the Congressional Record. 

" Mr. Bankhead. Under this bill, what would be the status of governments 
like England, that made a so-called ' token payment ', but has defaulted in the 
main? 

90353—35 17 



240 REPORT OF THE SECRETARY OF THE TREASURY 

" Mr. McRetnolds. The President of the United States, as I understand it, 
has held that they are not in default." (Cong. Rec, vol. 78, p. 6192.) 

" Mr. Britten. Does the gentleman agree with the gentleman from New 
York (Mr. Fish) that those governments which have made a small token pay- 
ment will not be held in default by our Government? 

" Mr. Johnson of Texas. I am not so sure about that." (Cong. Rec, vol. 7S, 
p. 6194.) 

" Mr. Johnson of Texas. Yes ; the language is broad and comprehensive, but 
the question of what constitutes a default is one that will have to be deter 
mined by the terms of the original contracts supplemented by any subsequent 
agreements that may have been lawfully made." (Cong. Rec, vol. 78, p. 6195.) 

" Mr. Kloeb. Since that time we have beheld the spectacle of all these debtor 
countries, save one, either actually defaulting in the payments of the install- 
ments as they became due or making a so-called ' token payment ' in order to 
avoid the ugly word 'default'." (Cong. Rec, vol. 78, p. 6197.) 

" Mr. Britten. Mr. Speaker, I am going to vote for this bill because I have, 
to my own satisfaction at least, concluded that any nation of Europe in 
default of any portion of its indebtedness, interest or principal, to us is included 
in the intention of the bill. 

" I realize that in the following statement I am disagreeing with the chair- 
man of the committee, and probably with the ranking Member on this side, 
but on page 2, in speaking about the indebtedness, it says, ' While such gov- 
ernment is in default in payment of its obligation or any part thereof.' I 
fail to see why England, with a surplus this year of $160,000,000 in her treas- 
ury, or France, with countless millions of gold in her treasury, more gold in 
her treasury per capita than we have, and governments of that type should 
be excluded from the provisions of this bill ; and France is not, I realize, just 
because they made some insignificant token payments on account of their vast 
obligation to us. 

" If the State Department were to exclude those nations from the provisions 
of this bill, then Czechoslovakia, Great Britain, Greece, Italy, Latvia, Lithuania, 
and Rumania would be excluded, because they have all made some small 
payment. 

" My contention is that the State Department should not act that way, nor 
has it the authority to presume that because an infinitesimal payment lias 
been made on an indebtedness of billions it takes that nation out of one class 
and puts it into a preferred class." (Cong. Rec, vol. 78, pp. 6197-G19S.) 

Mr. McReynolds was in charge of the bill during its consideration by the 
House, and therefore, under the rules applied by the courts in considering such 
proceedings, his apparent view that Great Britain and other countries similarly 
situated were not to be deemed in default is entitled to especial weight. 

Moreover, the President, by signing the bill, participated equally with the 
Houses of Congress, and his view as to the meaning of words employed in it 
is of great significance. I cannot assume that he believed Great Britain to 
be in default, within the meaning of the word as used in the bill, in view of 
his express statements on the subject ; and from such information as I now 
have before me it would appear that Czechoslovakia, Italy, Latvia, and Lithu- 
ania fall in the same category with Great Britain. I conclude, therefore, that 
these five countries are not, at the present time, in default under the terms of 
the act in question. 

Beyond this, a specific answer as to what governments, political subdivisions, 
organizations, or associations are in default on their obligations to the United 
States would seem to require a survey of data not immediately available to 
this office, but in general it may be said, in the words of the statute, that a 
" foreign government, political subdivision, organization, or association is in 
default " if it has failed " in the payment of its obligations, or any part thereof, 
to the Government of the United States ", according to its promise or under- 
taking to pay a fixed amount at a definite time, unless such default has been 
postponed or waived in some competent manner or by a transaction having 
that effect in law or good morals. Should any authoritative statement, in 
harmony with this opinion, be issued in the form of an administrative declara- 
tion that named countries are or are not in default, I should be inclined to 
follow it insofar as the Department of Justice is charged with the responsibility 
of instituting prosecutions in cases of violation, thereby removing misapprehen- 
sion and uncertainty to those who desire to avoid conflict with the statutory 
interdiction : and should the question come before the courts it is reasonable 
to believe that they would honor any such administrative determination. 



REPORT OE THE SECRETARY OE THE TREASURY 241 

With regard to the status, under the act, of a political subdivision of a 
defaulting country when the subdivision itself is not in default, attention is 
called to the fact that while explaining the bill in the House of Representatives 
Mr. McReynolds stated that in such a case the political subdivision, such as a 
city in a defaulting country, would not come within the inhibitions of the 
bill if the city itself were not in default (Cong. Rec, vol. 78, p. G20O). I 
approve this view, not only because of the presumption arising from Mr. 
McReynolds' explanation but because a reasonable interpretation of the statute 
itself supports the conclusion that the default of a foreign government would 
not be imputed to a political subdivision thereof, e. g., a municipality, so as 
to prohibit the purchase or sale of bonds or securities of the latter, if the 
municipality is not itself in default. 

It has also been asked whether or not Canada, a member of the common- 
wealth of nations which compose the British Empire, is to be regarded as a 
political subdivision of Great Britain. The question should properly be an- 
swered in the negative, and this conclusion was suggested in Congress (Cong. 
Rec, vol. 78, p. 6195), but it appears to be immaterial, in view of my conclusion 
above stated concerning the intention of Congress as applied to the obligations 
of political subdivisions. Canada, I believe, is not in default. 

"(i') To what types of transactions does the act apply? " 

The committee reports (S. Rept. 20 and H. Rept. 974, 73d Cong.) recite that 
the bill was introduced following an investigation by the Senate Committee on 
Finance and the revelation therein that " billions of dollars of securities 
* * * offered for sale to the American people " were overdue and unpaid ; 
that some of these " foreign bonds and obligations * * * were sold by the 
American financiers to make outrageously high profits " ; and stated a purpose 
" to prevent a recurrence of the practices which were shown by the investigation 
to be little less than a fraud upon the American people * * * to curb the 
rapacity of those engaged in the sale of foreign obligations * * *." 

This, I think, is indicative of a purpose to deal with such " bonds " and 
" securities " and with " other obligations " of like nature, observing the rule of 
ejusdem generis — that is, obligations such as those which had been sold to the 
American public to raise money for the use of the foreign governments issuing 
them — not contemplating foreign currency, postal money orders, drafts, checks, 
and other ordinary aids to banking and commercial transactions, which are 
" obligations " in a broad sense but not in the sense intended. It was obviously 
not the purpose of the Congress to discontinue all commercial relations with 
the defaulting countries. 

"(3) What constitutes a renewal of an existing credit?" 

Your legal adviser has concluded, in the memorandum transmitted with your 
letter of April 23d, that : 

" It would seem that any instrument which would be issued for the purpose 
of replacing the evidence of any existing indebtedness would constitute a 
renewal or an adjustment of an existing indebtedness. If new bonds were 
issued to replace old ones, it would seem that such a. transaction would be 
permissible. Any instrument given in satisfaction or extension of an existing 
indebtedness would, it is believed, come within this exception." 

In general I approve this statement, but obviously it will be a question of 
fact in each case whether or not what is done amounts in good faith to the mere 
" renewal * * * of existing indebtedness." 

"(4) Does the act apply to acceptances or time drafts?" 

This question appears to be sufficiently answered by the comments under 
question no. 2, supra. It appears proper to add, however, that such transactions 
must be conducted in good faith in order to be within the law, and not as mere 
subterfuges to circumvent its purpose. 

"(5) Is the present Soviet Government, as the successor to prior govern- 
ments of Russia, to be regarded as in default, in v^ew of the fact that no 
payment has been made on the bonds issued to the Government of the United 
States by the Provisional Government, on account of loans made to that Gov- 
ernment by the United States during the period of the war, the Provisional 
Government having been the immediate predecessor of the Soviet Government? " 

The proceedings in the House of Representatives indicate acceptance of the 
view that our Government regards the Soviet Government as responsible for 
the obligations incurred by prior Russian governments (Cong. Rec., vol. 
78, p. 6192). The position of our Government in this respect accords with 
accepted principles of international law, as illustrated by the following au- 
thorities : 



242 REPORT OF THE SECRETARY OF THE TREASURY 

Moore, Int. Law Digest, v. 1, sec. 96, quoting Secretary of State Adams 
(August 10, 1818) : 

" No principle of international law can be more clearly established than this : 
That the rights and the obligations of a nation in regard to other States are 
independent of its internal revolutions of government. It extends even to 
the case of conquest. The conqueror who reduces a nation to his subjection 
receives it subject to all its engagements and duties toward others, the ful- 
fillment of which then becomes his own duty." 

Halleck, Int. Law (3d ed.) v. 1, p. 90: 

" Public debts, whether due to or from the revolutionized state, are neither 
canceled nor affected by any change in the constitution or internal government 
of a state." 

The same rule is stated, in substance, in Kent's Commentaries (12th ed.) 
v. 1, p. 26, and in an opinion of Attorney General Griggs, 22 Op. A. G. 583, 
584. In connection with, and in support of, these statements the authors cite 
L. Whart. Int. Law Dig., sec. 5; Hall, Int. Law (4th ed.), pp. 104, 105; Rivier, 
Principes du Droit des Gens, I, pp. 70-72; United States v. NacRae, L. R. 
8 Eq., 69; Vattel, Droit des Gens, liv II, ch. XII, §§ 183-197; Grotius, De 
Jur. Bel., lib. II, cap. II § 8. 

This view, in fact, was stated in Congress (Cong. Rec, vol. 78, p. 6192) to 
have suggested the insertion of the provision in section 2 of the statute exclud- 
ing from its operation public corporations controlled by the United States, 
which are permitted to engage in the transactions prohibited to individuals 
and private corporations, if administratively determined to be desirable. I, 
therefore, regard the Soviet Government as in default within the contemplation 
of the statute. 

"(6) However the last question may be answered, can the Soviet Govern- 
ment be considered in default to the Government of the United States pending 
negotiations that are being had with a view to arriving at the amount of the 
indebtedness due from the Soviet Government to the Government of the 
United States?" 

Bearing in mind what I have just stated in response to your fifth question, 
I am aware of no principle of law under which a previously existing default 
is waived or overcome because of the mere pendency of negotiations " with a 
view to arriving at the amount of the indebtedness due ", assuming that there 
is any uncertainty in this regard, although, of course, the matter might be 
affected by the outcome of any such negotiations. 

"(7) Would the issue and sale in the United States of 'scrip' or 'funding 
bonds' in part payment of outstanding obligations be in violation of the act?" 

This question appears to present only a detail of the matter treated generally 
under question no. 3, and the same answer is applicable. In other words, such 
" scrip " or " funding bonds " are authorized if issued in the bona fide " re- 
newal or adjustment of existing indebtedness." 

It is made unlawful, as I have said, " to purchase or sell the bonds, securities, 
or other (similar) obligations of any foreign government * * * issued 
after the passage of this act, or to make any loan to such foreign govern- 
ment * * * except a renewal or adjustment of existing indebtedness." 
The word " renewal " needs no definition by me — it is frequently used and 
commonly understood in banking, business, and commercial transactions— and 
the word " adjustment ", relating to accounts or claims, has been used in our 
statutes since the formation of the Government. (See the act of Sept. 2, 1789, 
1 Stat. 65, and the act of Mar. 3, 1817, 3 Stat. 366.) It is used, I think, in the 
sense of compromising or determining how much is to be paid, when and where, 
upon what terms, and the like. Thus an adjustment of an existing indebted- 
ness within the meaning of the act is any lawful arrangement entered into in 
good faith between the debtor and the creditor which comprises or determines 
the amount to be paid by the debtor to the creditor, and it may include other 
details of composition or settlement. 
Respectfully, 

Homer Cummings, Attorney General. 

The honorable the Secretary of State. 



REPORT OF THE SECRETARY OF THE TREASURY 243 
Exhibit 36 

Message from the President to the Congress, transmitting a statement cm the 
subject of debts owed the Government and people of the United States by 
the governments and peoples of foreign countries (H. Doc. No. 392, 73d Cong., 
2d sess.) 

To the Congress of the United States: 

In my address to the Congress January 3 I stated that I expected to report 
later in regard to debts owed the Government and people of this country by 
the governments and people of other countries. There has been no formal 
communication on the subject from the Executive since President Hoover's 
message of December 19, 1932. 

The developments are well known, having been announced to the press as 
they occurred. Correspondence with debtor governments has been made public 
promptly and is available in the Annual Report of the Secretary of the Treas- 
ury. It is, however, timely to review the situation. 

Payments on the indebtedness of foreign governments to the United States 
which fell due in the fiscal year ended June 30, 1932, were postponed on the 
proposal of President Hoover announced June 20, 1931, and authorized by the 
joint resolution of Congress approved December 23, 1931. Yugoslavia alone 
suspended payment while rejecting President Hoover's offer of postponement. 

In the 6 months of July to December 1932, which followed the end of the 
Hoover moratorium year, payments of $125,000,000 from 12 governments fell 
due. Requests to postpone the payments due December 15, 1932, were received 
from Great Britain, France, Belgium, Czechoslovakia, Estonia, Latvia, Lith- 
uania, and Poland. The replies made on behalf of President Hoover through 
the Department of State declined these requests, generally stating that it was 
not in the power of the Executive to grant them, and expressing a willingness 
to cooperate with the debtor government in surveying the entire situation. 
After such correspondence Czechoslovakia, Finland, Great Britain, Italy, Lat- 
via, and Lithuania met their contractual obligations, while Belgium, Estonia, 
France, and Poland made no payment. 

In a note of December 11, 1932, after the United States had declined to 
sanction postponement of the payment due December 15, the British Gov- 
ernment, in announcing its decision to make payment of the amount due on 
December 15, made the following important statements : 

" For reasons which have already been placed on record His Majesty's Govern- 
ment are convinced that the system of intergovernmental payments in respect of 
the war debts as it existed prior to Mr. Hoover's initiative on June 20, 1931, 
cannot be revived without disaster. Since it is agreed that the whole subject 
should be reexamined between the United States and the United Kingdom this 
fundamental point need not be further stressed here. 

" In the view of His Majesty's Government therefore the payment to be made 
on December 15 is not to be regarded as a resumption of the annual payments 
contemplated by the existing agreement. It is made because there has not been 
time for discussion with regard to that agreement to take place and because the 
United States Government have stated that in their opinion such a payment 
would greatly increase the prospects of a satisfactory approach to the whole 
question. 

" His Majesty's Government propose accordingly to treat the payment on 
December 15 as a capital payment of which account should be taken in any 
final settlement and they are making arrangements to effect this payment in 
gold as being in the circumstances the least prejudicial of the methods open to 
them. « 

" This procedure must obviously be exceptional and abnormal and His Maj- 
esty's Government desire to urge upon the United States Government the 
importance of an early exchange of views with the object of concluding the 
proposed discussion before June 15 next in order to obviate a general break- 
down of the existing intergovernmental agreements." 

The Secretary of State, Mr. Stimson, replied to this note on the same day 
that acceptance by the Secretary of the Treasury of funds tendered in payment 
of the December 15 installment cannot constitute approval of or agreement to 
any condition or declaration of policy inconsistent with the terms of the agree- 
ment inasmuch as the Executive has no power to amend or to alter those terms 
either directly or indirectly or by implied commitment. 



244 REPORT OF THE SECRETARY OP THE TREASURY 

No payment was made by France December 15, 1932, as the French Chamber 
of Deputies by a vote on the morning of December 14 refused authorization 
to make the payment. The resolution voted by the French Chamber at that 
time invited the French Government to convoke as soon as possible, in agree- 
ment with Great Britain and other debtors, a general conference for the purpose 
of adjusting all international obligations and putting an end to all interna- 
tional transfers for which there is no compensating transaction. The resolution 
stated that the Chamber, despite legal and economic considerations, would have 
authorized settlement had the United States been willing to agree in advance 
to the convening of the conference for these purposes. 

This resolution of the French Chamber is to be read in relation with the 
public statements of policy made by President Hoover and by myself on 
November 23, 1932. President Hoover said : 

" The United States Government from the beginning has taken the position 
that it would deal with each of the debtor governments separately, as separate 
and distinct circumstances surrounded each case. Both in the making of the 
loans and in the subsequent settlements with the different debtors, this policy 
has been rigidly made clear to every foreign government concerned." 

I said : 

" I find myself in complete accord with the four principles discussed in the 
conference between the President and myself yesterday and set forth in a state- 
ment which the President has issued today. 

" These debts were actual loans made under the distinct understanding and 
with the intention that they would be repaid. 

" In dealing with the debts each government has been and is to be considered 
individually, and all dealings with each government are independent of dealings 
with any other debtor government. In no case should we deal with the debtor 
governments collectively. 

" Debt settlements made in each case take into consideration the capacity to 
pay of the individual debtor nations. 

" The indebtedness of the various European nations to our Government has no 
relations whatsoever to reparations payments made or owed to them." 

Of the $125,000,000 due and payable December 15, 1932, the Treasury received 
$98,750,000, of which $95,550,000 was the British payment made subsequent to 
the above correspondence, and the other $3,000,000 represented payments by 
five other debtor nations. The amounts due from Belgium, Estonia, France, 
Hungary, and Poland which were not received amounted to $25,000,000, of which 
$19,260,000 was due and payable by France. 

In my statement issued November 23, 1932, I had said : 

" I firmly believe in the principle that an individual debtor should at all times 
have access to the creditor ; that he should have opportunity to lay facts and 
representations before the creditor and that the creditor always should give 
courteous, sympathetic, and thoughtful consideration to such facts- and repre- 
sentations. 

" This is a rule essential to the preservation of the ordinary relationships of 
life. It is a basic obligation of civilization. It applies to nations as well as to 
individuals. 

" The principle calls for a free access by the debtor to the creditor. Each case 
should be considered in the light of the conditions and necessities peculiar to the 
case of each nation concerned." 

On January 20, 1933, President Hoover and I agreed upon the following 
statement : 

" The British Government has asked for a discussion of the debts. The in- 
coming administration will be glad to receive their representative early in 
March for this purpose. It is, of course, necessary to discuss at the same time 
the world economic probfems in which the United States and Great Britain 
are mutually interested and therefore that representatives should also be sent 
to discuss ways and means for improving the world situation." 

On March 4, 1933, the situation with regard to the indebtedness of other 
governments to the United States was, in brief, as follows: 

France: The French Parliament had refused to permit payment of 
$19,261,432.50 interest due on the $3,863,650,000 bonds of France owned by 
the United States. 

Great Britain : With respect to the British bonded debt held by the Treasury 
in the principal amount of $4,368,000,000, Great Britain in meeting a due pay- 
ment of $30,000,000 principal and $65,550,000 interest bad stated that the pay- 
ment was not to be regarded as a resumption of the annual payments con- 



REPORT OF THE SECRETARY OF THE TREASURY 245 

templated under the funding agreement of June 19 r 1923, but was to be 
treated, so far as the British Government was concerned, as a capital payment 
of which account should be taken in any final settlement. 

Italy: With respect to the $2,004,900,000 principal amount of bonds of the 
Italian Government held by the United States Treasury, the Italian Govern- 
ment had paid the sum of $1,245,437 interest due December 15, 1932; but in 
doing so it referred to a resolution of the Grand Council of Fascism, adopted 
December 5, 1932, in which " a radical solution of the ' sponging of the slate • 
type was declared to be necessary for the world's economic recovery." 

Czechoslovakia, in making a payment of $1,500,000 principal due Decem- 
ber 15, 1932, on its debt of $165,000,000, had stated that "this payment 
constitutes in the utmost self-denial of the Czechoslovak people their final 
effort to meet the obligation under such extremely unfavorable circumstances." 

Belgium had declined to pay $2,125,000 interest due December 15, 1932, on 
its bonds of $400,680,000 held by the Treasury of the United States, and in 
doing so had recited circumstances which it stated " prevent it from resuming, 
on December 15, the payments which were suspended by virtue of the agree- 
ments made in July 1931." Adding : " Belgium is still dispased to collaborate 
fully in seeking a general settlement of intergovernmental debts and of the 
other problems arising from the depression." 

Poland had not paid the $232,000 principal and $3,070,980 interest due Decem- 
ber 15, 1932, on its bonds in the principal amount of $206,057,000 held by the 
Treasury of the United States. 

Of the nine other governments whose bonds are held by the Treasury of the 
United States, Estonia and Hungary had not met payments due December 15, 
1932. 

Austria is availing itself of a contractual right to postpone payments. 

Greece was making only partial payments on its foreign bonded indebted- 
ness, including that held by the United States. 

Yugoslavia had declined to sign any Hoover moratorium agreement and had 
stopped paying. 

No payment by Rumania had fallen due since the close of the Hoover 
moratorium. 

Finland, Latvia, and Lithuania were current in their payments. 

Although I had informal discussions concerning the British debt with the 
British Ambassador even before Mai'ch 4, 1933, and in April there was further 
discussion of the subject with the Prime Minister of Great Britain and between 
experts of the two governments, it was not possible to reach definitive conclu- 
sions. On June 13 the British Government gave notice that in the then exist- 
ing circumstances it was not prepared to make the payment due June 15, 1933, 
but would make an immediate payment of $10,000,000 as an acknowledgment 
of the debt pending a final settlement. To this notice reply was made by the 
Acting Secretary of State, pointing out that it is not within the discretion of 
the President to reduce or cancel the existing debt owed to the United States 
nor to alter the schedule of debt payments contained in the existing settlement. 
At the same time I took occasion to announce that in view of the representa- 
tions of the British Government, the accompanying acknowledgment of the debt 
itself, and the payment made, I had no personal hesitation in saying that I 
would not characterize the resultant situation as a default. In view of the 
suggestion of the expressed desire of the British Government to make repre- 
sentations concerning the debt, I suggested that such representations be made 
in Washington as soon as convenient. 

The Agricultural Adjustment Act, approved May 12, 1933, had authorized 
the President for a period of 6 months from that date to accept silver in pay- 
ment of installments due from any foreign government, such silver to be ac- 
cepted at not to exceed a price of 50 cents an ounce. In the payments due 
June 15, 1933, the Governments of Great Britain, Czechoslovakia, Finland, Italy, 
Lithuania, and Rumania took advantage of this offer. 

On June 15, 1933, payments of about $144,000,000 were due from foreign gov- 
ernments, the larger amounts being about $76,000,000 from Great Britain, almost 
$41,000,000 from France, and $13,500,000 from Italy. The amounts actually 
paid into the Treasury were $11,374,000 of which $10,000,000 was paid by Great 
Britain and $1,000,000 by Italy. Communications were received from most of 
the debtor governments asking a discussion of the debt question with the United 
States Government. 

In October 1933, representatives of the British Government arrived in Wash- 
ington and conferred for some weeks with representatives of this Government, 



246 REPORT OF THE SECRETARY OF THE TREASURY 

These discussions made clear the existing difficulties and the discussions were 
adjourned. 

The British Government then stated that it continued to acknowledge the 
debt without prejudicing its right again to present the matter of readjustment 
and that it would express this acknowledgment tangibly by a payment of $7,500,- 
000 on December 15. In announcing this I stated that in view of the repre- 
sentations, of the payment, and of the impossibility of accepting at that time 
any of the proposals .for a readjustment of the debt, I had no personal hesita- 
tion in saying that I should not regard the British Government as in default. 

On December 15, 1933, there was due and payable by foreign governments 
on their debt funding agreements and Hoover moratorium agreements a total 
of about $153,000,000. The payments actually received were slightly less than 
$9,000,000 including $7,500,000 paid by Great Britain, $1,000,000 by Italy, and 
about $230,000 by Finland. 

At the present time Finland remains the only foreign government which 
has met all payments on its indebtedness to the United States punctually and 
in full. 

It is a simple fact that this matter of the repayment of debts contracted to 
the United States during and after the World War has gravely complicated 
our trade and financial relationships with the borrowing nations for many 
years. 

These obligations furnished vital means for the successful conclusion of a 
war which involved the national existence of the borrowers, and later for a 
quicker restoration of their normal life after the war ended. 

The money loaned by the United States Government was in turn borrowed 
by the United States Government from the people of the United States, and 
our Government in the absence of payment from foreign governments is com- 
pelled to raise the shortage by general taxation of its own people in order to 
pay off the original Liberty bonds and the later refunding bonds. 

It is for these reasons that the American people have felt that their debtors 
were called upon to make a determined effort to discharge these obligations. 
The American people would not be disposed to place an impossible burden upon 
their debtors, but are nevertheless in a just position to ask that substantial 
sacrifices be made to meet these debts. 

We shall continue to expect the debtors on their part to show full under- 
standing of the American attitude on this debt question. The people of the 
debtor nations will also bear in mind the fact that the American people are cer- 
tain to be swayed by the use which debtor countries make of their available 
resources — whether such resources would be applied for the purposes of re- 
covery as well as for reasonable payment on the debt owed to the citizens of 
the United States, or for purposes of unproductive nationalistic expenditure, or 
like purposes. 

In presenting this report to you, I suggest that, in view of all existing 
circumstances no legislation at this session of the Congress is either necessary 
or advisable. 

I can only repeat that I have made it clear to the debtor nations again and 
again that " the indebtedness to our Government has no relation whatsoever to 
reparations payments made or owed to them " and that each individual nation 
has full and free opportunity individually to discuss its problem with the 
United States. 

We are using every means to persuade each debtor nation as to the sacred- 
ness of the obligation and also to assure them of our willingness, if they 
should so request, to discuss frankly and fully the special circumstances relating 
to means and method of payment. 

Recognizing that the final power lies with the Congress, I shall keep the 
Congress informed from time to time and make such new recommendations as 
may later seem advisable. 

Franklin D. Roosevelt. 

The White House, 

June 1, 193$. 



REPORT OF THE SECRETARY OF THE TREASURY 247 

MIXED CLAIMS 

Exhibit 37 

Senate Report No. 1376, June 11, 1934, to accompany Senate Joint Resolution 
135, to amend Settlement of War- Claims Act of 1928, as amended (73d Cong., 
2d sess.) 

The Committee on Finance, to whom was referred the joint resolution (S. J. 
Res. 135) to amend the Settlement of War Claims Act of 1928, as amended, 
having considered the same, report favorably thereon with amendments, and 
recommend that the resolution, as amended, do pass. 

Following the war, German nationals had claims against the United States 
such as claims arising from our seizure of property owned by German nationals. 
Similarly, American nationals had claims against the German Government 
arising out of the war. On July 2, 1921, Congress passed the Knox-Porter 
peace resolution (later incorporated in the peace treaty between the United 
States and Germany), which provided that none of the property of the German 
Government and German nationals which was seized during the war should 
be returned until Germany had made suitable provision for the satisfaction of 
the claims of the United States and its nationals against Germany arising out 
of the war. 

Germany was not in a position to make a lump payment of the amount due 
to Americans. Accordingly, the United States consented to the German-Ameri- 
can debt agreement (June 23, 1930) under which Germany agreed (among 
other things) to make payment in installments over a period of years of an 
aggregate amount equal to the estimated amount due to American nationals. 
The installments were not sufficiently large to permit of early payments in 
substantial amounts. Accordingly, the American Congress appropriated $S6,- 
000,000 to be deposited in an account known as the " German Special Deposit 
Account ", out of which payments were to be made in accordance with priorities 
established in the Settlement of War Claims Act of March 10, 1928. Of this 
$86,000,000, approximately $43,000,000 was paid to American nationals and 
$43,000,000 to German nationals. 

The German Government took advantage of the provisions of the German- 
American debt agreement permitting postponement of its principal installment 
payments for a period not exceeding 2y 2 years. On March 31 of this year 
both the postponed installments and the installment due on that date became 
payable, but were not paid. The German Government did, however, make pay- 
ment of interest as required by the agreement until last September, when, 
instead of making the interest payment to the United States, it notified the 
United States that it had established a credit in marks in a German bank 
corresponding to the interest due. On March 31 of this year Germany made 
payment in dollars in the United States of the current interest due ; but as 
previously stated, failed to make payment of the principal installments due. 
Furthermore, the German Government has failed to make satisfactory assur- 
ances as to when those installments will be paid. 

The result is that while the United States has fulfilled its undertakings, 
Germany has failed to make suitable provision for the satisfaction of the 
claims of the United States and its nationals called for in the Knox-Porter 
peace resolution. Under these circumstances it would appear to be in accord 
with the policy of the Congress as declared in that resolution to postpone any 
further liquidation of the claims of German nationals against the United States 
until the German Government fulfills its undertakings to provide for satisfac- 
tion of the claims of American nationals against it. The resolution reported 
is designed to carry out this policy. 

The foregoing is stated in very general terms for the reason that it would be 
difficult to present in brief form a picture of the whole question of the war 
claims were an attempt made, at the same time, to set out the details and the 
necessary qualifications covering variations not essential to the point at issue. 

A detailed statement of the situation, together with an explanation of 
amendments similar to those agreed to by your committee, and which are 
clarifying in character, is contained in the report (appended herewith) of the 
House Committee on Ways and Means upon a companion resolution, House 
Joint Resolution 365. 



248 REPORT OF THE SECRETARY OF THE TREASURY 

[H. Rept. No. 1924, 73d Cong., 2d sess.] 

The Committee on Ways and Means, to whom was referred the joint resolu- 
tion (H. J. Res. 365) to amend the Settlement of War Claims Act of 1928, as 
amended, having had the same under consideration, report it back to the House 
with amendments and recommend that the joint resolution as amended do pass. 

The amendments are as follows : 

On page 3, line 11, strike out " any or ". 

On page 4, line 14, after " postponed ", insert " under this resolution ". 

On page 4 strike out in lines 15 to 18, inclusive, the following : " the action of 
the President in determining the period or periods in which Germany is in 
arrears in the payments hereinbefore described shall not be subject to judicial 
review " and insert in lieu thereof " the President is authorized to determine, 
for the purposes of this resolution, the period or periods in which Germany is 
in arrears in the payments hereinbefore described and his determination thereof 
shall not be subject to judicial review ". 

The purpose of this resolution is to postpone (a) further payments to Ger- 
man nationals from the German special deposit account in the Treasury De- 
partment, established under section 4 of the Settlement of War Claims Act of 
1928, on account of awards made by the War Claims Arbiter for ships, patents, 
and a radio station seized and used by this Government during the war, and 
(6) further return of property belonging to German nationals held by the 
Alien Property Custodian, while Germany is in arrears on her payments on 
claims of American nationals under the debt agreement of June 23, 1930. 

By the terms of the Settlement of War Claims Act, the awards in favor of 
German nationals for ships, patents, and a radio station and the awards 
entered by the Mixed Claims Commission against Germany in favor of Ameri- 
can nationals were to be paid in accordance with the scheme of priorities 
established in section 4 (c) of the act. 

Germany is now in arrears on the payments due under the debt agreement 
of June 23, 1930, and there is no assurance when those arrears will be dis- 
charged or further annual payments made. It is not felt that this Government 
should make further payments to German nationals from the limited funds that 
may be available in the German special deposit account, or that it should return 
the small amount of property still held by the Alien Property Custodian while 
3ermany's obligations under the debt agreement remain in their present state. 

The resolution withholds all amounts which may become payable to German 
nationals under the Settlement of War Claims Act of 1928 and withholds the 
return of all property belonging to German nationals now held by the Alien 
Property Custodian under the Trading with the Enemy Act, as amended. In 
view of the many complicated matters involved it is believed that a review of 
the problems before Congress at the time it passed the Settlement of War 
Claims Act and a review of subsequent events may be useful to the Members of 
the House. 

The Settlement of War Claims Act of 1928 was approved March 10, 1928. 
The act is complicated by reason of the innumerable complex situations cov- 
ered by it and also by the complexities of the Trading with the Enemy Act, 
which was amended in several particulars by the Settlement of War Claims Act. 

There were three major problems involving the United States and its na- 
tionals and the German Government and its nationals arising out of the war 
which the act attempted to settle. In order not to unduly complicate the 
matter, similar problems involving the United States and its nationals in their 
relation to the Austrian and Hungarian Governments and their nationals, also 
covered in the act, are not covered in this report. The three major problems 
referred to were as follows: 

1. Alien property.— Property of German nationals in the United States was 
seized during the war by the Alien Property Custodian under the provisions 
of the Trading with the Enemy Act, as amended, and a large part, estimated 
at a value of over $200,000,000. was being held at the time of the enactment of 
the Settlement of War Claims Act with no authority in the Executive to return 
it. Under the Knox-Porter peace resolution of July 2, 1921, quoted in part in 
the first paragraph of the preamble of House Joint Resolution 365, and which 
was incorporated in full in the Treaty of Berlin, the United States unquestion- 
ably possessed the right to retain this property until Germany had made suit- 
able provision for the satisfaction of the claims of American nationals against 
• ,, £ rman Government - Congress in the Settlement of War Claims Act author- 
Vzed the return of 80 percent of the aggregate value of the property of German 



REPORT OF THE SECRETARY OF THE TREASURY 249 

nationals so held, and further authorized that the remaining 20 percent of the 
aggregate value of such property be retained and invested in 5 percent certifi- 
cates which participate under certain conditions and in a certain order of 
priority in the funds in the German special deposit account in the Treasury 
created by the Settlement of War Claims Act. 

2. Mixed claims. — The United States Government and many American na- 
tionals suffered losses during the war period by reason of acts for which the 
German Government was responsible, and their claims had to be satisfied. 
A commission, known as the " Mixed Claims Commission, United States and 
Germany ", was created by the agreement of August 10, 1022, to bear and 
determine the claims and to enter awards for the losses for which Germany 
was responsible. Through arrangements made by the Secretary of State with 
the Allied Governments, there had been allocated to the United States under 
the provisions of the Finance Ministers' agreement of January 14, 1025, 2 1 / 4 
percent of all receipts paid by Germany which were available for reparation 
payments, with a proviso that the sum so allocated should not exceed 45,000,000 
gold marks in any one year. The United States was, therefore, receiving at the 
time of the enactment of the Settlement of War Claims Act approximately 
$11,000,000 per annum through the Reparation Commission for account of 
Germany's obligations. 

By passing the Settlement of War Claims Act, Congress in effect recognized 
that arrangements had been made which, if fulfilled, constituted a "suitable 
provision for the satisfaction of all claims " against Germany required by the 
joint resolution of July 2, 1921. By the debt agreement of June 23, 1930, an 
arrangement was made directly with Germany which superseded the previously- 
mentioned arrangement and provided for the gradual liquidation of the Mixed 
Claims awards through the payment of an annual sum of 40,800,000 reichs- 
marks ($9,700,000) for a period of 52 years, in semiannual installments of 
20,400,000 reichsmarks each. Congress approved this agreement. But if the 
American claimants had been forced to rely upon only the distributive share 
in the payments to be made under the two arrangements mentioned, more than 
70 years would have been required for payment in full. It was necessary, 
therefore, that some method be provided by which the American claimants 
could obtain a more immediate payment. 

3. Awards of War Claims Arbiter in favor of German nationals. — The United 
States Government, under the authority of a joint resolution of Congress, dur- 
ing the war seized and took title to a large number of ships owned by citizens 
of Germany and acquired for its own use during the war a large number of 
patents and a radio station. The United States recognized a duty to make com- 
pensation on these accounts to the German nationals for the value of their 
property so taken and used. The Settlement of War Claims Act created the 
office of War Claims Arbiter and authorized the Arbiter to hear the claims of 
the German nationals and to determine the fair compensation to be paid by 
the United States. Some provision had to be made for the payment of the 
amounts determined to be due. 

The Settlement of War Claims Act recognized the close relationship between 
the three problems and their solution as a whole, linger the circumstances, it 
was not possible to provide for the immediate payment of all American claim- 
ants, nor the immediate payment of all owners of the ships, patents, and the 
radio station, nor the immediate return of all the alien property. The act did, 
however, provide for the immediate payment of as large a percentage as 
possible of the claims of the American nationals and the German nationals, 
and for the return of as large a percentage as possible of the alien property, 
with a provision for the payment of the balance due over a period of years. 

The act created in the Treasury a German special deposit account into which 
the Secretary of the Treasury was directed to deposit the following funds: 

(a) All sums invested by the Alien Property Custodian under the provisions 
of section 25 (a) of the Trading with the Enemy Act, as amended, which repre- 
sents 20 percent of the aggregate value of the property of German nationals 
temporarily retained by the Alien Property Custodian. As the funds are 
invested as required by the Trading with the Enemy Act and deposited in the 
Gorman s^pr>ia] ripnosit account, the Secretary of the Treasury issues to the 
Alien Property Custodian a 5 percent participating certificate, which is payable 
in accordance with the priorities hereinafter enumerated. 

(b) All sums transferred by the Alien Property Custodian under the provi- 
sions of section 25 (b) of the Trading with the Enemy Act, as amended, which 
was referred to as the " Unallocated interest fund " and which represented the 



250 REPORT OF THE SECRETARY OF THE TREASURY 

interest accrued prior to March 4, 1923, on investments of funds of the Alien 
Property Custodian, plus interest on the investment of such interest after 
March 4, 1923. No authority of law existed for distributing any interest 
accruing on the investment of the funds prior to March 4, 1923, the date of 
the approval of the Winslow Act, which act authorized the return of not to 
exceed $10,000 per annum to any one person, of the income accruing after 
that date. 

(c) Amounts appropriated by Congress for the payment of awards of the 
War Claims Arbiter in favor of German nationals for ships, patents, and a 
radio station. 

(d) All moneys received from Germany on account of the awards of the 
Mixed Claims Commission in favor of American nationals. 

(e) Earnings on investments of funds in the deposit account. 

The act authorized and directed the Secretary of the Treasury to make pay- 
ments out of the German special deposit account in the following order of 
priority : 

(1) Payment of expenses of administration. 

(2) Payment in full of awards in favor of American nationals attributable 
to death and personal injury, together with interest thereon up to the date of 
payment. 

(3) Payment in full of awards in favor of American nationals the amount 
of which, including interest to January 1, 1928, does not exceed $100,000, 
together with interest on such amount from January 1, 1928, to the date of 
payment. 

(4) Payment of $100,000 on account of awards in favor of an American 
national, the amount of which, including accrued interest to January 1, 1928, is 
in excess of $100,000, provided no person shall be paid an amount in excess of 
$100,000 under this priority, irrespective of the number of awards made in his 
behalf. 

(5) Additional payments on awards in excess of $100,000, including interest to 
January 1, 1928, entered in favor of American nationals, as and when funds are 
available for this purpose as determined by the Secretary of the Treasury, until 
the aggregate payments authorized by priorities 2 to 5 equal 80 percent of the 
aggregate amount of the awards entered, including interest to January 1, 1928. 

It is pointed out that all the payments authorized by paragraphs 2, 3, and 4 
above have been practically completed. There are a few cases remaining unpaid 
because the claimants cannot be located and for other reasons, but funds have 
been reserved for their complete payment. As to paragraph 5, payments have 
been made which aggregate about 74% percent of the amount authorized to be 
paid under these priorities. There remains, therefore, approximately 5% per- 
cent (about $2,000,000) to complete this priority to American nationals. 

(6) Payment to German nationals of 50 percent of the awards entered by the 
War Claims Arbiter for ships, patents, and a radio station, including interest to 
December 31, 1928. The Secretary of the Treasury was authorized to pay this 
amount without regard to any of the other priorities. 

(7) Payment of accrued interest upon the 5 percent participating certificates 
evidencing the amounts invested by the Alien Property Custodian. 

(8) Payment of accrued interest since January 1, 1928, on awards of the 
Mixed Claims Commission in excess of $100,000 in amount, including accrued 
interest to January 1, 1928, in favor of American nationals and accrued interest 
since December 31, 1928, on awards of the War Claims Arbiter in favor of 
German nationals for ships, patents, and a radio station, including accrued 
interest to December 31, 1928. 

(9) Pro rata payments, to the extent funds are available, (a) to the Alien 
Property Custodian, on the 5 percent participating certificates held by him as 
evidence of the investment of funds representing 20 percent of German property 
temporarily retained; (6) to German nationals on account of the balance due 
on their awards entered by the War Claims Arbiter for ships, patents, and a 
radio station, including interest to December 31, 1928; and (c) to American 
nationals on account of the balance due on awards in excess of $100,000 in 
amount, including interest to January 1, 1928, entered by the Mixed Claims 
Commission. 

(10) Payment to German nationals on account of the "Unallocated interest 
fund." No interest accrues on this sum. 

(11) Payment to the United States Government on account of awards entered 
in its behalf by the Mixed Claims Commission, together with interest on such 
awards. 



REPORT OF THE SECRETARY OF THE TREASURY 251 

The Trading with the Enemy Act, as amended by the Settlement of War 
Claims Act, authorized the return of 80 percent of the aggregate value of the 
property of German nationals, as determined by the Alien Property Custodian ; 
authorized the temporary retention of the remaining 20 percent ; and authorized 
that funds equal to the value of such property so retained be paid to the German 
nationals from the German special deposit account in the order of priority estab- 
lished by the Settlement of War Claims Act. 

The following is a statement showing the amounts of the various classes of 
claims, the payments made on account of each class, and the balance due as of 
March 31, 1934 : 

I. Principal of awards of Mixed Claims Commission $128, 500 000 

Interest to Jan. 1, 1928 40, 500, 000 

Amount due Jan. 1, 1928 169,000,000 

Payments made on account 134, 000, 000 

, 35,000,000 

Interest accrued at 5 percent per annum, from Jan. 

1, 1928, to Mar. 31, 1934 19,000,000 

Balance due as of Mar. 31, 1934 $54 000 000 

II. Principal of awards of War Claims Arbiter 63 200 000 

Interest to Dec. 31, 1928 23, 500, 000 

Amount due Dec. 31, 1928 86, 700, 000 

Payments made on account 43, 400, 000 

43, 300, 000 
Interest accrued at 5 percent per annum from Dec. 31, 

1928, to Mar. 31, 1934 16, 100, 000 

Balance due as of Mar. 31, 1934 59,400,000 

III. Twenty percent of German property temporarily re- 
tained : 

Investment by Alien Property Custodian 17, 550, 000 

Investment yet to be made bv Alien Property Cus- 
todian ($15,500,000). 
Interest accrued on investment to Mar. 31, 1934 3, 600, 000 

Balance due as of Mar. 31, 1934 21, 150, 000 

IV. Unallocated interest fund 21,750,000 

Amount due private claimants from German special deposit 

account as of Mar. 31, 1934 156,300,000 

V. Principal of awards entered in behalf of the United 

States Government 42, 035, 000 

Interest to Mar. 31, 1934 38, 300, 000 

• 80, 335, 000 

Total including accrued interest 236, 635, 000 

In addition it is understood that the Alien Property Custodian has property 
in his hands valued at approximately $10,000,000, of which 80 or 90 percent is 
estimated to belong to German nationals. Under the law as it now stands, 80 
percent of this property would probably be returned this calendar year, the 
remaining 20 percent to be retained for deposit in the German special deposit 
account. 

The following shows the funds made, or to be made, available to the German 
special deposit account and the payments that have been made out of such 
account : 

Receipts : 

From investments of Alien Property Custodian under 
Trading with the Enemy Act, as amended : 

Unallocated interest fund $21, 750, 000 

20 percent German property retained 17, 550. 000 

Total $39, 300, 000 

From Germany : 

2% percent of receipts as authorized by Finance 

Ministers' agreement of Jan. 14, 1925 32, 183, 000 

Under debt agreement of June 23, 1930 20, 198, 00.0 

Total 52, 381, 000 

Appropriation made by Congress for ships, patents, and 

radio station (awards for War Claims Arbiter) 86,852,000 

Earnings and profits on investments 4,181,000 

Total receipts______ 182, 714, 000 



252 REPORT OF THE SECRETARY OF THE TREASURY 

Payments ; 

On account of awards of the Mixed Claims Commission- $134, 000. 000 

On account of awards of the War Claims Arbiter 43, 368, 000 

Miscellaneous payments (expenses, etc.) 817,000 

Total $178, 185, 000 

Balance in German special deposit account 4,529,000 

Funds in hands of Alien Property Custodian available for deposit in Ger- 
man special deposit account 15, 500, 000 

Total available to German special deposit account 20, 029, 000 

It will be noted that the funds now available to the German special deposit 
account amount to about $20,000,000, which are being reserved to make payment 
on account of any awards which the Mixed Claims Commission might enter on 
the claims now pending before it. In case awards are entered on account of the 
claims now pending before the Commission, payments will be made in the same 
manner and to the same extent as payments have already been made on account 
of awards entered and certified for payment. On the other hand, if the claims 
pending before the Commission are disallowed, the $20,000,000 held in reserve 
will be released and distributed to American and German nationals in accord- 
ance with priorities specified in section 4 (c) of the Settlement of War Claims 
Act, hereinafter enumerated. In such case the funds made available, together 
with 80 percent of the value of the property in the hands of the Alien Property 
Custodian estimated at $6,500,000, or a total of $26,500,000, would be distributed 
approximately as follows : 

To American nationals : 

Balance of 80 percent of awards of Mixed Claims Commis- 
sion under priority no. 5 (5% percent remaining unpaid)- $2,000,000 

On account of interest accrued since Jan. 1, 1928 (approxi- 
mately 40 percent of such interest) 7,800,000 

Total to American nationals $9, 800, 000 

To German nationals : 

Interest on 5 percent participating certificates (20 percent of 

German property temporarily retained) 3,600,000 

On account of interest accrued since Dec. 31, 1928, on 
awards of War Claims Arbiter (approximately 40 percent 

of such interest) 6,600,000 

Return of property in hands of Alien Property Custodian 6, 500, 000 

Total to German nationals 16, 700, 000 

Total available for distribution 26, 500, 000 

Under the debt agreement of June 23. 1930, the German Government is obli- 
gated to pay semiannually to the United States for a period of 52 years on 
account of the awards of the Mixed Claims Commission, the sum of 20,400,000 
reichsmarks ($4,850,000 at the time the agreement was concluded, or about 
$8,150,000 at the present mint parity of the mark). Under the debt agreement 
that Government has the option of postponing payment of the installments due 
for a period of 2V-> years, but the amounts so postponed bear interest at the rate 
of 5 percent per annum, payable semiannually. 

The Hoover moratorium was declared in June 1931 and covered payments 
falling due during the year July 1, 1931, to June 30, 1932. It excepted private 
obligations, and the joint resolution of December 23, 1931. authorizing that 
moratorium, treated the payments due on account of mixed claims as falling 
under the exception. Germany, however, took advantage of the option in the 
agreement to postpone the payments due, and has exercised that option ever 
since up to and including the payment due September 30. 1933. It paid the 
interest semiannually up to March 31, 1933, but the semiannual payment of 
interest due on September 30, 1933, was paid in reichsmarks into an account 
in Germany and was not transferred to the United States as required by 
the terms of the debt agreement. It is understood that the United States ad- 
vised the German Government that it could not accept the payment in 
reichsmarks as a compliance with the debt agreement. 

On March 31, 1934, all of the installments aggregating 102,000,000 reichs- 
marks, previously postponed since September 30, 1931, together with the semi- 
annual installment of 20,400,000 reichsmarks and semiannual interest of 
2,550,000 reichsmarks, or a total of 122,400,000 reichsmarks (about $50,000,000). 
were due and payable. Germany advised that it could not meet the principal 
payments falling due, but would and did pay the interest due of 2,550,000 
reichsmarks (about $1,000,000). 



REPORT OF THE SECRETARY OF THE TREASURY 253 

The Treasury holds German bonds for account of mixed claims in the face 
amount of 2,040,000,000 reichsmarks ($500,000,000 at time of acquisition but 
$800,000,000 at present rates). 

The debt agreement of June 23, 1930, provides that the obligation of Germany 
to make the payments specified therein shall cease as soon as all of the pay- 
ments contemplated by the Settlement of War Claims Act of 192S have been 
completed and the bonds of Germany held by the United States not then 
matured shall be canceled and returned to Germany. 

The amendment to the joint resolution striking out " any or " and the amend- 
ment inserting " under this resolution " are clerical clarifying amendments. 
The amendment to the last proviso specifically empowers the President to 
determine the period or periods in which Germany is in arrears on her pay- 
ments and retains the substance of the provision stricken out, so that judicial 
review of the President's determination is denied. 



Exhibit 38 

[Public Resolution No. 38, 73d Cong., H. J. Res. 325] 

Joint resolution extending for two years the time within which American 
claimants may make application for payment, under the Settlement of War 
Claims Act of 1928, of awards of the Mixed Claims Commission and the 
Tripartite Claims Commission, and extending until March 10, 1936, the time 
within which Hungarian claimants may make application for payment, under 
the Settlement of War Claims Act of 1928, of awards of the War Claims 
Arbiter 

Resolved by the Senate and House of Representatives of the United States of 
America in Congress assembled, That subsection (g) of section 2 and subsection 
(f) of section 5 of the Settlement of War Claims Act of 1928, as amended by 
Public Resolution Numbered 11, Seventy-third Congress, approved June 12, 1933, 
are further amended, respectively, by striking out the words " six years " where- 
ever such words appear therein and inserting in lieu thereof the words " eight 
years ". 

Sec. 2. The first sentence of subsection (h) of section 6 of the Settlement of 
War Claims Act of 1928 is amended to read as follows : 

" No payment shall be made under this section unless application therefor is 
made by March 10, 1936, in accordance with such regulations as the Secretary of 
the Treasury may prescribe." 

Approved, June 18, 1934. 



Exhibit 39 

[Public Resolution No. 53, 73d Cong., H. J. Res. 365] 

Joint resolution to amend the Settlement of War Claims Act of 1928, as 

amended 

Whereas the joint resolution of the Congress of the United States, approved 
July 2, 1921, provides in part as follows : 

" Seo. 5. All property of the Imperial German Government, or its successor 
or successors, and of all German nationals, which was, on April 6, 1917, in 
or has since that date come into the possession or under control of, or has 
been the subject of a demand by the United States of America or of any of 
its officers, agents, or employees, from any source or by any agency whatsoever, 
* * * shall be retained by the United States of America and no disposition 
thereof made, except as shall have been heretofore or specifically hereafter 
shall be provided by law until such time as the Imperial German Govern- 
ment * * * shall have * * * made suitable provision for the satis- 
faction of all claims against said [Government] * * *, of all persons, 
wheresoever domiciled, who owe permanent allegiance to the United States 
of America and who have suffered, through the acts of the Imperial German 
Government, or its agents * * * since July 31, 1914, loss, damage, or 
injury to their persons or property, directly or indirectly, whether through 
the ownership of shares of stock in German, * * *, American, or other 
corporations, or in consequence of hostilities or of any operations of war, 
or otherwise * * *." 



254 REPORT OF THE SECRETARY OF THE TREASURY 

Whereas the treaty between the United States and Germany of August 25, 
1921, incorporated said provision of such joint resolution and also provided 
in article I thereof as follows : 

" Germany undertakes to accord to the United States, and the United States 
shall have and enjoy, all the rights, privileges, indemnities, reparations, or 
advantages specified in the aforesaid joint resolution of the Congress of the 
United States of July 2, 1921, including all the rights and advantages stipu- 
lated for the benefit of the United States in the Treaty of Versailles which 
the United States shall fully enjoy notwithstanding the fact that such treaty 
has not been ratified by the United States." ; and 

Whereas by the agreement of August 10, 1922, between Germany and the 
United States, a Mixed Claims Commission was established to adjudicate claims 
of American nationals against Germany arising out of the World War ; and 

Whereas under the terms of the debt funding agreement between Germany 
and the United States dated June 23, 1930, Germany agreed to pay to the 
United States in satisfaction of Germany's obligations remaining on account 
of awards, including interest thereon, entered and to be entered by the Mixed 
Claims Commission, United States and Germany, the sum of 40,800,000 reichs- 
marks for the period September 1, 1929, to March 31, 1930, and the sum of 
40,800,000 reichsmarks per annum from April 1, 1930, to March 31, 1981; and 

Whereas Germany is now in arrears in payments due under said debt funding 
agreement between Germany and the United States, and has, accordingly, failed 
to make suitable provision for the satisfaction of the said claims against 
Germany : Now, therefore, be it 

Resolved by the Senate and House of Representatives of the United States 
of America in Congress assembled, That so long as Germany is in arrears in any 
payments of principal or interest, including interest at the rate of 5 per centum 
per annum on principal installments not paid when due, under the debt funding 
agreement between Germany and the United States, dated June 23, 1930, with 
respect to Germany's obligations remaining on account of awards, including 
interest thereon, entered and to be entered by the Mixed Claims Commission, 
United States and Germany, all payments, conveyances, transfers, or deliveries 
of money or property, or the income, issues, profits, and/or avails thereof 
authorized or directed to be made under the Trading with the Enemy Act, as 
amended, or the Settlement of War Claims Act of 1928, as amended, whether 
or not a judgment or decree has been entered with respect thereto, shall be 
postponed and the money or property, or the income, issues, profits, and/or 
avails thereof reserved : Provided, however, That such of the funds as are from 
time to time available (without taking into consideration interest thereafter 
accruing) under the Settlement of War Claims Act of 1928, as amended, for 
the payment of principal and interest upon awards of said Mixed Claims Com- 
mission shall be applied when available to the payment of principal and in- 
terest upon such awards in the same manner and to the same extent as though 
certain of the payments provided for in said act had not been postponed under 
this resolution : Provided further, That the President may, in his sole discretion, 
remove the restriction as to any of the cases or classes of cases in relation 
to which payments, conveyances, transfers, or deliveries have been postponed 
under this resolution: And provided further, That the President is authorized 
to determine, for the purposes of this resolution, the period or periods in which 
Germany is in arrears in the payments hereinbefore described, and his determi- 
nation thereof shall not be subject to judicial review. 

Section 36 of the Emergency Farm Mortgage Act of 1933, as amended, is 
amended — 

I. By striking the comma and the word " and " after the words " to reduce 
and refinance its outstanding indebtedness incurred in connection with any 
such project " in the second sentence thereof and inserting in place thereof 
the following : " ; or, whether or not it has any such indebtedness, to purchase 
or otherwise acquire in connection with such project storage reservoirs or 
dams or sites therefor, or additional water rights, or canals, ditches, or rights- 
of-way for the conduct of water, or other works or appurtenances necessary for 
the delivery of water, provided such purchase or acquisition is not intended to 
bring additional lands into production. Such loans ". 

II. By adding at the beginning of (5) thereof the following: " in the case of 
a loan to reduce or refinance its outstanding indebtedness,". 

III. By adding at the beginning of (C) thereof the following: "in the case 
of a loan to reduce or refinance the outstanding indebtedness of an applicant,". 

Approved, June 27, 1934. 



REPORT OF THE SECRETARY OF THE TREASURY 255 

GOVERNMENT DEPOSITS 

Exhibit 40 

Supplements to Department Circular No. 92, revised, relating to special deposits 
of public moneys under the act of Congress approved September 24, 1917, as 
amended 

THIRD SUPPLEMENT, JULY 24, 1933 

Treasury Department Circular No. 92, dated February 23, 1932, as amended, 
is hereby further amended by the addition of the following paragraph under 
the caption " Collateral security " : 

" 11. Federal land bank and Home Owners' Loan Corporation bonds. — Bonds 
of the Federal land banks and bonds of the Home Owners' Loan Corporation ; 
all at par." 

Paragraph 2 of the collateral security provisions of the circular is hereby 
amended to read as follows : 

"2. Federal farm loan, insular, and territorial government securities. — 
Bonds and debentures issued under the Federal Farm Loan Act, as amended 
(other than bonds of the Federal land banks as specified in par. 11), bonds of 
Puerto Rico, bonds and certificates of indebtedness of the Philippine Islands, 
and bonds of the Territory of Hawaii ; all at market value, not to exceed face 
value." 

Dean Acheson, 
Acting Secretary of the Treasury. 



FOURTH SUPPLEMENT, OCTOBER 30, 1933 

Treasury Department Circular No. 92, dated February 23, 1932, as amended, 
is hereby further amended so that paragraph 11 under the caption " Collateral 
security " will read as follows : 

" 11. Federal land bank bonds, obligations of the Reconstruction Finance Cor- 
poration, obligations of Federal home loan banks, and Home Owners' Loan 
Corporation bonds. — Bonds of the Federal land banks, obligations of the Recon- 
struction Finance Corporation, obligations of the Federal home loan banks, and 
bonds of the Home Owners' Loan Corporation ; all at face value." 

Dean Acheson, 
Acting Secretary of the Treasury. 



FIFTH SUPPLEMENT, JANUARY 30, 1934 

Treasury Department Circular No. 92, dated February 23, 1932, as amended, 
is hereby further amended so as to provide for payment by credit through war 
loan deposit accounts for accepted tenders of Treasury bills in specific cases 
when the public notice given by the Secretary of the Treasury offering such 
Treasury bills authorizes payment in that manner. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 



SIXTH SUPPLEMENT, MARCH 27, 1934 

Treasury Department Circular No. 92, dated February 23, 1932, as amended, 
is hereby further amended so that paragraph 11, under the caption " Collateral 
Security ", will read as follows : 

" 11. Federal land bank bonds, bonds issued under the Federal Farm Mort- 
gage Corporation Act, obligations of the Reconstruction Finance Corporation, 
obligations of Federal home loan banks, and Home Owners' Loan Corporation 
bonds. — Bonds of the Federal land banks, bonds issued under the Federal 
Farm Mortgage Corporation Act, obligations of the Reconstruction Finance 
Corporation, obligations of the Federal home loan banks, and bonds of the 
Home Owners' Loan Corporation ; all at face value." 

Stephen B. Gibbons, 
Acting Secretary of the Treasury. 

90353—35 18 



256 REPORT OF THE SECRETARY OF THE TREASURY 

Exhibit 41 

Supplements to Deportment Circular No. 176, relating to regulations governing 
deposit of public moneys and payment of Government checks and warrants 

FIFTH SUPPLEMENT, JULY 2 4, 19 3 3 

Paragraph 28 of Treasury Department Circular No. 176, dated September 2, 
.1930, as amended, is hereby further amended so that section (b) thereof will 
read as follows: 

"(b) Bonds of the Federal land banks, bonds of the Home Owners' Loan 
Corporation, bonds of Puerto Rico, and bonds and certificates of indebtedness 
of the Philippine Islands ; all at par." 

Dean Acheson, 
Acting Secretary of the Treasury. 



SIXTH SUPPLEMENT, OCTOBER 30, 1933 

Treasury Department Circular No. 176, dated September 2, 1930, as amended, 
is hereby further amended so that section (b) of paragraph 28 will read as 
follows : 

"(b) Bonds of the Federal land banks, obligations of the Reconstruction 
Finance Corporation, obligations of the Federal home loan banks, bonds of 
the Home Owners' Loan Corporation, bonds of Puerto Rico, and bonds and 
certificates of indebtedness of the Philippine Islands ; all at face value." 

Dean Acheson, 
Acting Secretary of the Treasury. 



SEVENTH SUPPLEMENT, MARCH 27, 1934 

Treasury Department Circular No. 176, dated September 2, 1930, as amended, 
is hereby further amended so that section (b) of paragraph 28 will read as 
lollows : 

"(b) Bonds- of the Federal land banks, bonds issued under the Federal Farm 
Mortgage Corporation Act, obligations of the Reconstruction Finance Corpo- 
ration, obligations of the Federal home loan banks, bonds of the Home Owners' 
Loan Corporation, bonds of Puerto Rico, and bonds and certificates of indebted- 
ness of the Philippine Islands ; all at face value." 

Stephen B. Gibbons, 
Acting Secretary of the Treasury. 



MISCELLANEOUS 
Exhibit 42 

Accounting system of the Treasury Department (Department Circular No. 51-'i) 

Treasury Department, 

June SO, 193/ h 
To the heads of bureaus and offices of the Treasury Department and others 
concerned: 

Hereafter no installations of new accounting forms, systems, and procedures, 
and no changes in existing accounting forms, systems, and procedures shall be 
made in any bureau, division, or office of the Treasury Department without 
express approval of the Secretary of the Treasury or by an officer of the De- 
partment duly authorized to act for the Secretary, and all recommendations 
with respect thereto, before being acted upon by the Secretary of the Treasury 
or by his duly authorized representative, shall be submitted to the office of the 
Commissioner of Accounts and Deposits for investigation and report not less 
than 15 days in advance < f the date on which the proposed installations or 
changes are to be made. As soon as any changes in accounting procedures are 
contemplated, the office of the Commissioner of Accounts and Deposits should 



REPORT OF THE SECRETARY OF THE TREASURY 257 

be immediately notified, in order that arrangements may be made for repre- 
sentatives of that office to participate in conferences which may be held 
regarding the proposed changes. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 



Exhibit 43 



Regulations and instructions governing the issue of duplicate checks of disburs- 
ing officers (first supplement to Department Circular No. 327, revised) 

Treasury Department, 

February 20, 193J f . 
To flic heads of departments and establishments and others concerned: 

Effective immediately, paragraph 4 of Treasury Department Circular No. 327 
(revised), dated October 15, 1924, is hereby amended by adding a sentence at the 
end thereof, reading as follows : 

" Whenever the issuance of a duplicate check under the provisions of sections 
3646 and 3647 of the Revised Statutes, as amended, is necessary to replace a 
lost, destroyed, or stolen check issued by an officer whose disbursing function 
has been transferred to the Division of Disbursement, Treasury Department, 
but who is still in the service of the United States, such duplicate check will 
be prepared in the Division of Disbursement, Treasury Department, and pre- 
sented to the former disbursing officer for signature, if practicable ; when signed 
by the issuing officer, the duplicate check, with bond of indemnity, will be trans- 
mitted to the Secretary of the Treasury, Division of Bookkeeping and War- 
rants, for approval, after which it will be returned to the Division of Disburse- 
ment for delivery to the payee." 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 



Exhibit 44 



Laws and regulations governing the recognition of attorneys, agents, and 
other persons representing claimants and others before the Treasury Depart- 
ment and offices thereof 

FIRST SUPPLEMENT, AUGUST S, 1933, TO department CIRCULAR NO. 230, REVISED, 

OF JULY 1, 1927 

Treasury Department Circular No. 230 (revised), dated July 1, 1927, pre- 
scribing rules and regulations governing the recognition of attorneys and 
agents and other persons representing claimants before the Treasury Depart- 
ment and offices thereof is hereby amended by striking out the third and 
fourth paragraphs of section 1 prescribing the duties of the secretary of the 
committee and the attorney for the committee and inserting in lieu thereof 
the following: 

"The Secretary of the Treasury shall appoint an attorney for the committee 
who shall not be a member of the committee. Such attorney shall be the 
legal adviser of the committee, present all formal complaints against enrolled 
attorneys or agents, and represent the Government in all proceedings before 
the committee. Such attorney shall also be the secretary of the committee and 
shall keep and maintain its records and shall have the custody of all of its 
papers, records, rolls, etc." 

Thomas Hewes, 
Acting Secretary of the Treasury. 



SECOND SUPPLEMENT, JANUARY 5, 1934, TO DEPARTMENT CIRCULAR NO. 230, 
REVISED, OF JULY 1, 1927 

Section 1 of Treasury Department Circular No. 230 (revised), dated July 1, 
1927, prescribing rules and regulations governing the recognition of attor- 
neys and agents and other persons representing claimants before the Treasury 



258 REPORT OF THE SECRETARY OF THE TREASURY 

Department and offices thereof as amended by first supplement dated August 
8, 1933, is hereby further amended to read as follows : 

"A committee on enrollment and disbarment is hereby created consisting of 
6 members who shall be appointed by the Secretary of the Treasury, of 
whom 2 shall be detailed from the office of the Secretary. The Secretary 
of the Treasury shall designate a chairman and vice chairman of the com- 
mittee. The chairman shall be designated from the members detailed from 
the Secretary's office. The committee shall make such rules for its own gov- 
ernment as it considers advisable. The committee shall meet regularly on 
Tuesday and Friday of each week if a business day, and shall meet on other 
days at the call of the chairman. Three members shall constitute a quorum. 

" The committee shall receive and consider applications to be recognized 
as attorney, agent, or other representative before the Treasury Department 
or offices thereof; receive complaints against those enrolled; conduct hear- 
ings ; make inquiries ; perform other duties as prescribed herein, and do all 
things necessary in the matter of proceedings for enrollment, suspension, or 
disbarment of such attorneys, agents, or other representatives, pursuant to 
these regulations ; and submit its recommendations thereon to the Secretary 
of the Treasury for approval. 

" The Secretary of the Treasury shall appoint an attorney for the com- 
mittee who shall not be a member of the committee. Such attorney shall be 
the legal adviser of the committee, present all formal complaints against en- 
rolled attorneys or agents, and represent the Government in all proceedings 
before the committee. Such attorney shall also be the secretary of the com- 
mittee and shall keep and maintain its records and shall have the custody of 
all of its papers, records, rolls, etc." 

Henry Morgenthau, Jr.. 
Secretary of the Treasury. 



Exhibit 45 



Executive orders and Treasury orders changing organization and procedure in 
the Treasury Department 

EXCERPTS FROM EXECUTIVE ORDER NO. 6166, JUNE 10, 1933, WHICH RELATE TO THE 

TREASURY DEPARTMENT 

Whereas section 16 of the act of March 3, 1933 (Public No. 428, 47 Stat. 
1517), provides for reorganizations within the executive branch of the Govern- 
ment ; requires the President to investigate and determine what reorganiza- 
tions are necessary to effectuate the purposes of the statute ; and authorizes 
the President to make such reorganizations by Executive order ; and 

Whereas I have investigated the organization of all executive and adminis- 
trative agencies of the Government and have determined that certain regroup- 
ings, consolidations, transfers, and abolitions of executive agencies and func- 
tions thereof are necessary to accomplish the purposes of section 16 : 

Now, therefore, by virtue of the aforesaid authority, I do hereby order that : 

SECTION 1. — PROCUREMENT 

The function of determination of policies and methods of procurement, ware- 
housing, and distribution of property, facilities, structures, improvements, ma- 
chinery, equipment, stores, and supplies exercised by any agency is transferred 
to a Procurement Division in the Treasury Department, at the head of which 
shall be a Director of Procurement. 

The Office of the Supervising Architect of the Treasury Department is trans- 
ferred to the Procurement Division, except that the buildings of the Treasury 
Department shall be administered by the Treasury Department and the admin- 
istration of post-office buildings is transferred to the Post Office Department. 
The General Supply Committee of the Treasury Department is abolished. 

In respect of any kind of procurement, warehousing, or distribution for any 
agency the Procurement Division may, with the approval of the President, (a) 
undertake the performance of such procurement, warehousing, or distribution 
itself, or (b) permit such agency to perform such procurement, warehousing, 
or distribution, or (c) entrust such performance to some other agency, or (d) 
avail itself in part of any of these recourses, according as it may deem desir- 



REPORT OF THE SECRETARY OF THE TREASURY 259 

able in the interest of economy and efficiency. When the Procurement Division 
has prescribed the manner of procurement, warehousing, or distribution of 
anything, no agency shall thereafter procure, warehouse, or distribute such 
thing in any manner other than so prescribed. 

The execution of work now performed by the Corps of Engineers of the Army 
shall remain with said corps, subject to the responsibilities herein vested in the 
Procurement Division. 

The Procurement Division shall also have control of all property, facilities, 
structures, machinery, equipment, stores, and supplies not necessary to the work 
of any agency ; may have custody thereof or entrust custody to any other 
agency ; and shall furnish the same to agencies as need therefor may arise. 

The fuel yards of the Bureau of Mines of the Department of Commerce are 
transferred to the Procurement Office. * * * 

SECTION 2. NATIONAL PARKS, BUILDINGS, AND RESERVATIONS 

All functions of administration of public buildings, reservations, national 
parks, national monuments, and national cemeteries are consolidated in an 
Office of National Parks, Buildings, and Reservations in the Department of the 
Interior, at the head of which shall be a Director of National Parks, Buildings, 
and Reservations; except that where deemed desirable there may be excluded 
from this provision any public building or reservation which is chiefly employed 
as a facility in the work of a particular agency. This transfer and consolida- 
tion of functions shall include, among other, those of the National Park Service 
of the Department of the Inteiior and the National Cemeteries and Parks of 
the War Department which are located within the continental limits of the 
United States. National cemeteries located in foreign countries shall be trans- 
ferred to the Department of State, and those located in insular possessions under 
the jurisdiction of the War Department shall be administered by the Bureau 
of Insular Affairs of the War Department. 

The functions of the following agencies are transferred to the Office of Na- 
tional Parks, Buildings, and Reservations of the Department of the Interior, 
and the agencies are abolished : 

Arlington Memorial Bridge Commission. 

Public Buildings Commission. 

Public Buildings and Public Parks of the National Capital. 

National Memorial Commission. 

Rock Creek and Potomac Parkway Commission. 
Expenditures by the Federal Government for the purposes of the Commission 
of Fine Arts, the George Rogers Clark Sesquicentennial Commission, and the 
Rushmore National Commission shall be administered by the Department of 
the Interior. 

SECTION 3. — INVESTIGATIONS 

All functions now exercised by the Bureau of Prohibition of the Department 
of Justice with respect to the granting of permits under the national prohibition 
laws are transferred to the Division of Internal Revenue in the Treasury 
Department. 

All functions now exercised by the Bureau of Prohibition with respect to 
investigations and all the functions now performed by the Bureau of Investi- 
gation of the Department of Justice are transferred to and consolidated in a 
Division of Investigation in the Department of Justice, at the head of which 
shall be a Director of Investigation. 

All other functions now performed by the Bureau of Prohibition are trans- 
ferred to such divisions in the Department of Justice as in the judgment of the 
Attorney General may be desirable. 

SECTION 4. — DISBURSEMENT 

The function of disbursement of moneys of the United States exercised by any 
agency is transferred to the Treasury Department and. together with the Office 
of Disbursing Clerk of that Department, is consolidated in a Division of Dis- 
bursement, at the head of which shall be a Chief Disbursing Officer. 

The Division of Disbursement of the Treasury Department is authorized to 
establish local offices, or to delegate the exercise of its functions locally to 
officers or employees of other agencies, according as the interests of efficiency 
and economy may require. 



260 REPORT OF THE SECRETARY OF THE TREASURY 

The Division of Disbursement shall disburse moneys only upon the certifica- 
tion of persons by law duly authorized to incur obligations upon behalf of the 
United States. The function of accountability for improper certification shall 
be transferred to such persons, and no disbursing officer shall be held account- 
able therefor. 

SECTION 5. CLAIMS BY OR AGAINST TIIE UNITED STATES 

The functions of prosecuting in the courts of the United States claims and 
demands by, and offenses against, the Government of the United States, and of 
defending claims and demands against the Government, and of supervising the 
work of United States attorneys, marshals, and clerks in connection therewith, 
now exercised by any agency or officer, are transferred to the Department of 
Justice. 

As to any case referred to the Department of Justice for prosecution or de- 
fense in the courts, the function of decision whether and in what manner to 
prosecute, or to defend, or to compromise, or to appeal, or to abandon prosecu- 
tion or defense, now exercised by any agency or officer, is transferred to the 
Department of Justice. 

For the exercise of such of his functions as are not transferred to the De- 
partment of Justice by the foregoing two paragraphs, the Solicitor of the Treas- 
ury is transferred from the Department of Justice to the Treasury Department. 

Nothing in this section shall be construed to affect the function of any agency 
or officer with respect to cases at any stage prior to reference to the Depart- 
ment of Justice for prosecution of defense. 

SECTION 8. — INTERNAL REVENUE 

The Bureaus- of Internal Revenue and of Industrial Alcohol of the Treasury 
Department are consolidated in a Division of Internal Revenue, at the head of 
which shall be a Commissioner of Internal Revenue. 

SECTION 16. — APPORTIONMENT OF APPROPRIATIONS 

The functions of making, waiving, and modifying apportionments of appro- 
priations are transferred to the Director of the Bureau of the Budget. 

SECTION 19. GENERAL PROVISIONS 

Each agency, all the functions of which are transferred to or consolidated 
with another agency, is abolished. 

The records pertaining to an abolished agency or a function disposed of, dis- 
position of which is not elsewhere herein provided for, shall be transferred to 
the successor. If there be no successor agency, and such abolished agency be 
within a department, said records shall be disposed of as the head of such 
department may direct. 

The property, facilities, equipment, and supplies employed in the work of an 
abolished agency or the exercise of a function disposed of, disposition of which 
is not elsewhere herein provided for, shall, to the extent required, be trans- 
ferred to the successor agency. Other such property, facilities, equipment, and 
supplies shall be transferred to the Procurement Division. 

All personnel employed in connection with the work of an abolished agency 
or function disposed of shall be separated from the service of the United States, 
except that the head of any successor agency, subject to my approval, may, 
within a period of 4 months after transfer or consolidation, reappoint any of 
such personnel required for the work of the successor agency without re- 
examination or loss of civil service status. 

SECTION 20. — APPROPRIATIONS 

Such portions of the unexpended balances of appropriations for any abolished 
agency or function disposed of shall be transferred to the successor agency as 
the Director of the Budget shall deem necessary. 

Unexpended balances of appropriations for an abolished agency or function 
disposed of, not so transferred by the Director of the Budget, shall, in accord- 
ance with law, be impounded and returned to the Treasury. 



REPORT OF THE SECRETARY OF THE TREASURY 261 

SECTION 2 1 . — DEFINITIONS 

As used in this order — 

"Agency " means any commission, independent establishment, board, bureau, 
division, service, or office in the executive branch of the Government. 

"Abolished agency " means any agency which is abolished, transferred, or 
consolidated. 

" Successor agency " means any agency to which is transferred some other 
agency or function, or which results from the consolidation of other agencies 
or functions. 

" Function disposed of " means any function eliminated or transferred. 

SECTION 22. — EFFECTIVE DATE 

In accordance with law, this order shall become effective 61 days from its 
date : Provided, That in case it shall appear to the President that the interests 
of economy require that any transfer, consolidation, or elimination be delayed 
beyond the date this order becomes effective, he may, in his discretion, fix a 
later date therefor, and he may for like cause further defer such date from 
time to time. 

Franklin D. Roosevelt. 
The White House, 

June 10, 1933. 



EXECUTIVE ORDER NO. 6224, JULY 27, 1933, POSTPONING CERTAIN PROVISIONS OF 
EXECUTIVE ORDER NO. 016fi, OF JUNE 10, 1933 

Whereas it appears that the interests of economy require that the transfers, 
consolidations, and eliminations provided for under sections 1, 4, and 8 of 
Executive Order No. 6166, of June 10, 1933, be delayed beyond the effective date 
of said order ; 

Now, therefore, pursuant to the provisions of section 22 of said order, I 
hereby order that, except as hereinafter provided, the transfers, consolidations, 
and eliminations contemplated by sections 1 (except the abolition of the Fed- 
eral Employment Stabilization Board), 4, and 8 of Executive Order No. 6166, 
of June 10, 1933, together with the operation of all other provisions of the said 
order in so far as they relate to any of the said sections, shall be delayed until 
December 31, 1933: Provided, That any transfer, consolidation, or elimination 
in whole or in part under any of the said sections (except the abolition of tlie 
Federal Employment Stabilization Board) including any other provisions of the 
said order in so far as they relate to any of the said sections may be made oper- 
ative and in force between August 10, 1933, and December 31, 1933, by order of 
the Secretary of the Treasury, approved by the President. 

Franklin D. Roosevelt. 

The White House, 

July 21, 1933. 



EXECUTIVE ORDER NO. 0244, AUGUST S, 1933. POSTPONING CERTAIN PROVISIONS OF 
EXECUTIVE ORDER NO. 6166, OF JUNE 10, 1933 

Pursuant to the provisions of section 22 of Executive Order No. 6166, of June 
10, 1933, and in the interests of economy, I hereby order that, except as herein- 
after provided, the operation of the provisions of the first paragraph of section 
5 of the said order in so far as the said provisions may relate to any function of 
the Office of the General Counsel for the Bureau of Internal Revenue, and the 
operation of all other provisions of the said order in so far as they may relate 
to any such function shall be delayed until October 10, 1933 : Provided, That 
any of the provisions of the said order the operation of which is hereby delayed, 
may be made operative and in force in whole or in part between August 10, 
1933, and October 10, 1933, by joint order of the Secretary of the Treasury and 
the Attorney General, approved by the President. 

Franklin D. Roosevelt. 

The White House, 

August 8, 1933. 



26^ REPORT OF THE SECRETARY OF THE TREASURY 

ORDER OF SECRETARY OF TREASURY, OCTOBER 9, 1933, PURSUANT TO EXECUTIVE ORDERS 

NOS. 6166 AND 6224 

Pursuant to the provisions of Executive Order No. 6166 of June 10, 1933, and 
Executive Order No. 6224 of July 27, 1933, and subject to the approval of the 
President, the following provisions of the said Executive order of June 10, 1933, 
are hereby made operative and in force to the extent hereinafter set forth : 

1. The establishment in the Treasury Department of a Procurement Division 
with all the powers set forth in the said order of June 10, 1933. 

2. The transfer to the Procurement Division of — 

(a) The functions of the General Supply Committee; 

(&) The fuel yards of the Bureau of Mines of the Department of Commerce; 

(c) The functions of the Office of the Supervising Architect of the Treasury 
Department ; 

(d) The functions of the Federal Coordinating Service relating to the dis- 
position of seized and surplus property, and to the procurement, warehousing 
and distribution of property, facilities, structures, improvements, machinery, 
equipment, stores, and supplies exercised by — 

(1) The area coordinators; 

(2) The Federal Real Estate Board; 

(3) The Federal Specifications Board; 

(4) The Federal Standard Stock Catalog Board; 

(5) The Federal Traffic Board; 

(6) The Interdepartmental Board of Contracts and Adjustments. 

(e) Such portions of the unexpended balances of appropriations available 
for the conduct of all agencies or functions transferred pursuant hereto as the 
Director of the Budget shall deem necessary. 

(f) Custody and control of Federal warehouse and all property, facilities, 
structures, machinery, equipment, stores, and supplies belonging to or in the 
custody, control, management, or supervision of any agency whose procurement, 
warehousing, and distributing functions are transferred pursuant hereto. 

3. The abolition of the General Supply Committee. 

4. The separation from the service of the United States of all personnel 
employed in connection with the work of those functions and activities trans- 
ferred pursuant hereto. 

5. All persons employed in connection with the work of those functions trans- 
ferred pursuant hereto as of the date this order takes effect are hereby reap- 
pointed to their same positions and at their same salaries as employees of the 
Procurement Division for a temporary period of not exceeding 4 months from 
and including the date this order takes effect. 

6. Section 1 and subsection (d) of section 2 of this order shall take effect at 
12 : 01 a. m., October 10, 1933. The remaining provisions of this order shall take 
effect at 12 : 01 a. m., October 16, 1933. 

W. H. Woodin, 
Secretary of the Treasury. 
Approved : 

Franklin D. Roosevelt, 

The White House, October 9, 1933. 



TREASURY DEPARTMENT ORDER NO 1, NOVEMBER 2 0, 1933 

It is ordered that the following changes in organization and procedure in the 
Treasury Department shall be effective immediately : 

(1) All statements- to the press or to the public through interviews, speeches, 
or public addresses by any officer or employee of the Treasury Department 
shall be submitted before release for approval by Mr. Herbert E. Gaston, 
Assistant to the Secretary. 

(2) All legal matters affecting the Treasury Department shall be under the 
general control and direction of Mr. Herman Oliphant, General Counsel to the 
Secretary. 

(3) All administrative matters, including personnel and budget, shall be 
handled by Mr. William H. McReynolds, Administrative Assistant to the 
Secretary. 

Henry Morgenthau, Jr., 
Acting Secretary of the Treasury. 



REPORT OF THE SECRETARY OF THE TREASURY 263 

TREASURY DEPARTMENT OEDEE NO. 2, NOVEMBER 22, 1933 

Effective from and after this date, the Secret Service Division of the Treasury 
Department will report directly to the Secretary of the Treasury. Department 
Circular No. 244 of September 19, 1930, is modified accordingly. 

Heney Morgenthau, Jr., 
Acting Secretary of the Treasury. 



OEDEE OP THE SECEETAEY OF THE TEEASUBY, NOVEMBER 29, 1933, PUESUANT TO EXECU- 
TIVE ORDERS NO. 6166 AND NO. 6224 

Pursuant to the provisions of Executive Order No. 6166 of June 10, 1933, 
and Executive Order No. 6224 of July 27, 1933, and subject to the approval of 
the President, the provisions of the said Executive order of June 10, 1933, are 
hereby made operative and in force to the extent hereinafter set forth : 

1. The establishment in the Treasury Department of a Division of Disburse- 
ment. 

2. The transfer to the Division of Disbursement of — 

(a) The functions of disbursement exercised by the Disbursing Clerk of 

the Treasury Department ; 

(b) The functions of disbursement exercised in Washington, D. C, by — 

(1) The United States Civil Service Commission; 

(2) The United States Employees Compensation Commission; 

(3) The General Accounting Office ; 

(4) The Interstate Commerce Commission; 

(5) The Federal Trade Commission ; 

(6) The United States Tariff Commission; 

(7) The Federal Power Commission. 

3. All persons employed on the date of transfer in connection with the work 
of those functions transferred pursuant hereto are hereby reappointed at their 
same salaries as employees of the Division of Disbursement for a temporary 
period of not exceeding four months from and including the date of such 
transfer. 

4. Section 1 and subsection (a) of Section 2 of this order and the operation 
of Section 3 in so far as it applies to persons affected thereby shall take effect 
at 12: 01 a. m.. December 16, 1933. The remaining provisions of this order shall 
take effect at 12 : 01 a. m., December 22, 1933. 

Henry Moegenthau, Jr., 
Acting Secretary of the Treasury. 
Approved : 

Fbanklin D. Roosevelt, 

The White House, November 29, 1933. 



OBDEB OF THE SECEETAEY OF THE TEEASTJBY, DECEMBER 4, 1933, AMENDING TREASURY 
DECISION NO. 1, OF APEIL 1, 1927, ISSUED PURSUANT TO THE ACT OF MARCH 3, 
1927 

To the Commissioner of Industrial Alcohol, the Commissioner of Internal Reve- 
nue, and all officials and employees of the Treasury Department concerned: 

1. Treasury Decision No. 1 (Bureau of Prohibition) of April 1, 1927, and 
any decision or order supplementary thereto or amendatory thereof are hereby 
amended as follows: 

2. There are hereby transferred to, conferred, and imposed upon the Com- 
missioner of Internal Revenue, subject to the general supervision and direction 
of the Secretary of the Treasury, all rights, privileges, powers, and duties 
conferred or imposed upon the Secretary of the Treasury by section 4 of the 
act of March 3, 1927, and which have been heretofore by the said Treasury 
Decision No. 1 and/or any other orders conferred or imposed upon the Com- 
missioner of Prohibition (now the Commissioner of Industrial Alcohol), and 
any other officer or employee of the Bureau of Industrial Alcohol, except such 
rights, privileges, powers, and duties as were transferred to or conferred or 
imposed upon the Attorney General by the act of May 27, 1930, and except such 
other rights, privileges, powers, and duties as may have been heretofore with- 
drawn from the Secretary of the Treasury or the Commissioner of Prohibition 
(now the Commissioner of Industrial Alcohol). 



264 REPORT OF THE SECRETARY OF THE TREASURY 

3. Except as may hereafter be otherwise provided, all regulations prescribed, 
all orders and instructions issued, and all forms adopted for the enforcement of 
the laws administered by the Bureau of Industrial Alcohol, Treasury Depart- 
ment, remaining in effect after repeal of the eighteenth amendment, are hereby 
continued in effect as regulations, orders, instructions, and forms of the Bureau 
of Internal Revenue, Treasury Department. 

4. The personnel of the Bureau of Industrial Alcohol shall perform such 
duties as the Secretary of the Treasury or the Commissioner of Internal Reve- 
nue may prescribe. 

5. Except as herein provided nothing in this order shall be construed to affect 
the validity of any act done, power exercised, or order, decision, or finding 
made, or to relieve any person from any liability incurred prior to the effective 
date of this order. 

6. This order shall take effect at 12 : 01 a. m. December 6, 1933. The right 
to amend or supplement this order or any provisions thereof from time to time 
or to revoke this order or any provision thereof at any time is hereby reserved. 

Henry Morgenthau, Jr., 
Acting Secretary of the Treasury. 



TREASURY DEPARTMENT ORDER NO. 3, DECEMBER 5, 1933 

Effective from and after this date, the Bureau of Internal Revenue will re- 
port directly to the Secretary of the Treasury. Department Circular No. 244 
of September 19, 1930, is modified accordingly. 

Henry Morgenthau, Jr., 
Acting Secretary of the Treasury. 



TREASURY DEPARTMENT ORDER NO. 4, DECEMBER 26, 1933 

The following offices of the Treasury Department are hereby assigned to the 
supervision of the Administrative Assistant to the Secretary : 

1. Chief Clerk of the Department. 

2. Division of Appointments. 

3. Division of Supply. 

The Division of Disbursement created under the provisions of section 4 of 
Executive Order No. 6166 of June 10, 1933, is hereby assigned to the general 
supervision of the Commissioner of Accounts and Deposits, this officer report- 
ing to the Under Secretary of the Treasury as heretofore. 

The above assignments will be effective this date, and Department Circular 
No. 244 of September 19, 1930, is modified and amended accordingly. 

Henry Morgenthau, Jr., 
Acting Secretary of the Treasury. 



EXECUTIVE ORDER NO. 6540, DECEMBER 28, 1933, RELATIVE TO THE POSTPONEMENT OF 
CERTAIN PROVISIONS OF EXECUTIVE ORDER NO. 6166 OF JUNE 10, 1933 

Whereas it appears that the interests of economy require that certain trans- 
fers, consolidations, and eliminations provided for under sections 4 and 8 of 
Executive Order No. 6166 of June 10, 1933, be further delayed beyond the 
effective date of said order : 

Now, therefore, pursuant to the provisions of section 22 of said order, I 
hereby order that, except as hereinafter provided, the transfers, consolidations, 
and eliminations contemplated by sections 4 and 8 of Executive Order No. 
6166 of June 10, 1933, which are not effected prior to December 31, 1933, pur- 
suant to Executive Order No. 6224, dated July 27, 1933, together with the 
operation of all other provisions of Executive Order No. 6166 of June 10, 1933. 
insofar as they relate to said sections 4 and 8, shall be further delayed until 
June 30. 1934 : Provided, That any transfer, consolidation, or elimination, in 
whole or in part, under said sections 4 and 8, including any other provisions of 
the said order of June 10, 1933, in so far as they relate to sections 4 and 8 
thereof, may be made operative and in force between January 1, 1934, and June 
30, 1934, by order of the Secretary of the Treasury, approved by the President. 

Franklin D. Roosevelt. 
The White House, 

December 28, 19S3. 



REPORT OF THE SECRETARY OF THE TREASURY 265 

ORDER OF THE SECRETARY OF THE TREASURY, JANUARY 13, 1934, PURSUANT TO 
EXECUTIVE ORDERS NO. 6166, NO. 6224, AND NO. 6540 

Pursuant to the the provisions of Executive Order No. 6166 of June 10, 1933, 
Executive Order No. 6224 of July 27, 1933, and Executive Order No. 6540 of 
December 28. 1933, and subject to the approval of the President, the provisions 
of the said Executive order of June 10, 1933, are hereby made operative and in 
force to the extent hereinafter set forth : 

1. The transfer to the Division of Disbursement of the function of disburse- 
ment of moneys of the United States exercised in Washington by — 

(a) The Veterans' Administration; 

(b) The American Battle Monuments Commission; 

(c) The Board of Mediation; 

(d) The Board of Tax Appeals; 

(e) The Federal Radio Commission; 

(f) The National Advisory Committee for Aeronautics; 

(g) The Smithsonian Institution; 

(h) The United States Geographic Board; 
(i) The Department of Labor. 

2. All personnel employed on the date of transfer in connection with those 
functions transferred pursuant hereto are hereby reappointed at their same 
salaries as employees of the Division of Disbursement for a temporary period 
of not exceeding four months from and including the date of such transfer. 

3. The provisions of this order affecting The Veterans' Administration and 
the personnel employed therein shall take effect at 12 : 01 a. m., January 16, 
1934. The provisions of this order affecting the other independent establish- 
ments named and the Department of Labor, and the personnel employed 
therein, shall take effect at 12: 01 a. m., February 1, 1934. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 
Approved : 

Franklin D. Roosevelt, 

The White Home, January 13, 193J t . 



EXECUTIVE ORDER NO. 6639, MARCH 10, 1934, CONSOLIDATING EXECUTIVE AGENCIES 
ENGAGED IN THE ENFORCEMENT OF THE INTERNAL REVENUE LAWS 

Whereas section 16 of the act of March 3, 1933 (ch. 212, 47 Stat. 1489, 1517), 
provides for reorganizations within the executive branch of the Government, 
requires the President to investigate and determine what reorganizations are 
necessary to effectuate the purposes of section 16, and authorizes the President 
to make such reorganizations by Executive order ; and 

Whereas I have investigated the organization of the executive and admin- 
istrative agencies of the Government which are engaged in the enforcement 
of the internal revenue laws, and have determined that a consolidation of 
such agencies is necessary to accomplish the purposes of section 16 ; 

Now, therefore, by virtue of and pursuant to the authority vested in me 
by the aforesaid section 16 of the act of March 3, 1933, it is hereby ordered 
as follows : 

TRANSFER OF FUNCTIONS 

1. (a) The Bureau of Industrial Alcohol and the office of Commissioner of 
Industrial Alcohol are abolished, and the authority, rights, privileges, powers, 
and duties conferred and imposed by law upon the Commissioner of Indus- 
trial Alcohol are transferred to and shall be held, exercised, and performed 
by the Commissioner of Internal Revenue and his assistants, agents, and 
inspectors, under the direction of the Secretary of the Treasury. 

(&) The authority, rights, privileges, powers, and duties conferred and im- 
posed upon the Attorney General by the act of May 27, 1930 (ch. 342, 46 Stat. 
427), entitled "An act to transfer to the Attorney General certain functions 
in the administration of the National Prohibition Act, to create a Bureau of 
Prohibition in the Department of Justice, and for other purposes ", so far as 
they are required to, or may, be exercised and performed under existing law, 
are transferred to and shall be held, exercised, and performed by the Com- 
missioner of Internal Revenue and his assistants, agents, and inspectors, 



266 REPORT OF THE SECRETARY OF THE TREASURY 

under the direction of the Secretary of the Treasury : Provided, That the 
Attorney General shall continue to exercise the power and authority (a) to 
remit or mitigate forfeitures under the internal revenue laws and to determine 
liability for internal revenue taxes and penalties, in connection with violations 
of the National Prohibition Act occurring prior to the repeal of the eighteenth 
amendment, and (b) to institute suits upon any cause of action under the 
National Prohibition Act or under the internal revenue laws involving a 
violation of the National Prohibition Act, arising prior to, and/or not affected 
by, the repeal of the eighteenth amendment, and to compromise any such 
cause of action before or after suit is brought : And provided further, That 
the Commissioner of Internal Revenue, subject to the approval of the Sec- 
retary of the Treasury, shall prescribe all regulations under the provisions 
of the National Prohibition Act, and all laws amendatory thereof or supple- 
mentary thereto, which were not rendered inoperative by the repeal of the 
eighteenth amendment, relating to permits, and he shall prescribe the form 
of all applications, bonds, permits, records, and reports under such acts. 

TKANSFER OF OFFICIAL RECORDS AND PROPERTY 

2. (a) The official records and papers on file in, and pertaining to the busi- 
ness of, the Bureau of Industrial Alcohol, together with the supplies, furniture, 
equipment, and other property of the United States in use in such Bureau, are 
transferred to the Bureau of Internal Revenue. 

(6) The official records and papers on file in the Department of Justice per- 
taining to the functions transferred by this order to the Commissioner of 
Internal Revenue, together with the supplies, furniture, equipment, and other 
property of the United States in use in said Department in connection with the 
performance of such functions, are transferred to the Bureau of Internal 
Revenue. 

TRANSFER OF PERSONNEL 

3. (a) The officers and employees employed in, or under the jurisdiction of, 
the Bureau of Industrial Alcohol, are transferred to the Bureau of Internal 
Revenue, without change in classification or compensation. 

(6) The officers and employees employed in, or under the jurisdiction of, 
the Alcoholic Beverage Unit of the Division of Investigation, Department of 
Justice, except those employed in, or under the jurisdiction of, the taxes and 
penalties section of said unit, are transferred to the Bureau of Internal Rev- 
enue without change in classification or compensation. 

(c) Officers and employees transferred to the Bureau of Internal Revenue 
hereunder, who do not already possess a competitive classified civil service 
status, shall not acquire such status by reason of such transfer, except upon 
recommendation by the Secretary of the Treasury to the Civil Service Com- 
mission, subject to such noncompetitive tests of fitness as the Commission may 
prescribe ; and no officer or employee so transferred may be retained in the 
Bureau of Internal Revenue without appropriate civil service status for a period 
longer than 60 days from the effective date of this order. 

TRANSFER OF APPROPRIATIONS 

4. The unexpended balances of appropriations for the Bureau of Industrial 
Alcohol and the field service thereunder, and the unexpended balances of the 
appropriations made for salaries and expenses, Bureau of Prohibition, Depart- 
ment of Justice, including the field service thereof, in so far as may be required 
for the performance of the functions transferred by this order to the Commis- 
sioner of Internal Revenue, shall be transferred on the books of the Treasury 
Department to the appropriation entitled " Collecting the Internal Revenue ", 
which shall thereafter be available in the Bureau of Internal Revenue as a 
single fund for expenditure for the purposes named in the laws making the 
separate appropriations for " Salaries and expenses, Bureau of Industrial Alco- 
hol, Treasury Department ", " Salaries and expenses, Bureau of Prohibition, 
Department of Justice ", and " Collecting the Internal Revenue ", respectively ; 
and appropriations, if any, made to the Bureau of Industrial Alcohol and the 
Department of Justice, respectively, for the fiscal year 1935, for the perform- 
ance of the functions transferred by this order to the Bureau of Internal Rev- 
enue shall likewise be transferred on the books of the Treasury Department to 
the appropriation " Collecting the Internal Revenue ", subject to the conditions 
herein set forth. 



REPORT OF THE SECRETARY OF THE TREASURY 267 

GENEBAL PROVISIONS 

5. Executive Orders Nos. 6166, 6224, and 6540, dated June 10, 1933, July 27, 
1933, and December 28, 1933, respectively, are revoked in so far as they are in 
conflict with the provisions of this order. 

6. This order shall take effect upon the sixty-first calendar day after its 
transmission to Congress, unless otherwise determined in accordance with law. 

Franklin D. Roosevelt. 
Done in triplicate. 
The White House, 

March 10, 1984. 



ORDER OP THE SECRETARY OF THE TREASURY, APRIL 3, 1934 

Treasury financing, investment of Government funds, and other matters 
relating directly or indirectly to financing operations are hereby assigned to the 
supervision of Mr. T. J. Coolidge, Special Assistant to the Secretary. 

Treasury officials whose duties bear on these subjects will perform such duties 
under the supervision of Mr. Coolidge. This will apply particularly to the 
following officials: 

Mr. Broughton, Commissioner of the Public Debt. 

Mr. Kilby, Assistant to the Commissioner of the Public Debt. 

Mr. Bell, Commissioner of Accounts and Deposits. 

Mr. Harlan, Assistant to the General Counsel. 

Mr. Stark, Chief, Section of Financial and Economic Research. 

Mr. Lochhead, Technical Assistant, Office of the Secretary. 

Mr. Lanston, Technical Assistant, Office of the Secretary. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 



T. D. 4432, ESTABLISHING AN ALCOHOL TAX UNIT IN THE BUREAU OF INTERNAL 
REVENUE AND DEFINING ITS JURISDICTION 

To Officers and Employees of the Bureau of Internal Revenue, Collectors of 
Internal Revenue, and Others Concerned: 

1. There is hereby established in the Bureau of Internal Revenue a unit to 
be known as the "Alcohol Tax Unit ", at the head of which shall be a Deputy 
Commissioner of Internal Revenue appointed as required by law. 

2. The Alcohol Tax Unit shall be charged with the administration, under 
the direction of the Commissioner of Internal Revenue, of the internal revenue 
laws concerning the following subjects : 

(a) The production, custody, and supervision of distilled spirits, alcohol, 
wines, fermented liquors, cereal beverages, denatured alcohol, and other such 
liquors and liquids; 

(6) The establishment, construction, operation, custody, and supervision of 
distilleries, industrial alcohol plants, bonded warehouses, denaturing plants, 
wineries, bonded wine storerooms, breweries, rectifying houses, dealcoholizing 
plants, cereal beverage plants, and other places at which such spirits, liquors, 
or liquids are produced or stored ; 

(c) The determination, assertion, and assessment of all internal revenue 
taxes and penalties pertaining to distilled spirits, alcohol, wines, fermented 
liquors, cereal beverages, denatured alcohol, and other such liquors and liquids, 
and the compromise thereof, except that all moneys shall be received and 
accounted for by the collectors of internal revenue under the direction of the 
Commissioner of Internal Revenue ; 

(d) Inquiries and investigations relating to the filing of returns for occu- 
pational and commodity taxes and penalties in respect to distilled spirits, alco- 
hol, wines, fermented liquors, cereal beverages, denatured alcohol, and other 
such liquors and liquids, except that the collectors of internal revenue will 
remain charged with the routine inspection of the places of business of retail 
dealers in such liquors and liquids ; 

(e) The investigation, prevention, and detection of violations of the laws 
pertaining to distilled spirits, alcohol, wines, fermented liquors, cereal bever- 
ages, denatured alcohol, and other such liquors and liquids, or any regulations 
issued thereunder, and the apprehension of offenders against such laws; 



268 REPORT OF THE SECRETARY OF THE TREASURY 

(/) The detention and seizure, for violation of laws relating to distilled 
spirits, alcohol, wines, fermented liquors, cereal beverages, denatured alcohol, 
and other such liquors and liquids, of property, whether real or personal 
(except seizure under distraint warrant), and the custody, control, sale, and 
disposition of property so seized ; 

(g) The discharge of liens under section 902 of the Revenue Act of 1926. 

3. There are conferred and imposed upon the Deputy Commissioner of 
Internal Revenue in charge of the Alcohol Tax Unit, and the assistants, in- 
spectors, and agents under his supervision, subject to the direction of the 
Commissioner of Internal Revenue and subject to such regulations as he may 
prescribe from time to time with the approval of the Secretary of the Treas- 
ury, all the rights, privileges, powers, and duties conferred and imposed upon 
the Secretary of the Treasury and/or the Commissioner of Internal Revenue 
under the provisions of the Executive order of March 10, 1934 (no. 6639), and 
of section 4(a) of the act approved March 3, 1927, entitled "An act to create 
a Bureau of Customs and a Bureau of Prohibition in the Department of the 
Treasury ", insofar as they relate to the duties to be performed by the Alcohol 
Tax Unit as enumerated in paragraph 2 hereof. 

4. Except as may hereafter be otherwise provided, all regulations prescribed, 
all orders and instructions issued, and all forms adopted for the enforcement 
of the laws heretofore administered by the Commissioner of Industrial Alcohol 
or the Bureau of Industrial Alcohol, and assistants, inspectors, and agents 
thereunder, and remaining in effect after the repeal of the eighteenth amend- 
ment, will continue in effect as regulations, orders, instructions, and forms 
of the Bureau of Internal Revenue : Provided, That the term " Commissioner " 
or " Commissioner of Industrial Alcohol ", and the term " Supervisor " or 
" Supervisor of Permits ", wherever used in such regulations, orders, instruc- 
tions, and forms, shall be held to mean, respectively, " Deputy Commissioner 
of Internal Revenue " and " District Supervisor." 

Guy T. TIelvering, 
Commissioner of Internal Revenue. 
Approved May 10, 1934: 

Henry Morgenthau, Jr., 

Secretary of the Treasury. 



EXECUTIVE ORDER NO. G727, MAY 29, 1934, POSTPONING EFFECTIVE DATE OF 
CERTAIN PROVISIONS OF EXECUTIVE ORDER NO. (illiG OF JUNE 10, 1933 

Whereas it appears that the interests of economy require that certain trans- 
fers, consolidations, and eliminations provided for under section 4 of Executive 
Order No. 6166 of June 10, 1933, be further delayed beyond the effective date of 
said order : 

Now, therefore, pursuant to the provisions of section 22 of the said order, 
I hereby order that, except as hereinafter provided, the transfers, consolida- 
tions, and eliminations contemplated by section 4 of Executive Order No. 6166 
of June 10, 1933, which are not effected prior to June 30, 1934, pursuant to 
Executive Order No. 6224 of July 27, 1933, and Executive Order No. 6540 of 
December 28, 1933, together with the operation of all other provisions of 
Executive Order No. 6166 of June 10, 1933, in so far as they relate to said 
section 4, be further delayed until December 31, 1934: Provided, That any 
transfer, consolidation, or elimination, in whole or in part, under said section 4, 
including any other provisions of the said order of June 10, 1933, in so far 
as they relate to section 4 thereof, may be made operative and effective be- 
tween June 30, 1934, and December 31, 1934, by order of the Secretary of the 
Treasury, approved by the President. 

Franklin D. Roosevelt. 

The White House, 

May 29, 1934. 



REPORT OF THE SECRETARY OF THE TREASURY 269 

EXECUTIVE ORDER NO. 0728, MAY 29, 1!)34, REVOKING IN PART SECTION 4 OF EXECUTIVE 
ORDER NO. 6166 OF JUNE 10, 193:! 

Whereas section 4 of Executive Order No. 6166 of June 10, 1933, provides in 
part : 

" The function of disbursement of moneys of the United States exercised by 
any agency is transferred to the Treasury Department and, together with the 
Office of Disbursing Clerk of that Department, is consolidated in a Division of 
Disbursement, at the bead of which shall be a Chief Disbursing Officer." 

Whereas the effective date of section 4 of Executive Order No. 6166 has been 
deferred until December 31, 1934, by Executive Order No. 6727 of this date, 
subject to the provisions contained therein; and 

Whereas, after further consideration, I have determined that such transfer 
of the disbursing functions under the jurisdiction of the War Department, the 
Navy Department, and the Panama Canal, except as hereinafter set forth, 
would adversely affect the operation of our military and naval forces in time 
of emergency and would not be in the public interest ; 

Now, therefore, by virtue of and pursuant to the authority vested in me by 
section 16 of the act of March 3, 1933 (ch. 212, 47 Stat., 1489, 1517), it is 
ordered that the above-quoted provision of section 4 of Executive Order No. 
6166 of June 10, 1933, be, and it is hereby, revoked in so far as and to the extent 
that it is applicable to the disbursing functions under the jurisdiction of the 
War Department, the Navy Department (including the Marine Corps), and the 
Panama Canal, except those pertaining to departmental salaries and expenses 
in the District of Columbia : Provided, That the Secretary of War and the 
Secretary of the Navy shall continue to furnish the Secretary of the Treasury 
such fiscal reports as are now or may hereafter be required by law, and such 
other fiscal data as may be required by the Secretary of the Treasury from 
time to time: Provided, further, That upon the request of the Secretary of the 
Treasury and with the approval of the Secretary of War and the Secretary of 
the Navy, as the case may be, the facilities of the War and Navy Departments 
and the Panama Canal may be utilized in the disbursement, or aiding in the 
disbursement, of public moneys of the United States available for expenditure 
by any executive department, independent establishment, or agency of the 
Government. 

This order will become effective in accordance with the provisions of section 
1, title III, of the act of March 20, 1933 (ch. 3, 48 Stat. 8, 16). 

Franklin D. Roosevelt. 

Done in duplicate. 

The White House, 

May 29, 1934. 



DEPARTMENT CIRCULAR NO. 519, JUNE 20, 1934 

The Revenue Act of 1934 created in the Department of the Treasury the 
Office of General Counsel for the Department of the Treasury. Accordingly, 
there is hereby established a division to be known as " Legal Division, Depart- 
ment of the Treasury ", to which is transferred all of the personnel, records, 
books, furniture, and supplies connected with the legal activities of the Treas- 
ury Department, and such division is hereby placed under the direct super- 
vision and control of the General Counsel. 

The General Counsel is hereby authorized to perform all duties and func- 
tions incident to the administration of the legal activities of the Treasury 
Department, including the signing of letters and the approval in my stead of 
such documents as may come before him in the regular course of his adminis- 
tration of the Legal Division of the Treasury Department, and such other duties 
as may be assigned to him by me from time to time. 

All matters relating to personnel in the Legal Division, including recommen- 
dations for new appointments, transfers, promotions, or other matters relating 
to changes in personnel and all matters relating to the purchase of books and 
supplies for the Legal Division shall be referred to the General Counsel for 
his approval before any action is taken thereon. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 



270 REPORT OF THE SECRETARY OF THE TREASURY 

Exhibit 46 

Excerpt from a letter of the Postmaster General to the Secretary of the Treas- 
ury, dated November 15, 1934, certifying extraordinary expenditures contribut' 
ing to the deficiency of postal revenues for the fiscal year ended June SO, 
1934, in pursuance of Public Act No. 316, Seventy-first Congress, approved 
June 9, 1930 (40 Stat. 523) 

In accordance with the provisions of the act of June 9, 1930, embodied in 
section 260, Postal Laws and Regulations, the amounts set forth below with 
respect to certain mailings during the fiscal year ended June 30, 1934, are 
certified to you in order that they may be separately classified on the book? 
of the Treasury Department in stating the expenditures made from the appro- 
priation to supply the deficiency of postal revenues : 

(a) The estimated amount which would have been collected at regular 
rates of postage on matter mailed during the year by officers of the 
Government (other than those of the Post Office Department) under 

the penalty privilege, including registry fees $23, 094, 882. 00 

(b) The estimated amount which would have been collected at regular 
rates of postage on matter mailed during the year by : 

1. Members of Congress under the franking privilege — $775, 785. 00 

2. By others under the franking privilege 215. 00 

776, 000. 00 

(c) The estimated amount which would have been collected during the 
year at regular rates of postage on publications going free in the 

county 545, 227. 00 

(d) The estimated amount which would have been collected at regular 

rates of postage on matter mailed free to the blind during the year 103, 552. 00 

(e) The estimated difference between the postage revenue collected dur- 
ing the year on mailings of newspapers and periodicals published by 
and in the interests of religious, educational, scientific, philanthropic, 
agricultural, labor, and fraternal organizations, and that which would 

have been collected at zone rates of postage 418, 100. 00 

(f) The estimated excess during the year of the cost of aircraft service 

over the postage revenues derived from air mail 12, 992, 910. 83 

<g) The estimated amount paid during the year to vessels of American 
registry for carrying the ocean mail in excess of what would have 
been paid at pound rates if carried in vessels of foreign registry 28, 692, 458. 00 

Total 66, 623, 129. 83 



TABLES 



271 



90353—35 19 



8SJSAT 






61 58— S580G 



YHU8AMHT 3HT 10 YHATaaoae 3HT TO THO'IBS £Y£ 

-c"' itenoO oiiT— .(89io)ibn9qx9) bguaai aJnim 

lo sonsupsaao Tii/gjsaiT edi mori irrab 9 : .nom on taxtt ■- 

Surti aoiiupoi 

boJinU grid i. j 9r fj } 19TuaB91 T otii 

zinr 1 

- fiIT si BIG 

jJJJj EXPLANATION OF BASES USED IN TABLES 

Figures in the following tables are shown on various bases, namely: (1) Dailv 
Treasury statements, unrevised (current cash); (2) daily Treasury statements, 
revised factual); (3) warrants issued; (4) checks issued;* and (5) collections re- 
ported by collecting officers. 

"Daily' Treasury statements (unrevised) (receipts and expenditures).— The 
figures shown in the daily statement of the United States Treasury are compiled 
from t l.e latest daily reports received by the Treasurer of the United States 
from Treasury officers and public depositaries holding Government funds. The 
daily Treasury statement, therefore, is a current report compiled from latest 
available information, and, by reason of the promptness with which the infor- 
mation is obtained and made public, it lias come into general use as reflecting 
the financial operations of the Government covering a given period, and gives 
an accurate idea 1 >f tin- actual condition of the Treasury as far as it is ascertainable 
from day fo day. This is known as "current cash'basis", according to daily 
Treasury statements (unrevised). Table 8 (p. 294) shows receipts and expendi- 
tures on this basis. The current assets and liabilities of the Treasury and the 
outstanding public debt are also 'available on this basis. 

Daily Treasury statements (revised) (receipts and expenditures).— On ac- 
count of the distance of some of the Treasury offices and depositaries from the 
Treasury, it is obvious that the reports from all officers covering a particular 
day's transactions cannot be received and assembled in the Treasury at one 
time without delaying for several days the publication of the daily Treasury 
statement. It is necessary, therefore, id order to exhibit the actual receipts and 
expenditures for any given month or fiscal year, to take into consideration those 
reports covering the transactions for the last few days of the month or fiscal year 
concerned which have not been received in the Treasury until the succeeding 
month or fiscal year, and to eliminate receipts and expenditures relating to the 
preceding month. After taking into consideration these reports, the revised 
figures indicate the condition of the Treasury on the basis of actual transactions 
occurring during the period under review. This is known as "the basis of daily 
Treasury statements (revised)." 

It is not practical to delay the publication of the daily Treasury statement in 
order to include the later reports, as the difference between the revised and the 
unrevised figures is immaterial. The unrevised figures as shown in current 
(laily !: "Treakttry 'statements are the basis for the Budget estimates submitted 
to Congress by the President. The revised figures are of no practical use except 
to enable the use of a true General Fund balance on the monthly statement of 
the public debt of the United States and to bring the daily Treasury statement 
figures into agreement with the figures basedon warrants issued. The table on 
page 154 shows receipts and expenditures on this basis. The current assets and 
liabilities of the Treasurv and the outstanding public debt are also available on 
this basis. 

Warrants issued (receipts). — Section 305 of the Revised Statutes provides that 
receipts for all moneys received by the Treasurer of the United States shall be 
endorsed upon warrants signed by the Secretary of the Treasury, without •which 
warrants, so signed, no acknowledgment for money received into the Public 
Treasury shall be valid. The issuance of warrants by the Secretary of the 
Treasury, as provided bv law, represents the formal covering of receipts into 
the Treasury. 

Gortiiicatos of deposit covering actual deposits in Treasury offices and deposi- 
taries, upon which covering warrants are based, cannot reach the Treasury 
srmurtaneouslv, and for that reason all -receipts for a fiscal year cannot Be covered 
into the Treasury by warrants of the Secretary immediately upon the close 
of that fiscal vear. It is necessary to have all certificates of deposit before a 
statement can be issued showing the total receipts for a particular fiscal year 
on a -warrant basis. The figures thus compiled will agree with the figures com- 
piled on the basis of daily Treasury statements (revised). The details in table 
1 (p. 276) show receipts on this basis. 

273 



274 REPORT OF THE SECRETARY OF THE TREASURY 

Warrants issued (expenditures). — The Constitution of the United States pro- 
vides that no money shall be drawn from the Treasury but in consequence of 
appropriations made by law. Section 305 of the Revised Statutes requires that 
the Treasurer of the "United States shall disburse the moneys of the United 
States upon warrants drawn by the Secretary of the Treasury. As the warrants 
are issued by the Secretary they are charged against the appropriate appropria- 
tions provided by law. Some of these warrants do not represent actual pay- 
ments to claimants, but are merely advances of funds to be placed to the credit 
of disbursing officers of the Government with the Treasurer of the United States 
for the payment of Government obligations. The disbursing officer then issues 
his check on the Treasurer in payment of such obligations. As far as the appro- 
priation accounts are concerned, the warrants issued and charged thereto consti- 
tute expenditures, but it will be observed that such expenditures necessarily in- 
clude unexpended balances to the credit of the disbursing officers. Under nor- 
mal conditions these balances over a period of several years fluctuate very little 
in the aggregate, and the difference between the total expenditures on a warrant 
basis and a cash basis (revised) is immaterial. Statement of the expenditures on 
a warrant basis from 1789 to 1915 is shown on page 302 of this report. 

Checks issued (expenditures). — -This basis, more than any other, reflects the 
real expenditures of the Government. Expenditures for a given fiscal year on 
the basis of checks issued differ from the corresponding figures on the basis of 
warrants in that the former include expenditures made by disbursing officers 
from credits granted during the previous fiscal year, and exclude the amount of 
unexpended grants remaining to their credit at the end of the fiscal year. The 
basis of checks issued differs from the basis of the daily Treasury statement (re- 
vised) in that the former includes checks outstanding at the end of the fiscal 
year, and excludes unpaid checks outstanding at the beginning of the fiscal year. 
A detailed explanation of the basis of checks issued will be found on page 89 of 
the Secretary's report for 1927. Table 2 (p. 282) shows expenditures on this basis. 

Collections reported by collecting officers (receipts). — Statements showing re- 
ceipts on a collection basis are compiled from reports received by the various 
administrative offices from collecting officers in the field, such as collectors of in- 
ternal revenue and collectors of customs. These reports cover the collections 
actually made by these officers during the period specified. The collections are 
then deposited in a designated Government depositary to the credit of the 
Treasurer of the United States, which depositary renders a report to the Treas- 
urer. The reports of the collecting officers and the depositaries do not, of course, 
coincide, for the reason that the collecting officers make collections during the 
last few days of the fiscal year which are not deposited until after the close of the 
fiscal year. On this account the two reports do not agree. The receipts are 
reported on a collection basis merely for statistical purposes and to furnish infor- 
mation as to detailed sources of revenue. Classification of such items on the 
basis of deposits has been found to be impracticable and uneconomical. Tables 
7 and 13 (pp. 317 and 329) show receipts on a collection basis. 

DESCRIPTION OF ACCOUNTS THROUGH WHICH TREASURY 
OPERATIONS ARE EFFECTED 

All receipts of the Government are covered into the General Fund of the Treas- 
ury from which all expenditures are made. Receipts and expenditures, however, 
are classified in the Treasury's records according to the class of accounts through 
which operations are effected. Transactions are segregated in order to exhibit 
separately those effected through general fund accounts, as contrasted with those 
effected through special and trust accounts representing restricted or specially 
allocated receipts and expenditures chargeable thereto. This classification was 
first shown in published records for 1927 for the warrants and checks-issued 
bases and on the daily Treasury statements beginning with the July 1, 1930, 
issue, in order to conform to the practice of the Bureau of the Budget. In some 
tables in this report, however, transactions in the three types of accounts are com- 
bined for purposes of historical comparison. A brief general explanation of the 
three classes of accounts is presented below. 

General fund accounts. — The principal sources of general fund account receipts 
are income taxes, miscellaneous internal revenue, and customs duties. In 
addition, a large number of miscellaneous receipts come under this head including 
such items as proceeds of Government owned securities (except those which are 



REPORT OF THE SECRETARY OF THE TREASURY 275 

applicable to public debt retirement), sale of surplus and condemned property, 
Panama Canal tolls, fees (including consular and passport fees), fines, penalties, 
forfeitures, rentals, royalties, reimbursements, immigration head tax, sale of 
public land, tax on national bank circulation, interest on public deposits, seignior- 
age on coinage of subsidiary silver and minor coins, etc. Moneys represented in 
the general fund accounts may be withdrawn from the Treasury only in pursuance 
of appropriations made by Congress. There are four classes of appropriations 
payable through the general fund accounts of the Treasury, namely: (a) An- 
nual, being those made each year in the several departmental supply bills and 
limited for obligation during the fiscal year for which made; (b) continuing 
(no year), being available until expended or until the object for which appro- 
priated has been accomplished, such as construction of public works; (c) perma- 
nent-specific, being fixed amounts provided for each of a series of years by perma- 
nent legislation, without annual action of Congress; and (d) permanent-indefinite, 
being indefinite amounts (so much as may be necessary) provided by permanent 
legislation without annual action of Congress, such as the indefinite appropriation 
to cover interest on the public debt. 

A statement of general fund receipts and expenditures is, therefore, in the 
nature of a general operating statement, and gives a picture of the relationship 
between the general revenues of the Government and the operating expenditures 
(including capital outlays and fixed charges) chargeable against them. 

Special accounts. — -Special account receipts may be generally defined as funds 
received under special authorizations of law which may be expended only for 
the particular purposes specified therein. Special account receipts may not be 
used for the general expenditures of the Government. The most important 
items of receipts included under this heading, from the standpoint of amounts, 
are those applicable to the retirement of the public debt. Other important 
special account receipts are the reclamation fund under the Department of the 
Interior, funds received for river and harbor improvements, Forest Service 
cooperative funds, and proceeds from sales of ships, etc., by the United States 
Shipping Board available for construction loans. There are many other special 
account receipts of lesser importance. 

Trust accounts. — Trust account receipts represent moneys received by the 
Government for the benefit of individuals or classes of individuals. Moneys 
held in trust, being payable to or for the use of beneficiaries only, are not available 
for general expenditures of the Government. There are several classes of trust 
account receipts, the beneficiaries under which may be either individuals or 
groups of individuals. The funds may represent (a) moneys received directly 
from or for account of individuals, as in the case of moneys received from foreign 
governments or other sources in trust for citizens of the United States or others 
under the act of February 27, 1896; (b) moneys collected as revenues and held 
in trust, such as the proceeds of sales of Indian lands which are held as interest- 
bearing funds for the benefit of Indian tribes; and (c) proceeds of grants from the 
general fund accounts of the Treasury in pursuance of treaty or other obligations 
such as the perpetual trust fund created for the Ute Indians under section 5 of 
the act of June 15, 1880. 



276 immm sis m c m*iwm « mssmsp 

,^*i9qoiq baa i baa anlqiJJaria #J*ap#n9rn9Ti;tei tdeb oiidnq oi 9ldBoiIqq£ 

,39i'' ;■[ bajr-TsfCTstroTyaifauIoni) 399! ,afloi tensO jjnwsfl.81 

-loiagiga ,a*iac KECJEIP IS AN D. E^PLNDl fURES; jmi no yBi |bnjsI aiIduq 

ni bgtno- dcneral tables ra lo 9§Bnioo no 93s 

gonaifaiiiq ni vI.';o v7:;p,B9iT 9i^ i. - sm aJfliJOOOB bau\ Isnans^ edi 

"Table i:^lkiM'$'(ffre r kelpl&, %y sources and ticCdtii}tsy$oVkMiffiWVif4m ( iW>£ to 

■ uoiriJ y[«. svfiq 

[Details on basis of warrants issuedwith totals adjusted to basis ol, daily. Treasury statements (unrevised^,, 

see ,). 273. Fur axp} ar^io> ; fif account,, see p. 274J , ^ ^^ 

-oiqqjj ibiil/7 — — ~ ; — ^~ — .[j iiJnn 'io bebiiijq xi) iiJaiu aldidiiiv ■ — - :■'/ on) 



-Brxii9q (o) ;x:!ti// 'jiu'l^^g aoiteinJanoo a/i douy ,b 
-ean9q T {d 8-ibo\ to 391193 bio do£9 ioi b9bivo 



■ ; I General and n 

special accounts 



..gjiafiobtd-ui ■■ — 1 : ■ ■ gaignoO to noitofl Isi. i 



■ 
jn9nfimi9q vd b9bivo»gv^f*38909a 9d \&ai ?& douce 
InterimiJrpTenup:; ajinitobni 9dj 8fi doua ,a39l3fioO '■ 

Income taxes 4^^. 

Miscellaneous internal revenue taxes , -,. ' _. 

9^o8fesifi§ tax on farm | .roducts L2SL. PJSfi.ffl[ai§aS3..-Pi 

qid 

, Total internal revenue, warrapts-iss.ued basis 

"''Adjustment between warrants' issued and cash receipts 

■ 

ebr^dt^iinteirj^f^epUeisafih^ecfeiijts -.--4 .... 

siV\i _j'Ju>» » r iabjJ.iiCLL''^3 _3'i xf>nt dairfw wbI to anoitssi 

Customs (excluding tonnage tax): 



(Trust (inklacbahq 

tributpd accounts . 

■il L r < 9n 



os) sL uorajs jiinitobrd gnigd 
ddiw noiiiil3i§9l 

319trri-19-7TT9-0i 

-kr-9-ro^en 



..$817, 025, 339.72 
1, 473; 724', 386. (32" 
' ■ 3B6;iI62, 220. 36 



2,641}, 9QL, 946- 70 

■ 6,298*118.40 



2, 640,003, .s28. 30 || 



EJ-n99W*9d 

^a JBI/foni ) 






" Customs duties, warraii'ts-'issiifed- basis:.. 



..•ni?md* bar! toajit, $&, 240. 64 



jilAidiustment between, warrants 'issued; and oaiJh rjedoipte— aaaijii : 

Total c^1on«duties^n ^M2}h^^.^Ll?P. 
:i i9flJT) :./ouD oiranq 3nJ 10 Jnoinyujoi 

Miscellaneous: ,;ul noijJJfOBloai yd| 9'IC 



i>r;w».,it 



313, 434,'3Q2;i9 



U JJ9Vi9991 

. jjzlviiiiwsi. Sid 5 
j_- atij:---K3^--bo8 iJ 
j'>-n 10 amgj'i 



qir"fla"r < ?T,T^« ,f: 



..,518;904V84 



Tax on circulation of national banks 

Tonnage ta\... :...._...■. :_.._L- 

Imaiigration head teaS-STOri!— ,2iuiat-aGii3.U5ttefl09 

Taxes, licenses, fines, etc., Canal Zone — sorrfttao JfXii isIhSP%3% 

3 d J v cjroi&i tnisegriaifeoti^^Ses jtn989io;9T. . 8d.qi90.9i . .in L c o 
a^onoM .alfinbivibni io a98a/ifo io alsubivibni to 

lii (tjrest, exchange, and dividends: a A 

10 agrcemwits,,..,.,....: gft ____._ t ; .'jiiiJi 



inuoooB l£io9qa 
bitul ,ioii9JaI 



)ooi«4fe5 i 'o22-!48 r CCiIyZCVi3liqoQ3 

10} 9lfi*p yov qo Itigoa.gaiqqiHg 

rcrisooT Trnuo99£ 



6,^123,921.11 






,\ -ii .ent s . . . . : l:L??l?P. .' ?* f Id "78, 'fe fr ' '.ll J A U .H.?A 
Tntcrest on bonds of foreign govemmerits ' under fUnding- ' 



Interest on tanners' seed loans r , „.- 

Interest on Library of Congress trust fund, investment ac 

ngi9iofc OU ut..A:............ALroflUP.P-:-:-:--.. > 

Interest on loans, Puerto 'iiioarJ Hurricaaia Belief Commie 

bio'i sion rtfo **h-!ttm-\-»J---r-.-'~ i -->l 

Interest ou endowment fund, preservation birthplace of 
Abraham Lincoln.... i... '. ... 

Interest 1 on public deposits^.---- — .-^ 

Interest ojn, :objigafions qi Reconstruction Finance, Cor^o' 

ration..... __L+.l., _,..__' J „-. , l. T -'_.;.. J .i..." 

'• Interefst'ori money loaned from cdnstrirction' loan funds..':..' 

Interest and profits on Federal Farm Mortgage Corporation 
bonds 

Interest on miscellaneous obligations. 

Interest on loans to States, municipalities, etc., Public 
Works Administration 

Interest on investments, National Institute of Health con- 
ditional gift fund 

Gain by exchange 

Dividends on capital stock of the Panama R. R. owned by 
the United States 

Military and naval insurance, Veterans' Administration 
(repayments to appropriations) 

Federal control of transportation systems (repayments to 
appropriations) 

Loans to railroads after termination of Federal control (re- 
payments to appropriations) 

Dividends on capital stock of Federal home loan banks 

Earnings of War Finance Corporation. 

Discount on Treasury obligations redeemed and purchased.. 

Total interest, exchange, and dividends on capital stock... 

Fines and penalties: 

Judicial.. 

Customs Service 

Immigration Service 

Enforcement of National Prohibition Act (Judicial) 

For footnotes, see p. 281. 



bbd 
'ti9§"ibl 

i.iS3d.T.-,tHifC)OaS 

rbtir-to-sqcrois 
>0£ ioi io moil 



'l-3l«Iill-^fiH£9d 

a bnul bngngg 

aqL 3KH UK Idply 3 
afijjl to job edi 



3 ,20,-033;5&1 10 

&iri l,778,4i:,85 

n9fnni9vo§ 
W^ 3 !(r"*3B-9rf*-rabrti/ 

'.b9900M 9RJ 3 3 liODS ^801^ ni 
jngfig86,30&9ftj 

•'37446,170.92 

- [ .51 

374, 048. 92 
154, 317. 07 

24, 645. 78 

(') 
19,359.11 

2,000,000.00 

* 868, 108. 65 

2 19, 181. 76 

» 475, 405. 07 
552, 635. 61 
100, 000. 00 
332, 310. 58 



79,471,164.58 



347, 351. 86 

596, 807. 21 

51, 490. 00 

490, 153. 98 






-am ban tctnT 
?.iauoooa balwihl 



bns [si9nfiouTQe 



revenue — continued 



Miscellaneous — C ontinued. 

Fines and penalties — Continued. 

Navigatio a. T ~„ _. 1__ 

Liquidated jjarnages . - - 



bannUno: i— auviavaa 



------- 





Naval fines' and forfeitures....^ _ 

Recovery ©t value, of oil in case of United States against fa 
American' pqta^um Co. . 

Other ,... I , r - Trrr .... 



General and 
■special accounts 



Fees 



Total fines and penalties IYlVUP.. }™ 

tqaSh ,8$ffiJfE 



Agricultural Commodities Act ?. 9 "iL K 1?? 

Clerks, United States mv^izz~-.~~".-.~zz~-.z-J??Rwy 

Board of Tax Appeals . 

Commissions on telephone pay stations in Ferteral-bajll 
and Tented post offices. 



Alaska gapiejaws 

Consular grid passport _ 



-4 -jjjj ■ i ". - 1?;,- - - -- 1 :r "alvis i 1 



56, 1.-1. 01 
14,78'i. 12 
3, 246, 654. 12 

Court of ClSr md Patent Appe ^ : n^V 

copSii:n-v;:;::::::::::::::::::::::: 

Immigration (registration) •..-... ■.".".-.-.-.-.-.-.-.--% 

Indian-lands and timber ■.:.___..'_. 

Land offices (including commissions) 

Marshals, United States courts r '_.'. 

Naturalization. ' - - 

Naval stores grading r. . . i-v.--.-.-.-. i . I '.". 

N gyigartiop-- j^z. .:'" i. ------------ ------- --------------- 

Patents X-,.-.^. ,,,._, i 

Purchase of discharge's, Navy and Marine Corps 
Registration Securities 

Testing fr ... 

Warehouse Act 



: ioY?7ooitc'7T 



tol . 



- Total teles. 



."-"-"."".""JfiBobV , ----------- 

'." - . Snoaisq ffwooSHJi Tn~; 



Water anS power Hfehts. . 
-•Othpr "' 

,£3 .CKE .38 

-pr 

Forfeitures: j 
Bonds of Aliens, comractors, etc 

Bribes to IJaited Spates officers 

Judicial rrjisceflaneous '.'_-......'. . 

Under enforcement of National Prohibition Act (JuditfalK 
Jnclaimed moneys and wages remaining in registry of courts 



----- 



6-, 82. 
38,329. (ii 
1 .250,-315.6(1 

58, 530. 55 

260, 240. 35 

177, 306. 3S 

1,761,076.51 

7,678.05 

172,333.4)9 

4, 280, 242. 55 

92, 980. 33 , 
59,341.88 
15,200.00 
31,896. IX 
13,615.06' 



_.9aiv 

2}n9m9voiqaii locher 



.. . 

JdobKofTgfDTo"' noi 1, 



•■ 



261, 555. 55 
'6, 016.40 

156, 58a 58 
53, 9Wi 07 

249, 478. 63 

Unclaimed merchandise 133, 214. 4)2 

Unclaimed funds' .i... --------- 

Unexplained balances in cash accounts .--_.-_ JLV.VlvS™ 

nthor T 9T8BT? ,29iofa B9nni9l5aoo ,sls 
uiner.„j. grTSrB g 5 . i 



Total forfeitures. - 



1 bap, iool.:97il_ S'liln fofli l 506, 132. '.'7 



Assessments:!^^ apA'ano 

Colorado Rjivei' Dam fund, Boulder Canyon project- 

-- Deposits -for establishing wool standards... 

-- Deposits, p'ublfp survey work, Alaska. ... .-- 

Deposits, ptfblic survey work, general: :.„._: 

On Federal Reserve l>anks for salaries and expenses-, -Federal 



Reserve' Board: t - 

On Federarana joint stock jland- banks, and Federal-inter- 
mediate, credit batiks for expenses of examinations,- -Farm 

- Credit Administration. --4 -......-- -.-.i-.-.-.-.-.:-.-.-.:-.:.-.^ 

On- Federal .Home Loan Banks for salaries and -expenses-. L-iV 1 
On national binkstbr salaries and oxpenses-of national- bank 



.examinejrs. 



General railroad contingent fund . „,-..^ --..„ .. ... IbJoTO) 

On railroads for expenses of Federal Coordinator of Trans- 



portatiob-,--^ 
German G£yernin£nt>% mojety, expenses,- Mixed Glaims- 

"- CommiSS^;l'..C^ j ___._. .-;l;; = ;.;--i::;,~~.^ 

Furlough 'atid/eprnpensatiorj deductions and vacancy' sav-' ' 
ings (special dep6sit accouvts)-.-.^-..~^-.-.-.~---------- z ' zz:iZ '" i 

Naval- hospital nirid 4--------i--r--^—--~i--"--V--:j 

j -ni ,naiJ09mi8iD ,noijs;?imnt §d 

Total assess $&85- ],-.i.-.-i--------------------------.--------------^----- 

_ r^^TT,!!' 0917102 Y.lDniJ 

fiS.YW.Sfr 

For footnotes, see p. 281. 



.baimitnc 

$30, 555. 50 
206, 640. 25 
267,971.44 

191,214.28 
11,550.46 



Trust and con- 
tributed accounts 



2, 193, 737. 98 



98, 870, 00 

1,458,901. 11 

42, 805. 23' 



... 

:K"l90n"lj"~" 

a9iaoiffiS~ 

... 



aflsJoT" 



12,255,663.23 



1, 436. 15 
vliaqoigi^fgj. 

14;- 886. 49 



. 72; 923.49 
14, 000. 00 

870. 00 



6, 240. 56 
_2ini bat 



:iuilui: 



170, 734. 00 
•'268-, 1 861 I . 1 96- 



< 3 )- 



io 89lf 

i h rriiin " 



58,178.37 

63, 746'. 15 

403, 873. 22 



1,464,418.74 

' il l '," .(■'■»:■' ■■■■ 



) — RuronelloDaiM 
irno^iudrnioJI 

■" 

""" 

7T 



B 

km:: 

1 

fdiUM" 



iibV hnc 8J1TD" 
iBldll 

i-ifioT/— — 



.a 





To "flintaiT" 



:Q 



... 

il >[> xoT 
q bns 1JH3U .&3QH_ 



moif isU' 

.lorilO 



402, 767. 3C»' iil^Xo??!??.. 
Baal BfiOTli^ii 

2, 223. 69 






jtiH. 



.182 .q 998 ,29loalool lol 



278 REPORT OF THE SECRETARY OF THE TREASURY 

Table 1. — Details of receipts, by sources and accounts, for the fiscal year 1984 — Con. 



Source 



revenue— continued 

Miscellaneous — Continued. 
Reimbursements: 

Construction charges (Indian Service) --- 

Collections under Grain and Cotton Standards Acts 

Maintenance of District of Columbia inmates in Federal 

penal and correctional institutions 

Refunds on empty containers 

Expenses, miscellaneous 

By contractors for excess cost over contract price 

By State of Arizona for expenditures, nonproduction of cot- 
ton zones for 1930 crop losses 

Expenses of redeeming national currency 

Inspection of food and farm products 

Gasoline State tax 

Government property lost or damaged 

Hospitalization charges and expenses 

Expenses of international service of ice observations and 

patrol --- 

Costs from estates of deceased Indians 

Maintenance and operation charges, irrigation systems, 

Indian Service 

Of appropriations made for Indian tribes 

Reclamation fund, collections 

Auxiliary reclamation fund, Yuma project, Arizona 

By District of Columbia for advances for acquisition of lands 

under sec. 4, act May 29, 1930, as amended 

Licenses under sec. 27, Trading with the Enemy Act 

Settlement of claims against various depositors — 

Other — 



Total reimbursements- 



Gifts and contributions: 

Forest Service cooperative work 

Library of Congress gift fund 

Library of Congress trust fund, investment account 

Moneys received from known and unknown persons 

Donations to the United States. 

Donations, National Park Service 

Contributions for river and harbor improvements 

Contributions for flood control 

For roads, bridges, and related works, Alaska 

Return of part of compensation of the President 

Return of salary and mileage paid to Members of Congress- 
Return of salary from constitutional officers -.- 



Total gifts and contributions . 



Sales of Government property — products: 

Scrap and salvaged materials, condemned stores, waste 

paper, refuse, etc - 

Agricultural products, including livestock and livestock 

products 

Dairy products 

Card indexes, Library of Congress 

Public documents, charts, maps, etc 

Electric current, power plant, Coolidge Dam, Ariz 

Electric current (Dam No. 2, Muscle Shoals, Ala., $40,931.14) 

Fox skins and furs 

Heat, light, and power 

Gas from helium plants 

Ice 



Occupational therapy products... 
Subsistence (meals, rations, etc). 

Water 

Other 



Total sales of Government property— products 

Sales of services: 

Alaska Railroad fund 

Fumigating and disinfecting 

Laundry and dry-cleaning operations 

Livestock breeding service 

Overhead charges on sales of services or supplies (War and 

Navy) 

Quarantine charges (including fumigation, disinfection, in- 
spection, etc., of vessels) 

Quarters, subsistence, and laundry service 

Radio service 

For footnotes, see p. 281. 



General and 
special accounts 



$15, 858. 80 
84, 886. 46 

90, 922. 77 

9, 014. 41 

107, 196. 24 

66, 494. 58 

1, 134. 94 

469. 887. 79 

251, 353. 41 

4, 172. 29 

37, 290. 59 

52, 476. 51 

75, 854. 55 
46, 077. 12 

462, 910. 51 

104, 314. 18 

2, 080, 677. 90 

14, 158. 48 

1, 000, 000. 00 

103, 585. 00 

5, 762. 31 

58, 509. 86 



5, 142, 538. 70 



(>) 

(') 

(') 
8, 052. 04 

36, 320. 55 

(0 

(') 

(') 

(') 

10, 625. 00 
1, 478. 65 
5, 839. 15 



62, 315. 39 



989, 237. 76 

31, 099. 85 

36, 109. 40 

205, 986. 73 

485, 809. 29 

2, 307. 59 

87, 333. 40 

23, 215. 21 

86, 773. 02 

17, 500. 05 

54, 675. 36 

45, 954. 87 

47, 059. 54 

42, 836. 84 

34, 375. 75 



2, 190, 274. ( 



1, 360, 719. 68 

19, 596. 00 

815, 659. 38 

1, 479. 40 

75, 719. 19 

228, 040. 44 
41, 542. 95 
43, 417. 25 



Trust and con- 
tributed accounts 



REPORT OF THE SECRETARY OF THE TREASURY 279 

Table 1. — Details of receipts, by sources and accounts, for the fiscal year 1934 — Con. 



Source 


General and 
special accounts 


Trust and con- 
tributed accounts 


revenue— continued 

Miscellaneous — Continued. 

Sales of services — Continued. 

Storage and other charges... 


$158, 029. 73 

189, 201. 80 

252, 680. 21 

24, 746, 684. 75 

11,954.56 

71, 608. 32 




Profits from sale of ships' stores, Navy 




Telephone and telegraph 




Tolls and profits, Panama Canal 




Work done for individuals, corporations et al 




Other 








Total sales of services 


28, 016, 333. 66 








Rents and royalties: 

Rent of public buildings, grounds, etc 


295, 452. 19 
105, 745. 56 
3, 206, 891. 30 
753, 826. 09 
71, 923. 99 
18, 995. 67 
74, 315. 95 
18, 192. 93 
34, 073. 17 
15, 000. 00 




Rent of land . 
































Other 










4, 594, 416. 85 








Permits, privileges, and licenses: 


210, 167. 65 

158, 959. 92 

2, 398. 94 

200, 789. 28 

554, 910. 08 

489, 415. 34 

15, 253. 00 

150, 000. 00 

765. 00 


















( 6 ) 














Other . 










1, 782, 659. 21 










2, 960, 537. 47 










3, 348, 949. 03 










20, 124. 04 
222, 805. 54 












Total 


242,929.58 










68, 117. 52 










152, 124, 109. 98 










3, 112, 548, 297. 32 








NONREVENUE 
Miscellaneous — Realization upon assets: 


249, 800. 84 








Repayments of investments: 

Federal control of t