(navigation image)
Home American Libraries | Canadian Libraries | Universal Library | Community Texts | Project Gutenberg | Children's Library | Biodiversity Heritage Library | Additional Collections
Search: Advanced Search
Anonymous User (login or join us)
Upload
See other formats

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

V 



Ha 



^■o^'^. 



ANNUAL REPORT OF THE 
SECRETARY OF THE TREASURY 



ON 



THE STATE OF THE 
FINANCES 



FOR THE FISCAL YEAR 
ENDED JUNE 30 

1935 





UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1936 



Treasury Department 

Document No. 3072 

Secretary 



CONTENTS 



Paga 

Budget results 1 

Receipts 1 

Income taxes . 3 

Miscellaneous internal revenue 3 

Agricultural adjustment taxes 5 

Customs 5 

Miscellaneous receipts 5 

Expenditures 5 

The public debt 12 

Issues during the year 16 

Second Liberty Bond Act — Further amendments 18 

Cumulative sinking fund 18 

Refunding of Fourth Liberty Loan continued 19 

Refunding of First Liberty Loan 21 

Redemption of 2 percent bonds 22 

United States Savings Bonds 23 

General Fund of the Treasury 25 

Emergency legislation 26 

Revenue legislation 30 

Extension of temporary taxes and increased postal rates 30 

Publicity of income tax returns 30 

Revision and extension of agricultural adjustment taxes 30 

■Estimates of receipts and expenditures 32 

Fiscal year 1936 36 

Fiscal year 1937 38 

Silver, silver certificates, and national bank notes 41 

Silver 41 

Silver certificates 42 

National bank notes 44 

Bureau of Internal Revenue 44 

Back taxes on incomes 44 

Alcohol tax administration 44 

Construction activities of the Treasury 45 

The original public building program 45 

Building program in the District of Columbia 46 

Program under the Public Works Administration 46 

Program under the Emergency Appropriation Act 46 

Program for other departments 47 

Bureau of Customs 47 

Nonfiscal activities 48 

Coast Guard 48 

Public Health Service 48 

Bureau of Narcotics 51 

Organization changes 52; 

ADMINISTRATIVE REPORTS OF BUREAUS AND DIVISIONS 

Accounts and Deposits, Office of the Commissioner of 55 

Combined statement of assets and liabilities of governmental corpora- 
tions and credit agencies 55 

Securities owned by the United States Government 55 

Contingent liabilities of the United States 57 

Accounting and disbursing of Emergency Relief funds appropriated 

under the Emergency Relief Appropriation Act of 1935 57 

'^ ni 



rV CONTENTS 

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

Obligations of foreign governments 58 

Receipts from Germany 59 

Army costs , 59 

Mixed claims, United States and Germany 60 

Annuities under moratorium agreement 60 

Treasury administration of alien and mixed claims 60 

Mixed Claims Commission: Claims against Germany 61 

War Claims Arbiter "_ 64 

Claims of German nationals 64 

Claims of Hungarian nationals 64 

German special deposit account 64 

Tripartite Claims Commission 65 

Claims against Austria 65 

Claims against Hungary 65 

Railroad obligations 66 

Section 204 66 

Section 207 66 

Sections 209 and 212 67 

Section 210 67 

Trust funds invested by the Treasury ■ 68 

Adjusted service certificate fund 68 

Civil service retirement and disability fund 68 

Foreign service retirement and disability fund 69 

Canal Zone retirement and disability fund 70 

District of Columbia teachers' retirement fund 71 

Longshoremen's and harbor workers' compensation fund 73 

District of Columbia workers' compensation fund 73 

Library of Congress trust fund 74 

United States Government life insurance fund 77 

National Institute of Health gift fund 78 

Alien property trust fund 79 

General railroad contingent fund 80 

Pershing Hall Memorial fund 80 

Special funds 81 

Colorado River Dam fund 81 

Advances to reclamation fund 82 

Division of Deposits 83 

Section of Surety Bonds 84 

Division of Bookkeeping and Warrants 84 

Division of Disbursement 84 

Appointments, Division of 85 

Number of employees 85 

Retirement of employees 86 

Budget and Improvement Committee 86 

Coast Guard 87 

Protection to navigation 87 

Enforcement of customs and other laws 88 

Communications 89 

Equipment 90 

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

base, etc 92 

Engineering competition 93 

Personnel 93 

Awards of life-saving medals 93 

Appropriations and expenditures 94 

Comptroller of the Currency 95 

Changes in the condition of national banks 95 

Reopening and reorganization of national banks 96 

Summary of changes in membership in the national banking system. _ 98 

Customs, Bureau of 98 

Collections 98 

Volume of business 99 

Enforcement activities 100 

Smuggling 101 

Miscellaneous 102 

Investigative Unit 102 

Engraving and Printing, Bureau of 104 



CONTENTS V 

Page 

Enrollment and Disbarment of Attorneys and Agents, Committee on 107 

Internal Revenue, Bureau of 108 

General 108 

Internal revenue collections 108 

Refunds 108 

Additional assessments 109 

Cost of administration HO 

Income Tax Unit JJO 

Additional revenue HI 

Final notices of deficiency (90-day letters) 112 

Claims and overassessments 113 

Returns on hand 113 

Audit in Washington 114 

Audit in the field 114 

The Technical Staff 115 

Miscellaneous Tax Unit 115 

Estate Tax Division 116 

Tobacco Division 118 

Silver Tax Division 118 

Sales Tax Division 118 

Processing Tax Division 121 

Capital Stock Tax Division. __ 123 

Alcohol Tax Unit 124 

Enforcement Division 124 

Audit Division 124 

Laboratory Division 125 

Accounts and Collections Unit 125 

Collection Accounting Division 125 

Collectors' Personnel, Equipment, and Space Division 126 

Disbursement Accounting Division 127 

■ OflSce of the Assistant General Counsel 127 

Assistant General Counsel's Committee 128 

Reorganization Section 128 

Appeals Division 128 

Civil Division 129 

Compromise Section 130 

Interpretative Division 131 

Penal Division 131 

' Review Division 132 

Legislative and Regulations Division 132 

Intelligence Unit 132 

Legal Division 133 

Mint, Bureau of the 134 

Institutions of the Mint Service 134 

Coinage 135 

Bullion deposit transactions 135 

Gold operations 135 

Silver operations 136 

Commemorative coins 136 

Refineries 136 

Stock of coin and monetary bullion in the United States 137 

Production of gold and silver 137 

Industrial consumption of gold and silver 137 

Appropriations, expenses, and income 137 

Narcotics, Bureau of 138 

Enforcement activities 138 

Extent and trend of narcotic traffic 140 

Division of Printing 140 

Printing and binding 141 

Stationery supplies 143 

Department advertising 143 

Engraving work 143 

Procurement Division 143 

Branch of Supply 143 

Public Works Branch 148 

Office of the Supervising Architect 148 

Office of the Supervising Engineer 148 



VI CONTENTS 

Procurement Division — Continued. 

Public Works Branch — Continued. Page 

Section of Painting and Sculpture 148 

Original public building program 149 

Program under the Public Works Administration 149 

Relief program 150 

Emergency construction program 150 

Private architectural services 151 

Administration and cost of Federal buildings under the control 

of the Treasury Department 151 

Expenditures 151 

Public Debt Service 153 

Division of Loans and Currency 153 

Register of the Treasury 156 

Division of Public Debt Accounts and Audit 158 

Division of Paper Custody 159 

Destruction Committee 160 

Public Health Service 161 

Division of Sanitary Reports and Statistics 161 

Division of Foreign and Insular Quarantine 162 

Division of Domestic Quarantine 164 

Division of Scientific Research 165 

Division of Marine Hospitals and Relief 167 

Division of Venereal Diseases 167 

Division of Mental Hygiene 168 

Division of Personnel and Accounts 169 

Division of Research and Statistics 170 

Taxation 170 

Federal financing 171 

Monetary problems 171 

Actuarial analysis 171 

Secret Service Division 172 

Treasurer of the United States 173 

War Finance Corporation 177 

EXHIBITS 

THE PCBLIC DEBT 

Issues and Redemptions of United States Bonds, Notes, and Certificates of 

Indebtedness 

Exhibit 1. Offering of l}4-percent Treasury notes of series D-1936, 2%- 

percent Treasury notes of series D-1938, and 3J^-percent Treasury 

bonds of 1944-46 (additional) 181 

Exhibit 2. Allotments on exchange subscriptions, Treasury notes of 

series D-1936 and series D-1938, and Treasury bonds of 1944-46 186 

Exhibit 3. Partial redemption on April 15, 1935, of Fourth Liberty Loan 

bonds before maturity (third call) 187 

Exhibit 4. Offering of 3j^-percent Treasury bonds of 1949-52, IJ^-percent 

Treasury notes of series E-1936, and 2^-percent Treasury notes of 

series A-1939 (additional) 192 

Exhibit 5. Subscriptions and allotments, Treasury bonds of 1949-52 and 

Treasury notes of series E-1936 and series A-1939 195 

Exhibit 6. Offering of United States Savings Bonds, series A 197 

Exhibit 7. Sales of United States Savings Bonds from March 1 to June 

30, 1935 199 

Exhibits. Offering of 2%-percent Treasury bonds of 1955-60 and 1%- 

percent Treasury notes of series A-1940 200 

Exhibit 9. Allotments on exchange subscriptions, Treasury bonds of 

1955-60 and Treasury notes of series A-1940 204 

Exhibit 10. Call for redemption of 2-percent consols of 1930 and 2-percent 

Panama Canal Loan bonds of 1916-36 and 1918-38 on July 1 and August 

1, 1935, respectively 204 

Exhibit 11. Call for redemption of First Liberty Loan bonds of 1932-47 on 

June 15, 1935 210 

Exhibit 12. Call for redemption on October 15, 1935, of Fourth Liberty 

Loan bonds before maturity (final call) 214 

Exhibit 13. Offering of 2%-percent Treasury bonds of 1955-60 (additional) 

and 15^-percent Treasury notes of series A-1940 (additional) 217 



CONTENTS Vn 

Exhibit 14. Allotments on exchange subscriptions,. Treasury bonds of Page 

1955-60 and Treasury notes of series A-1940 222 

Exhibit 15. Refunding of the First Liberty Loan, March 15 to June 30, 

1935 223 

Exhibit 16. Inviting tenders for 3-percent Treasury bonds of 1946-48 

(additional) 223 

Exhibit 17. Acceptance of tenders for Treasury bonds of 1946-48 225 

Exhibit 18. Offering of IJ^-percent Treasury notes of series B-1940 225 

Exhibit 19. Allotments on exchange subscriptions, Treasury notes of 

series B-1940 226 

Exhibit 20. Inviting tenders for 3-percent Treasury bonds of 1946-48 

(additional) 227 

Exhibit 21. Acceptance of tenders for Treasury bonds of 1946-48 228 

Issues of Treasury Bills 

Exhibit 22. Inviting tenders for Treasury bills dated July 3, 1934, and 

maturing January 2, 1935 228 

Exhibit 23. Acceptance of tenders for Treasury bills dated July 3, 1934, 

and maturing January 2, 1935 229 

Exhibit 24. Summary of information contained in press releases issued in 

connection with Treasury bills offered during the fiscal year 1935 229 

Issues and Redemptions of Bonds of Government Agencies Guaranteed as to 
Interest and Principal by the United States 

Exhibit 25. Inviting tenders for Federal Farm Mortgage Corporation 

3-percent bonds of 1944-49 232 

Exhibit 26. Acceptance of tenders for Federal Farm Mortgage Corpora- 
tion bonds of 1944-49 234 

Exhibit 27. Inviting tenders for Home Owners' Loan Corporation bonds, 
series C, 1936 (1% percent), series D, 1937 (1% percent), and series E, 
1938 (2 percent) 234 

Exhibit 28. Acceptance of tenders for Home Owners' Loan Corporation 

bonds, series C, 1936; series D, 1937; and series E, 1938 236 

Exhibit 29. Offering of Home Owners' Loan Corporation IJ^-percent 

bonds of series F-1939 236 

Exhibit 30. Allotments on exchange subscriptions. Home Owners' Loan 

Corporation bonds of series F-1939 242 

Miscellaneous 

Exhibit 31. An act to amend the Second Liberty Bond Act, as amended, 

and for other purposes 243 

Exhibit 32. Statement for the press, January 21, 1935, giving an expla- 
nation of the bill to amend the Second Liberty Bond Act 245 

Exhibit 33. Regulations governing United States Savings Bonds 246 

Exhibit 34. Amendment to Department Circular No. 418, as amended 

May 3, 1934, governing the sale and issue of Treasury bills 251 

Exhibit 35. Supplement, dated June 25, 1935, to Department Circular 
No. 300, July 31, 1923, prescribing regulations governing United States 
bonds and transactions with the Treasury Department 252 

Exhibit 36. Statutes relating to lost, stolen, destroyed, mutilated, and 

defaced bonds and notes 253 

Exhibit 37. Press release, September 25, 1934, respecting the guarantee 
of bonds of the Federal Farm Mortgage Corporation and the Home 
Owners' Loan Corporation 255 

MONEY 

Exhibit 38. Proclamations and orders relating to silver 256 

Exhibit 39. Statements and official orders relating to the issue of silver 

certificates 262 

Exhibit 40. Statement by the Secretary of the Treasury, February 11, 

1935, relating to the stabilization fund 265 

Exhibit 41. Proclamation, February 14, 1935, extending for 2 years the 
period within which the Federal Reserve Board may authorize the 
Federal Reserve banks to offer, and the Federal Reserve agents to 
accept, direct obligations of the United States as collateral security for 
Federal Reserve notes 265 



VIII CONTENTS 



TAXATION 



Exhibit 42. An act to amend certain provisions relating to publicity of Page 
certain statements of income, approved April 19, 1935 266 

Exhibit 43. Joint resolution to provide revenue, and for other purposes, 

approved June 28, 1935 266 

Exhibit 44. Processing tax rates under the Agricultural Adjustment Act, 
and rates of tax on cotton ginning and tobacco sales, to June 30, 1935, 
with effective dates 267 

OBLIGATIONS OF FOREIGN GOVERNMENTS 

Exhibit 45. Statements by the Treasury Department concerning the 

indebtedness of certain foreign governments to the United States 269 

Exhibit 46. Correspondence exchanged between the Government of the 
United States and various foreign governments concerning foreign 
debts owing to the United States 271 

GOVERNMENT DEPOSITS 

Exhibit 47. Instructions for collecting agents regarding the receipt of 
postal money orders drawn on points outside the district in which 
received 278 

Exhibit 48. Supplement to regulations governing deposit of public moneys 

and payment of Government checks and warrants 279 

ORGANIZATION CHANGES 

Exhibit 49. Orders changing organization and procedure in the Treasury 

Department 279 

Exhibit 50. Supervision of bureaus, offices, and divisions of the Treasury 

Department 281 

MISCELLANEOUS 

Exhibit 51. Executive Order No. 6869, October 10, 1934, requiring certain 

financial statements to be furnished the Secretary of the Treasury 282 

Exhibit 52. Regulations No. 1 — Administrative procedure for the main- 
tenance of the system of accounts and disbursements under the Emer- 
gency Relief Appropriation Act of 1935, established pursuant to section 
II (A) of Executive Order No. 7034 283 

Exhibit 53. Executive Order No. 6981, March 2, 1935, removing, in cer- 
tain cases, restrictions imposed by Public Resolution 53, of June 27, 

1934, as to payments, transfers, and deliveries of property under the 
Trading with the Enemy Act and the Settlement of War Claims Act 

of 1928 288 

Exhibit 54. Letter of the Acting Postmaster General to the Secretary of the 
Treasury, dated November 26, 1935, certifying extraordinary expendi- 
tures contributing to the deficiency of postal revenues for the fiscal year 

1935, in pursuance of Public Act No. 316, Seventy-first Congress, 
approved June 9, 1930 (40 Stat. 523) 289 

TABLES 

Explanation of bases used in tables 293 

Description of accounts through which Treasury operations are effected-- 294 

RECEIPTS AND EXPENDITURES 

General Tables 

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

1935 (warrants and daily statement bases) 296 

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

for the fiscal year 1935 (checks-issued and daily statement bases) 302 

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

1932 to 1935 (.daily statement basis) 316 

Table 4. Receipts and expenditures for the fiscal years 1789 to 1935 

(warrant and daily statement bases) 320 



CONTENTS IX 

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

expenditures, by months, for the fiscal vear 1935 (daily statement Page 
basis) I 328 

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

units, for the fiscal year 1935 (daily statement basis) 329 

Specific Receipts and Expenditures 

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

years 1934 and 1935 (collection basis) 341 

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

1916 to 1935 (collection basis) 343 

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

fiscal year 1935 (collection basis) 345 

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

1935 (checks-issued basis) 347 

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 1934 (on basis of reports of 
the Bureau of Foreign and Domestic Commerce) 352 

Table 12. Customs duties (estimated), value of dutiable imports, and 
ratio of duties to value of dutiable imports, by tariff schedules, for the 
calendar years 1923 to 1934 (on basis of reports of the Bureau of Foreign 
and Domestic Commerce) 353 

Table 13. Customs receipts, expenditures, and entries, by districts, fiscal 

year 1935 (collection basis) 355 

Table 14. Panama Canal receipts and expenditures for the fiscal j^ears 

1903 to 1935 (warrant basis) 356 

Estimates of Receipts 

Table 15. Actual receipts for the fiscal year 1935 and estimated receipts 

for the fiscal years 1936 and 1937, by sources 357 

PUBLIC DEBT 

Public Debt Outstanding 

Table 16. Public debt outstanding June 30, 1935, by issues (revised 

daily statement basis) 364 

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

1935 (revised daily statement basis) 368 

Table 18. Interest-bearing debt outstanding June 30, 1935, classified 
according to kind of security and callable period or payable date (revised 
daily statement basis) 377 

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

fiscal year from 1853 to 1935 (revised daily statement basis) 378 

Public Debt Operations 

Table 20. Public debt retirements chargeable against ordinary receipts 
during the fiscal year 1935, and cumulative totals to June 30, 1934 
and 1935, by sources and issues (revised daily statement basis) 380 

Table 21. Summary of transactions in interest-bearing and noninterest- 
bearing securities during the fiscal year 1935 (revised daily statement 
basis) 382 

Table 22. Summary of transactions in interest-bearing securities, by 
form of issue, during the fiscal year 1935 (revised daily statement 
basis) . 384 

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

year 1935 (revised daily statement basis) 385 

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

the fiscal year 1935 (revised daily statement basis) 389 

Table 25. Issues, maturities, and redemptions of interest-bearing securities, 
exclusive of trust account and other special issues, July 1934 through 
June 1935 394 

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

1915 to 1935 (daily statement basis) 397 

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

the fiscal year 1935 (revised daily statement basis) 398 



X CONTENTS 

Table 28. Transactions on account of the cumulative sinking fund for the Page 
fiscal years 1921 to 1935 (revised daily statement basis) 399 

Table 29. Securities retired through the cumulative sinking fund, par 
amount and principal cost, to June 30, 1935 (revised daily statement 
basis) 399 

Interest on the Public Debt 

Table 30. Interest on the public debt payable, paid, and outstanding 

unpaid, for the fiscal year 1935 (revised daily statement basis) 400 

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

1933 to 1935 (warrant basis) 400 

Table 32. Amount of interest-bearing debt outstanding, the computed an- 
nual interest charge, and the computed rate of interest, for the fiscal 
years 1916 to 1935, and by months from July 1929 to June 1935 (revised 
daily statement basis) 401 

Contingent Liabilities 
Table 33. Contingent liabilities of the United States, June 30, 1935 403 

CONDITION OF THE TREASUKY EXCLUSIVE OF PUBLIC DEBT LIABILITIES 

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

fiscal years 1933, 1934, and 1935 (revised daily statement basis) 406 

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

each month, fiscal year 1935 (daily statement basis) 407 

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

1935 408 

ASSETS AND LIABILITIES OF GOVERNMENTAL COEPORATIONS AND AGENCIES 

Table 37. Combined statement of assets and liabilities of governmental 
corporations and credit agencies of the United States, as of June 30, 
1935 411 

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, June 30, 1913 to 1935 418 

Table 39. Stock of money, by kinds, at the end of each fis'cal year from 

1913 to 1935 420 

Table 40. Monev in circulation, by kinds, at the end of each fiscal year 

from 1913 to 1935 421 

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

banks, and in circulation, by kinds, June 30, 1935 422 

MISCELLANEOUS 

Table 42. Principal of the funded and unfunded indebtedness of foreign 
governments to the United States, the accrued and unpaid interest there- 
on, and payments on account of principal and interest, as of November 
15, 1935 423 

Table 43. Estimated amount of securities outstanding interest on which is 
wholly or partially exempt from the Federal income tax, June 30, 1913 to 
1935, by type of obligor 424 

Table 44. Estimated amount of securities outstanding interest on which 
is wholly exempt from normal income tax and surtax of the Federal 
Government, June 30, 1913 to 1935, by type of obligor 425 

Table 45. Amount of securities outstanding interest on which is exempt 
from normal income tax, but not surtax, of the Federal Government, 
June 30, 1918 to 1935, by direct obligor 427 

Table 46. United States Government direct obligations held by Federal 
Reserve banks, classified by the degree of exemption of the interest 
thereon from the Federal income tax, June 30, 1915 to 1935 428 

Table 47. Net expenditures for Federal aid to States, fiscal years 1920, 

1934, and 1935, and amounts appropriated for 1936, by appropriations. 429 

Table 48. Expenditures made by the Government as direct payments to 

States during the fiscal 3'ear 1935 432 



CONTENTS XI 



PERSONNEL 



Table 49. Number of employees in the departmental service of the Treas- Page 
ury in Washington, by months, June 1934 to June 1935 436 

Table 50. Number of employees in the departmental and field services of 

the Treasury, June 1934 and June 1935 437 

Table 51. Number of persons retired, and number of persons eligible for 
retirement retained, departmental and field services of the Treasury, 
August 20, 1920, to June 30, 1935 437 

Index 439 



SECRETARIES, UNDER SECRETARIES, AND ASSISTANT SECRETARIES 
OF THE TREASURY DEPARTMENT DURING THE FISCAL YEARS 
1934 AND 1935 > AND THE PRESIDENT UNDER WHOM THEY SERVED 



Term of service 


Official 


Secretary of the 
Treasury 


President 


From— 


To- 


Mar 4 1933 


Dec. 31,1933 


Secretaries of the Treasury 
William H. Woodin, New York 




Roosevelt. 


Jan. 1, 1934 


Henry Morgentliau, Jr., New Yorlt. 

Under Secretaries 

Dean O. Acheson, Maryland 

Henry Morgenthau, Jr., New York 
Thomas Jefferson Coolidge, Mas- 
sachusetts. 

Assistant Secretaries 

Lawrence W. Robert, Jr., Georgia- 
Stephen B. Gibbons, New York- 
Thomas Hewes, Connecticut 

Josephine Roche, Colorado 




Roosevelt. 


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

Apr. 18,1933 
June 6, 1933 


Nov. 16, 1933 
Dec. 31,1933 


Woodin 


Roosevelt. 


Woodin 

Morgenthau.- 

Woodin, Morgenthau.-. 
Woodin, Morgenthau-.. 

Woodin 

Morgenthau 


Roosevelt. 
Roosevelt. 




Roosevelt. 




Roosevelt. 


June 12,1933 
Dec. 1, 1934 


Dec. 12,1933 


Roosevelt. 
Roosevelt. 











1 For officials since 1789 see Annual Report for 1932, pp. xvii to xxi.and corresponding table in Annual 
Report for 1933. 

xin 



PRINCIPAL ADMINISTRATIVE AND STAFF OFFICERS OF THE 
TREASURY DEPARTMENT AS OF NOVEMBER 15, 1935 

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. 

Josephine Roche — Assistant Secretary of the Treasury. 

Herbert E. Gaston... Assistant to the Secretary. 

Peter Grimm Assistant to the Secretary. 

Daniel W. Bell... Assistant to the Secretary. 

LeRoy Barton Assistant to the Secretary. 

Oyril B. Upham... Assistant to the Secretary. 

Harold N. Graves Assistant to the Secretary. 

Henrietta S. Klotz Assistant to the Secretary. 

John Kieley Assistant to the Secretary. 

Archie Lochhead Technical Assistant to the Secretary. 

Beriah M. Thompson Special Assistant to the Secretary. 

Chester T. Crowell.. Special Assistant to the Secretary. 

Eugene Sloan Special Assistant to the Secretary. 

Harold Riegelman Special Assistant Counsel. 

James W. Bryan. Consulting Ex-pert. 

Edwin B. Fussell Consulting Expert. 

William H. McReynolds Administrative Assistant to the Secretary. 

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

Charles R. Schoeneman Special Staff Assistant. 

Harris F. Mires Technical Assistant. 

Edwin R. Ballinger Technical Assistant. 

Lucius Wilmerding, Jr Technical Assistant to Mr. Grimm. 

H. R. Sheppard Assistant to Assistant Secretary. 

Francis C. Rose Assistant to Assistant Secretary. 

Mary E. Switzer Assistant to Assistant Secretary. 

W. C. Cram, Jr Technical Adviser. 

F. A. Birgfeld Chief Clerk and Superintendent. 

W. H. Moran Chief, Secret Service Division. 

L. C. Spangler Chief, Division of Printing. 

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. 

Clinton M. Hester Assistant General Counsel. 

C. E. Turney Assistant General Counsel. 

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

Eli Frank, Jr Chief Counsel, Bureau of Customs. 

OFFICE OF THE DIRECTOR OF RESEARCH AND STATISTICS 

George C. Haas Director. 

Lawrence H. Seltzer Assistant to the Director. 

A. S. McLeod Assistant to the Director. 

Harry D. White Assistant to the Director. 

Russell R. Reagh Assistant to the Director (Government Actuary). 

Aaron Director Assistant to the Director. 

PUBLIC DEBT SERVICE 

William S. Broughton Commissioner of the Public Debt. 

Edwin L. Kilby Assistant Commissioner of the Public Debt. 

Rene W. Barr Deputy Commissioner of the Public Debt. 

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. 

BUREAU OF ENGRAVING AND PRINTING 

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

Clark R. Long Assistant Director (Administration). 

Jesse E. Swigart Assistant Director (Production). 

OFFICE OF THE COMMISSIONER OF ACCOUNTS AND DEPOSITS 

Edward F. Bartelt Commissioner of Accounts and Deposits. 

Maurice Collins Assistant Commissioner of Accounts and Deposits. 

William T. Heffelflnger Assistant to the Commissioner. 

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

Joseph Greenberg Chief, Division of Bookkeeping and Warrants. 

Edward D. Batchelder Chief, Division of Deposits. 

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

XIV 



XV 



OFFICE OF THE COMPTROLLER OF THE CURRENCY 

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

F. G. Await Deputy Comptroller. 

Eugene H. Gough Deputy Comptroller. 

Glbbs Lyons Deputy Comptroller. 

W. P. Folger Chief National Bank Examiner. 

J. E. Fouts --- SupervisingReceiver, Insolvent National Bank Division. 

George R. 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. 

BUREAU OF NARCOTICS 

Harry J. Anslinger.- Commissioner of Narcotics. 

Will S. Wood Deputy Commissioner of Narcotics. 

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 .T. Schoeneman.. Deputy Commissioner. 

D. Spencer Bliss Deputy Commissioner. 

Stewart Berkshire Deputy Commissioner. 

Eldon P. King Special Deputy Commissioner. 

A. R. Marrs Head, Technical Staff. 

Elmer L. Irey .— -. Chief, Intelligence Unit. 

Bertha Wetherton Special Assistant to the Commissioner. 

FEDERAL ALCOHOL ADMINISTRATION 

Franklin C. Hoyt Federal Alcohol Administrator. 

Harris E. Willingham Associate Administrator. 

John E. O'Neill Deputy Administrator. 

John L. Huntington. Deputy Administrator. 

John F. Moore Acting General Counsel. 

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'ReOly Assistant Director. 

PUBLIC HEALTH SERVICE 

Hugh S. Cumming 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 O. Williams Assistant Surgeon General. 

R. A. Vonderlehr Assistant Surgeon General. 

D. S. Masterson Chief Clerk and Administrative Officer. 

UNITED STATES COAST GUARD 

Rear Admiral H. G. Hamlet Commandant. 

Capt. Leon C. Covell Assistant Commandant. 

Comdr. Russell R. Waesche Head, Finance Division. 

A. T. Thorson Budget Officer. 

Oliver M. Maxam.. Technical Adviser to the Commandant. 

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. 

W. N. Rehlaender Administrative Assistant, Supply Branch. 

Louis A. Simon Supervising Architect. 

Neal A. MeUck Supervising Engineer. 



XVI 



ADVISORY COMMITTEE ON ARCHITECTURAL DESIGN 



Charles Z. Klauder, Chairman. Philip B. Maher. 

Aymar Embury II. Henry R. Shepley. 

Louis A. Simon 

BOARD OF AWARDS 

Neal A. Melick, Supervising Engineer, Chairman. William K. Laws, Chief, Legal Section. 
W. E. Reynolds, Assistant Director. John H. Schaefer, Office Manager. 

Louis A. Simon, Supervising Architect. John Weber, Secretary. 

Nelson S. Thompson, Chief, Mechanical Engineer- 
ing Section. 

STANDING DEPARTMENTAL COMMITTEES 

BUDGET AND IMPROVEMENT COMMITTEE 

C. R. Schoeneman, Chairman. John H. Schaefer. 
F. A. Birgfeld, Vice Chairman. Arthur E. Wilson. 
W. N. Thompson. M. E. Slmdee. 

D. S. Bliss. George O. Barnes. 
L. C. Martin. Ered P. Trott. 
Edward F. Bartelt. ' Mary E. Switzer. 
Harris F. Mires. E. C. Nussear, Secretary. 

COMMITTEE ON ENROLLMENT AND DISBARMENT OF ATTORNEYS AND AGENTS 

Guy C. Hanna, Chairman. I. T. Gilruth. 

W. W. Cook. 

COMMITTEE ON PERSONNEL 

F. A. Birgfeld, Chairman. (Vacant.) 

James E. Harper. 

COMMITTEE ON CIVIL SERVICE RETIREMENT 

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

James E. Harper. Frank Dow. 



16816— 3e 



q: 
D 
CD 
< 
LIJ 
CH 

H 



LJJ in 
-pro 
J- O) 

I-- 



oe 

> 

o 

■z. 
V- 

z 

LU 

q: 
< 

Q_ 
LLI 
Q 



,s 



ANNUAL REPORT ON THE FINANCES 



Treasury Department, 
Washington, D. C, November 20, 1935. 
Sir: I have the honor to make the following report: 

BUDGET RESULTS 

Receipts 

Total receipts of general and special funds during the fiscal year 
1935 were $3,800,500,000, as compared with $3,115,600,000 in 1934, 

RECEIPTS OF GENERAL AND SPECIAL FUNDS. FISCAL YEARS 1926 TO 1935. BY PRINCIPAL 

SOURCES 

DOLLARS DOLLARS 



Billions 



Billions 




1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 
Chart 2. 

An increase of $684,900,000. Income taxes, miscellaneous internal 
revenue, agricultural adjustment taxes, customs, and seigniorage on 
silver all showed substantial increases. 

The trend in receipts by major sources, from 1926 to 1935, inclusive, 
is shown in the chart above. A more detailed comparison of receipts 
for 1934 and 1935 is presented in the table on page 2. 



2 KEPORT OF THE SECRETARY OF THE TREASURY 

^ Income tax receipts, which were 26 percent of total receipts in 
1934, increased to 29 percent of total receipts in 1935. Miscel- 
laneous internal revenue, though showing a substantial absolute 
increase in 1935, declined in relation to total receipts from 47 percent 
in 1934 to 43 percent in 1935. 



Receipts by major sources for the fiscal years 19S4 and 1935 * 
[In millions of dollars] 





1934 


1935 


Increase (+), 
decrease (— ) 


Internal revenue: 
Income taxes: 

Current corporation 


321.4 
355.0 
140.6 


465.4 
448.2 
185.6 


+144 


Current individual 


+93 2 


Back taxes 


+45.0 




Total income ta,xe3 fcollection basis) 


817.0 
+1.0 


1, 099. 2 
-.1 


+282 2 


Adjustment to daily Treasury statement basis (unrevised) 


-1.1 


Total income taxes 


818.0 


1, 099. 1 


+281 1 






Miscellaneous internal revenue taxes: 

Excess-profits 


2.6 

80.2 

104.0 

9.2 

90.0 

169.0 

425.2 

66.6 


6.6 
91.5 
140.4 
71.7 
195.4 
215.6 
459.2 
43.1 


+4.0 
+11 3 


Capital stock 


Estate 


+36 4 


Gift- 


+62 5 


Distilled spirits and wines (including special taxes) 


+105. 4 


Fermented malt liquors Cincluding special taxes) 


+46.6 


Tobacco 


+34.0 


Stamp 


—23 5 






Manufacturers' excise: 

Gasoline 


202 6 
70.9 
33.1 
25.3 
58.1 


161.5 
77.3 
32,6 
27.8 
43.1 


—41.1 


Automobiles, trucks, tires, tubes and parls or accessories.. 
Electrical energy 


+6.4 
—.5 


Lubricating oils 


+2.5 


All other 


— 15 






Total manufacturers' excise 


390.0 


342.3 


-47.7 






Telegraph, telephone, radio, and cable 


19.3 
10.4 
41.4 
14.6 


19.7 
9.5 
25.6 
15.4 
24.5 
13.5 


+.4 


Transportation of oil by pipe line 


-.9 


Checks 


—15 8 


Admissions 


+.8 




+24.5 


All other miscellaneous internal revenue 


2 61.3 


-47.8 






Total miscellaneous internal revenue (collection basis). 

Adjustment to daily Treasury statement basis (unrevised) 


1, 483. 8 
-14.2 


1,674.0 
-16.8 


+190. 2 
-2.6 


Total miscellaneous internal revenue 


1, 469. 6 


1, 657. 2 


+187. 6 






Agricultural adjustment taxes... 


353.1 


521.4 


+168 3 






Total internal revenue 


2, 640. 7 
313.4 


3, 277. 7 
343.4 


+637. 


Customs 


+30.0 




Total internal revenue and customs 


2, 954. 1 


3. 621. 1 


+667. 






Miscellaneous receipts: 

Proceeds of Government-owned securities: 

Foreign obligations. •„ 


20.4 

57.4 

.5 

83.2 


.7 
38.1 

58.0 
82.6 


-19.7 




— 19 3 


Seigniorage^ 


+57.5 
-.6 










161.5 


179.4 


+17.9 








3,115.6 


3, 800. 5 


+684. 9 







I Income taxe'' and miscellaneous internal revenue taxes on the basis of collections, with totals adjusted 
to basis nf daily Treasury statement (unrevised) . aericultural adjustment taxes, customs, and miscellaneous 
receipts on basis of daily Treasury statement (unrevised). General and special accounts combined. For 
description of accounts and bases, see p. 293. 

' Includes $50.2 million from tax on dividends, terminated Dec. 31, 1933. 

'See footnote on o. 6. 



EEPORT OF THE SECRETARY OF THE TREASURY 6 

Income taxes. — In the fiscal year 1935 income tax receipts aggre- 
gated $1,099,100,000 as compared with $818,000,000 in the fiscal 
year 1934, an increase of $281,100,000. Receipts during the first 
half of the fiscal year 1935 were based largely on incomes for the 
calendar year 1933, and receipts during the second half, on incomes 
reported for the calendar year 1934. Receipts during the second 
half, therefore, reflected the higher levels of corporate and individual 
incomes during the calendar year 1934 as compared with 1933, as well 
as the changed provisions contained in the Revenue Act of 1934, 
which then became effective for the first time. 

Collections of current corporation income taxes increased $144,- 
000,000 in 1935 over the preceding year, about 62 percent of this 
increase occurring in the second half of the fiscal year. Among 
the changed provisions in the Revenue Act of 1934 affecting corpora- 
tion income tax collections were the elimination of consolidated 
returns (except for railroad corporations), the imposition of a surtax 
on personal holding companies, and new provisions with regard to 
reorganizations. In addition, the Treasury changed its administra- 
tion of depreciation allowances. The last-named factor, together with 
the special efforts of the Bureau of Internal Revenue to collect back 
taxes on incomes, resulted in an increase of collections of $45,000,000 
during the fiscal year 1935. 

Approximately 79 percent of the increase of $93,200,000 in current 
individual income taxes during the fiscal year 1935 was collected during 
the second half of the fiscal year and reflected, in addition to the 
higher level of individual incomes in 1934 as compared with 1933, 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. — Receipts from miscellaneous in- 
ternal revenue taxes were $1,657,200,000 in the fiscal year 1935, 
as compared with $1,469,600,000 in 1934, an increase of $187,600,000. 
Collections from the leading revenue-producing taxes of this class are 
shown in the table on page 2. 

In 1935 approximately 86 percent of the total miscellaneous in- 
ternal revenue collections came from the following sources, which are 
arranged in the order of their revenue-producing importance: To- 
bacco taxes, manufacturers' excise taxes, taxes on fermented malt 
liquors, taxes on distilled spirits and wines, the estate tax, and the 
capit il stock tax. 

Increased revenue was obtained from taxes on distilled spirits and 
\vines, gifts, fermented malt liquor, estates, and tobacco. These in- 
creases more than oft"set declines in the collections from manufac- 
turers' excise taxes, documentary stamp taxes, and certain other 
miscellaneous internal revenue taxes. 



4 REPORT OF THE SECRETARY OP THE TREASURY 

The increased rates of tax on estates imposed by the Revenue Act 
of 1934 were not reflected to any marked extent in collections until 
May 1935, since under that act returns were not required to be filed 
until one year after the death of the decedent. The increase of $36,- 
400,000 in collections from the estate tax was caused mainly by the 
increase in the taxable value of estates of decedents in the year ended 
June 30, 1934. Collections from the gift tax increased by $62,500,000 
to $71,700,000 in 1935. This increase was due more to the larger 
amount of gifts — probably made, at least in part, in anticipation of 
higher income and estate taxes — than to the higher rates of gift 
tax under the Revenue Act of 1934, applicable to gifts made during 
the calendar year 1935. 

Collections from the tax on tobacco manufactures increased 
$34,000,000 in 1935 to a new high level of $459,200,000. As in other 
recent years tliis was the result of increased consumption of cigarettes. 

Nineteen hundred and thirty-five was the first full fiscal year during 
which the repeal of the eighteenth amendment was effective. This 
factor, together with an increase in the consumption of tax-paid 
distilled spirits and wines, accounted for a $105,400,000 increase 
in revenue from this source. Increased consumption of fermented 
malt liquor resulted in additional revenue of $46,600,000. Total 
revenue of $411,000,000 from liquor taxes for the fiscal year 1935 
exceeded that for any year in the pre-prohibition period except 1918 
and 1919. 

The decline of $47,700,000 in revenue from manufacturers' excise 
taxes in the fiscal year 1935 was in most part due to the decUne in 
collections from the tax on gasoline. During part of the preceding 
fiscal year the Iji cents per gallon rate imposed by the National In- 
dustrial Recovery Act was in eft'ect, whereas during the whole of 
1935 the rate was 1 cent per gallon. The repeal of taxes on candy 
and soft drinks and the modification of taxes on furs and jewelry 
also contributed to the loss of revenue from manufacturers' excise 
taxes. 

Collections from the capital stock tax and excess-profits tax in- 
creased, and new taxes imposed by the Revenue Act of 1934 on the 
processing of coconut and other oils gave rise to substantial revenue. 
The expiration, however, of the tax on dividends, effective December 
31, 1933, and of the tax on checks, effective January 1, 1935, resulted 
in reduced collections from those sources. A decline in revenue from 
documentary stamp taxes was in large part due to the lower revenue 
from taxes on stock transfers, reflecting a contraction in the volume 
of stock trading. Another factor contributing to the decUne was the 
reduction, in the Revenue Act of 1934, of the stamp tax on sales of 
produce for future dehvery from 5 cents per $100 to 3 cents per $100. 



REPORT OF THE SECRETARY OF THE TREASURY 5 

Agricultural adjustment taxes. — Keceipts from agricultural adjust- 
ment taxes totaled $521,400,000 in 1935, an increase of $168,300,000 
over receipts from this source in the fiscal year 1934. This increase 
was due mainly to the fact that none of these taxes was in effect 
during all of 1934 and for some commodities only during a small part 
of the year. Processing and related taxes on peanuts and rice and 
the cotton ginning and tobacco sales taxes did not become effective 
until the fiscal year 1935. 

Collections of processing and related taxes combined were higher 
in 1935 for all commodities represented in both years except for 
cotton and paper and jute products. By far the largest increases 
occurred in the cases of hogs, on which the tax became effective 
November 5, 1933, and the last increase in rate, March 1, 1934, and 
of sugar beets and sugar cane, on which taxes did not become effective 
until June 8, 1934. Receipts from taxes on hogs, wheat, and cotton 
accounted for 77 percent of total collections of agricultural adjust- 
ment taxes during the fiscal year 1935. For a further discussion of 
agricultural adjustment taxes, see page 30. 

Customs. — Customs receipts in the fiscal year 1935 amounted to 
$343,400,000, or $30,000,000 more than in the fiscal year 1934. The 
additional revenue from customs resulted from an increase in imports 
of distilled spirits and wines and from a relatively large volume of 
imports of agricultural products. 

Miscellaneous receipts. — Miscellaneous receipts of general and 
special funds increased from $161,500,000 in the fiscal year 1934 to 
$179,400,000 in 1935. These receipts include such items as proceeds 
from Government-owned securities, Panama Canal tolls, seigniorage, 
tax on the circulation of national bank notes, fees, fines and penalties, 
rents and royalties, and sales of Government property. An increase 
of $57,500,000^ in receipts from seigniorage more than offset decreases 
in certain other sources of miscellaneous receipts. 

Expenditures 

Total expenditures for general and special (including recovery 
and relief) accounts amounted to $7,375,800,000 for the fiscal 
year 1935, as compared with $7,105,000,000 in 1934, an increase of 
$270,800,000. The trend in total expenditures and in the principal 
classes of expenditures for the fiscal years 1926 to 1935 is shown in the 
chart on page 6. A comparison of expenditures on a functional basis 
for the fiscal years 1934 and 1935 appears in the table beginning on 
page 7, and another classification of expenditures for the two years 
is given in the table beginning on page 10. 

' This amount Is exclusive of $140,100,000 held as a trust account, etc., receipt, representing seigniorage 
taken on silver acquired under the Silver Purchase Act of 1934 and received under the President's procla- 
mation dated Aug. 9, 1934. See exhibit 38, page 256. 



6 



REPORT OF THE SECRETARY OF THE TREASURY 



Expenditures for 1934 and 1935 shown on the chart as "Recovery 
and relief" are not strictly comparable with such expenditures for the 
fiscal years 1932 and 1933. For 1932 and 1933 these expenditures 
include only those made from funds of the Reconstruction Finance 
Corporation and subscription to stock of the Federal land banks. 
Other expenditures in 1932 and 1933 traceable to the economic de- 
pression and aU such expenditures in earUer years were made from 

EXPENDITURES FOR GENERAL AND SPECIAL GNCLUDING RECOVERY AND RELIEF) 
ACCOUNTS, FISCAL YEARS 1926 TO 1935, BY PRINCIPAL CLASSES 




1927 1928 



1930 1931 
Chart 3. 



1934 1935 



regular appropriations and general Treasury accounts. Recovery 
and relief expenditures for 1934 and 1935 shown in both the chart and 
the table on page 7 include those classified as emergency expendi- 
tures in the daily Treasury statements of those years and also general 
expenditures for the Agricultural Adjustment Administration, re- 
funds of processing taxes on farm products, and subscription to stock 
of Federal land banks. The classification of expenditures on a 
functional basis shown in that table follows the classification in com- 
pilations of the Bureau of the Budget. 



REPORT OF THE SECRETARY OP THE TREASURY 7 

Expenditures for the operation and maintenance of regular depart- 
ments and establishments of the Government (exclusive of public 
debt charges) aggregated $1,732,100,000 in 1935, an increase of 
$26,800,000 over the preceding year. The principal items of increase 
in this class of expenditure were: $53,900,000 for national defense, to 
provide replacement and improvement of equipment for the Army and 
to meet provisions of the naval treaties of 1922 and 1930; $49,000,000 
for veterans' pensions and benefits, as the result of the application of 
new laws or revised rules pertaining to service-connected disabilities; 
and $12,000,000 on account of the postal deficit. These increases 
were largely offset by a decrease of $50,200,000 in regular expenditures 
for public buildings, due to the completion of a major part of the 
original public building program of 1926 for the District of Columbia, 
and by lower expenditures for regular river and harbor works and for 
refunds of customs and internal revenue receipts. Additional expend- 
itures for some of these purposes were made from recovery and 
relief funds and are shown as such. 



Expenditures by major functions, fiscal years 19S4 and 1935 * 
[In millions of dollars] 



Class of expenditure 



1934 



1935 



Increase 
(+) or de- 
crease (— ) 



Operation and maintenance of regular departments and establishments: 

Legislative, judicial, and executive 

Civil departments and agencies 2_ 

Public buildings ^ 

River and harbor worlcs ' 

Postal deficiency 

National defense 3 

Veterans' pensions and benefits ^ 

Refunds of receipts, internal revenue and customs 

All other. 



Total operation and maintenance. 

Public debt charges: 

Interest 

Retirements 



Total public debt charges. 



Recovery and relief: 
Agricultural aid:* 

Agricultural Adjustment Administration 

Refunds of processing taxes 

Commodity Credit Corporation 

Farm Credit Administration (including Federal Farm Mortgage 

Corporation) 8.. 

Federal land banks 



Total agricultural aid. 



Relief: 

Federal Emergency Relief Administration (including Federal 

Surplus Relief Corporation) 

Civil Worlds Administration 

Emergency Conservation Work 

Drought-stricken areas (Department of Agriculture) 



Total relief. 



Footnotes at end of table. 



32.6 
331.9 
75.5 
78.3 
52.0 
479.7 
556.6 
62.7 
36.0 



1, 705. 3 



756.6 
359.9 



1,116.5 



289.1 

1.2 

183.1 

346.3 
46.2 



<865.9 



707.4 
805.1 
331.9 



1, 844. 4 



35.7 

333.3 

25.3 

55.1 

64.0 

533.6 

605.6 

45.2 

34.3 



1, 732. 1 



820.9 
573.6 



1, 394. 5 



711.8 

31.2 

•60.1 

141.4 
48.0 



<872.3 



1, 814. 3 

11.3 

435.5 

80.6 



2, 341. 7 



+3.1 
-fl.4 
-50.2 
-23.2 
+12.0 
+53.9 
+49.0 
-17.5 
-1.7 



+26.8 



+64.3 
+213. 7 



+278. 



+422. 7 
+30.0 
-243.2 

-204.9 

+1.8 



+6.4 



+1,106.9 

-793.8 

+ 103.6 

+80.6 



+497.3 



8 KEPOET OF THE SECRETAEY OF THE TREASURY 

Expenditures hy major functions, fiscal years 1934 and 1935 ' — Continued 



Class of expenditure 



Recovery and relief— Continued. 
Public Works: 

Administrative expenses, Public Works Administration. 

Boulder Canyon project -- - 

Loans and grants to States, municipalities, etc 

Loans to railroads - 

Public highways - 

River and harbor works.. 

National defense 

Other public works 



Total public works. 



Aid to home owners: 

Home loan system 

Emergency housing... 

Federal Housing Administration. 

Resettlement Administration 

Subsistence homesteads 



Total aid to home owners 

Reconstruction Finance Corporation, direct loans and expenditures. 
Tennessee Valley Authority - ■ 



Miscellaneous: 

Export-Import Banks of Washington — 
Federal Deposit Insurance Corporation. 
Administration for Industrial Recovery. 
Unclassified items 



Total miscellaneous 

Total recovery and relief. 
Total expenditures. 



1934 



6.5 
19.4 

78.6 
70.7 
267.9 
72.5 
60.7 
66.1 



642.4 



192.2 

.4 



2.3 



194.9 



' 565. 8 



2.7 

149.5 

6.6 



* 4, 283. 2 



7, 105. 



1935 



Increase 
(+) or de- 
crease (— ) 



14.6 
23.8 
137.7 
66.2 
317.4 
147.9 
176.3 
136.5 



75.7 
6.5 

16.9 
1.7 
3.7 



103.5 



« 135. 4 



36.2 



«2.6 
.5 

12.5 
.1 



10.5 



< 4,249.2 



7, 375. 8 



+8.1 
+4.4 

+59.1 
-4.5 

+49.5 

+75.4 
+115.6 

+70.4 



+378. 



-116.5 

+6.1 

+15.9 

+1.7 
+1.4 



-91.4 



-701.2 



+25.2 



-5.3 

-149.0 

+5.9 

+.1 



-148.3 



-34.0 



+270. 8 



> On basis of daily Treasury statements (unrevised), partly reclassified on the basis of compilations of the 
Bureau of the Budget. (See note 4 below.) 

2 Operation and maintenance expenditures only, exclusive of expenditures for public buildings and public 
works. 

3 Additional expenditures for these accounts included under " Recovery and relief. 

< Includes the following expenditures classified as general in the daily Treasm-y statements: Expenditures 
for the Agricultural Adjustment Administration, refunds of processing taxes on farm products, and sub- 
scription to stock of Federal land banks. 

« Excess of credits, deduct. 

• Additional expenditures for Farm Credit Administration included under Civil departments and 
agencies, above. 

' Exclusive of $333,600,000 included under "Federal Emergency Relief Administration" and $18,800,000 
under " Commodity Credit Corporation." 

Public debt charges amounted to $1,394,500,000 in 1935, as com- 
pared with $1,116,500,000 in 1934, an increase of $278,000,000, of 
which $213,700,000 represented larger statutory debt retirements, 
and $64,300,000, increase in interest payments. The public debt and 
expenditures on its account are discussed in detail on page 12. 

Total expenditures for recovery and relief amounted to $4,249,- 
200,000 in 1935, or $34,000,000 less than in 1934. This total is net, 
after taking into consideration the earnings of and repayments of 
loans to certain agencies of the Government. 

Expenditures for agricultural aid aggregated $872,300,000 in 1935, 
an increase of $6,400,000 over 1934. Increases in rental and benefit 
payments and in refunds of processing taxes arose chiejQy because such 
payments during 1934 were not made for the full fiscal year and also 
because additional commodities were made a part of the program in 
1935. This subject is analyzed in greater detail on page 30. Due 



EEPORT OF THE SECRETARY OF THE TREASURY 9 

largely to these increases, expenditures of the Agricultural Adjustment 
Administration were $452,700,000 higher in 1935 than in 1934. This 
increase was partly offset by net repayments of loans in excess of 
expenditures of the Commodity Credit Corporation in the amount 
of $60,100,000, as agamst net expenditures of $183,100,000 in 1934. 
Recovery and relief expenditures of the Farm Credit Administration 
decreased $204,900,000, chiefly because of the expenditure in 1934 of 
$199,900,000 of the $200,000,000 made available to the Federal Farm 
Mortgage Corporation by the Reconstruction Finance Corporation 
under the act of May 12, 1933. 

Total expenditures for relief amounted to $2,341,700,000 in 1935, 
as compared with $1,844,400,000 in 1934, an increase of $497,300,000. 
Expenditures for the Federal Emergency Relief Administration (in- 
cluding the Federal Surplus Relief Corporation) were $1,814,300,000 
in 1935, an increase of $1,106,900,000 over 1934, chiefly as a result of 
larger outlays for direct relief. To a large extent these outlays sup- 
planted work relief through the Civil Works Administration, which 
was nearly terminated by the end of the preceding year. Expendi- 
tures for the Civil Works Administration were $11,300,000 in 1935, 
as compared with $805,100,000 in 1934. Owing to the drought in 
the summer of 1934, loans and rehef expenditures made by the 
Department of Agriculture in stricken agricultural areas amounted 
to $80,600,000 in 1935. 

Expenditures for emergency public works increased from $642,- 
400,000 in 1934 to $1,020,400,000 in 1935, because of larger expendi- 
tures for loans and grants to States, municipalities, etc., for public 
highways, river and harbor works, national defense, etc. Loans to 
railroads showed a slight decrease. 

Total aid to home owners declined $91,400,000 in 1935 owing to the 
fact that expenditures for the purchase of capital stock of the Home 
Owners' Loan Corporation amounted to $46,000,000 in 1935, com- 
pared with $153,000,000 in 1934. This decrease of $107,000,000 was 
partly offset by expenditures of $15,900,000 by the Federal Housing 
Administration, created under the act of June 27, 1934; of $1,700,000 
for the Resettlement Administration, established by Executive order 
on April 30, 1935; and of increased amounts for emergency housing 
and subsistence homesteads. 

Earnings and repayment of loans received by the Reconstruction 
Finance Corporation in 1935 exceeded direct loans and expenditures 
by the Corporation, resulting in net receipts of $135,400,000 as com- 
pared with net expenditures of $565,800,000 in 1934. Expenditures 
for the Tennessee Valley Authority increased from $11,000,000 in 
1934 to $36,200,000 in 1935, largely for construction in connection 
with the water-control program. 



10 



REPORT OF THE SECRETARY OF THE TREASURY 



Expenditures classified as "miscellaneous" decreased $148,300,000 
in 1935, chiefly because the Treasury's purchase of $150,000,000 of 
capital stock of the Federal Deposit Insurance Corporation, as 
provided in the Banking Act of 1933, was practically completed in 
the fiscal year 1934. 

Expenditures for general and special accounts, including those for 
recovery and relief, for the fiscal years 1934 and 1935 are shown also in 
the table below, with recovery and relief expenditures separated into 
two classes, nonrepayable and repayable. 

Summary of expenditures, fiscal years 1934 o.nd 1935 



1934 



General expenditures: 

Departmental L. 

National defense ' 

Veterans' Administration ' 

Agricultural Adjustment Administration '.. 

Refunds of processing taxes 

Postal deficiency 

Subscription to stock of Federal land banks. 

Interest on the public debt 

Public debt retirements 

All other - 



$341, 335, 
479, 694, 
606, 549, 
279, 723, 
1, 194, 
52, 003, 
» 1, 737, 
756, 617, 
359, 864, 
325, 670, 



354. 16 
307. 99 
454. 14 
062. 38 
639. 95 
295. 62 
780.00 
126. 73 
092. 90 
980. 27 



Total general expenditures 

Recovery and relief expenditures (as shown below). 

Total expenditures 



3,100,914,534.14 
4, 004, 135, 550. 81 



7, 105, 050, 084. 95 



Recovery and relief expenditures: 
Nonrepayable: 

Grants, aids, and expenses: 

Federal Emergency Relief Administration 

Civil Works Administration 

Emergency conservation work 

Public Works Administration: 

Administrative expenses 

Public bodies 

Surplus Relief Corporation 

Agricultural Adjustment Administration 

Federal land banks (reduction in interest rates on 

mortgages). 

Reconstruction Finance Corporation 

Administration for Industrial Recovery. 

Department of Agriculture relief 

Resettlement Administration 

Rural Electrification Administration 

Regional agricultural credit corporations 



667, 298, 535. 98 
805, 122, 892. 29 
331,940,851.40 

6,539,315.18 

12, 273, 185. 33 

40, 053, 808. 31 

2.3 62, 799, 128. 10 

7, 029, 256. 79 

< 20, 455, 630. 34 

6, 632, 491. 49 



2, 096, 993. 26 



$355, 992, 

533, 597. 

555, 573, 

661, 540, 

31, 208, 

63, 970, 

1, 939, 

820, 926, 

573, 558, 

222, 928, 



512. 25 
243. 04 
274. 31 
268. 39 
208.32 
404.80 
140.00 
353. 45 
250.00 
980.20 



3, 721, 234, 634. 76 
3, 654, 590, 530. 81 



7, 375, 825, 165. 57 



1,737,906,816.44 

11,327,263.67 

435, 508, 643. 05 

14,501,002.60 

34, 445, 313. 00 

76, 570, 514. 43 

3 221, 647, 440. 05 

12, 477, 674. 95 

< 21, 897, 084. 04 

12, 496. 730. 81 

80, 561, 249. 99 

122, 787. 39 

16, 820. 93 

8, 603, 628. 15 



Total grants, aids, and expenses. 



> 1,795,732,671.59 



3 2,624,348,801.42 



Federal public works projects: 

Tennessee Valley .\uthority 

Public highways 

Rivers and harbors 

Other: 

Legislative establishment 

State Department 

Treasury Department: 

Public building construction and sites . 

All other 

War Department (nonmilitary) 

National defense: 

Army 

Navy 

Footnotes at end of table. 



11,036,794.57 
267, 882, 017. 66 
72, 450, 381. 47 

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 



36, 148, 537. 34 
317, 356, 940. 05 
147, 924, 751. 64 

486, 103. 10 
2, 659, 016. 08 

32, 756, 840. 70 
5,615,951.73 
1, 488, 375. 48 

61, 298, 999. 11 
115,037,329.60 



REPORT OF THE SECRETARY OF THE TREASURY H 

Summary of expenditures, fiscal years 1934 ond 1935 — Continued 





1934 


1935 


Recovery and relief expenditures— Continued. 
Nonrepayable— Continued. 

Federal public works projects— Continued. 

Panama Canal . .. 


$751, 480. 25 

137, 450. 23 

6, 198. 00 

17,183,404.08 

13, 002, 563. 35 

5, 170, 815. 47 

1,908,471.87 

401, 033. 60 

905, 286. 01 

180,911.17 

2 339, 918. 19 


$243,541.54 


Department of Justice 


531, 703. 81 


Post Office Department 




Interior Department (exclusive of subsistence home- 
steads and Boulder Canyon project) .- 


37, 491, 354. 58 


Department of Agriculture (exclusive of highways).. 
Department of Commerce . . 


15,722,946.75 
10, 197, 883 69 




6,260,630.26 


Veterans' Administration . 


1,491,450 37 


Independent offices and commissions 


4, 490, 965. 39 


District of Columbia . . 


957 701 03 


Unclassified items . 


418,175.19 






Total Federal public works projects 


475,105,628.93 


798 579 197.44 






Total nonrepayable 


2.270,838,200.52 


3,422,927,998.86 






Repayable: 

Federal public works projects: 

Boulder Canvon project 


19,445,381.64 
3,009,961.56 


23, 820, 507. 04 


Other reclamation projects 


15,644,679.42 






Total Federal public works projects.. 


22,455,343.20 


39,465,186 46 






Loans: 

Commodity Credit Corporation 


164,341,934.85 
941, 044. 35 

2 102, 254, 406. 06 

66.323,044. 42 

70, 739, 000. 00 

369, 351. 41 


8 60 144 064 86 


Joint stock land banks 


2 904,325.15 
88 691 246.34 


Crop and feed loans, etc. (Farm Credit Administra- 
tion) 


Public Works Administration: 

Public bodies 


103 262 104 46 


Railroads 


66, 230, 752. 95 


Emergency housing 


6 479 835 47 


Federal Housing Administration 


15' 963 873.02 


Subsistence homesteads ».. 


2, 372, 312. 69 


3 661 937 71 


Resettlement administration 


1 638 875 67 


Reconstruction Finance Corporation 


605, 078, 647. 39 
2, 054, 324. 15 


2 113 512 873 64 


Export-Import Banks of Washington 


2 2 616 496 63 






Total loans 


810, 565, 253. 20 


108 750 865 34 






Subscriptions to capital stock, etc.: 

Production credit corporations... 


105, 000, 000. 00 

110,000,000.00 
5, 659, 821. 75 

199, 889, 710. 83 
25, 000, 000. 00 
39,125,697. 16 
38, 475, 700. 00 

153, 000, 000. 00 
754, 800. 00 

149, 502, 149. 65 


15 000 000.00 




15, 000. 000. 00 


Regional agricultural credit corporations 


Federal Farm Mortgage Corporation. 


265 62 


Federal intermediate credit banks.. ... 


15 000 000 00 


Federal land banks 


35 569 325 59 


Home loan banks 


200 000 00 


Home Owners' Loan Corporation 


46 000 000 00 


Federal savings and loan associations.. 


29, 486, 784. 08 


Federal Deposit Insurance Corporation. ... 


497,850.35 




Total subscriptions to capital stock, etc 


826, 407. 879. 39 


156, 754, 225. 64 






Total repayable 


1,659,428,475.79 


304, 970, 277. 44 




Total nonrepayable and repayable 


3 3,930,266,676.31 


3 3 727 898 276 30 






Reconciliation with daily Treasury statement: 

Total nonrepayable and repayable (shown above) 

Add processing tax receipts (deducted above) 


3, 930, 266, 676. 31 
353, 048, 796. 83 


3,727,898,276.30 
521,379,871.22 




4, 283, 315, 473. 14 


4, 249, 278, 147. 52 


Deduct general expenditures included above: 

Agricultural Adjustment Administration 


279, 723, 062. 38 

1,194,639.95 

2 1, 737, 780. 00 


561, 540, 268. 39 


Refunds of processing taxes 


31 208 208 32 


Subscriptions to stock of Federal land banks 


1 939 140.00 








279,179,922.33 


594, 687, 616. 71 


Total recovery and relief expenditures 


4, 004, 135, 550. 81 


3, 654, 590, 530. 81 





' Additional expenditures for these accounts included under recovery and relief expenditures. 

2 Excess of credits, deduct. 

3 After deduction of processing tax receipts. 
< Earnings in excess of expenditures, deduct. 

* Includes real estate acquired and held for sale. 



12 



REPORT OF THE SECRETARY OF THE TREASURY 



THE PUBLIC DEBT 

The fiscal year 1935 closed with the gross public debt outstanding 
at $28,700,892,624.53 as compared with $27,053,141,414.48 out- 
standing on June 30, 1934, an increase of $1,647,751,210.05. The net 
changes brought about during the year in the amounts of the various 
classes of securities which make up the outstanding debt are shown 
in the following table, in which the amounts of the various classes 
outstanding at the beginning and at the end of the year are compared: 

Changes in public debt outstanding June SO, 1934 ond 1935, by classes 
[On basis of daily Treasury statements (unrevised), see p. 293] 





June 30, 1934 


June 30, 1935 


Increase (+) or 
decrease (— ) 


Interest-bearing debt: 
Public issues: 

Pre-war (including postal savings) 
bonds 


$831,350,370.00 

I 6, 295, 020, 300. 00 

9, 332, 732, 350. 00 


$855, 263, 470. 00 

2 1, 246, 230, 750. 00 

12, 683, 570, 300. 00 

a 62, 047, 818. 75 


-f$23,913, 100. 00 


Liberty bonds 


—5, 048, 789, 550. 00 


Treasury bonds 


-1-3, 350, 837, 950. 00 


United States Savings Bonds 


-1-62, 047, 818. 75 








Total bonds 


16. 459, 103, 020. 00 
6,653,111,900.00 
1,517,245,000.00 
1,404,035,000.00 


14,847,112.338.75 
10, 023, 251, 900. 00 


— 1,611 990 681 25 


Treasury notes 


+Z, 370, 140, 000. 00 


Certificates of indebtedness 


-1,517,245,000.00 


Treasury bills 


2,052,898,000.00 


-i-648, 863, 000. 00 






Total 


26, 033, 494, 920. 00 


26, 923, 262, 238. 75 


-1-889,767,318 75 






Special issues for investment of trust 
funds, etc.: 
Treasury notes. . . 


278, 439, 000. 00 
117, 800, 000. 00 


477, 742, 000. 00 
155,500,000.00 


-fl99, 303, 000 00 


Certificates of indebtedness 


+Z7, 700, OUO. 00 






Total 


396, 239, 000. 00 


633, 242, 000. 00 


-f237, 003, 000 00 






Total interest-bearing debt 


126,429,733,920.00 

* 105, 020, 780. 26 

518, 386, 714. 22 


2 27,556,504,238.75 
'319.399,005.26 
824, 989, 380. 52 


-f 1, 126, 770, 318. 75 


Matured debt on which interest has ceased 

Debt bearing no interest 


4-214, 378, 225. 00 
-i-306, 602, 666. 30 






Total gross debt 


27, 053, 141, 414. 48 


28, 700, 892, 624. 53 


-fl, 647, 751,210. 05 







• Excludes $50,753,950 estimated amount of outstanding first-called Fourth 4H's on which interest has 
ceased. 

2 Excludes $88,736,850 estimated amount of outstanding first-, second-, and third-called Fourth 4H's on 
which interest has ceased. 

' Includes only bonds sold during March and April less redemptions through June 30. The amount 
sold during March to June inclusive amounted to $96,365,587.50 as shown in the table on page 24, and 
subtracting redemptions to that date (on the basis of daily Treasury statements, revised), the amount 
actually outstanding on June 30, 1935, was $95,834,700.00. Sales during May and June were not taken into- 
the Treasurer's books, however, until the next fiscal year. 

* Includes $50,753,950 referred to in note 1. 
« Includes $88,736,850 referred to in note 2. 

Open market issues during the year aggregated $12,099,919,493.75, 
and maturities and redemptions aggregated $11,234,065,275.00, with a 
resulting increase of $865,854,218.75 in this class of debt outstanding. 
Open market transactions during 1935 are summarized in the table on 
page 14. 



REPORT OP THE SECRETARY OF THE TREASURY 



13 




14 



REPORT OF THE SECRETARY OF THE TREASURY 



Open market issues, maturities, and redemptions during the fiscal year 1935 {pre-war 
and postal savings bonds excluded) 

[On basis of daily Treasury statements (unrevised), see p. 293] 





Outstanding June 
30, 1934 


Issues 


Maturities and 
redemptions 


Outstanding June 
30, 1935 




Num- 
ber of 
issues 


Amount 


Num- 
ber of 

issues 


Amount 


Num- 
ber of 
issues 


Amount 


Num- 
ber of 

issues 


Amount 


Liberty bonds 

Treasury bonds 

United States Sav- 


2 
12 


■$6,295,020, 300 
9, 332, 732, 350 






1 

3 

2 
49 


2$5,04S,789, 550 

< 555, 000 

< 519, 225 
? 1,308, 753, 500 

1, 517, 245, 000 
3, 358, 203, 000 


1 
14 

1 
17 


3$1, 246,230, 750 


2 

1 

5 


$3,351,392,950 

• 62,567,044 
4, 678, 893, 500 


12, 683, 570, 300 
9 62,047,819 


Treasury notes 

Certificates of in- 


15 

2 
23 


6,653,111,900 

1, 517, 245, 000 
1, 404, 035, 000 


10, 023, 251, 900 


Treasury bills 


63 


4, 007, 066, 000 


37 


2, 052, 898, 000 


Total 


54 


25, 202, 144, 550 


71 


12, 099, 919, 494 


55 


11, 234, 065, 275 


70 


26, 067, 998, 769 







' Excludes $50,753,950 estimated amount of outstanding first-called Fourth 4H's on which interest has 
ceased. 

' Includes First Liberty Loan bonds called for redemption June 15, 1935, and estimated amount of • 
Fourth Liberty Loan bonds included in second and third calls for partial redemption Oct. 15, 1934, and Apr. 
16, 1935. respectively. 

> Excludes $88,736,850 estimated amount of outstanding first-, second-, and third-called Fourth 4H's on 
which interest has ceased. 

* Redemptions prior to maturity. 

» Includes only bonds sold during IMarch and April. 

6 Includes onlv bonds sold during March and April less redemptions through June 30. See note 3, p. 12. 

1 Includes $335,686,600 Treasury notes, series B-1935, due Aug. 1, 1935, redeemed June 15, 1935, in exchange 
for Treasury notes, series B-1940. 

These transactions occasioned a considerable alteration of the 
composition and of the final maturity of the interest-bearing debt 
outstanding. The composition of the debt divided between six 
types of obligations, from January 1926 to June 1935, is shown in 
the chart on page 13, in which the total interest-bearing debt outstand- 
ing each month is taken as 100 percent. The various maturities, by 
years, of the interest-bearing debt outstanding as of June 30 for each 
of the last four years are shown in chart 5 on the page opposite. 

On the basis of the interest-bearing debt outstanding on June 30, 
1934, and on June 30, 1935, the computed annual interest charge was 
reduced from $842,301,133 to $748,878,754, and the computed 
average rate of interest borne was reduced from 3.181 to 2.715 
percent. The reduction of $93,422,379 in the computed annual 
interest charge, notwithstanding an increase of over one billion dollars 
in the outstanding interest-bearing debt, was brought about through 
money market conditions which permitted the issue of new debt at 
low rates of interest, as is indicated by the reduction of 0.466 percent 
in the computed rate. Actual expenditures for interest during 1935 
were $820,926,353.45. 

The course of the interest-bearing debt outstanding and of the 
computed rate of the interest charge on that debt from January 1919 
through June 1935, is shown in chart 6 on page 16 and in table 32 on 
page 401. 



REPORT OP THE SECRETARY OP THE TREASURY 



15 



MATURITY, BY CALENDAR YEARS. OF THE INTEREST-BEARING PUBLIC DEBT OUT- 
STANDING 1 AS OF JUNE 30, 1932 TO 1935 



Bills 



Bonds 



DOLLARS 



DOLLARS 



As of June 30 

1932 



r ill 



1932 '34 '36 '36 "40 42 44 '46 '48 '50 '52 '54 '56 '58 '60 



As of June 30 

1933 



i, ,, 1, 1 ,,, B ,, i 



1932 '34 '36 '38 '40 42 '44 '46 '48 '50 '52 '54 '56 '58 '60 



-a 



As of June 30 

1934 



■ ■ igjll 1 li 



1932 34 36 38 40 42 44 46 48 50 52 54 56 56 60 



As of Jun« 30 

1935 



IB II.IB I !■■ I 



1932 '34 '36 '38 '40 '42 '44 '46 '48 '50 '52 "54 '56 '56 '60 

Chart 5. 

Exclusive of consols, postal savings bonds. United States Savings Bonds, and special obligations 
issued to governmental trust funds and agencies. Certificates of indebtedness are included with Treasury 
notes. 

16816—36 3 



16 



REPORT OF THE SECRETARY OF THE TREASURY 



Issues during the year 



Net new issues during the year were confined to sales for cash of 
$967,861,000 of Treasury bonds and notes on December 15, 1934, 
weekly sales of Treasury bills in moderate amounts, the total for the 
year being $648,863,000 in excess of maturities, and the sale for cash, 
on a bid basis, on June 3, 1935, of $98,708,000 par amount of 3 per- 
cent Treasury bonds of 1946-48. Otherwise the open market issues 
were offered only in exchange for maturing or called obligations, 

INTEREST-BEARING DEBT OUTSTAXDING ' AND COMPUTED RATE OF INTEREST 
THEREON, BY MONTHS. JANUARY 1919 TO JUNE 1935 




On September 10, 1934, in addition to exchange offerings made to 
the holders of second-called Fourth Liberty Loan bonds, an issue of 
2-year 1% percent Treasury notes of series D-1936 was offered in 
exchange for Iji percent Treasury certificates of indebtedness matur- 
ing September 15, 1934. The subscription books were closed on 
September 13, 1934, and $514,066,000 of the $524,748,500 maturing 
certificates were exchanged for the new Treasury notes. 

On December 3, 1934, the December 15 financing was announced, 
there being ofi^ered for cash $450,000,000 of 15-18 year 3^8 percent 

1 On basis of daily Treasury statements (revised). Exclusive of United States Savings Bonds. 



REPORT OF THE SECRETARY OF THE TREASURY 17 

Treasury bonds of 1949-52 and $450,000,000 of l^-year 1)^ percent 
Treasury notes of series E-1936. In addition, the 1}^ percent notes 
and an additional issue of 2% percent notes of series A-1939 were 
offered in exchange for 2% percent Treasury certificates of indebted- 
ness of series TD-1934, of which $992,496,500 were maturing on 
December 15, 1934. The subscription books for the cash offerings 
were closed on the opening day, December 3, and those for the ex- 
change offerings were closed on December 6, 1934. Cash subscrip- 
tions aggregating $2,334,467,500 were received for the 3}^ percent 
Treasury bonds of 1949-52, of which $491,377,100 were allotted, and 
cash subscriptions aggregating $3,036,069,900 were received for the 
V/s percent Treasury notes of series E-1936, of which $476,483,900 
were allotted. With respect to the exchange subscriptions, $210,- 
132,500 of the maturing certificates were exchanged for the 1}^ percent 
Treasury notes of series E-1936 and $765,192,500 were exchanged for 
the 2% percent Treasury notes of series A-1939. Accordingly, ex- 
changes aggregated $975,325,000 and only $17,171,500 of the maturing 
certificates were not exchanged. 

In addition to the exchange offering of bonds for third-called 
Fourth Liberty Loan bonds on March 4, 1935, an issue of 5-year, 
1% percent Treasury notes of series A- 1940 was offered in exchange 
for 2)^ percent Treasury notes maturing March 15, 1935. The 
subscription books were closed on March 8, 1935, and $513,884,200 
of the $528,101,600 of maturing Treasury notes were exchanged for 
the new series. 

On May 27, 1935, tenders were invited for an additional issue of 
$100,000,000 of 3 percent Treasury bonds of 1946-48. Tenders 
aggregating $270,077,000 were received up to May 29, 1935, and 
tenders aggregating $98,708,000, at prices ranging from 103^^2 down 
to 103/^2 inclusive, were accepted. The average price of the bonds 
issued was 103^^2 and a total premium of $3,082,863.87 was received. 

On June 24, 1935, tenders were again invited for an additional 
$100,000,000 of the same bonds. Tenders aggregating $461,341,000 
were received up to June 26, and those ranging in price from 103^)^2 
down to 103^%2, aggregating $112,669,000, were accepted. The 
average price of the issue was 103^%2, and a premium of $4,005,378.18 
was received — payment being made on July 1, 1935. 

On June 10, 1935, an issue of 5-year IK percent Treasury notes 
of series B-1940 was offered in exchange for 3 percent Treas- 
ury notes of series A-1935 maturing June 15, 1935, of which 
$416,602,800 were outstanding, and for 1% percent Treasury notes of 
series B-1935 maturing August 1, 1935, of which $353,865,000 were 
outstanding. The subscription books were closed on June 13, 1935, 
at which time $402,741,800 of the notes maturing June 15 and 
$335,686,600 of the notes maturing August 1, or a total of $738,428,400, 
were exchanged for the new notes. 



18 REPORT OF THE SECRETARY OF THE TREASURY 

The refunding of the First and Fourth Liberty Loans, the calls of 
the 2 percent bonds, the issue of United States Savings Bonds, and 
an account of the cumulative sinking fund, are discussed separately 
in the pages following. 

Details of the open market transactions are set forth in the state- 
ment appearing as table 25 on page 394, in which each separate issue 
offered, matured, or redeemed during the year is shown. All official 
circulars and public statements, relating to these transactions during 
the fiscal year are included among the exhibits appended to this 
report. 

Second Liberty Bond Act — Further amendments 

The act of February 4, 1935, further amended the Second Liberty 
Bond Act in several important particulars, so as to permit more 
flexibihty and economy in Government financing. 

Before the amendment in question, the act authorized the issue of 
$28,000,000,000 of bonds, which authority was not recurring, and in 
addition authorized the issue of $10,000,000,000 of notes outstanding 
at any one time and $10,000,000,000 of certificates of indebtedness or 
Treasury bills outstanding at any one time. In lieu of this authority, 
the act of February 4, 1935, estabhshed a revolving authority for the 
issue of bonds, providing that not exceeding $25,000,000,000 may be 
outstanding at any one time, and at the same time consoHdated 
authority to issue notes, certificates of indebtedness, and Treasury 
bills so as to provide that not exceeding $20,000,000,000 of these 
classes in the aggregate may be outstanding at any one time. The 
former language authorizing the issue of bonds, notes, certificates of 
indebtedness, and Treasury bills was modified so as to bring the 
language of the several sections of the act into agreement as to the 
purposes for which such securities might be issued. 

The new act also gave authority for the issuance of United States 
Savings Bonds, a new type ol security, to be issued on a discount 
basis, with maturities not less than 10 nor more than 20 years with 
provision for redemption prior to maturity at the option of the holder, 
and at an issue price to afford a yield not in excess of 3 percent per 
annum, compounded semiannually. The act also repealed authority 
for further issues of postal savings bonds after July 1, 1935, and made 
provision for the conversion of postal savings deposits into Savings 
Bonds. It further authorized the use of the Postal Service for the 
sale of these bonds. 

The act of February 4, 1935, will be found as exhibit 31 on page 243. 

Cumulative sinking jund 

The appropriation available for the cumulative sinking fund during 
the fiscal year 1935, including an unexpended balance of $79,354,835 
brought forward from the fiscal year 1934, was $573,183,652. 



REPORT OP THE SECRETARY OP THE TREASURY 19 

Fourth Liberty Loan bonds called for redemption on April 15 and 
October 15, 1934, and April 15, 1935, in an aggregate face amount of 
$421,407,750, and First Liberty Loan bonds, called for redemption 
on June 15, 1935, in an aggregate face amount of $151,592,250, 
were redeemed at par for account of the fund, and an unexpended 
balance of $183,652 was carried forward to the fiscal year 1936. 

Tables covering transactions on account of the fund for the fiscal 
year 1935, and since its inception on July 1, 1920, will be found on 
pages 398 and 399 of tliis report. 

Refunding of Fourth Liberty Loan continued ^ 

The refunding of the Fourth Liberty Loan 4K percent bonds of 
1933-38, begun during the fiscal year 1934, was continued during 
1935. On October 12, 1933, an amount estimated at $1,880,428,200 
of the outstanding bonds was called for redemption on April 15, 1934. 
In response to an exchange offer made at the time of the call $874,- 
863,900 of first-called bonds and $25,852,650 of uncalled bonds were 
exchanged for 4}^-3)^ percent Treasury bonds of 1943-45. In April 
1934, $827,494,000 of first-called bonds were exchanged for 3}^ per- 
cent Treasury bonds of 1944-46, and a balance of $178,070,300 
remained for cash redemption. The second call, for the redemption of 
$1,246,231,800 of the outstanding bonds on October 15, 1934, was 
issued on April 13, 1934. 

On September 10, 1934, an additional issue of 3}{ percent Treasury 
bonds of 1944-46, and an issue of 4-year 2^ percent Treasury notes of 
series D-1938, were offered, both in exchange for Fourth Liberty 
Loan bonds called for redemption on October 15, 1934. The sub- 
scription books for the Treasury notes were closed on September 24, 
and those for the Treasury bonds on October 11, 1934. Through 
these offerings, $456,898,300 of the second-called Fourth Liberty Loan 
bonds were exchanged for VA percent Treasury bonds of 1944-46 and 
$596,416,100 were exchanged for 2K percent Treasury notes of series 
D-1938. There remained outstanding for cash redemption $192,917,- 
400 of the Fourth Liberty Loan bonds called for redemption on October 
15, 1934. 

On October 12, 1934, the third call was issued for the redemption on 
April 15, 1935, of approximately $1,869,346,100 of the outstanding 
Fourth Liberty Loan bonds. For the refunding of those bonds, 
announcement was made on March 4, 1935, of an offering of 20-25 
year 2li percent Treasury bonds of 1955-60 to be issued in exchange 



' Fourth Liberty Loan bonds (temporary coupon, permanent coupon, and registered) were numbered 
serially beginning with no. 1 for each denomination, and all bonds were issued in this serial order. Accord- 
ingly, the outstanding bonds were divisible into 10 approximately equal series as determined by the final 
digits of the serial numbers, and this approximate division was the basis for determining the amounts 
included in each of the 4 calls. In the account under this heading, this approximate division has been used. 
It follows that such amounts are subject to adjustment as bonds are redeemed. 



20 REPORT OF THE SECRETARY OF THE TREASURY i 

for the called bonds. This exchange offering of Treasury bonds of 
1955-60 was terminated on March 27, 1935, at which time $1,558,- 
022,650 of the Fourth Liberty Loan bonds called for redemption on 
April 15, 1935, had been exchanged for the new Treasury bonds, 
and of the called bonds approximately $311,323,450 remained out- 
standing for cash redemption on or after April 15. 

On April 14, 1935, the fourth and final call was issued for the 
redemption on October 15, 1935, of the remainder of the outstanding 
Fourth Liberty Loan bonds not previously called, the amount included 
in the final call being estimated at $1,246,230,750. No action for the 
refunding of these bonds was taken before the close of the fiscal year. 

Up to the close of 1935, of the $6,268,094,150 of the Fourth Liberty 
Loan bonds outstanding October 12, 1933, $4,339,547,600 were 
exchanged for other issues, $593,578,950 were redeemed for cash, and 
there remained outstanding on June 30, 1935, approximately 
$88,736,850 on which interest had ceased and approximately 
$1,246,230,750 called for redemption on October 15, 1935. On the 
basis of the exchanges to the end of the fiscal year 1935, the annual 
interest charge was reduced $53,711,182. 

A brief summary of the refunding operations to June 30, 1935, 
follows: 

Fourth iYi's outstanding Oct. 12, 1933 $6, 268, 094, 150 

Exchanged for — 

4K-3>1 percent Treasury bonds of 1943-45. $900, 716, 550 

3K percent Treasury bonds of 1944-46..- 1, 284, 392, 300 

2% percent Treasury bonds of 1955-60. . . 1, 558, 022, 650 

2>^ percent Treasury notes, series D-1938. 596, 416, 100 

Total exchanged 4, 339, 547, 600 

Redeemed for cash 593, 578, 950 

Total retired to June 30, 1935 4, 933, 126, 550 

Balance outstanding June 30, 1935: 

First-, second-, and third-called (payable 

on presentation) i 88, 736, 850 

Fourth-called, for redemption on Oct. 15, 

1935 1 1, 246, 230, 750 

Total outstanding 1, 334, 967, 600 

6, 268, 094, 150 

The official calls and the official circulars governing redemptions 
and offering exchange issues during tbe year, will be found in the 
public debt exhibits beginning on page 181 of this report. 

' Estimated amount subject to adjustment as bonds are redeemed 



REPORT OF THE SECRETARY OF THE TREASURY 21 

Refunding of First Liberty Loan 

On March 14, 1935, all outstanding First Liberty Loan bonds, 
including those of the original issue and those subsequently issued on 
conversion were called for redemption on June 15, 1935, The First 
Liberty Loan, in the form of 3^2 percent bonds, was originally issued 
June 15, 1917, in the total amount of $1,989,455,550. Subsequently 
three conversion privileges arose, and the S]4. percent bonds were in 
part converted into other First Liberty Loan bonds bearing interest 
at 4 or 4}^ percent, and the 4 percent bonds issued on conversion were 
largely converted into 4}^ percent bonds. At the time of the call. 
First Liberty Loan bonds, divided among the four issues, were out- 
standing as follows: 

First Syi's $1, 392, 226, 250 

First converted 4's 5, 002, 450 

First converted 4%'s 532,489, 100 

First-second converted 4J4's 3, 492, 150 



1, 933, 209, 950 

On April 22, 1935, announcement was made of the offering of addi- 
tional issues of 20-25 year 2% percent Treasury bonds of 1955-60, 
and of 5-year 1% percent Treasury notes of series A-1940, both in 
exchange for First Liberty Loan bonds of any series, called for re- 
demption on June 15, 1935. The Treasury bonds and the Treas^iry 
notes then offered were identical in all respects with the bonds, and 
notes offered on March 4, 1935, and formed a part of those respective 
issues. 

The bonds and the notes were offered at par, with the right reserved 
to increase the issue price of either the bonds or the notes, or both, 
by public announcement effective at any time fixed by the Secrt^tary 
but not earlier than April 29, 1935. 

The exchange offering of 1% percent Treasury notes was terminated 
on May 2, 1935. On May 3, 1935, public announcement was made 
that the issue price of the 2% percent Treasury bonds offered in ex- 
change would be increased to lOOK, effective after May 7, 1935. The 
exchange offering of Treasury bonds was terminated on May 23, 1935. 

First Liberty Loan bonds aggregating $1,610,886,550 were ex- 
changed, $746,406,550 for 2% percent Treasury bonds of 1955-60 
and $864,480,000 for 1% percent Treasury notes of series A-1940, and 
$322,323,400 of the called bonds remained outstanding for cash 



22 EEPORT OP THE SECRETAEY OF THE TREASURY 

redemption pursuant to the call. A summary of the refunding 

operation follows: 

Outstanding March 14, 1935 $1,933,209,950 

Exchanged for — 

2% percent Treasury bonds of 1955-60 $746, 406, 550 

1% percent Treasury notes, series A-1940-- 864, 480, 000 

Total exchanged 1, 610, 886, 550 

Cash redemptions to June 30, 1935 177, 521, 750 

Total retired to June 30, 1935 1, 788, 408, 300 

Outstanding June 30, 1935, payable on presentation 144, 801, 650 

1, 933, 209, 950 

The official call and the official circulars governing the redemption 
and offering the exchange issues are presented as exhibits 11, 13, and 
14 beginning on pages 210, 217, and 222 of this report. A statement 
showing details of the refunding appears as exhibit 15 on page 223. 

Redemption of 2 percent bonds 

On March 11, 1935, calls were issued for the redemption on July 1 
of the outstanding 2 percent consols of 1930 and for the redemption 
on August 1, 1935, of the outstanding 2 percent bonds of the Panama 
Canal loans of 1916-36 and 1918-38. The 2 percent consols in the 
amount of $646,250,150 were issued between 1900 and 1907 under 
the aOt of March 14, 1900, in refunding a like amount of out- 
standing 3, 4, and 5 percent bonds. Under section 18 of the Federal 
Reserve Act $46,526,100 of the consols were refunded into 3 percent 
bonder and notes, reducing the amount outstanding to $599,724,050, 
the amount called. Two percent bonds, in the amount of $84,631,980, 
fvere issued under the act of June 28, 1902, to provide funds for the 
construction of the Panama Canal. These bonds were issued in two 
series, $54,631,980, dated August 1, 1906, making up the series of 
1916-36, and $30,000,000, dated November 1, 1908, making up the 
series of 1918-38. Under the Federal Reserve Act, $5,677,800 of the 
former and $4,052,600 of the latter series were refunded into 3 per- 
cent bonds or notes reducing the amounts outstanding to $48,954,180 
and $25,947,400, respectively. 

For many years the only outstanding bonds available for deposit 
as security for the issue of circulating notes of national banks were 
the 2 percent consols of 1930 and the two series of 2 percent Panama 
Canal bonds. As an emergency measure, by a provision of the 
Federal Home Loan Bank Act approved July 22, 1932, the circula- 
tion privilege was attached to all bonds of the United States bearing 
interest at a rate not exceeding 3% percent per annum for a 3-year 
period, terminating July 22, 1935. Retirement of the 2 percent 



RBPOET OF THE SECRETARY OF THE TREASURY 23 

consols of 1930 and the 2 percent Panama Canal bonds, and the 
expiration of the authority to use other bonds as security for the 
issuance of circulating notes of national banks will eventually result 
in the elimination of national bank notes as a medium of circulation 
and to such extent will accomplish a simplification of the currency 
system of the United States. 

At the time the calls were issued it was announced that in retiring 
the called bonds the Treasury would make use of part of the balance 
of gold in the General Fund resulting from the reduction in the weight 
of the gold dollar, and that gold certificates would be issued to the 
Federal Reserve banks in an amount about equal to that of the bonds 
retired, a like amount of gold being withdrawn from the General 
Fund as security for the gold certificates issued. The gold certificates 
issued to Federal Reserve banks will form added reserves against 
which Federal Reserve notes may be issued in replacement of the 
national bank currency retired. It was subsequently decided that 
such gold certificates should be issued to the Federal Reserve banks 
only as rapidly as the national bank currency in circulation is actually 
retired, in order to avoid a temporary increase in member bank 
reserves during the interim between the redemption of the 2 percent 
bonds and the actual retirement of the national bank currency. The 
gradual retirement of the national bank currency and the issuance of 
gold certificates to the Federal Reserve banks in accordance with this 
program is now in progress. 

Deposits in the Treasury by national banks of moneys for the retire- 
ment of national bank notes, principally in anticipation of the retire- 
ment of the 2 percent bonds, together with deposits by Federal 
Reserve banks for the retirement of Federal Reserve bank notes 
during the fiscal year amounted to $553,936,922.50 or $306,626,602.50 
in excess of expenditures for the redemption of such currency. Such 
unexpended deposits for the retirement of national bank and Federal 
Reserve bank currency are carried as " noninterest-bearing debt" 
and account entirely for the increase in this item shown in the table 
on page 12. 

The public announcement concerning the retirement of the 2 
percent consols and the 2 percent Panama Canal bonds, the official 
calls for redemption, and the official circulars governing the redemp- 
tion of these bonds, are included as exhibit 10 on page 204 of this report. 

United States Savings Bonds 

United States Savings Bonds, a new type of Government security, 
were placed on sale beginning March 1, 1935. These bonds, author- 
ized under the Second Liberty Bond Act, as amended by the act of 
February 4, 1935, are issued on a discount basis. Bonds of the 



24 



REPORT OF THE SECRETARY OF THE TREASURY 



initial series, tlie sale of which is limited to the calendar year 1935, 
will mature in each instance 10 years from the first day of the month 
in which issued. The issue price of these securities was fixed at $75 
for each $100 face amount, and at this price the investment yield is 
about 2.9 percent, compounded semiannually, if the bonds are held 
to maturity. The bonds are fully registered and are not transferable. 
They are issued in denominations of $25, $50, $100, $500, and $1,000 
(maturity value), and a single ownership is limited to $10,000 (ma- 
turity value) of bonds issued in any one calendar year. A Savings 
Bond may be redeemed prior to maturity (but not within 60 days after 
the issue date), at the owner's option, at fixed redemption values which 
increase each 6 months after 1 year from the issue date. If redeemed 
prior to maturity the investment yield is less than if the bond is held 
to maturity. For the sale of United States Savings Bonds the Postal 
Service has been utilized, and these bonds are on sale at about 14,000 
post offices, including those of the first, second, and third class, and 
a few of the fourth class. 

During the period March 1 to June 30, 1935, United States Savings 
Bonds in the aggregate maturity value of $128,487,450 were sold, for 
which cash aggregating $96,365,587.50 was received. Redemptions, 
on the basis of daily Treasury statements (revised), amounted to 
$172,068.75 in May and $358,818.75 in June, or a total of $530,887.50. 
Sales by months and denominations follow: 

Sales of United States Savings Bonds, by ynonths ^ and denominations, March 1 to 

June SO, 1935 





$25 


$50 


$100 


$500 


$1,000 


Total 




MATURITY VALUE 


March. 


$1,301,975 
595, 925 
421,975 
379,825 


$1, 672, 750. 00 
859, 850. 00 
651, 950. 00 
594, 600. 00 


$7, 487, 300 
4, 336, 600 
3, 104. 600 
2, 813, 100 


$13, 576, 500 
8, 010, 500 
5.811,000 
4, 957, 000 


$27, 713, 000 
17,912,000 
13, 807, 000 
12, 480, 000 


$51, 751, 525 00 


April 


31, 714, 875. 00 


May 


23, 796, 525. 00 




21, 224, 525. 00 






Total 


2, 699, 700 


3, 779, 150. 00 


17,741,600 


32, 355, 000 


71, 912, 000 


128, 487, 450. 00 








CASH RECEIPTS 


Total 


$2, 024, 775 


$2, 834, 362. 50 


$13, 306, 200 


$24, 266, 250 


$53, 934, 000 


$96, 365. 587. 50 







' Separation of sales by months on the basis of final Treasury audit of sales reported by the Postal Service 
through June 30. 



It should be noted, however, that most of the tables in this report 
showing the public debt outstanding on June 30, 1935, include only 
United States Savings Bonds sold and reported by the Post Office 
Department in March and April, less redemptions to June 30. Sales 
are taken into the Treasurer's books as part of the public debt 



REPORT OF THE SECRETARY OF THE TREASURY 25 

between one and two months after the close of the month in wliich 
the sales are made. Accordingly, actual sales during May and 
June did not appear in the public debt until after the close of the 
fiscal year. In the interim, necessary for verification, the cash 
receipts from sales of such bonds by the Postal Service were carried 
as a special account in the General Fund to the credit of the Post- 
master General. Postal Service reports of sales through June 30 
appear as exhibit 7, page 199. 

Department Circular No. 529, offering United States Savings Bonds 
for sale, and Department Cu'cular No. 530, prescribing regulations 
governing the bonds, both dated February 25, 1935, will be found as 
exhibits 6 and 33 on pages 197 and 246 of this report. 

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 from it. The 
balance in 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: 

Analysis of the change in the General Fund balance between June 30, 1934, and 

June 30, 1935 

[On basis of daily Treasury statements (unrevised), seep. 293. For a description of accounts through which 
Treasury transactions are effected, see p. 294) 

Balance, June 30, 1934 -- $2,581,922,240.16 

Ordinary receipts: 

General and special funds - .-. - - 3,800,467,201.96 

Trust funds, increment on gold, etc.- 371,509,695.45 

Net increase in gross public debt 1,647,751.210.05 

Total funds available - 8,401,650,347.62 

Expenditures chargeable against ordinary receipts: 

General and special accounts $7,375.825, 165. 57 

Less public debt retirements _ 573,558,250.00 

$6, 802, 266, 915. 57 

Trust funds, increment on gold, etc ' 150,546,457.42 

Less national bank note retirements.. 91,415,650.00 

1 241, 962, 107. 42 

Total expenditures (excluding retirements of 
public debt and national bank notes) 6,560,304,808. 15 

Balance, June 30, 1935 -- - 1,841,345,539.47 

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, 1934 and 1935, in the table 
following. Similar information is presented in somewhat greater 
detail, on the basis of the daily Treasury statements (revised), in the 
table on page 406 of this report. 

' Excess of credits (deduct). 



26 



REPORT OF THE SECRETARY 0^ THE TREASURY 



Current cash assets and liabilities of the Treasury, June SO, 1934 o,nd 1935, and 

changes during the year 

[On basis of daily Treasury statements (unrevised), see p. 293] 





June 30, 1934 


June 30, 1935 


Increase (+). de- 
crease (— ) 


Oold assets: Gold ' 


$7, 856, 074, 225. 67 


$9,115,380,809.40 


+$1, 259, 306. 583. 73 






Deduct gold liabilities: 

Oold certificates outstanding (outside of 
Treasury) . 


958, 684, 599. 00 

3, 973, 332, 588. 66 

25, 722 721. 73 

156,039,430.93 

1, 800, 000. 000. 00 


787, 745, 989. 00 

5,509,710,115.48 

22, 879, 855. 28 

156, 039, 430. 93 

1, 800, 000, 000. 00 


— 170,938,610.00 


Gold certificate fund, Federal Reserve 
Board 


+1,536.377.526 82 


Redemption fund, Federal Reserve notes. - 


-2,842,866.45 


Exchange stabilization fund.. 








Total 


6, 913, 779, 340. 32 


8. 276. 375. 390. 69 


+1,362,596,050.37 


Gold in General Fund 


942, 294. 885. 35 


839,005,418.71 


-103,289,466 64 


SilverassedlP''"""^'""" " *""■'" ■^-- • .>,,..,_ 
Silver -i*!' ' ' 




1,500,000.00 
503. 852. 622. 00 


313,308.863.15 
510. 024. P4.5. 00 


+311,748,863. 15 


Silver dollars 


+6. 172, 323 00 






Total 


505,412,622.00 


823, 333. 808. 15 


+317,921.186.15 






Deduct silver liabilities: 

Silver certificates outstanding 


494, 996, 414. 00 
1, 189. 324. 00 


810. 040, 419. 00 
1, 181, 574. 00 


+315, 044. 005. 00 


Treasury notes of 1890 outstanding 


-7, 750. 00 






Total 


496, 185. 738. 00 


811.221.993.00 


+315, 036, 255. 00 


Silver in General Fund 


9, 226. 884. 00 


12,111.815.15 


+2, 884, 931. 15 






General Fund assets: 
In Treasury ofBces: 

Oold (as above) 


942. 294, 885. 35 

9, 226, 884. 00 

93, 668, 569. 49 

1, 984, 894, 916. 20 
2,831.924.78 


839, 005, 418. 71 

12,111,815.15 

192, 906, 203. 17 

958, 480, 491. 77 
13, 565, 097. 25 


—103, 289, 466. 64 


Silver (as above) 


+2,884,931.15 


Other coin, currency, and bullion 

In depositary banlis, reserve banks, and 
treasury of Philippine Islands.. 


+99, 237, 633. 68 
-1,026,414,424.43 


All other — collections, etc 


+10, 733, 172. 47 






Total 


3, 032. 917. 179. 82 


2, 016, 069, 026. 05 


—1, 016. 848, 153. 77 






Deduct General Fund liabilities 


450, 994. 939. 66 


174. 723, 486. 58 


-276. 271, 453. 08 


Balance in the General Fund of the Treasury.. 


2, 581, 922. 240. 16 


1,841,345,539.47 


-740, 576, 700. 69 


Balance of increment resulting from reduction 
in weight of the gold dollar 


811, 375, 756. 72 


700, 091, 147. 08 

140,111.441.47 

1,001,142,950.92 


-111.284.609.64 


Seigniorage ' . ... 


+140.111,441 47 


Working balance 


1, 770, 546. 483. 44 


—769. 403, 532. 52 






Balance in the General Fund of the 
Treasury. 


2, 581, 922, 240. 16 


1,841,345,539.47 


-740, 576, 700. 69 



' Gold valued at $35 per fine ounce. 

s Reserve against $346,681,016 of United States notes and Treasury notes of 1890 outstanding in the amount 
of $1,189,324 in 1934 and $1,181,574 in 1935. Treasury notes of 1890 are also secured by silver dollars in the 
Treasury. 

' 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 returned for the silver received 
under the President's proclamation dated Aug. 9, 1934. 

EMERGENCY LEGISLATION 

During the fiscal year 1935, further appropriations and allocations 
of funds were made for the purpose of continuing the Federal pro- 
gram to furnish relief and to aid recovery. An increase in the capital 
structure of certain corporate agencies of the Government was 
authorized, funds were appropriated for an extensive emergency 
public employment program, and the borrowing limits of the Treas- 
ury were raised by amendments to the Second Liberty Bond Act. 
These amendments are discussed on page 18 of this report. 

On June 30, 1935, the amount of capital stock and obligations that 
the Reconstruction Finance Corporation was authorized to have 
outstanding at any one time was $6,050,000,000, exclusive of indefi- 
nite authorizations for which there is no statutory Umitation. By 
the act approved January 31, 1935, extending the life of the Corpora- 
tion, the authorization had been increased in the amount of $100,000,- 
000 to enable the Corporation to subscribe for, or make loans upon, 



REPOET OF THE SECRETARY OF THE TREASURY 27 

nonassessable stock of national mortgage associations organized 
under the National Housing Act and of other mortgage institutions. 
The same act increased from $50,000,000 to $75,000,000 the author- 
ization to subscribe to preferred stock and purchase capital notes of 
insurance companies. 

During the year the Reconstruction Finance Corporation made 
further sales of its notes to the Secretary of the Treasury in the net 
amount of $400,000,000. As of June 30, 1935, the total sold to the 
Treasury amounted to $3,655,000,000 excluding the original $500,000,- 
000 of the Corporation's capital stock purchased by the Treasury. 
Notes issued by the Corporation directly to banks from which the 
Corporation purchased capital stock increased by $14,957,000 to 
$249,771,667 during the fiscal year. 

An amendment, approved May 28, 1935, to the Home Owners^ 
Loan Act of 1933, increased the bond-issuing authority of the Home 
Owners' Loan Corporation from $3,000,000,000 to $4,750,000,000 in 
order to enable that Corporation to provide further relief to indi- 
vidual home-mortgage borrowers. 

The Emergency Relief Appropriation Act of 1935, approved April 
8, 1935, provided funds for additional emergency activities of the 
Government. A direct appropriation of $4,000,000,000 was made to 
provide relief and work relief and to increase employment by provid- 
ing for useful projects. It is to remain available until June 30, 1937. 
An additional amount not to exceed $880,000,000 was reappropriated 
from the unexpended balances of funds of the Reconstruction Finance 
Corporation and of other emergency appropriations. The $4,000,000,000 
appropriation was made available for the following classes of projects 
in the amount indicated after each class: 

Highways, roads, streets, and grade-crossing elimination ^00,000,000 

Rural rehabilitation and relief in stricken agricultural areas, water conservation, etc 500, 000, 000 

Rural electrification 100,000,000 

Housing 490,000,000 

Assistance for educational, professional, and clerical persons 300,000,000 

Civilian Conservation Corps 600,000,000 

Loans and grants for projects of States and local governments 900,000,(XIO 

Sanitation, prevention of soil erosion, reforestation, flood control, rivers and harbors, miscel- 
laneous 350,000.000 

Total 4,000,000,000 

It was further provided that the President might increase any one or 
more of the foregoing limits by 20 percent of the appropriation. 

The following table summarizes all funds appropriated for emer- 
gency purposes and allocated to governmental organizations, expen- 
ditures therefrom, and unexpended balances on June 30, 1935. As 
shown in the table, $2,211,000,000 of the $4,000,000,000 appropriated 
under the Emergency Relief Appropriation Act of 1935 remained 
unallocated on that date. Practically all of the funds made available 
under this act were allocated by December 15, 1935. A subsidiary 
table shows the details of revolving funds in which repayments and 
collections from previous loans are offset against payments for current 
loans made by Federal lending agencies. 



28 



REPORT OP THE SECRETARY OF THE TREASURY 



Funds appropriated and allocated to emergency organizations, expenditures there- 
from, and unexpended balances, as of June 30, 1935 
[In millions of dollars] 



Organization 



Sources of funds 



Appropriations 



Spe- 
cific 



Agricultural Adjustment Administration. - 
Less processing tax.. 



Net. 



Tommodity Credit Corporation ^ 

Farm Credit Administration ' 

Federal Farm Mortgage Corporation 

Federal land banks; 

Capital stock 

Paid-in surplus. 

Reduction in interest rales on mort- 
gages 

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, munici- 
palities, etc." 

Public highways 

Boulder Canyon project 

River and harbor work 

Rural Electrification Administration.. 

Works Progress Administration 

All other 

Home Loan System: 

Home loan bank stock 

Home Owners' Loan Corporation 

Federal savings and loan associations.. 

Emergency housing 

Federal Housing Administration... 

Resettlement 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: 

By the President.. 

By Public Works Administration 

Grand total 



Statutory and 
Executive alloca- 
tions 



.Na- L, 
tional^^er. 

In- Isency 



d US- 
trial 
Re- 
cov- 
ery 
Act 



3 1,683 

«874 



125 
125 

23 

" 605 

"345 
93 



256 
18 



'3 50 



C^) 



2,751 



Ap- 
pro- 
pria- 
tion 
Act, 
1935 



Emer- 
gency 
Re- 
lief 
Ap- 
pro- 
pria- 
tion 
Act, 
1935 



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



152 

400 
323 



50 
200 

517 

437 

44 

252 



17 



3,300 



(10) 



2,751 13,300 



481 



343 
92 



25 



1,426 



545 
"223' 



37 
500 



108 

(10) 

1 
114 



(^) 



Total 



Expendi- 
tures ' 



1,721 

■ 874 



'397 
313 
200 



911 



(12) 
(12) 



125 
200 



1,789 
2,211 



4,000 



< 4,264 
13 

(15) 



6,546 



6,546 



847 
400 
600 
200 

125 
125 



2, 694/ 

834 
982 
92 



75 
200 

709 

1,193 

65 

456 

(10) 

1 
982 

125 
200 

50 
196 

35 
141 



4,264 

14 

150 

22 



Fiscal 
year 
1935 



743 

521 



Fiscal 
year 
1934 
and 
prior 
years2 



290 
353 



222 
»60 
141 

(10) 

2 
34 

13 
1,738 
77 
11 
435 
80 

36 
66 

138 

317 

24 

148 

(10) 



15, 807 



2,212 
4 



18, 023 



328 

(10) 

46 
29 

7 
16 



» 135 
«3 

(10) 

12 



3, 728 



3, 728 



6 63 
164 
282 
200 

123 
41 

7 

7051 

40/ 

805 

332 



Unex- 
pend- 
ed 



688 



688 
296 
177 



268 
19 
73 



133 

81 

154 

1 

(10) 



2,412 

3 

150 



6,100 



6,100 



(10) 



3 

134 

18 

215 

12 

28 
63 

492 

608 

22 

235 

(10) 

1 
521 

44 



20 
189 

19 

139 

1 

1,987 
14 



3 

5.979 



2,214 
2 



8,195 



' The expenditures in this table are on the same basis as those exhibited on p. 2 of the daily Treasury 
statement, but differ with respect to classification. The purpose of this table is to show all funds appro- 
priated or allocated to the respective emergency organizations, the expenditures therefrom, and the un- 
expended balances. The principal difference in classification of expenditures is with respect to amounts 
paid from funds allocated by the Reconstruction Finance Corporation to various emergency organizations. 
The expenditures in the daily Treasury statement under the caption "Reconstruction Finance Corpo- 
ration" comprehend all expenditures from funds of the Reconstruction Finance Corporation, including 
those allocated to other organizations, whereas expenditures included in this table 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 under the caption "Agricultural Adjustment Administration," 
whereas such expenditures are exhibited in this table as expenditures of the Farm Credit Administration 
and the Commodity Credit Corporation, respectively. The total amount of expenditures for the fiscal 
year 1935 in this table can be reconciled with the total amount of emergency expenditures shown 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 cap- 
tion "Processing tax on farm products." 



EEPORT OF THE SECRETARY OF THE TREASURY 



29 



2 The emergency expenditures included in this table for the period prior to the fiscal year 1934 include 
only expenditures on account of the Keconstruction Finance Corporation and subscriptions to capital stock 
of Federal land banks under authority of the act of Jan. 23, 1932. Expenditures by the several depart- 
ments 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. 

5 Includes (a) $350,000,000 specific appropriations from the general Treasury under the acts of May 12, 
1933, Mav 25, 1934, and June 19, 1934; (b) $1,324,885,000 advanced by the Secretary of the Treasury under 
authority of sec. 12 (6) of the Agricultural Adjustment Act, which must be returned to the Treasury from 
the proceeds of processing taxes collected on farm products: (c) $1,753,795 advanced by the Secretary of the 
Treasury under authority of sec. 10 (o) of the act of June 28, 1934; and (d) $8,000,000 allocated from process- 
ing taxes for purchase of surplus sugar under the act of May 9, 1934; less $758,513 transferred to the Division 
of Disbursement, Treasury Department. 

* There are no statutory limitations on the amounts of funds which may be made available by the Re- 
construction 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 or 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 Recon- 
struction Finance Corporation. The authority of the Reconstruction Finance Corporation to issue its 
bonds, notes, and debentures has been increased by such amounts as may be required to provide funds 
for such purposes. 

» The sum of $3,000,000 of this amount has been allocated for the purchase of surplus sugar under the act 
of May 9, 1934. The remainder is reserved to reimburse the Treasury for the advances referred to in 
footnote 3. 

6 Excess of processing tax, deduct. 

' Expenditures are stated on a net basis; i. e., gross expenditures less repayments and collections, the 
details of which are set forth in the table following 

8 Net, after deducting repayments to the Reconstruction Finance Corporation. 

' Excess of credits, deduct. 

10 Less than $500,000. 

" The appropriation of $950,000,000 provided in the act of Feb. 15, 1934, was allocated by the Presi- 
dent as follows: Civil Works Administration, $345,000,000, and Federal Emergency Relief Administration, 
$fi05.000,000. 

'2 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 Admin- 
istration of Public Works, but the amount which the Reconstruction Finance Corporation may have 
invested 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 expenditure." of the Federal Emergency Administration 
of Public Works. The amount by which the available funds on account of such transactions has been 
increased is, therefore, included in the funds of the "Reconstruction Finance Corporation— direct loans 
and expenditures." 

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

'< The appropriation of $500,000,000 for subscription to capital stock is included in the figures shown in the 
column for Reconstruction Finance Corporation. 

" Under sec. 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. 

" This amount represents the unallocated balance of an allocation of $400,000,000 by the President to 
the Administrator of Public Works. As and when such funds are allocated by the Administrator to 
specific projects, the amounts are transferred from an unallocated status to an allocated status. 

Details of revolving funds, fiscal year 1935, included in the table on page 28 

fin millions of dollars] 



Organization 



Commodity Credit Corporation - 

Farm Credit Administration... 

Loans to railroads ^ _ 

Loans and grants to States, municipalities, etc.^ 

Reconstruction Finance Corporation — direct loans and expenditures 
Export-Import Banks of Washington _-_ 



Pay- 
ments 



190 
334 
141 
159 

1,179 
5 



Repay- 
ments 
and 
collec- 
tions 



250 

193 

75 

21 

1,314 

8 



Net 
expendi- 
tures 



"60 
141 
66 
138 
' 135 
1 3 



' Excess of repayments and collections, deduct. 

2 Effective Apr. 18, 1935, figures relating to "Loans to railroads" have been segregated from those relat- 
ing to "Loans and grants to States, municipalities, etc." 



30 EEPOET OF THE SECRETARY OF THE TREASURY 

REVENUE LEGISLATION 

Revenue legislation during the fiscal year 1935 included the exten- 
sion for two years of the temporary taxes and of the increased postal 
rates provided for in the Revenue Act of 1932, as amended; an 
amendment to the Revenue Act of 1934 relating to publicity of income 
tax returns; and additions to agricultural adjustment taxes. 

Extension qf temporary taxes and increased postal rates 

Pubhc Resolution No. 36, approved June 28, 1935, amended the Rev- 
enue Act of 1932, as amended, by substitution of "1937" for "1935" 
wherever it appeared in title IV, and parts I, II, III, and IV of title 
V. The taxes which were continued in effect until June 30 or July 31, 
1937, by this legislation include: (1) the various manufacturers' excise 
taxes; (2) taxes on the importation of coal, petroleum and products, 
lumber, and copper; (3) the miscellaneous taxes on telegraph, tele- 
phone, radio, and cable facilities, transportation of oil by pipe line, and 
stamp taxes on bond transfers and deeds of conveyance; (4) the 
changes in rates of stamp taxes on issues of bonds of indebtedness, 
issues of capital stock, transfer or sale of capital stock, and sale of 
produce on exchanges for future delivery; and (5) the reduced ex- 
emption for the tax on admissions. The increase in first class postage 
rates, and authorization for the President to proclaim modification 
of certain postage rates, were continued in effect until June 30, 
1937, by the same resolution. 

A copy of Public Resolution No. 36 is shown as exhibit 43 on 
page 266. 

Publicity qf income tax returns 

Public No. 40, approved April 19, 1935, substituted for section 
55 (b) of the Revenue Act of 1934, which provided that certain item& 
from income tax returns should be available for public inspection, a 
new section providing that, subject to regulations made by the Com- 
missioner of Internal Revenue with the approval of the Secretary of 
the Treasury, all income returns filed for any taxable year beginning 
after December 31, 1934, shall be open, upon the written request of 
the Governor of a State, to inspection by any official, body, or com- 
mission, lawfully charged with the administration of any State tax 
law, if the inspection is for the purpose of such administration or for 
the purpose of obtaining information to be furnished to local taxing 
authorities. A cop}'' of Pubhc, No. 40 appears as exhibit 42 on page 266. 

Revision and extension of agricultural adjustment taxes 

The Agricultural Adjustment Act, as amended, provides for the 
following types of taxes: (1) A tax upon the first domestic processing 
of basic agricultural commodities with respect to which rental and 



REPORT OF THE SECRETARY OP THE TREASURY 31 

benefit payments have been proclaimed, and of any commodity found 
and proclaimed by the Secretary of Agriculture to be competing to the 
disadvantage of the processors or producers of any basic commodity; 
(2) a tax upon floor stocks of any article processed wholly or in chief 
value from any commodity with respect to which a processing tax 
is imposed, which are held at the time the processing tax becomes 
effective or the rate is increased; and (3) a compensating tax upon 
the importation, during the period when a processing tax is in effect 
with respect to any commodity, o^ articles processed wholly or partly 
from that commodity. 

At the beginning of the fiscal year 1935, processing taxes, floor 
stocks taxes, and import compensating taxes were already in effect 
with respect to the following basic agricultural commodities specified 
in the act, as amended — wheat, cotton, tobacco, field corn, hogs, 
sugar beets and sugar cane; and similar taxes had been imposed 
upon certain paper products, jute fabric and jute yarn which were 
found to be competing to the disadvantage of cotton processors. 
Taxes had also been imposed by the act of April 21, 1934 (Public No. 
169) upon the ginning, in excess of an allotment, of cotton harvested 
during the crop year beginning June 1, 1934; and by the act of June 
28, 1934 (Pubhc No. 483) upon the first bona fide sale of certain 
tobacco harvested thereafter and prior to May 1, 1935, for which 
tax-payment warrants to the extent of an allotment had not been 
issued. 

During the fiscal year 1935, in addition to these taxes, which con- 
tinued in effect, processing and import compensating taxes on peanuts 
became effective October 1, 1934, as a result of the proclamation by the 
Secretary of Agriculture of rental and benefit payments with respect 
to peanuts. A proclamation of the President eliminated the initial 
floor stocks tax in this case. The taxation of rice under the Agricul- 
tural Adjustment Act was stipulated by Public No. 20, approved 
March 18, 1935, which provided that processing and import compen- 
sating taxes with respect to rice become effective April 1, 1935. The 
cotton ginning tax was continued for the crop year beginning June 1, 
1935, by requisite proclamations of the President and the Secretary 
of Agriculture issued under authority of the act of April 21, 1934. 
The tobacco sales tax was continued in effect for the crop year begin- 
ning May 1, 1935, by a proclamation of the Secretary of Agriculture 
issued under authority of the act of June 28, 1934. 

Changes in rates of a number of agricultural adjustment taxes were 
made during the fiscal year in accordance with the procedure provided 
for in the acts imposing these taxes. A summary of the rates of proces- 
sing tax which have been applicable to each commodity' since the enact- 
ment of the Agricultural Adjustment Act on May 12, 1933, and of 
cotton ginning and tobacco sales tax rates since the imposition of these 
taxes, together with effective dates, appears as exhibit 44 on page 267. 

16816—36 4 



32 REPORT OF THE SECRETARY OF THE TREASURY 

ESTIMATES OF RECEIPTS AND EXPENDITURES 

Actual receipts and expenditures for the fiscal year 1935 and esti- 
mates for the fiscal years 1936 and 1937 are shown in the table below. 
Estimated expenditures are based on the latest information from the 
Bureau of the Budget. More detailed estimates of receipts are shown 
in table 15, on page 357. All estimates of revenue are based on the 
assumption that the existing tax structure will continue during the 
period covered. 

Total internal revenue (exclusive of agricultural adjustment taxes 
and taxes imposed by the act to levy a tax upon carriers and upon 
their employees, by the Bituminous Coal Conservation Act, and by 
the Social Security Act) and customs receipts are estimated at 
$3,660,000,000 (on Treasury statement basis) for the fiscal year 1936 
and at $4,400,000,000 for the fiscal year 1937. Actual receipts from 
these sources in the fiscal j^ear 1935 were $3,100,000,000. 

Receipts and expenditures for the fiscal year 1935, on the basis of daily Treasury 
stateititnts {unrevised), and estimated receipts and expenditures for the fiscal years 
J 936 and 1937 



1935, actual 



1936, estimates 



1937. estimates 



General and Special Accounts 

receipts 
Internal revenue: 

Income tax 

Miscellaneous internal revenue 

Processing tax on farm products 

Other internal revenue: 

Tax on carriers and their employees — 

Bituminous Coal Conservation Act 

Social Security Act 

Customs 

Miscellaneous receipts: 

Proceeds of Government-owned securities: 

Principal— foreign obligations 

Interest — foreign obligations 

Another 

Panama Canal tolls, etc --. 

Seigniorage 

Other miscellaneous 



099,118.637.90 
657, 191, 518. 70 
521, 379. 871. 22 



.$1,434,112,000.00 

1,873,091,000.00 

529, 042, 000. 00 

33, 000, 000. 00 
5, 600, 000. 00 



343, 3.53, 033. 56 



66, 709. 53 
601.114.48 
38,105,611.49 
24, 704, 262. 38 
58,035,251.37 
57,911,191.33 



35.3,191,000.00 



69, 898. 00 
324, 871. 00 
79, 476, 253. 00 
24, 890, 500. 00 
20, 000, 000. 00 
57, 996, 424. 00 



$1, 942, 600, 000. 00 

2,103,114,000.00 

547, 300, 000. 00 

101,600,000.00 

12, 300, 000. 00 

433, 200, 000. 00 

354, 000, 000. 00 



72, 094. 00 
322, 365. 00 
62, 688, 694. 00 
24, 905, 500. 00 
19, 000, 000. 00 
53,114,997.00 



Total- 



3,800,467.201.96 



4,410,793,946.00 



5, 654, 217, 650. 00 



EXPENDITURES 

General: 

Departmental: ' ^ 

Legislative establishment. - 

Executive proper 

State Department 

Trea.sury Department. _ 

War Department (nonmilitary) 

Department of Justice 

Post Office Department 

Department of the Interior: 

Boulder Canyon project 

Other 

Department of Agriculture: • 

Public highways 

Other 

Department of Commerce --. 

Department of Labor 

Shipping Board 

Independent offices and commissions- 
Unclassified items 



19, 623, 720. 95 

457, 693. 77 

15, 860, 779. 62 

121, 863, 248. 67 

2, 128,302.12 

32, 278. 677. 51 

lJt,25S. 16 



55,211,498. 12 



62,036,811.90 
32,315,736.67 
13,012,157.65 

21,3i8,27Z.9l 

29, 473, 078. 57 

m, ^65. J,0 



22, 021, 530. 00 

431,650.00 

16,984.167.00 

129,580,000.00 

1, 588, 700. 00 

35, 050, 000. 00 

25, 000. 00 

13, 000, 000. 00 
71,121,200.00 

30, 000, 000. 00 
75, 267, 400. 00 
33, 654, 515. 00 
15, 000, 500. 00 
e, 748, 870. 00 
33, 772, 669. 00 



23,603,977.00 

431, 650. 00 

18, 762, 000. 00 

142, 886, 100. 00 

1,333,000.00 

40, 500, 000. 00 

25, 000. 00 

16, 600, 000. 00 
111,525,400.00 

64, 000, 000. 00 
103, 116,896.00 
33, 392, 500. 00 
24, 185, 000. 00 
138, 900. 00 
86, 190, 700. 00 



Adjustment for disbursing 
outstanding 



officers' checks 



362, 408, 815. 08 
6, il6, SOB. 83 



Total, departmental 3. 
For footnotes, see p. 35. 



355, 992, 512. 25 



474, 748, 461. 00 



666, 413, 323. 00 



REPORT OF THE SECRETARY OF THE TREASURY 



33 



Receipts and expenditures for the fiscal year 1935, on the basis of daily Treasury 
statements (unrevised), and estimated receipts and expenditures for the fiscal years 
1936 and i557— Continued 





1935, actual 


1936, estimates 


1937, estimates 


EXPENDITURES— continued 

General — C(3ntinued. 

Public buildings '. _ ... . 


$25, '269, 072. 94 
55,118,567.21 
8, 766, 204. 74 
63, 970, 404. 80 

20, 850, 000. 00 
159, 100. 00 


$14, 612, 200. 00 
74, 207, 400. 00 
11, 189,500.00 
90, 652, 054. 00 

40, 000, 000. 00 

162, 400. CO 

500, 000. 00 

5, 707, 500. 00 

319, 489, 088. 00 
425, 350, 500. 00 

617.822,280.00 
100,000,000.00 
.508, 014, 000. 00 

20, 000, 000. 00 
10, 755, 382. 00 
25, 000. 000. 00 
20, 398, 386. 00 

551,000,000.00 

1, 000, 000. 00 

25, 000. 00 

742, 000, 000. 00 

13, .500,000. CO 
33, 603, 000. 00 
23, 000, 000. 00 


$49, 300. 000. 00 
139, 777, 000. 00 
11, 294, .500. 00 
78, 909, 149. 00 

46, 050, 000. 00 

185, 300. 00 

500, 000. 00 

5, 700, 000. 00 

369,919,566.00 
567, 872, 400. 00 

630, 058, 900. CO 
160,000,000.00 
507, 052, 000. 00 

20, 000, 000. 00 

4, 926, 500. 00 

220, 000, 000. 00 

45, 000, 000. 00 

580, 000, 000. 00 

100, 000. 00 

25. 000. 00 

805, 000, 000. 00 

17,000,000.00 
32, 403, 100. 00 
42. 000. 000. 00 


River and hfirbor work i_ _ ._ _ .. 


Panama Canal ' _ 


Postal deficiency -.. 


Retirement funds (United States share): 

Civil service retirement fund- 


Foreisn service retirement fund 


Canal Zone retirement fund 


District of Columbia (United States share). .. 
National defense: ' 

Army. . . _ 


4, 539, 295. 00 

212, 186,712.61 
321,410,530.43 

55,5, 573, '274. 31 

50, 000, 000. 00 

561, 540, 268. 39 


Navy 


Veterans' pensions and benefits: 

Veterans' Administration ' 


Agricultural Adjustment Administration ' . . . 

Agricultural Adjustment Administration (act 

Aug. 24, IQS.'i) 


Farm Credit Administration i-.. 


12,979,061.00 


Emergency Conservation Work . 


Tennessee Vallev Authority 




Debt charges: 
Retirements: 

Sinking fund ... 


573,001,000.00 


Redemption of bonds, etc., Public 


Estate taxes, forfeitures, gifts, etc 

Interest ... 


557, 250. 00 
820, 926, 353. 45 

20,715,688.49 
24,531,990,82 
31,208,208.32 


Refunds: 


Internal revenue 


Processing tax on farm products 




Total, general . 


3, 719, 295, 494. 76 


4, 122, 737, 151. 00 


4, 999, 486, 738. 00 




Recovery and relief: 
.Agricultural aid: 

-Agricultural Adjustment Administra- 
tion 


150,278,834.56 

60, 280, Jt85. OJt 
136, 420. 18 

i, 383, 977. 67 

8, 603, 628. 15 

904, 325. 1.5 

131 78 

265. 62 

15,000,000.00 

11,248,180.18 

110,000.00 

111,827,178.61 

1,939,140.00 
33, 630, 185. 59 

12,477,674.95 

499,033,591.17 
1,31.5,308,715.70 


70,113,000.00 

154,498,000.00 
7, 000, 000. 00 

375, 000. 00 

28, 313, 000. 00 
285, 860. 00 


50, '295, 000. 00 

161,346.900.00 
4, 000. 000. 00 

515. 000. 00 

14,528,600.00 
93, 600. 00 


Commodity Credit Corporation: 

Reconstruction Finance Corporation 
funds- 


Other. 


Farm Credit Administration: 

Reconstruction Finance Corporation 
funds: 
Crop production loans -- 


Regional agricultural credit cor- 
porations- 


Loans to joint-stock land banks. . 
Farm mortgage relief _ 


Federal Farm Mortgage Corpo- 
ration --- -- - . 






banks revolving fund 






Farm Credit Administration 






Unclassified 






Other 


33, 050, 000. 00 


9,655,000.00 


Federal land banks: 

Capital stock . 


Subscriptions to paid-in surplus 

Reduction in interest rates on 
mortgages _. 


35, 000, 000. 00 
30, 000, 000. 00 

486,400.00 
423, 865. 300. 00 


41,000,000.00 
23, 000, 000. 00 


Relief: 

Federal Emergency Relief Administra- 
tion, including Federal Surplus Relief 
Corporation: 
Reconstruction Finance Corporation 
funds. - 


Other 





For footnotes, see p 35. 



34 



REPORT OF THE SECRETARY OF THE TREASURY 



Receipts and expenditures for the fiscal year 1935, on the basis of daily Treasury 
statements {unrevised) , and estimated receipts and expenditures for the fiscal years: 
1936 and 1937 — Continued 



1935, actual 



1936, estimates 



1937, estimates 



EXPENDITURES — Continued 

Recovery and relief — Continued. 
Relief— Continued. 

Civil Works Administration.. 

Emergency conservation work-- 

Department of Agriculture, relief 

Public works: 

Boulder Canyon project 

Loans and grants to States, municipali- 
ties, etc -. 

Loans to railroads -. 

Public highways 

River and harbor work 

Rural Electrification Administration 

Works Progress Administration 

Other public works: 

Administrative expenses, Public 

Works Administration.. 

Legislative establishment 

State Department 

Treasury Department: 

Public buildings 

Other 

War Department (nonmilitary) 

National defense: 

Army 

Navy 

Panama Canal 

Department of Justice 

Department of the Interior 

Department of Agriculture 

Department of Commerce 

Department of Labor 

Veterans' Administration . . _ _ . 

Independent offices and commissions. 

District of Columbia 

Unclassified items 

Aid to home owners: 
Home loan system: 

Reconstruction Finance Corporation 
funds: 

Home loan bank stock 

Home Owners' Loan Corporation. 
Federal savings and loan associations. 

Emergency housing 

Federal Housing Administration: 

Reconstruction Finance Corporation 

funds 

Other 

Resettlement Administration 

Subsistence homesteads 

Miscellaneous: 

Export-Import Banks of Washington: 
Reconstruction Finance Corporation 

funds 

Other 

Federal Deposit Insurance Corporation.. 
Administration for Industrial Recovery.. 
Reconstruction Finance Corporation- 
direct loans and expenditures 

Tennessee Valley Authority 



$11,327,263.67 
435, 508, 643. 05 
80, 561, 249. 99 

23, 820, 507. 04 

137,707,417.46 
66, 230, 752. 95 
317, 356, 940. 05 
147, 924, 751. 64 
16, 820. 93 



14, 561, 002. 60 

486, 103. 10 

2, 659, 016. 08 

32, 756. 840. 70 
5,615,951.73 
1, 488, 375. 48 



61, 298, 

115, 037, 

243, 

531, 

53, 136, 

15, 722, 

10, 197, 

6, 260, 

1,491, 

4, 490, 

957. 

418, 



999.11 
329. 60 
541. 54 
703. 81 
034. 00 
946, 75 
883. 69 
630. 26 
450. 37 
965. 39 
701.03 
175. 19 



200, 000. 00 

46, 000. 000. 00 

29, 486, 784. 08 

6, 479, 835. 47 



15, 046, 858. 01 

917,015.01 

1, 761, 663. 06 

3, 661, 937. 71 



2, eiS, 129. 74 

1,633.11 

497, 850. 35 

12, 496, 730. 81 

136, S8i, 933. 68 
36, 148, 537. 34 



Total, recovery and relief. 



3, 656, 529, 670. 81 



$469, 100. 00 

503, 383, 000. 00 

4, 238, 000. 00 

15, 755, 300. 00 

52, 450, 000. 00 

40, 000, 000. 00 

276, 543, 000. 00 

150, 510, 000. 00 

5, 000, 000. 00 

1, 000, 000, 000. 00 



20, 000, 000. 00 

1, 761, 500. 00 
2, 462, 700. 00 

60, 167, 500. 00 

26, 194, 700. 00 

640, 300. 00 

21, 938, 400. 00 
138, 290, 600. 00 
900. 00 
700, 000. 00 
77, 426, 900. 00 
50, 045, 741. 00 

2, 766, 805. 00 
9, 795. 600. 00 
2. 314, 620. 00 

15, 229, 200. 00 



43,095.300.00 



14, 307, 000. 00 
49, 000, 000. 00 



14, 000, 000. 00 

82, 985. 00 

73, 200, 000. 00 

900, 000. 00 



16, 914, 000. 00 
204, 582. 00 



4, 236, 000. 00 

gl5, 000, 000. 00 
29, 601, 614. 00 



3, 167, 564, 187. 00 



$9, 100, 000. 00" 
325, 756, 000. 00 



236, 518, 000. 00 

84,511,000.00 

2, 500, 000. OO 



15, 000, 000. OO 
636, 582. 00 



43, 550, 000. 00' 
6, 755, 000. 00 



4, 850, 000. OO 
41, 225, 000. OO 



57, 820, 100. 00 

36, 719, 800. 00 

125, 750. OO 

134, 000. 00 

64, 500. 00 

23, 698, 000. OO 



61, 000, 000. OO 

20, 000, 000. OO 
'156,000, 600.60 



10, 000, 000. 00 



ns, 000, 000. 09 



928, 119, 632. 00 



Total expenditures, general and special 

accounts.. 

Supplemental items 

Unallocated balance of emergency appropria- 
tions as of Oct. 31, 1935, and additional 
amounts made available thereafter from 
Reconstruction Finance Corporation funds. 

Grand total, expenditures, general and 

special accounts. 

Excess of expenditures over receipts 



7,375,825,165.57 



7, 290, 301, 338. 00 
80, 000, 000. 00 



275, 000, 000. 00 



5, 927, 606, 370. OO 
600, 000, 000. 00 



225, 000, 000. 00 



7, 375, 825, 165. 57 
3, 575, 357, 963. 61 



7, 645, 301, 338. 00 
3,234,507,392.00 



6, 752, 606, 370. OO 
1, 098, 388, 720. 00 



For footnotes, see page 35. 



EEPOET OF THE SECRETj^RY OF THE TREASURY 



35 



Receipts and expenditures for the fiscal year 1935, on the basis of daily Treasury 
statements (nnrevised), and estimated receipts and expenditvres for the fiscalyears 
1936 and 1937 — Continued 



1935, actual 



1936, estimates 



1937, estimates 



Summary 

Excess of expenditures --. 

Less public debt retirements 

Excess of expenditures (excluding public debt 
retirements) 

Trust accounts, increment on gold, etc., excess of 
receipts (— ) or expenditures (+).- 

Less national bank note retirements 

Total excess of expenditures (excluding 

public-debt retirements) 

TDeerease in general fund balance 

Increase in the public debt — 

Tublic debt at beginning of year - 

Public debt at end of year 

Trust Accounts, Increment on Gold, Etc. 
receipts 



$3, 575, 357, 963. 61 
573, 558, 250. 00 



3, 234, 507, 392. 00 
552, 025, 000. 00 



,$1, 098, 388. 720. 00 
580, 125, 000. 00 



3,001,799,713.61 
-522, 056, 152. 87 



2, 682, 482. 392. 00 
+290, 173, 359. 00 



518, 263, 720. 00 
+46, 950, 769. 00 



2, 479, 743, 560. 74 
91,41.5,650.00 



2,972,655,751.00 
450, 000, 000. 00 



565, 214, 489. 00 
100, 000, 000. 00 



2, 388, 327, 910. 74 
740, 576, 700. 69 



2, 522, 655, 751. 00 
290, 173, 359. 00 



465, 214, 489. 00 
46, 950, 769. 00 



1, 647, 751, 210. 05 
27, 053, 141, 414. 48 



2, 232, 482, .392. 00 
28, 700, 892, 625. 00 



418, 263, 720. 00 
30, 933, 375. 017. 00 



28, 700. 892, 624. 53 



30,933,375,017.00 



31, 351, 638, 7.37. 00 



Trust accounts 

Deposits by States under Social Security Act 
(title IX, sec. 904 (a)) 

Increment resulting from reduction in the weight 
of the gold dollar 

Seigniorage <- - -- 



229, 660, 234. 35 



237, 935, 409. 00 
48, 500, 000. 00 



237, 550, 685. 00 
282, 800, 000. 00 



1, 738, 019. 63 
140, 111, 441. 47 



169,888,5.59.00 



60, 000, 000. 00 



Total - 



371, 509, 695. 45 



456, 323, 968. 00 



580, 350, 685. 00 



EXPENDITURES 



Trust accounts 

Deposits bv States under Social Security Act 

(title IX, sec. 904 (a)) -. 

Transactions in checking accounts of govern- 
mental agencies (net) ' - 

■Chargeable against increment on gold: 

Melting losses, etc 

Payments to Federal Reserve banks (sec. 13b, 

Federal Reserve Act, as amended) 

For retirement of national bank notes.- 



165, 959, 662. 87 



iid, 628, 749. 66 

675, 121. 93 

20, 931, 857. 34 
91, 415, 650. 00 



Total. 



Excess of receipts over expenditures. 
Excess of expenditures over receipts. 



150, 5J,6, 457. 4S 



522, 056, 152. 87 



233, 377, 430. 00 

48, 500, 000. 00 

4, 528, 750. 00 

391, 147. 00 

9, 700, 000. 00 
450, 000, 000. 00 



746, 497, 327. 00 



290, 173, 359. 00 



224, 501, 454. 00 

282, 800, 000. 00 

10, 000, 000. 00 

300, 000. 00 

9, 700, 000. 00 
100, 000, 000. 00 



627,301,454.00 



46, 950, 769. 00 



1 Additional expenditures on these accounts for the fiscal year 1935 are included under "Recovery and 
•relief. ". 

2 Detail on basis of checks issued. 

3 The Executive order of June 10, 1933, as amended, provides for the transfer of the function of disburse- 
ment of all monevs of the United States (except those relating to the Military and Naval Establishments, 
rivers and harbors, and Panama Canal) to the Division of Disbursement, Treasury Department. The 
transfer of such functions in Washington, D. C, of the several departments and establishments subject 
to the Executive order of June 10, 1933, was completed on July 1, 1934. Therefore, effective July 1, 1934, 
in the interest of economy and efliciency, the disbursements by the Division of Disbursement, Treasury 
Department, which appear in daily Treasury statement" under the caption " Departmental Expenditures" 
are on the basis of checks issued. The total shown, after making adju.stment for outstanding checks of 
the Division of Disbursement, relating to such "Departmental Expenditures" is on the basis of checks 
paid as published heretofore. 

< 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 returned for the silver received 
under the President's proclamation dated Aug. 9, 1934. 

» This item represents transfers of balances in checking accounts of certain special agencies of the Govern- 
ment, net transactions in which will hereafter be shown under this caption. 

Note. — Excess credits and adjustments in italics to be deducted. 



36 REPORT OF THE SECRETARY OF THE TREASURY 

A large part of the estimated increases in receipts from these sources 
in 1936 and 1937 reflects estimated higher income tax and estate 
tax collections wliich, owdng to the nature of the Federal tax structure, 
do not promptly reflect improvements in business conditions. Current 
income tax collections in a given fiscal year are based upon corporate 
and individual incomes of the two preceding calendar years ending 
with December of the fiscal year. Current income tax collections 
during the fiscal year 1935, therefore, did not reflect until the second 
half of that year either the liigher levels of incomes of the calendar 
year 1934 or the effect of the Revenue Act of 1934. During the full 
fiscal year 1936 the provisions of the Revenue Act of 1934 with respect 
to income taxes will be effective, and in the last half of that year 
collections will reflect the higher income levels of the calendar year 
1935. Income tax collections during the last half of the fiscal year 1937 
will be based on the anticipated higher incomes of the calendar year 

1936 and, moreover, will reflect the eft'ects of the Revenue Act of 
1935. Estimated estate tax collections in the fiscal years 1936 and 

1937 are based upon the estimated higher values of estates in the 
fiscal years 1935 and 1936, respectively, and in the last 7 months of 
1937 will also reflect the upw^ard revision in estate tax rates and 
the lowered specific exemption under the Revenue Act of 1935. 

Fiscal year 1936 

Total internal revenue and customs receipts (on Treasury state- 
ment basis) are esthnated at $4,228,000,000 in the fiscal year 1936, an 
increase of $607,000,000 over such receipts of the fiscal year 1935. Of 
this increase, it is estimated that $551,000,000 mil come from higher 
income tax and miscellaneous internal revenue receipts. The balance 
of the increase reflects a moderate increase in receipts from agricul- 
tural adjustment taxes and customs duties, and also from the taxes 
imposed by the act to levy a tax upon carriers and upon their em- 
ployees and by the Bituminous Coal Conservation Act which will be 
collected for the first time during the last half of the fiscal year 1936. 

Current corporate income taxes are estimated to yield $615,000,000, 
an increase of $150,000,000 over collections of the fiscal year 1935. 
Collections from current individual income taxes are estimated at 
$629,000,000, an increase of $181,000,000 over collections in the 
preceding fiscal year. The estimated increase in income tax collec- 
tions in 1936 reflects the liigher level of incomes upon wliich they are 
based and also the effect of the Revenue Act of 1934 wliich will be 
fully reflected in collections for 1936. 

The continued special efforts of the Bureau of Internal Revenue to 
collect back taxes and the change in the Treasury's administration of 
depreciation allowances are expected to increase collections from that 
source by about $4,000,000 over the relatively liigli collections during 
the fiscal year 1935. 



REPORT OF THE SECRETARY OF THE TREASURY 37 

Total miscellaneous internal revenue taxes are estimated to yield 
$1,873,000,000 (on Treasury statement basis), an increase of $216,- 
000,000 as compared with receipts in the fiscal year 1935. Practically 
all sources of miscellaneous internal revenue are expected to contribute 
to tliis increase. 

Estate tax collections are estimated to increase by $51,000,000, 
reflecting an increase in the value of taxable estates of decedents 
during the fiscal year 1935 and, for the first time, the full effect of the 
upward revision in estate tax rates under the Revenue Act of 1934. 
Gift tax collections, which in 1935 were almost eight times as large as 
those of the fiscal year 1934 owing, at least in part, to a large amount of 
gifts probably made in anticipation of liigher income and estate tax 
rates, are expected to continue at a relatively high level since it seems 
probable that a large amount of gifts were made in the calendar year 
1935 because of the same factors. 

Revenues derived from taxes on alcoholic liquors are estimated to 
increase $92,000,000 in 1936, reflecting mainly the upward trend in 
consumption of tax-paid distilled spirits because of improving quality, 
lower prices, enforcement activity, and increasing incomes. Tobacco 
tax collections are expected to show a moderate increase owing to an 
estimated increase in the consumption of small cigarettes. The esti- 
mated increase of $24,000,000 in documentary stamp tax collections 
reflects estimated increases in refunding of security issues and greater 
activity in trading on stock exchanges. Collections from the manu- 
facturers' excise taxes are also expected to increase moderately, chiefly 
as the result of anticipated higher collections from the taxes on motor 
vehicles and gasoline. The decrease resulting from the repeal of the 
tax on checks effective January 1, 1935, which yielded $26,000,000 
during part of the fiscal year 1935, will more than offset estimated 
increases in collections from certain other miscellaneous taxes. 

Revenue from taxes imposed under the Agricultural Adjustment 
Act and related legislation are estimated at $524,000,000 (on collec- 
tion basis), or $2,000,000 less than collections in the fiscal year 1935. 
Estimated increases in collections from the processing taxes on wheat, 
cotton, peanuts, and the new taxes on rice and rye will be more than 
offset by decreases in the processing taxes collected on hogs, sugar, 
and tobacco. The expected lower collections from the taxes on tobacco 
are due to a reduction in rates on that commodity effective October 1, 
1935. The 1936 estimates assume the continuance and collection of 
these taxes in their present form and do not take into account the 
effect of court injunctions restraining the collection of these taxes. 

The act to levy an excise tax upon carriers and an income tax 
upon their employees imposes an income tax of 3/2 percent of the 
compensation (not in excess of $300 per month) of each employee, 
as defined by the act, and an excise tax on carriers equal to 3K percent 
of the compensation (not in excess of $300 per month) paid by them 



38 REPORT OP THE SECRETARY OP THE TREASURY 

to their employees. The taxes become effective March 1, 1936, and 
only one quarterly payment in the estimated amount of $33,000,000 
will be received from these taxes during the fiscal year 1936. 

The Bituminous Coal Conservation Act, approved August 30, 
1935, levies a tax of 15 percent on the sale price of bituminous coal at 
the mine, with the provision that coal producers who accept the Bitu- 
minous Coal Code shall be entitled to a credit of 90 percent of the 
amount of the tax. It is estimated that about $6,000,000 mil be 
collected from this tax during the latter part of the fiscal year 1936 

Total customs receipts (on collection basis) are estimated at $352,- 
000,000, an increase of $7,000,000 over collections in the fiscal year 
1935. Duties collected on imported distilled spirits and wines are 
expected to decline by about $8,000,000 largely because of improve- 
ment in the domestic product and of the eft'ect of the reduction in 
duty on whisky, aged 4 years or more, from $5 per proof gallon to 
$2.50 per proof gallon under the Canadian trade agreement effective 
January 1, 1936. Collections of duties on other commodities are 
estimated to increase by about $15,000,000 over collections of the 
preceding fiscal year. 

Total receipts from miscellaneous revenues and the realization 
upon assets are estimated at $183,000,000, an increase of about 
$4,000,000 over receipts of the fiscal year 1935. 

Fiscal Year 1937 

Total receipts from internal revenue taxes and customs duties for 
the fiscal year 1937 are estimated at $5,494,000,000, an increase of 
$1,266,000,000 over estimated receipts from these sources (on Treas- 
ury statement basis) for the fiscal year 1936. Of this increase, 
$433,000,000 is estimated to come from taxes imposed by the Social 
Security Act which mil be collected for the first time in the last half of 
the fiscal year 1937, and $75,000,000 from increased collections from 
taxes imposed by the act to levy a tax upon carriers and upon their 
employees and by the Bituminous Coal Conservation Act. Total 
internal revenue and customs receipts exclusive of these items are esti- 
mated at $4,947,000,000, an increase of $758,000,000 over the estimate 
for 1936 and of $1,326,000,000 over actual collections from these 
sources in the fiscal year 1935. 

Total income tax collections are estimated at $1,943,000,000, an 
increase of $509,000,000 over the estimate for 1936, Of this increase, 
estimated current corporation and current individual income tax 
collections account for $212,000,000 and $307,000,000, respectively. 
The major part of these estimated increases will occur in the second 
half of the fiscal year 1937, reflecting the anticipated higher incomes 
of the calendar year 1936 as compared with 1935 and, for the first 
time, the effects of the Revenue Act of 1935. The major provisions 



REPOKT OF THE SECRETABY OP THE TREASURY 39 

of that act affecting revenue from income taxes based on incomes for 
calendar years beginning subsequent to December 31, 1935, include: 
Corporations, the substitution of a graduated tax (except in the case 
of railroad corporations which continue having the privilege of filing 
consolidated returns) ranging from 12}^ percent on net income not in 
excess of $2,000 to 15 percent on net incomes in excess of $40,000 for 
the single rate of 13% percent in effect under the Revenue Act of 
1934, the allowance of only 90 percent of dividends received from 
domestic corporations as a deduction from gross income, and an 
increase in rates of tax on personal holding companies; individuals, 
increased surtax rates on surtax net incomes in excess of $50,000, the 
graduated rates ranging up to 75 percent on surtax net incomes in 
excess of $5,000,000 as compared with a maximum rate of 59 percent 
on surtax net incomes in excess of $1,000,000 under the Revenue 
Act of 1934. It is estimated that the increased revenue from current 
corporate and individual income taxes in the last half of the fiscal 
year 1937 due to the Revenue Act of 1935 will be $42,000,000 and 
$62,000,000, respectively. Collections from back taxes on incomes 
are estimated to be $180,000,000 or $10,000,000 less than for the 
fiscal year 1936. 

Total miscellaneous internal revenue collections are estimated at 
$2,103,000,000, an increase of $230,000,000 over the 1936 estimate 
(on Treasury statement basis). 

Collections from the capital stock and excess-profits taxes are esti- 
timated to be $66,000,000 greater than the 1936 estimate. This in- 
crease is entirely due to the Revenue Act of 1935. Under that act 
the rate of tax on capital stock was increased from $1 to $1.40 per 
$1,000 of the adjusted declared value. The rate of tax on excess 
profits was changed from 5 percent under the Revenue Act of 1934 
upon net incomes in excess of 12^ percent of the adjusted declared 
value of capital stock to 6 percent of net income in excess of 10 percent 
and not in excess of 15 percent of adjusted declared value, and 12 
percent on net income in excess of 15 percent of adjusted declared 
value. In consequence of the changes in excess-profits tax provisions, 
corporations are expected to declare a higher capital stock valuation 
than under the 1934 act. The increase in the capital stock valuation 
and the higher rate of tax form the basis for the estimated increase 
in revenue. 

Estate tax collections are estimated to increase $77,000,000 over 
the 1936 estimate reflecting the estimated higher taxable value of 
estates and beginning in December 1936, the effect of the Revenue 
Act of 1935. Under that act the graduated additional estate tax 
rates imposed by the Revenue Act of 1932, as amended by the Revenue 
Act of 1934, were increased to a maximum rate of 70 percent on net 
estates in excess of $50,000,000 and the specific exemption was reduced 



40 REPOET OF THE SECRETARY OF THE TREASURY 

from $50,000 to $40,000. The 1935 act provided further that the 
estate tax imposed under its provisions shall be due and payable 15 
months after a decedent's death and that the executor has the option, , 
with certain exceptions, to report the value of the gross estate as of , 
the date of the decedent's death or one year after death. 

Gift tax collections are estimated to decline by about $35,000,000 
from the 1936 estimate, based on the assumption that gifts made in i 
the calendar year 1936 will be in smaller amounts. Collections in 
the last half of the fiscal year 1937 will be under provisions of the [ 
Revenue Act of 1935 which increased the graduated rates of tax on ; 
gifts and decreased the specific exemption of $50,000, allowed under ' 
the 1932 and 1934 revenue acts, to $40,000. It is estimated that 
the changed provisions in the Revenue Act of 1935 with respect to ; 
estates and gifts will provide $52,000,000 additional revenue in the i 
fiscal year 1937. \ 

The upward trend in the consumption of alcoholic liquors and 
tobacco manufactures, chiefly small cigarettes, is expected to continue 
during the fiscal year 1937 and collections fi-om these sources are 
estimated to increase by $52,000,000 and $26,000,000, respectively, 
over the 1936 estimates. Collections from the manufacturers' excise 
taxes and miscellaneous taxes are also estimated to increase moder- 
ately. 

Total agricultural adjustment taxes are estimated at $547,000,000, 
an increase of $23,000,000 over the estimate (on collection basis) for 
1936, chiefly because of estimated increases in consumption of cotton, 
wheat, and hog products. As in the case of the 1936 estimate, the 
estimate for 1937 assumes the continuance of existing taxes and 
rates of tax. 

Collections from the taxes imposed by the act to levy a tax upon 
carriers and their employees are estimated at $102,000,000, an in- 
crease of $69,000,000 over the estimate for 1936. Since the act pro- 
vides that these taxes shall terminate on February 28, 1937, the 1937 
estimate provides for only three quarterly payments of this tax. The 
tax imposed by the Bituminous Coal Conservation Act is estimated 
to yield about $6,000,000 more than the 1936 estimate as the result 
of a full year's collection from this tax in 1937. 

The Social Security Act, approved August 14, 1935, provides for 
two types of taxes which will be reflected in receipts during the last 
half of the fiscal year 1937. Title VIII of that act imposes with re- 
spect to employment (a) an income tax on wages (not in excess of 
$3,000 per year) of every individual (excluding certain occupational 
groups and persons 65 years of age and over) and (6) an excise tax on 
each employer equal to certain percentages of wages paid by him with 
the same salary limit and occupational and age exclusions. The rates 
of tax with respect to each of these taxes will be 1 percent during the 



REPORT OF THE SECRETARY OF THE TREASURY 41 

calendar years 1937, 1938, and 1939, with rates increasing in subse- 
quent years to a maximum of 3 percent after December 31, 1948. 
It is estimated that $305,000,000 will be collected under title VIII 
during the last half of the fiscal year 1937. 

Title IX of the Social Security Act imposes an excise tax upon em- 
ployers of eight or more persons (with certain occupational exclusions) . 
The rates of tax range from 1 percent on wages with respect to em- 
ployment during the calendar year 1936 to 3 percent after December 31, 
1937. The taxpayer is allowed a credit for all contributions paid into 
State unemployment funds not in excess of 90 percent of the tax. If 
all States had adopted approved unemployment compensation sys- 
tems by the beginning of 1936, the Federal Government would receive 
in January 1937 an amount equal to 1/10 of 1 percent of the total 
taxable pay roll. Inasmuch as it is improbable that all States will 
adopt approved systems before January 1, 1937, and since the law 
requires that the entire tax shall be paid to the Federal Government in 
cases wdiere States have not adopted approved systems, the estimate 
of $128,000,000 from Federal collections of this tax during the latter 
part of the fiscal year 1937 is larger than it would be with complete 
State coverage. 

Total customs receipts estimated at $354,000,000 are at about the 
same level as the 1936 estimate. Collections from duties on distilled 
spirits and wines are expected to decline $6,000,000 from the 1936 
estimate chiefl}'^ as the result of the reduction in duty on whisky, aged 
4 years or more, under the Canadian trade agreement. Revenue 
from other dutiable imports is estimated to increase $8,000,000 over 
the estimate for 1936. 

Miscellaneous receipts are estimated at $160,000,000, a decrease 
of $23,000,000 from the estimate of the preceding fiscal year. 

SILVER, SILVER CERTIFICATES, AND NATIONAL BANK NOTES 

Silver 

The Executive order of August 9, 1934, required that all silver 
situated in the continental United States on August 9, 1934, with 
certain stipulated exemptions, be delivered to the United States mints 
within 90 days. The proclamation of August 9, 1934, directed the 
United States mints to receive for coinage or for addition to the mone- 
tary stocks of the United States any silver which the mint is satisfied 
was situated on August 9, 1934, in the continental United States, 
including the Territory of Alaska. For silver so received the United 
States mints were to return to the depositor an amount equal to 
50.01 cents per fine troy ounce. The provisions of the proclamation 
were supplementary to the proclamation of December 21, 1933, with 
respect to the coinage of silver. 



42 REPORT OF THE SECRETARY OF THE TREASURY 

On November 2, 1934, the Executive order of August 9, 1934, was 
amended so as to exempt permanently from the requirement of 
delivery thereunder silver which at the close of business on November 
7, 1934, fell within certain stated categories. 

Regulations were issued on July 5, 1934, relating to the export- 
ation of silver, and on August 17, 1934, relating to the importation,, 
dealing in, and exportation of silver. Regulations relating to newly- 
mined silver were issued on April 16 and May 15, 1935. 

On April 10, 1935, the President amended the proclamation of 
December 21, 1933, as amended, by increasing the amount returnable 
by the United States mints and assay offices to producers of domestic 
silver mined on or after April 10, 1935, from the equivalent of 64.64 
cents per ounce to the equivalent of 71.11 cents per ounce. On 
April 24, 1935, the amount returnable with respect to such silver 
mined on or after April 24, 1935, was further increased to 77.57 cents 
per ounce. 

On May 20, 1935, the Secretar}' of the Treasury, with the approval 
of the President, issued an order prohibiting, with certain exceptions, 
the importation into the continental United States of foreign silver 
coins and other conventional pieces or forms of silver commonly used 
in any foreign country as money or coin. In accordance with this 
order the silver regulations of August 17, 1934, as amended, were 
further amended. 

Acquisitions of silver by the Treasury from all sources during 
the fiscal year were 437,798,807 ounces, at a cost of $232,435,879. 
Under the proclamation of December 21, 1933, as amended, 30,863,349' 
ounces were received; 112,301,335 ounces were received under the 
proclamation of August 9, 1934; 293,737,702 ounces were purchased 
under the authority of section 3 of the Silver Purchase Act of 1934; 
and 896,421 ounces were received in deposits of gold bullion and in 
exchange for Government stamped bars. It is estimated that the 
total acquired was 12 times as much silver as was produced in the 
United States in the same period, 17.5 times as much of that produc- 
tion as was available for monetary use, 2.2 times the total world 
production, and 2.9 times the current world output available for 
monetary use. 

The proclamations and orders issued during the fiscal year with 
respect to silver appear as exhibit 38, page 256. 

Silver certificates 

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 redemption of any 
outstanding silver certificates." Under this act, silver certificates 



KEPOET OF THE SECRETARY OF THE TREASURY 43 

Ibecame 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 This series of new silver certificates has been given the 
designation. Series of 1934. The issuance of silver certificates of tliis 
series was begun on August 7, 1934. During the remainder of the 
fiscal year $422,488,000 of these certificates were issued and 
$91,276,072 redeemed. 

In a series of orders (summarized in the letter of the Secretary of 
the Treasury to the President, September 10, 1934, approved by the 
President September 12, 1934, and supplemented by the letters of 
the Under Secretary of the Treasury to the Treasurer, March 1 and 
April 5, 1935), the issuance and maintenance as part of the money cir- 
culation of the United States of silver certificates were authorized and 
directed in a face amount equal to the total of the following items: 

(a) The amount of silver dollars held by the Treasury. 

(b) $80,000,000, being an amount approximately equal to the 
monetary value of all of the silver bullion in the Treasury on June 14, 
1934, not then held for redemption of any outstanding silver certifi- 
cates. This amount does not include silver held in the stabilization 
fund on June 14, 1934. 

(c) $1,560,000, being the amount of silver certificates of the series 
of 1933 outstanding on March 12, 1934 (including those held in the 
Treasurer's cash). Silver certificates of the series of 1934 will be 
issued in lieu of silver certificates of the series of 1933 as they are 
redeemed or otherwise received into the Treasury and retired. 

(d) A sum equal to the amount heretofore or hereafter returned to 
the depositors for silver received at the United States mints and assay 
oflfices on and after June 15, 1934, whether under the proclamation 
of December 21, 1933 (relating to newly-mined domestic silver), or 
under the proclamation of August 9, 1934 (relating to the nationali- 
zation of silver stocks). 

(e) A sum equal to the cost of aU silver heretofore or hereafter 
purchased under the authority of section 3 of the Silver Purchase 
Act of 1934, whether purchased from the stabilization fund or from 
other sources. 

Since there was a considerable reserve stock of silver certificates 
of the series of 1928, the Treasurer was directed to issue them until 
the stock was exhausted. The last of these certificates was issued 
on July 6, 1935. On June 30, 1935, the amount of silver certifi- 
cates outstanding was $810,040,419, representing an increase of 
$315,044,005 during the fiscal year. 

Statements and official orders issued during the year relating to 
silver certificates appear as exhibit 39, page 262. 



44 REPORT OF THE SECRETARY OF THE TREASURY 

National hank notes 

Steps were taken during the year which will eventually lead to the 
retirement from the monetary circulation of the United States of cir- 
culating notes of national banking associations. A discussion of the 
action taken appears on pages 22 and 23. 

BUREAU OF INTERNAL REVENUE 

During the fiscal year 1935, collections of internal revenue in 
the amount of $2,773,000,000/ exclusive of agricultural adjustment 
taxes, exceeded collections in the preceding fiscal year by $472,000,000. 
Agricultural adjustment taxes amounted to $526,200,000,' which 
exceeded collections from that source in the preceding fiscal year by 
$154,800,000. 

Back taxes on income 

Efforts to obtain more prompt payment of back taxes on income 
continued unabated during the year, and the total collected amounted 
to $185,600,000 The collections during the year exceeded estimates 
based on established quotas for the several collection districts. Back 
tax collections usually represent the concrete result of the investiga- 
tion of income tax returns by Bureau representatives. 

Close investigation of and attention to "tax sales" cases were con- 
tinued during the fiscal year. These cases often involve apparent 
sales, fictitious in fact, of stock or other securities to relatives or to 
close business associates for the sole purpose of claiming deductions 
from income for tax purposes. 

The policy of closely examining taxpayers' claims for depreciation 
deductions to prevent more than reasonable and consistent charges 
on that account resulted in a reduction in depreciation allowances in 
the approximate amount of $288,000,000 during the year. Additional 
tax resulting from these disallowances was estimated in the amount 
of $35,916,414, of which $25,032,112 was agreed to by taxpayers. 

Alcohol tax administration 

A concentrated attack was directed during the year against the 
illicit manufacture of and traffic in nontax-paid spirits. In addition 
to the general enforcement accomplishments, a speciahzed investiga- 
tive eft'ort has been directed at the larger syndicates trafficking in 
nontax-paid spirits, with the result that a great number of the larger 
organizations have been placed under indictment in the leading 
metropolitan centers of the country. 

The enforcement of the act of June 18, 1934, relating to substances 
used in the illegal manufacture of distilled spirits, has brought about 

' On the basis of reports of collections, see p. 294. 



BEPOET OF THE SECRETARY OF THE TREASURY 45 

a very material reduction in the sale of corn sugar, brown sugar, 
black strap molasses, oak chips, and other materials generally used 
in maldng unlawful Uquors. The law requiring a stamp to be placed 
on bottles of distilled spirits, as well as the law authorizing the 
Treasury to regulate the use of bottles, has also aided materially in 
reducing transactions in unlawful hquors. 

Brewers were required to provide meters for the measurement of 
beer for tax payment. These meters, which are now in operation at 
all breweries, insure more accurate measurement of beer for tax 
payment, and have permitted the removal of a large number of store- 
keeper-gagers heretofore required to be present when beer was 
measured in tanks. 

Research work was performed in the laboratory of the Alcohol Tax 
Unit to develop satisfactory methods for determining whether race 
horses have been stimulated with narcotic or other drugs and for 
assaying opium. Research work was also carried on with the view 
of developing more efficient denaturants for the purpose of preventing 
the diversion of tax-free denatured alcohol to illegal uses, and a new 
specially denatured alcohol formula containing sucrose octa acetate 
was adopted for the manufacture of rubbing alcohol compounds. 
During the past few years substantial quantities of rubbing alcohol 
compounds have been used for beverage purposes, but it is believed 
that the new denaturant will prevent this diversion. 

A detailed description of the work of the Bureau of Internal Revenue 
will be found on pages 108 to 133 of this report. 

CONSTRUCTION ACTIVITIES OF THE TREASURY 

The Department's building operations, carried on under several 
different programs and appropriations, resulted in the completion 
during the fiscal year of 152 projects with a total limit of cost of 
$262,594,557 and the placing under contract of 443 projects with a 
total limit of cost of $68,707,433. At the end of the year additional 
projects were in the following stages: 219 projects with a total limit 
cost of $39,693,417 were on the market for bids or in the final stage 
of preparing specifications; plans were being prepared for 73 projects 
at a limit of cost of $19,221,810; land had been acquired for 6 addi- 
tional projects to cost approximately $949,000; and sites for 28 proj- 
ects to cost approximately $4,420,000 had been selected or were in 
process of selection. 

The original public building program 

The Public Building Act, approved May 25, 1926, and subsequent 
acts enlarging the regular building program made general authoriza- 
tions of $702,296,794 and total specific authorizations for buildings 
and land of $496,366,798. Of the 735 construction projects previ- 
ously under contract in this program, 702 had been completed by 



46 REPORT OF THE SECRETARY OF THE TREASURY 

June 30, 1935, leaving still under contract 33 projects with a total 
limit of cost of $12,792,575. 

Building 'program in the District of Columbia. — The program for 
Federal buildings in the District of Columbia under the public build- 
ing program of 1926 has been practically completed, except for minor 
items for the Archives Building. The buildings for the Department 
of Labor, the Department of Justice, and the Interstate Commerce 
Commission, the South Building of the Department of Agriculture, 
and the addition to the Federal Warehouse were occupied during the 
year. The addition to the Internal Revenue Building is rapidly 
nearing completion, and the National Institute of Health will be 
ready for occupancy on all floors by September 1935. Bids had 
been received for the new Interior Department Building to be con- 
structed under a transfer of funds from the Pubhc Works Adminis- 
tration amounting to $11,110,000, but award of the contract had not 
been made at the end of the fiscal year; and bids were being taken for 
an extension to the Ai-chives Building under an allotment of $3,610,000 
by the Public Works Administration. 

Program under the Public Works Administration 

During the fiscal year 1935 the total number of allotments for 
public building projects made by the Administrator of Public Works 
was reduced from 465 to 442, but the total hmit of cost under these 
allotments was increased from $67,410,788 to $70,850,768. At the 
end of the fiscal year 27 of these projects had been completed under 
a limit of cost of $2,978,675; 283 were under contract under a limit 
of cost of $45,806,288; and bids had been received or were being 
soUcited, or specifications were being completed on 101 projects, to 
cost approximately $16,559,295; 17 were m the drawing stage; and 
14 were awaiting the purchase or selection of sites. 

Program under the Emergency Appropriation Act 

The Emergency Appropriation Act approved June 19, 1934, pro- 
vided $65,000,000 for public buildings throughout the country, the 
projects to be selected by the Secretary of the Treasury and the 
Postmaster General. During the year, 355 projects estimated to cost 
approximately $65,166,945 were selected, of which one was completed 
at a total limit of cost of $50,000, and 160 were placed under contract 
at a total limit of cost of $22,901,145. At the end of the year bids 
had been received, or the work had been placed on the market or 
was in the specification stage, on 118 projects to cost approximately 
$23,131,500. The remaining 76 projects were in the drawing stage 
or awaiting the acquisition of sites. 



EEPOBT OF THE SECRETARY OF THE TREASURY 47 

Program for other departments 

Funds to the amount of $13,588,161 were transferred to the 
Treasury Department by other departments for 37 projects involv- 
ing the rehabilitation, extension, and remodeling of old buildings, 
construction of new buildings, repair of sea walls, etc. Projects 
totaling $2,288,861 were under contract at the end of the fiscal 
year, the value of work on the market or in the specification stage 
was $11,110,000, and drawings were being prepared for projects to 
cost approximately $189,300. 

Detailed information with reference to all building programs and 
appropriations will be found in the abstract of the report of the 
Procurement Division on pages 148 to 152 of this report. , 

BUREAU OF CUSTOMS 

Total customs receipts during the fiscal year 1935 amounted to 
$343,353,000 as compared with $313,434,000 in 1934. This increase 
of $29,919,000 reflects chiefly larger collections from duties on liquors 
and wines and on certain agricultural products, which more than 
offset small decreases in duties on sugar and other commodities. 

The fiscal year 1935 was the first full fiscal year during which 
the repeal of the eighteenth amendment was effective. Collections 
from duties on imported liquor and wine aggregated $41,019,000 in 
1935 as compared with $24,024,000 collected during the last 7 months 
of the fiscal year 1934 subsequent to repeal. 

Largely in consequence of the drought in the summer of 1934, 
there were during the fiscal year 1935 comparatively large imports 
of certain agricultural products including grains, fodders and feeds, 
meats, butter, and vegetable oils. 

Imports of sugar in the fiscal year 1935 were 2,774,700 short tons 
as compared with 1,359,300 short tons in 1934. This increase was 
due to the postponement to the latter half of the calendar year 1934 
of a large part of the year's quota of imports of Cuban sugar in antici- 
pation of reductions in duty from 2 cents to 1.5 cents per pound on 
June 8, 1934, and, under the Cuban trade agreement, to 0.9 cent per 
pound effective September 3, 1934. The increased volume of sugar 
imports permitted under the quota practically offset the effect of the 
reduction in duty on Cuban sugar. 

The value of dutiable imports entered for consumption in the fiscal 
year 1935 was $752,153,000, an increase of 24.3 percent over 1934 
and 77.1 percent over 1933. The value of imports entered free of 
duty constituted 57.9 percent of the total value of aU imports entered 
for consumption during 1935 as compared with 63.6 percent for 1934. 

Foreign trade results and customs receipts are summarized by 
fiscal years in the foUowing table: 

16816—36 5 



48 



REPORT OF THE SECRETARY OF THE TREASURY 



Merchandise exports and imports and customs receipts, fiscal years 1980 to 1935 

[In millions of dollars] 









Excess 










Excess 








Gen- 


of ex- 


Cus- 






Gen- 


of ex- 


Cus- 


Fiscal year 


Ex- 
ports 


eral 
im- 


ports 
over 


toms 
re- 


Fiscal year 


Ex- 
ports 


eral 
im- 


ports 
over 


toms 
re- 






ports 


im- 
ports 


ceipts • 






ports 


im- 
ports 


ceipts » 


1930 . 


4,694 
3,083 
1,948 


3,849 
2,432 
1,730 


845 
651 
218 


587 
378 
328 


1933 


1,440 
2,042 
2,121 


1,168 
1,721 
1,786 


272 
321 
335 


251 


1931 


1934 


313 


1932 


1935 


343 









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

A more detailed statement of the activities of the Bureau of Customs 
is presented on pages 98 to 104 of this report. 

NONFISCAL ACTIVITIES 

Coast Guard 

The Coast Guard continued to perform during the year its usual 
duties, which are of great importance to maritime and general pub- 
lic interests. The principal activities were: The International Ice 
Patrol in the vicinity of the Grand Banks of Newfoundland along the 
trans-Atlantic steamship lanes and related ice observation and oceano- 
graphic cruises and surveys; patrol of the coast — including aircraft 
patrol — to aid vessels and persons in distress; patrol of the waters of 
the north Pacific Ocean, Bering Sea, and southeastern Alaska, for 
the enforcement of laws and regulations for the protection of the fur 
seal and sea otter, game, fisheries, and fur-bearing animals of Alaska, 
and of other laws in Alaska; supervision of the anchorage and move- 
ments of vessels at ports and other places where Federal regulations 
are in force; enforcement of the customs, navigation, motor boat, and 
other laws of the United States; prevention of smuggling of liquor 
and other contraband; removal of derelicts and other obstructions 
from the paths of navigation; and the preservation of life and prop- 
erty at sea and along the coasts. During the year, 5,825 persons 
were saved or rescued from peril by the Coast Guard. 

A more detailed account of these and other operations of the Coast 
Guard will be found on pages 87 to 94 of this report. 

Public Health Service 

The work of collecting, compiling, and publishing current reports of 
disease prevalence in the United States and throughout the world 
was continued during the year. Preliminary mortality rates for a 
large group of States for the calendar year 1934, showing a slight 
ncrease over the minimum rate for the United States recorded in 1933, 
were made available. 



KEPORT OF THE SECRETARY OF THE TREASURY 49 

The International Sanitary Convention for Aerial Navigation was 
ratified by the United States on June 13, 1935, and will become effec- 
tive November 22, 1935. 

The Consular Regulations of the United States of America were 
amended to authorize American consular officers in foreign ports to 
authenticate foreign certificates of deratization and of deratization 
exemption. 

Recommendation was made for favorable consideration on the part 
of the United States of a proposal submitted by the International 
Office of Public Health to amend article 25 of the International 
Sanitary Convention of Paris (revised 1926) to permit the repeated 
fumigation under special circumstances of ships coming from plague- 
infected ports. Instructions were issued on March 5, 1935, requiring, 
until further notice, all vessels coming from River Plata ports, South 
America, except Montevideo, to be considered as potentially danger- 
ous from the standpoint of introducing plague and to be treated 
accordingly at United States ports. 

The privileged quarantine treatment accorded vessels of the United 
States Navy which carry naval medical officers has been extended to 
vessels of the Coast Guard which carry medical officers of the Public 
Health Service. 

Medical officers of the Public Health Service were authorized, when 
requested by immigration officials, to make the physical examination 
of nominees selected by immigration officials for appointment as 
immigration patrol inspectors. 

In an efliort to restrict the introduction of malaria, medical officers 
of the Service on the Texas-Mexican border were directed to make 
microscopic examinations of the blood of all arriving persons suspected 
of having malaria, and to notify the State health authority of any 
infected persons who were permitted entry. 

A new quarantine station has been completed at Port Townsend, 
Wash., to serve the various ports of ^he United States located on 
Puget Sound and its tributaries. 

In addition to trachoma eradication, psittacosis control, plague- 
preventive measures in California, Oregon, and Hawaii, certifications 
of sources of drinking water used on common carriers, and assistance 
to rural health organizations, the Public Health Service participated 
actively in the work relief program of the Federal Emergency Relief 
Administration. Under this program and in cooperation with the 
State health departments, sanitary outdoor toilets for rural homes 
were constructed, malaria-control drainage projects were carried out, 
and abandoned mines were sealed to prevent the pollution of streams 
by acid wastes. In connection with work relief projects for the con- 
trol of endemic typhus fever, emphasis was placed upon rat-flea 



50 REPORT OF THE SECRETARY OF THE TREASURY 

surveys, rat extermination, and the promotion of rat-proof construc- 
tion of buildings. 

The new administration and laboratory buildings for the National 
Institute of Health in Washington, D. C, and the laboratory building 
at the Rocky Mountain Laboratory, Hamilton, Mont., were completed 
and occupied during the year. 

Late in the fiscal year an epidemic of poliomyelitis occurred in 
North Carolina. With the aid of State and local authorities and the 
cooperation of the medical profession, the Service began a carefully 
controlled study designed to test the efficacy of a vaccine in the pre- 
vention of this disease. 

Activities pertaining to venereal-disease control work have in- 
cluded investigative projects in the cHnic and the laboratory, studies 
of the prevalence and trend of syphiHs and gonorrhea , and continued 
cooperative work with State and local health departments. Among 
the investigative projects the evaluation of various serodiagnostic 
tests for syphiHs was highly successful and received much favorable 
comment. Several thousand transient citizens infected with venereal 
diseases were treated at the PubHc Health Service Clinic, Hot Springs 
National Park, Ark. The admissions to this cHnic have markedly 
increased during recent years. 

The United States Narcotic Farm at Lexington, Ky., the first 
institution of tliis character, was completed and opened for the 
reception of patients on May 29, 1935. The Service continued the 
supervision and furnisliing of medical, psychiatric, and technical 
services for the Federal penal and correctional institutions under the 
control of the Department of Justice, and special studies dealing with 
the country's medical and scientific needs for narcotic drugs and the 
medico-social problems of drug addiction were continued. Coopera- 
tion was also continued with international, national, and local 
oflEicial and voluntary agencies interested in various phases of nar- 
cotic and mental hygiene problems with which the Public Health 
Service is concerned. 

The marine hospitals and other rehef stations of the Pubhc Health 
Service continued to furnish hospital and out-patient care to Ameri- 
can merchant seamen and other legal beneficiaries. By the act of 
April 8, 1935, these benefits were extended to employees of the Works 
Progress Administration who are beneficiaries of the Employees' 
Compensation Commission. Seamen continued to be the most 
numerous class of patients. In addition to the customary medical 
services furnished to other Government agencies, the PubHc Health 
Service also assumed during the year medical supervision of 19 reHef 
units in the Treasury Department and other organizations. 

The activities of the PubHc Health Service are more f uUy presented 
on pages 161 to 170 of this report. 



REPORT OF THE SECRETARY OF THE TREASURY 51 

Bureau of Narcotics 

The Bureau of Narcotics has continued to direct its principal 
enforcement activities against major narcotic law violators and has 
made further progress in eliminating the sources of supply of illicit 
narcotic drugs. Through the continued exchange direct with foreign 
countries of information relating to illicit shipments, and with the 
active cooperation of the Bureau of Customs, the supply of narcotics 
available to the domestic illicit traffic from smuggled sources has fur- 
ther decreased, as evidenced by a marked decrease both in seizures 
at ports and borders and in the total drugs seized. Due to greatly 
increased activities on the part of narcotic enforcement oflBcers, seiz- 
ures in the internal traffic showed a marked increase, but, as hereto- 
fore, the drugs seized showed upon analysis a high degree of adulter- 
ation, a further evidence of the shortage of the actual drugs in the 
illicit market. Prices in the illicit market continued high. The 
total violations reported by narcotic ofiicers showed an increase of 
approximately 35 percent over the previous year. 

The decreased supplies of smuggled narcotics available to the illicit 
trafiic have forced peddlers and addicts to turn more and more to the 
channels of legitimate domestic medical supply. This renders the 
robbery of wholesale and retail stocks, the forgery and false execu- 
tion of narcotic prescriptions, and the improper prescribing and dis- 
pensing of narcotics, the major enforcement problems. Of the total 
violations reported during the year, approximately one-third involved 
persons registered under the law. 

The Bureau has continued to receive the cooperation of State and 
municipal enforcement agencies, whose activities have become more 
and more effective with the adoption and enforcement of the uniform 
State narcotic law. This law, approved by the Conference of Com- 
missioners on Uniform State Laws and by the American Bar Associa- 
tion nearly 3 years ago, was adopted with little or no amendment dur- 
ing the fiscal year 1935 in 18 States: Arizona, Colorado, Connecticut, 
Delaware, Georgia, Indiana, Louisiana, Maryland, Massachusetts, 
Nebraska, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, 
South Dakota, Utah, and West Virginia, This makes a total of 26 
States which have adopted this legislation, the law having been 
adopted previously by Florida, Kentucky, Nevada, New York, New 
Jersey, Rhode Island, South Carolina, and Virginia. 

A more complete account of the activities of the Bureau will be 
be found on pages 138 to 140 of this report. 



52 REPORT OF THE SECRETARY OF THE TREASURY 

ORGANIZATION CHANGES 

No major changes in Treasury organization have occurred during 
the fiscal year 1935, but much has been accomplished in improved 
administration in the various branches of the Department. Changes 
in organization which should be specifically mentioned were as 
follows: 

Treasury Department Order No. 8 of September 17, 1934, estab- 
lished in the Ofiice of the Secretary a Division of Research and Statis- 
tics, which, in addition to other duties mentioned in the order, took 
over the functions formerly exercised by the Section of Financial and 
Economic Research in the Office of the Secretary. 

By Treasury Department Order No. 9 of September 26, 1934, 
all medical relief activities in the Treasury Department in the District 
of Columbia, not then a part of or under the supervision of the United 
States Public Health Service, were transferred to that Service and 
placed under the supervision of the Surgeon General. 

By Treasury Department Order No. 10 of April 23,1935, the func- 
tions of purchasing and the storage and distribution of stationery 
supplies were transferred from the Division of Supply to the Procure- 
ment Di^HLsion and placed under the immediate supervision of the 
Assistant Director, Branch of Supply. The remaining functions of 
the Division of Supply dealing with printing and binding and miscel- 
laneous subjects were retained and the name of the Division changed 
to the Division of Printing. 

The above Treasury Department orders are contained in exhibit 49, 
page 279, of this report. 

On December 1, 1934, Miss Josephine Roche was appointed 
Assistant Secretary of the Treasury, supervision of the Public Health 
Service being assigned to her. A revision of Department Circular No. 
244 (exhibit 50, p. 281), was made on December 7, 1934, covering this 
assignment as well as the assignment of all other bureaus, offices, and 
divisions of the Department to the supervision of the Secretary, the 
Under Secretary, the Administrative Assistant to the Secretary, and 
the Assistant Secretaries of the Treasury. 

Attention is invited to the attached reports of bureaus and divisions 
of the Treasury Department and to the exhibits and tables accompany- 
ing the report on the finances. 

Henry Morgenthau, Jr., 

Secretary oj the Treasury. 
To the Speaker of the House of Representatives. 



ADMINISTRATIVE REPORTS 
OF BUREAUS AND DIVISIONS 



53 



OFFICE OF THE COMMISSIONER OF ACCOUNTS AND DEPOSITS 

Combined statement of assets and liabilities of governmental corporations 

and credit agencies 

Under Executive Order No. 6869 of October 10, 1934, a copy of 
which appears as exhibit 51, page 282, every executive department 
and independent establishment of the Government holding assets 
or incurring habilities and every corporation in which the Govern- 
ment of the United States has a proprietary interest is required to 
furnish to the Secretary of the Treasury, not later than the fifteenth 
day of each month, a statement of its assets, liabilities, capital, and 
surplus, as of the close of business on the last business day of the 
preceding month. The order further provides that the Secretary of 
the Treasury shall cause to be published monthly on the daily state- 
ment of the United States Treasury a combined statement of the 
assets, liabilities, capital, and surplus, reported pursuant to the 
provisions of such order. Prior to the issuance of the above order, 
the first combined statement of assets and liabilities of governmental 
corporations and credit agencies as of June 30, 1934, was released on 
August 29, 1934. The statement as of June 30, 1935, appears as 
table 37, on page 411 of this report. Following is a summary state- 
ment of the proprietary interest of the United States in these 
corporations and agencies as of June 30, 1934 and 1935. 

Proprietary interest of the United States in governmental corporations and credit 
agencies, June SO, 1934 o,^d 1935 

[In millions of dollars] 



June 30, 
1934 



June 30, 
1935 



Financed wholly from Government funds: 

Reconstruction Finance Corporation 

Commodity Credit Corporation 

Export-import banks 

Public Works Administration 

Regional agricultural credit corporations. 

Production credit corporations 

All other 



Total, group I. 



II. Financed partly from Government funds and partly from private funds: 

Federal land banks - 

Federal intermediate credit banks... 

Federal Farm Mortgage Corporation 

Banks for cooperatives 

Home loan banks 

Home Owners' Loan Corporation. 

Federal Savings and Loan Insurance Corporation 

Federal savings and loan associations 

Federal Deposit Insurance Corporation 

War Finance Corporation.. 



Total, group II. 
Grand total 



2,035 
153 

14 
312 

77 
121 
610 



3,238 


3,322 


161 


251 


85 


84 


197 


206 


111 


129 


81 


82 


144 


70 




102 


1 


32 


150 


150 


0) 


(') 


930 


1,106 



4,428 



> Less than a million dollars. 

Securities owned by the United States Government 

The aggregate amount of securities owned by the Government on 
June 30, 1935, based upon the latest reports received, was $17,676,- 

55 



56 



REPORT OP THE SECRETARY OF THE TREASURY 



212,144.72 as against $16,957,995,149.53 on June 30, 1934 (revised 
statement made up in same form as June 30, 1935, statement), an 
increase of $718,216,995.19. A summary comparison of the hold- 
ings at the end of the last 2 fiscal years is shown below. A detailed 
statement of the securities held on June 30, 1935, wiU be found as 
table 36, page 408. 

Summary of securities owned by the United States on June SO, 1934 {revised) and 

19S5 



Foreign obligations: 

Received under debt settlements. 
All other 



Total 

Capital stock of war emergency corporations 

Capital stock, etc., of other governmental cor- 
porations and credit agencies: 

Capital stock of Panama R. R. Co 

Capital stock of Inland Waterways Corpora- 
tion 

Reconstruction Finance Corporation... 

(Capital stock and notes, less funds ex- 
pended for subscriptions to capital stock of 
other governmental corporations and funds 
disbursed to other governmental agencies 
for making loans included below.) 

Capital stock of the Home Owners' Loan 
Corporation 

Capital stock of regional agricultural credit 
corporations 

Capital stock of Federal home loan banks 

Capital stock of Federal Farm Mortgage 
Corporation 

Capital stock of Export-Import Bank of 
Washington 

Capital stock of Second Export-Import Bank 
of Washington 

Capital stock of RFC Mortgage Co 

Capital stock of production credit corpora- 
tions _. 

Capital stock of commodity credit corpora- 
tion 

Capital stock of Electric Home and Farm 
Authority, Inc 

Capital stock of Federal Deposit Insurance 
Corporation 

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

Capital stock of Federal Subsistence Home- 
steads Corporation. 

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 Coopera- 
tives _.. 

Capital stock of banks for cooperatives 

other obligations and securities: 

Railroad obligations 

Obligations acquired by Federal Emergency 
Administration of Public Works 

Notes received by Farm Credit Administra- 
tion evidencing outstanding advances 
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 

Obligations of farmers for seed, feed, drought- 
relief, and crop-production loans 

Obligations of joint stock land banks... 



June 30, 1934 
(revised) 



$11,155,851,007.57 
859, 205, 363. 64 



Total. 



12, 015, 056, 371. 21 
83, 732, 612. 37 



7, 000, 000. 00 

12, 000, 000. 00 
3, 152, 818, 871. 78 



151, 000, 000. 00 

44, 500, 000. 00 
81,445,700.00 

200, 000, 000. 00 

11,000,000.00 

2, 750, 000. 00 



June 30, 1935 



.$11, 155, 784, 298. 04 
859, 205, 36o. 64 



105, 000, 000. 00 
3, 000, 000. 00 
1, 000, 000. 00 

150,000,000.00 

1, 086, 300. 00 

10, 000. 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 

91, 603, 755. 27 
935, 410. 02 



16, 957, 995, 149. 63 



12, 014, 989, 661. 68 
S3, 683, 096. 22 



7, 000, 000. 00 



Increase (-I-) or 
decrease (— ) 



-$66, 709. 53 



-66,709.63 
-49, 516. 15 



1 200, 000, 000. 00 



44, 
81, 

200, 
11, 

2, 
10, 

120, 

3, 

1, 
150, 



500, 
645, 

000, 

000, 

750, 
000, 

000, 

000, 

000, 

000, 



000. 00 
700. 00 

000. 00 

000. 00 

000. 00 
000. 00 

000. 00 

000. 00 

000. 00 

000.00 



32, 464, 000. 00 

10, 000. 00 

199, 452, 477. 76 

100, 000, 000. 00 

65, 000, 000. 00 
60, 000, 000. 00 

31, 192, 156. 36 

312, 360, 510. 09 



125,211,123.35 

433, 000. 00 

6, 086, 301. 17 

119, 719, 682. 87 

197, 124, 401. 86 
374, 478. 44 



17, 676, 212, 144. 72 



12, 000, 000. 00 
3, 486, 215, 654. 93 4-333, 396, 683. 15 



-t-46, 000, 000. 00 
"'"+20^000" 00 



-1-10,000,000.00 
-t-15,000,000.00 



-1-31,377,700.00 



+Z5, 569, 326. 59 
-M5,000,000.00 
-1-15,000,000.00 



-6,518,884.98 
-1-166,937,086.70 



-25, 149, 163. 08 
-395,000.00 
-1-176,312.97 

-23, 220, 554. 49 

-f 105, 520, 646. 59 
-560,931.58 



-1-718, 216, 996. 19 



1 Includes $100,000,000 expended for subscription to capital stock of the Federal Savings and Loan Insur- 
ance Corporation. 



REPORT OP THE SECRETARY OP THE TREASURY 



Contingent liabilities of the United States 



57 



A summary statement of the contingent liabilities of the United 
States as of June 30, 1934 and 1935, and the change between the two 
dates is shown below. A full statement of such Uabilities of the 
United States as of June 30, 1935, and a description of them appear 
as table 33, page 403. 





Obligation 


Total amount of contingent liability 


Increase (+) or 




June 30, 1934 


June 30, 1935 


decrease (— ) 


Federal Farm Mort- 
gage Corporation. 


Bonds, various issues... 

4 percent consolidated 
bonds of 1934, interest 
only. 

Bonds, various issues... 

Notes, various issues. .- 

Funds borrowed upon 

cotton. 
Funds due depositors.. 
Federal Reserve notes.. 


$313, 488, 165. 12 
6, 303, 499. 99 

135, 272, 290. 75 

235, 797, 098. 28 

58, 900, 130. 24 

1,220,549,448.99 
3,325,265,033.00 


$1,233,090,547.93 


+$919, 602, 382. 81 
-6, 303, 499. 99 


Home Owners' Loan 

Corporation. 
Reconstruction Finance 

Corporation. 
Secretary of Agriculture. 

Postal Savings Systenu. 
Federal Reserve Sys- 
tem. 


2, 666, 576, 480. 21 

250,988,401.82 

45, 095, 000. 00 

1.230,976,844.57 
3,234,959,135.00 


+2, 531, 304, 189. 46 

+ 15,191,303.54 

-13,805,130.24 

+10, 427, 395. £8 
-90,305,898.00 



Accounting and disbursing of emergency relief funds appropriated 
under the Emergency Relief Appropriation Act of 1935 

Section II (A) of Executive Order No. 7034, dated May 6, 1935, 
directs: 

(A) The Secretarj' of the Treasury, (1) through the disbursing and accounting 
facilities under the Commissioner of Accounts and Deposits of the Treasury 
Department, to make provision for all disbursements from the funds appropri- 
ated by the "Emergency Relief Appropriation Act of 1935", subject only to such 
exceptions as the Secretary may authorize, and to maintain a system of accounts 
necessary to enable the President (a) to exercise Executive control over such 
funds, (6) to provide Current financial and accounting information for govern- 
mental agencies concerned, and (c) to make a complete report to the Con- 
gress concerning expendifures made and obligations incurred, by classes and 
amounts * * *^ 

Pursuant to the provisions of this order, the Secretary of the 
Treasury issued on June 18, 1935, Regulation No. 1 prescribing 
administrative procedure for the maintenance of a system of accounts 
and disbursements under the Emergency Relief Appropriation Act 
of 1935. This regulation was approved by the President and issued 
as Treasury Department Circular No. 543, a copy of which appears 
as exhibit 52, on page 283. 

With a view to providing effective accounting controls and in order 
to facilitate disbursing operations, there have been set up in each 
State a Treasury accounts office and a Treasury disbursing office. 
For administrative expediency these offices are located in the same 
cities as the Treasury procurement offices and the State headquarters 
of the Works Progress Administration. 

Accounts are maintained showing in detail the status of the 
funds allocated by the President for various projects and purposes, 
and at frequent intervals reports are prepared for the information of 
administrative officers and others concerned, showing obligations, 
expenditures, and balances under each project and under various 
classifications, such as States, Government establishments, etc. 



58 



EEPORT OF THE SECRETARY OF THE TREASURY 



Obligations of foreign governments 

The United States received during the fiscal year 1935 payments 
aggregating $666,391 on account of the indebtedness of foreign 
governments, of which $62,000 was for account of principal, $566,330 
was for account of interest, and $38,061 was for account of annuities 
under the moratorium agreements. 

The following statement shows the payments due during the period 
July 1 to December 31, 1934, and the amounts actually paid on 
account by certain governments: 



AMOUNTS DUE AND PAYABLE, JULY 1 TO DECEMBER 31, 1934 



Country 



Funding agreements 



Principal 



Interest 



Moratorium 
agreements 



Total 



Belgium 

Czechoslovakia. 

Estonia 

Finland 

France 

Great Britain... 

Greece ' 

Hungary 

Italy 

Latvia.- 

Lithuania 

Poland 

Rumania 



Total- 



$1, 500, 000. 00 
208, 500. 00 
62, 000. 00 



$2, 625, 000. 00 



32, 000, 000. 00 

245, 000. 00 

12, 800. 00 



85, 800. 00 
'2,"577,'6oO."6o' 



286, 

147, 

19,261, 

75, 950, 

229, 

33, 

1, 245, 

119, 

107, 

3, 582, 



265. 00 
507. 50 
432. 50 
000. 00 
820. 00 
185. 07 
437. 50 
609. 00 
783. 67 
810. 00 



$484, 453. 88 

1S2, 812. 78 

36, 585. 29 

19, 030. 50 

3, 046, 879. 72 

9, 720, 766. 05 

67, 137. 38 

4, 225. 58 

896, 155. 88 

15, 274. 26 

13, 683. 26 

456, 229. 71 

48, 750. 08 



$3, 109, 

1, 682, 

531, 

228, 

22, 308, 

117, 670, 

541, 

50, 

2, 141, 

220, 

121, 

6,616, 

48, 



453.88 
812. 78 
350. 29 
538. 00 
312. 22 
765. 05 
957. 38 
210. 65 
593. 38 
683. 26 
466. 93 
039. 71 
750. 08 



36, 691, 100. 00 103, 588, 850. 24 



14, 991, 983. 37 



155, 271, 933. 61 



AMOUNTS ACTUALLY PAID 



Finland 


$62, 000. 00 


$147, 507. 50 
2 272, 400. 00 


$19, 030. 50 


$228, 538. 00 


Greece 


272, 400. 00 










Total 


62, 000. 00 


419, 997. 50 


19, 030. 50 


500, 938. 00 







1 Exclusive of principal payment of $150,000 postponed under the provision of the funding agreement 
with GrGGC6 

» A payment of $196,128 (27i^ percent of interest due on May 10, 1933, and Nov. 10, 1933, and 35 percent 
of interest due on May .10, 1934) was received on July 6, 1934. An additional payment of $76,272 (35 percent 
of amount due on Nov. 10, 1934) was received on Nov. 10, 1934. 

The following statement shows payments due during the period 
January 1 to June 30, 1935, and the amounts actually paid on account: 

AMOUNTS DUE AND PAYABLE, JANUARY 1 TO JUNE 30, 1935 



Country 


Funding agreements 


Moratorium 
agreements 


Total 


Principal 


Interest 


Austria ' 










Belgium. 


$4,300,000.00 
1,500,000.00 


$2,625,000.00 


$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 

48, 750. 08 


$7, 409, 453. 88 


Czechoslovakia. 


1, 682, 812. 78 


Estonia 


286, 265. 00 

146, 422. 50 

19, 261, 432. 50 

75,950,000.00 

233, 007. 50 

33,185.08 

1, 245, 437. 50 

119,609.00 

107, 783. 67 

3,582,810.00 


322, 850. 29 


Finland 




165, 453. 00 


France 


42, 058, 825. 41 


64, 367, 137. 63 


Great Britain... . ... 


85, 670, 765. 05 


Greece 


1,111,000.00 


1,411,144.88 


Hungary 


37, 410. 66 


Italy 


13,000,000.00 


15, 141, 593. 38 


Latvia 


134, 883. 26 


Lithuania 


42,885.00 


164, 351. 93 


Poland... 


4, 039, 039. 71 


Rumania 


1, 400, 000. 00 
325, 000. 00 


1, 448, 750. 08 


Yugoslavia 




325, 000. 00 










Total 


63, 737, 710. 41 


103,590,952.75 


14,991,983.37 


182, 320, 646. 53 







AMOUNTS ACTUALLY PAID 



Finland I | $146,422.50 | $19,030.50 | $165,453.00 

' Payments aggregating $494,860.23 were postponed under the provisions of the funding and moratorium 
agreements with Austria. 



REPORT OF THE SECRETARY OF THE TREASURY 



59 



Press releases of the Treasury and the Department of State and 
correspondence exchanged between the Government of the United 
States and various foreign governments regarding the amounts due 
during the fiscal year will be found as exhibits 45 and 46 on pages 269 
and 271 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, 1935, appears as table 42 on page 423. 

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, 1935, 
according to contract terms, are shown in the following statement: 

TOTAL AMOUNTS DUE AND NOT PAID, AS OF NOVEMBER 15, 1935 



Country 


Funding agreements 


Moratorium 
agreements 


Total 


Principal 


Interest 


Austria 










Belgium 


$12. 800, 000. 00 

7, 170, 085. 83 

344, 000. 00 

100, 227, 866. 76 

64, 000, 000. 00 

2, 696, 000. 00 

37, 870. 00 

37, 900, 000. 00 

133, 300. 00 

124, .385. 00 

4, 202, 000. 00 

3,600,000.00 

1, 160, 000. 00 


$14, 250, 000. 00 


$1,937,815.52 

731.251.12 

146, 341. 16 

12, 187, 518. 88 

38, 883. 060. 20 

335, 686. 90 

16, 902. 32 

3, 584, 623. 52 

61, 097. 04 

54, 733. 04 

1, 824. 918. 84 

195, 000. 32 


$28,987,815 52 


Czechoslovakia.. 


7, 901, 336. 95 


Estonia 


1, 676, 695. 00 

115,568,595.00 

302, 249, 481. 58 

1, 231. 651. 50 

184, 888. 29 

4, 227. 166. 74 

582, 514. 84 

475, 735. 00 

20,985,030.00 


2, 167, 036 16 


France.. 


227, 983, 980. 64 


Great Britain... 


465, 132, 541. 78 


Greece 


4,263,338 40 


Hungary ' 


239, 660. 61 


Italy 


45,711,790.26 


Latvia 


776,911 88 


Lithuania 


654, 853. 04 


Poland.. 


27,011,948.84 


Rumania 


3, 795, 000. 32 


Yugoslavia. . 




1, 150, 000 00 










Total 


234, 385, 507. 59 


521, 431, 757. 95 


59, 958, 948. 86 


815, 776, 214. 40 







J The Hungarian'Oovemment has deposited with the foreign creditors' account at the Hungarian Na- 
tional Bank the aggregate amount of 994,994.98 pengo. The debt-funding and moratorium agreements 
with Hungary provide for payment in dollars in the United States. 

Receipts from Germany 

During the fiscal year 1935 the United States received no payments 
from the Government of Germany under the debt-funding agreement 
of June 23, 1930, covering the costs of the American Army of Occupa- 
tion and the awards of the Mixed Claims Commission, United States 
and Germany. 

Army costs. — A payment amounting to 9,300,000 reichsmarks due 
September 30, 1934, on account of the costs of the Army of Occupa- 
tion was postponed to March 31, 1935, under the provisions of the 
debt-funding agreement. In accordance with the provisions of the 
agreement such postponed payment bears interest at the rate of 3% per- 
cent per annum. The payments aggregating 53,200,000 reichsmarks, 
which were previously postponed, became due on March 31, 1935, 
and there also matured on that date a payment of 9,300,000 reichs- 
marks. These principal sums together with interest falling due on 
September 30, 1934, and March 31, 1935, amounting to 1,759,937.50 
reichsmarks, have not been paid by the Government of Germany. 

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. 



60 



REPORT OF THE SECRETARY OP THE TREASURY 



Mixed claims, United States and Germany. — The payments of 
20,400,000 reichsmarks each, due on September 30, 1934, and March 
31, 1935, from the Government of Germany on account of nuxed 
claims awards were not made under the provisions of the debt agree- 
ment of June 23, 1930. The interest amounting to 6,630,000 reichs- 
marks due on those dates also has not been paid. 

Annuities under moratorium agreement. — The semiannual install- 
ments of the annuities under the moratorium agreement with the 
Government of Germany dated May 26, 1932, aggregating 3,058,- 
098.90 reichsmarks, which were due during the fiscal year 1935, were 
not paid hj Germany. 

The status of the indebtedness of Germany to the United States 
as of June 30, 1935, is summarized in the following tables: 



AMOUNT OF INDEBTEDNESS 
(In reichsmarks] 



Indebtedness as 
funded 



Total indebted- 
ness as of June 
30, 1935 



Principal 



Interest ac- 
crued and un- 
paid 1 



Army costs.-. 
Mixed claims. 

Total— 



1, 048, 100, 000 
2, 121, 600, 000 



1, 001, 124, 097. 61 
2, 048, 670, 000. 00 



997, 500, 000 
2, 040, 000, 000 



3,169,700,000 



2 3,049, 794, 097. 61 



3,037,500,000 



3, 624, 097. 61 
8, 670, 000. 00 



12, 294, 097. 61 



PAYMENTS RECEIVED 





Total pajTnents 
received as of 
June 30, 1935 


Payments of 
principal 


Payraents of 
interest 




51, 456, 406. 25 
87, 210, 000. 00 


50,600,000.00 
81, 600, 000. 00 


856, 406. 25 




6, 610, 000. 00 








138, 666, 406. 25 


132,200,000.00 


6, 466, 406. 25 








$33,587,809.69 


$31, 539, 595. 84 


$2, 048, 213. 85 







AMOUNTS NOT PAID ACCORDING TO CONTRACT TERMS, JUNE 30, 1935 

[In reichsmarlis] 



Date due 



Sept. 30, 1933- 
Mar 31, 1934.. 
Sept. 30, 1934. 
Mar 31, 1935.. 

Total... 



Funding agreement 



Principal 



122, 400, 000 
20, 400, 000 
82, 900, 000 



225, 700, 000 



Interest 



2, 498, 562. 50 



3, 855, 687. 50 
4, 534, 250. 00 



10, 888, 500. 00 



Moratorium 
agreement 



1, 529, 049. 45 
1, 529, 049. 45 
1, 529, 049. 45 
1, 529, 049. 45 



6,116,197.80 



Total 



a 4, 027, 611. 95 
123, 929, 049. 45 
25, 784, 736. 95 
88, 963, 299. 45 



242, 704, 697. 80 



1 Includes interest accrued under unpaid moratorium agreement annuities. 

2 Includes 4,027,611.95 reichsmarks deposited by German Government in the Konversionskasse fur 
Deutsche Auslandsschulden and not paid to the United States in dollars as required by the debt and mora- 
torium agreements. 

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 



REPORT OF THE SECRETARY OF THE TREASURY 61 

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 could file appUcations for awards 
from the Mixed Claims Commission, United States and Germany, 
and the Tripartite Claims Commission, United States, Austria, and 
Hungary, has been extended from time to time. The time within 
which such applications may be filed will expire on March 10, 1936. 

The restrictions imposed by Public Resolution No. 53 of June 27, 
1934, as to payments, transfers, and deliveries of property under the 
Trading with the Enemy Act, as amended, and the Settlement of 
War Claims Act of 1928, as amended, were removed in certain cases, 
pursuant to Executive Order No. 6981, dated March 2, 1935. A copy 
of this order will be found as exhibit 53, page 288 of this report. A 
copy of Public Resolution No. 53 will be found as exhibit 39 on page 
253 of the annual report for 1934. 

Mixed Claims Commission: Claims against Germany. — The Treas- 
ury made payments up to September 30, 1935, in the aggregate 
amount of $135,379,216.93 on account of awards of the Mixed 
Claims Commission, from which there has been deducted $676,896.68, 
representing one-half of 1 percent authorized by the Settlement of 
War Claims Act, making net payments to claimants of $134,702,320.25. 
Of the deductions so made, $650,025.64 has been covered into the 
Treasury as miscellaneous receipts or reserved for such purpose in 
accordance with the Settlement of War Claims Act of 1928, as reim- 
bursement to the United States for expenses incurred, and $26,871.04 
has been paid to the German Government or reserved for payment 
to that Government in accordance 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 the awards certified to the Treasury 
by the Secretary of State, by classes, number and amount of the 
awards, the amount paid on account, and the balance due thereon as 
of September 30, 1935: 



62 



REPOET OF THE SECRETARY OF THE TREASURY 



'S' 






- e 



« 



<a 






Sj>q 







i-H 1 


^^ 




,_t 


(M 1 


CO ic 


00 










s 




■^ 1 


^ 




"^ 


M 1 


CO »0 














S i 


^' 




■^ 


irf I 


03 '^' 


-9^ 










o 


1 
1 


05 




OS 


(M 1 




CO 










> 


t^ 1 


t-- 




t-- 


CO 1 


I-H -*r 


■0 










o 


^ 1 


^ 




mT 


Os" 1 


TtT tC 


^ 










(N 1 


CO 




CO 






CO 








i 


'&a 










oT ' 


i-T CO 


OS 










•S ® 




^ 1 


■<>• 




Tp 




«o M 


00 










"a 




** 1 






















1 


























aol 


•* 1 


I 




i 






I 










5 


3 b « 




i 










i 














t*00 


»o 


vn 





IM rf 


CO 05 


CJ 




^ 




ss 




« 


rICi 


•»»• 


m 




t>- 


CO t^ 






t^ ^H 






>o 


t^-^ 


,^ 


^ 


J^ 


05 »0 


CS f-H 


•^ 




• Q 




^ 




Oo 




o> 


IM 


oi 


§s 


{i § 


s 




s?s 




h4 


|3 


hS 


cf 


ro* 


o" 


rtc^r 


■*" s? 


•»<- 




10 oT 


££ £ 


«- 


t— ) 


10 


eo 




COIM 


en « 






CO 00 




10 




05—1 


00 


r- 




s 


Ci CO 


00 c^ 






00 r^ 




CO 


1 


^^ 


<o 


CO 




CO* 


N- 


en m" 


M 




t 




co- 


< 


CD 







en 


■«< 


CO IM 


CD 









5 


























a °12 


ra"* 


; 




i 






I 




i i 








a !r « 


























^■S|, 








1 






I 




! ! 










ttSN 


00 





00 


05 *0 


N CD 


00 




5S 


<N Op 


?5 




.«'0 


t^ 05 


CO 


10 






OS 


^ 








IOCS 


OJ 


ei 


t>; 


CSOJ 


06 c4 


T^ 




10 CO 


00 ■^* Tj« 


C3 










•^ 


"3 


00 


OS 




S38 


»-. 00 CO 


»o 






f^ 00 


en 





en 




CO ■<>• 


t^ 




oco 10 


CO 


. . 


<N-t>r 


0? 


00 


^ 


f-^ r^ 


^ Os- 


co- 




?f§" 


i-To ■^ 


^ 




O-^J- 


s 


•^ 





tOl^ 


IM CO 


os 




'rp r^ »o 


s 




^o 


,-1 .* 




10 


00 en 


CO CO 


CO 




0-fl< 


00 OS CO 


cS 


-<2 


10 cJ 


t-^ 




tC 


CD- 


!P -^ 


CO 




10 cf 


CO- ^- 


s' 




«/^ 












N 


IM 












0& 






















u 




























03 
















10 00 








NO 
















1-1 Ti< 








00 -H 
















OOrt 

eo-cvf 








>> 


100 


■0 






^ OJ 


00 ■* 


IM 




mo 


—1 IM ■* 


IM 




0"ST3 3 


t^o 


I^ 




t^ 


CO <N 


10 r^ 


CO 




t-o 


COIM t> 


=^ 




«°1« 


i^iri 


m' 




M 


-co' 


-^ 


im' 




t-:>o 










CO 




CO 


r~ 


TJ. 






CO c^ 


t^ 






05 to 










000 
cs*>o 


00 00 

•^ 00 


CO 




■* CD 

cs'co 


00 OS 00 

cJio 00 


co- 


►^ 


> u OT H 

^ « s 


00 10 


•^ 




■^ 




OS 00 






00 »o 


CO ^ 00 


00 


1 


T).iO 










r~ « 


00 ,-• 


10 




CO 


t^r^ S< 



•0 




a> 


€^ 






















5 


0, 
























a °'2 

3 is 0! 


o«o 


i" 




; 










o«o 








OJi-H 
















IM -H 








"HI l-H 


' 






















^•Sl 




; 




1 














_i 




^ 


OS 


§ 


»o 


5 


■^ 00 


CD ** 







CD 


CO M e^ 


CO 




a 


OOJ 


00 


t^ 00 









•*00 


coo CO 


OS 




§ 


to CO 


06 


CO 


,_j 


00 


,-H .-H 


IM 




r^^' 


^ CD 


CD 




■^ CO 


8 




00 


r-< rr 


■^ 00 


CJ 




t^ OS 


(M CD CD 






a 




c^ 


t^ 


IM 


t^ 


00 




00 t- 


00 CO CO 


M 




03 


10 in 


._7 


IC 


CO 


10 of 


00- U2 


CO 




CO ^ 


CO CO CO 


<^ 






00 en 


00 


00 





>oo 


lO OS 






000s 


t~0O ^ 


t~ 




03 


to to 








t^-* 


CO -OI 


00 




eoi^ 


100 10 


eo 

































coco 










OS rH 


,-t r^ 


00 




c5 ^ 




»o 




H 


10 


CO 




CO 


CO 


CO ■<}. 


r^ 








eo 














CI 


cq 














«* 
















^ 








fa °'H 


^0 
















10 CO 








>OOJ 
















CO CO 








in (M 
















Tl<-|N- 


































<s 






1 

3 I 
U 1 
^ 1 

S i 

a ; 

1 

£ ; 

3 1 

.2 ' 


p 
1 


S3 00 

52 <M 

2 OS 

0"^ 


an. 1, 1928... 

e of payment or, if 
5, at 5 percent per 
n the Settlement 
8.. 




OS 



CO 

ft 
ra 

s 

ft 

3 


1 \B 

1 l-o 

1 1« 

; :1 

1 1 ft 

OS OS 


0, 1922. 

1,1928 

annum from Jan. 1, 
nt as directed by the 
ims Act of 1928 


CO 

en 
eo 
1- 




'•S 


rt M 




•< i 


2P" 


-< CO 


'"' ■« g ■" OS 


» 


^."00- 


bid ftBo 

3 <D.u >> t. 


CO 




I 






£> 1 


en 


3 » 


OxjS-o;^ 


P 

03 


P 
3 


^s§^ 


2 






8 ?° ° 






P 


:22 

+3 4_S 

P P 


payable 
jreon to 
ept. 30, 
s specifi 
tns Act c 


a 

'3 

3 





ce 
p 


"2 


l°°p 

5 P P 0! 
" •» ® (-S 


ment of A 
ment of D 
t 5 percen 
date of pa 
ent of Wa) 


a 

03 






go a a 





3*0 





aa 


-—.SM 0J.= 
C3^ ca 


■o 


a a 


a 










p 

a '^ 

<A P 






£..^sa5 

£ ftp S3 
S p o> 


3 


ca 

a 


^ W) bj} to 


^ g s =3 a 


"3 








ffl 


»- bJD bX) 







)2 be OjD M .-3 













|<<i 


^ 


p 


S-^-^fe 


> COS 1^ 


E- 






'^'"n 




^^ 


^.^ 


o3 


■S 3 03 1> 






£ s 


03 tfScB 








§£ 




P 




p 




a 


P 








a 


























<i 














PM 












— ■ 














N 









EEPOET OF THE SECRETARY OF THE TREASURY 



63 









S 1 


1 ; s 


00 








oi 1 


1 1 ^ 


Tti 












CO 










1 1 .* 


lO 






I 


























S! I 




CO 








1 1 r~ 


CI 








y 1 


! 1 CO 


^ 






i 


<0 1 


1 1 CM 


00 




1 
1 


■* I Si I 






M a> 


t^ 


S52 


I 1 o> 


^ 




-HCO 


00 


1 1 t^ 


t^ 




oo 


t-: 


00 o> 


1 1 «-i 


s 






■^ 


ooo 


I i ^ 


c^ 




CO 03 


OS 


CM CM 


CD 




■»«■ 


«5 


lO-*- 


1 1 o" 


cjT 








rt CM 


1 1 CM 


•o 




E 




OCM 


1 1 CM 


■* 


















CO 


to 


1 1 CM 


00* 






o 




1 1 CM 


•o 


















■ 


«'° 




























i 




NOO 


S5 


ss 


h- IO 00 


IO 




CO to 


■^ CO CO 


CM 




irf o 


oc 


t-: t>: 


CO-^ 00 


r^ 




•^ to 




■^ rH 


00 r-* "-I 


^ 




0-. 


•— I 


tOOJ 


-1 t^ 05 


■* 




•>f oT 


i-r 


lOi-T 


o- ^- 


CO 






o 


CM 




IO 






s 














^*< i-H 










I 


-HCM 








Ol^ 


to 










(N05 












Ol^ 


■*■ 










too 


IM 










o t^ 


e<i 










rt CO- 


od" 








— 


IN 


o" 


— j-i— 


-f-i — !- 




— 


•*■* 


•o 


CM rt 


r»io CM 


r^ 




So 


P) 


t^ 05 


M< CO t^ 






IO ^ 


o 


■oas 


CO ■^* M* 


IO 




C>) t^ 


C>J 


iO t>. 


00 t^ ^ 


o 




ooo 


CO 




Sf, Tl. 


to 
















oto 


CM 


oto 


O CM 


-^ 




ICC^ 


o 


oc CM 


— IO 


t^ 






t^ 




Ol 


•o< 




<« 


Tjj' 


t^ 


lo' 


CO 






CO 


c» 


■* 


-1< 




















CO t^ 












— ICM 












05 






•g 




2 i 


1 1.9 


i iao i 


J 






a 1 


1 ,rs 

55 


: iiS i 


a> 


1 

n 

"a 

3 
■a 

■V 


005 


a I 

.§ i 

"3 1 
o ; 


• '"a 

: '.'3 

4) 

! 1 n 
: is 


1922 

1928... 

nt per annum 
lOunt payable 
1935 


o 

CO 

a 
m 
"o 


r-iCO 


i i 


K'*- 


2-ilo 


o 


a 
§ 

p. 






nt: 
rds: 
f Aug. 
f Dec. 
1, 192 


t of Aug. 

t Of Dec. 

3st at 5 pi 
on total 
to Sept. 


C3 

a 


o'o 


l°" 


ICOU 

iwai 
nt 
nt 
an. 


3 




"So 


>> 


P C t.. 00 rvt 


'V 




a> o 


c3iJ 


CO ~ 4) aji-5 


Ol Oi ocs?8 




"s 


:^aa 


OICC 


oB a o 


a ca -^ en £2 


s 


men 
gree 
gree 


uec 
ipal 
gree 
gree 

'St t: 

rds: 
gree 
gree 
ed 1: 


C13 

"3 


i 


03 




^S^^fe 


g<5<!5 Sea 
P o =e ta 


m 


P. 




a^ '-I 


03 ol-5>-> 




i3 






< 






















"3 












m 












co" 







'^S ^.! 



3 . 


■0.3 


o-" 




Bri 


e3 c3 






"3"^ 


s-S 


S a> 


"S a 




11 


n§ 


£3 


3 § 


0)03 


ss ea 
OS 


55 


-o o 


V.^ 






•3.M 


>-r 


ffg 


^S 


•-a 


•^ a 


(5 00 


= 8 


if 


^.9 


-oii^' 


SS 


|g 


O 03 


*ffl 




Oo 


".a 



55 

o o 

o 



."3'^ 

T3 O S 

►-— '-' 

§2-2 

h-l^ o 



"oCM -O fr^ * 



.2 00- 

VCM ^ 

Oi a; 
oc ^ OJ 

2<1« 






*^ e^ en ' 

a 9-s o,i 

rt s S-i 



S<i 



63 •» 



fi" 5 
P--.S t^ 

M C3 O ° 
03 w 

S 0.2S 

— 20 
o a o 



3 d 

to a> 

0) B 

^ o 

"^ a> 

<D > 

43 O 

*^ a) 



o g 
o a 

§ o 



Sra . 



o >> t 

tn.^ • 

S 0^ 
Sow 
^ ^- "J^ 

a^ £ 



!q SS 



S O Oco 

o 3 3 . 

a o o g 

? a Bq 

> 03 o: 






16816— 3€ 



64 



REPORT OF THE SECRETARY OP 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 
limitations, to hear the claims of 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. — The Treasury 
has completed payment of 50 percent of the amount of all awards 
made by the War Claims Arbiter in favor of German nationals as 
required by paragraph 7 of section 4 (c) of the Settlement of War 
Claims Act of 1928. Fifty percent of the award in favor of the estate 
of a German national was paid during the fiscal year folIo\ving removal 
by the President of the restrictions of Public Resolution No. 53, 
approved June 27, 1934, upon recommendation by the Secretary of 
the Treasury. 

The following summary shows the number and amount of awards in 
favor of German nationals certified to the Treasury for payment and 
the payments made on account: 

Awards of the War Claivis Arbiter on account of claims of German nationals for 
ships, patents, and radio station, amount paid, and balance due on each as of 
September 30, 1935 





Total amount 
(315 awards) 


Ships, amount 
(27 awards) 


Patents and 

radio station, 

amount (288 

awards) 


1. Amount due on account: 

Principal of awards includiuR interest to Jan. 1, 
1929 


$86, 738, 320. 83 
19, 321, 149. 97 


1 $74, 252, 933. 00 
16, 390, 173. 26 


$12,485,387.83 
2, 930, 976. 71 


Interest at 5 percent, per annum from Jan. 1, 1929, 
on total amount payable as of Jan. 1, 1929, or on 
the principal amount remaining unpaid to 
Sept. 30, 1935.. 




Total due claimants 


106,059,470.80 


90, 643, 106. 26 


15, 416, 364. 54 




2. Payments made on account to Sept. 30, 1935: 

Princinal of awards. . ... 


43, 3G8, 899. 24 


37, 126, 205. 21 


6, 242, 694. 03 


Interest at 5 percent per annum from Jan. 1, 1929, 
on total amount payable as of Jan. 1, 1929, or on 
the principal amount remaining unpaid to 
Sept. 30, 1935 










Total payments to Sept. 30, 1935... 


43,368,899.24 


37, 126, 205. 21 


6, 242, 694. 03 


3. Balance due on account: 

Principal of awards 


43, 369, 421. 59 
19,321,149.97 


37,126,727.79 
IG, 390, 173. 26 


6, 242, 693. 80 
2,930,976.71 


Interest accrued at 6 percent per annum from 
Jan. 1, 1929, on total amount payable as of Jan. 
1, 1929, or on the principal amount remaining 
unpaid to Sept. 30, 1935 




Balance due claimants... .. 


62, 690, 571. 56 


53, 516, 901. 05 


9, 173, 670. 51 







1 Includes awards amounting to $522.58 to members of former ruling family of Germany (Sec. 3 (j). 
Settlement of War Claims Act of 1928, as amended). 

War Claims Arbiter: Claims of Hungarian nationals. — The awards 
made by the Arbiter to Hungarian nationals in the sum of $39,125, 
with interest at the rate of 5 percent per annum from July 2, 1921, 
to December 31, 1928, amounting to $14,675, have been paid with the 
exception of two awards amounting to $1,512.58, together with 
interest thereon at the rate of 5 percent per annum from December 
31, 1928. 

German special deposit account. — The following statement shows 
the total amounts deposited in the German special deposit account, 



KEPORT OF THE SECRETARY OP THE TREASURY 65 

the amounts paid therefrom up to September 30, 1935, and the 
balance held in the account: 

Funds deposited in the German special deposit account and payments made therefrom 

up to September 30, 1935 

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 



53, 396, 763. 57 



From Germany: 

2H 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 

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, 85 1 , 945. 03 

Earnings and profits on investments made by Secretary 

of the Treasury _ 4,481,431.95 

Total receipts $184,032,237. 

PAYMENTS ON ACCOUNT 

Awards of the Mixed Claims Commission: 

Under agreement of Aug. 10, 1922 $129,354,936.29 

Under agreement of Dec. 31, 1928... 5,347,383.96 

$134, 702, 320. 25 

Awards of War Claims Arbiter: 



For ships 37, 126. 205. 21 

For patents and radio station 6, 242,694. 03 



43, 368, 899. 24 



J^ of 1 percent deducted from mixed claims payments covered into 

Treasury 650,025.54 

}4 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 ($2,720.95 withheld but not paid) 24, 150. 09 

Advances to special fund, expenses of administration of the Settlement of 
War Claims Act of 1928 (office of the Secretary of the Treasury) 39, 175. 00 

Expenses of administration, War Claims Arbiter account of German 
nationals 113,624.20 



Total payments on account 178,898,194.32 



Balance (including investments)... 5, 134, 043. 14 

Made up as follows: Principal cost 

.$4,447,000 face amount 3 percent Treasury bonds of 1951-55 $4, 425, 098. 51 

$110,000 face amount 3J.4 percent Treasury notes, series A, due 

Sept. 15, 1937.. 110, 103. 13 

Cash balance 598,841. 50 



5, 134, 043. 14 

Tripartite Claims Commission: Claims against Austria. — The total 
amount of awards, including interest, certified by the Tripartite 
Claims Commission to the Treasury for payment was $370,032.14. 
All of these awards against Austria have been paid, except one in the 
amount of $135.06. Sufficient funds have been retained in the Aus- 
trian special deposit account to pay this award. No payments were 
made on these awards during the fiscal year 1935. 

Tripartite Claims Commission: Claims against Hungary. — The 
awards entered by the Tripartite Claims Commission against Hungary, 
in favor of American nationals, amounted to $199,975.57. During the 
fiscal year 1935 the Treasury made payments to American nationals 
on account of such awards amounting to $14,570.12. As of June 30, 
1935, awards aggregating $9,194.88 had not been paid because claim- 
ants had not filed applications as required by law. 



66 



EEPOKT OF THE SECRETARY OF THE TREASURY 



Railroad obligations 

Total receipts during the fiscal year on account of railroad securitiea 
owned by the United States, which were acquired under the Federal 
Control Act, as amended, and the Transportation Act, 1920, as 
amended, amounted to $6,871,047.15, classified as follows: 





Principal 


Interest 


Total 


Collections by Treasury Department: 

Sec. 210 


$6,485,284.98 


$334,387.81 
12, 750. 00 
2, 016. 00 


$6, 819, 672. 7» 


Sec. 207 - 


12, 750. 00 


Equipment trust notes 


33, 600. 00 


36, 616. OQ 






Total 


6, 518, 884. 98 


349, 153. 81 
3,008.36 


6, 868, 038. 7» 




3, 008. 36 










6, 518, 884. 98 


352, 162. 17 


6, 871, 047. 15 







The following statement shows the total amount of railroad obliga- 
tions, by classes, originally held by the United States Government 
(exclusive of certain miscellaneous obligations held by the Director 
General of Railroads), the amount held on June 30, 1935, and 
payments received on account: 





Principal 

amount 

originally 

held 


Principal 

amount held 

on June 30, 

1935 


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 




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

277, 493, 337. 36 
264, 828, 010. 64 


$45, 338, 918. 25 


Sec. 7 .. 




23, 100, 562. 27 


Sec. 12 




4, 248, 171. 96 


Transportation Act: 

Sec. 207- .- 


$5, 219, 500. 00 
25, 972, 656. 36 


54, 347, 589. 70 


Sec. 210 --- 


90, 286, 652. 70 






Total 


1, 080, 575, 462. 64 


31, 192, 156. 36 


1, 049, 383, 306. 28 


217,321,894. as 







During the fiscal year 1935, $33,600 was received from the Minne- 
apolis & St. Louis Railroad Co. on account of equipment trust notes. 
This payment represents the concluding payment on equipment trust 
notes given to the Director General of Railroads by various carriers 
on account of equipment acquired by him and allocated to them after 
termination of Federal control. The total interest, aggregating 
$45,338,918.25, includes an adjustment of $44,546.87 in the amount 
shown in the 1934 annual report. 

Section 204- — There have been no transactions under section 204 
since June 30, 1 93 1 . 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 Transporta- 
tion Act, 1920, as amended, receipts on account of principal, and 
obligations outstanding June 30, 1933, appears as table 38 on page 370 
of the Annual Report of the Secretary of the Treasury for 1933. 
There has been no change in the status of such obligations since that 
date. 



iEEPOKT or THE SECKETARY OF THE TEEASUEY 



67 



Sections 209 and 212. — There have been no transactions under these 
sections since June 30, 1934. Total payments to carriers have 
amounted to $532,006,103.30. 

Section 210. — This section estabhshed 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 author- 
izing 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 expenditures by the Director General during the fiscal year under 
this section, after deducting repayments, amounted to $5,649.29, 
making net expenditures by him on this account of $33,636,686.95 to 
June 30, 1935. 

Total loans (including renewal loans and repayments thereof 
aggregating $59,800,000) to June 30, 1935, amounted to $350,600,667, 
repayments amounted to $324,628,010.64, and loans outstanding as 
of that date amounted to $25,972,656.36. Repayments during the 
fiscal year 1935 were made by the following carriers: 

Chicago & Western Indiana R. R. Co. $5,950,000.00 

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

National Railway Service Corporation, account of the — 

Minneapolis & St. Louis Railroad Co 50,970.01 

Wheeling & Lake Erie Ry. Co... 436,314.97 

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

Total- 6,485,284.98 

The following statement shows the amount of obligations held on 
June 30, 1935, on account of loans to carriers under section 210 of 
the Transportation Act, 1920, as amended, and the amount of 
principal and interest in default as of that date: 



Obligations held on June 30, 1935, on account of loans to carriers under section 210 
of the Transportation Act, 1920, as amended, and the amount of principal and 
interest in default as of that date 



Name of carrier 



Loans out- 
standing 



Principal in 
default 



Interest in 
default 



Alabama, Tennessee & Northern R. R. Corporation 

Aransas Harbor Terminal Ry 

Charles City Western Ry. Co 

Des Moines & Central Iowa R. R. Co. (formerly the Inter 

urban Ry. Co.) 

Fernwood, Columbia & Gulf R. R. Co 

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 

National Railway Service Corporation account: 

Minneapolis & St. Louis R. R. Co 

Wheeling & Lake Erie Ry. Co 

Salt Lake & Utah R. R. Co 

Seaboard Air Line Ry. Co 

Seaboard-Bay Line Co 

Shearwood Ry. Co 

Toledo, St. Louis & Western R. R. 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 

Total 



$151, 500. 00 
44. 304. 67 
140.000.00 

633, 500. 00 

10, 000. 00 

200, 000. 00 

75, 000. 00 

792, 000. 00 

1, 382, 000. 00 

3, 500, 000. 00 

56, 730. 79 

483, 883. 06 

872, 600. 00 

14, 443, 887. 84 

1, 256, 000. 00 

7, 500. 00 

48, 000. 00 

100, 000. 00 

38, 000. 00 

1, 260, 000. 00 

381, 750. 00 

90, 000. 00 



$114, 300. 00 
44, 304. 67 



633, 500. 00 



200, 000. 00 
75, 000. 00 



1, 382, 000. 00 



157, 000. 00 

i,"o99,"66o."oo" 



106, 000. 00 

38, 000. 00 

1, 000, 000. 00 

381, 750. 00 
90, 000. 00 



25, 972, 656. 36 



5, 320, 854. 67 



$13, 635. 00 
6, 724. 45 



295, 690. 07 



65, 164. 91 

53. 852. 53 

261, 360. 00 

957, 689. 73 

2, 243, 237. 04 



549, 682. 80 

4, 035. 468. 24 

263, 760. 00 



57, 237. 08 
20, 907. 84 
1,001,853.31 
263, 407. 50 
27, 000. 00 



10,116,670.50 



68 REPORT OP THE SECRETARY OP THE TREASURY 

Trust junds 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 1935 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 $213,600,000, of 
which $50,000,000 represented funds appropriated by Congress under 
the provisions of the act approved March 28, 1934; $158,300,000 
represented the principal proceeds of maturing notes reinvested; and 
$5,300,000 was derived from interest on investments. During the 
year $175,900,000 face amount of securities (including $158,300,000 
of maturing notes and notes amounting to $17,600,000 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 
1935 amounted to approximately $57,000,000, of which about 
$31,400,000 represented the net increase in direct loans to veterans. 

A statement of the fund as of June 30, 1935, 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 certi- 
ficates redeemed amounting to $52,000,545.20 and direct loans to 
veterans amounting to $1,132,533,489.19) is as follows: 

Adjusted service certificate fund, June SO, 1935 

FUND ACCOUNT 

Appropriations: 

To June 30, 1934 $1,246,000,000.00 

AvaUable July 1, 1934 50,000,000.00 

$1, 296, 000, 000. 00 

Interest on investments: 

To June 30, 1934 107,992,297.39 

July 1, 1934, to June 30, 1935 5,711,035.65 

113, 703, 333. 04 

Total.- 1,409,703,333.04 

Checks paid by Treasurer of the United States, less credits on account of repayments of 
loans and interest thereon 1,253,198,301.15 

Balance in fund June 30, 1935 156,505, 031.89 

FUND ASSETS ' 

Investments, 4 percent Treasury certificates of indebtedness 155,500,000.00 

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.- 923, 280. 88 

To credit of fund on books of the Division of Bookkeeping and Warrants- -. 81, 751. 01 

Total fund assets June 30, 1935 - --- 156,505,031.89 

Civil service retirement and disability fund.— The civil service retire- 
ment and disability fund was created by the act of May 22, 1920. 
During 1935 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 out- 
lined in the Annual Report of the Secretary of the Treasury for the 

' Exclusive of assets held by Veterans' Administration. 



EEPORT OP THE SECRETARY OF THE TREASURY 69 

fiscal year 1926. Total investments amounting to $41,400,000 were 
made, of which $12,700,000 represented the proceeds of maturing 
notes. Redemptions, in addition to the maturing notes, were made 
in the amount of $19,700,000 to meet current payments from the fund. 

Total credits to the fund during the fiscal year amounted to $61,- 
912,095.68, of which $30,089,204.72 was on account of deductions 
from basic compensation of employees and service-credit payments, 
$10,822,890.96 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, 1935, amounted to $70,571,880.03. 

The following statement shows the status of the fund as of June 
30, 1935: 

Civil service retirement and disability fund, June 30, 1935 
Credits: 

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

From Aug. 1, 1920, to June 30, 1934 '$319,463,891.26 

July 1, 1934, to June 30, 1935 30, 089, 204. 72 

$349, 553, 095. 98 

Appropriations: 

To June 30, 1934 124,450,000.00 

Available July 1, 1934. 2 21, 000, 000. 00 

145, 450, 000. 00 

Interest and profits on investments: 

From Aug. 1, 1920, to June 30, 1934 59, 748, 989. 07 

July 1, 1934, to June 30, 1935 10, 822, 890. 96 

70, 571, 880. 03 

Total 565,574,976.01 

Less checks paid by Treasurer of the United States on account of 
annuities and refunds, Aug. 1, 1920, to June 30, 1935 293,478,685.81 

Total 272,096,290.20 

Assets: 

Face amount Principal cost 

$4, 378, 700 Fourth Liberty Loan iH percent bonds $4, 321, 668. 79 

6, 884, 000 3M percent Treasury bonds 1943-45. 6, 794, 338. 03 

4, 621, 650 3H percent Treasury bonds 1944-46.. 4, 561, 4.54. 45 

6, 810, 700 2^8 percent Treasury bonds 1955-60.... 6, 721, 992. 74 

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 

45, 200, 000 4 percent special Treasury notes payable June 30, 1939... 45, 200, 000. 00 
22, 200, 000 4 percent special Treasury notes payable June 30, 1940— 22, 200, 000. 00 

270, 395, 050 270, 099, 454. 01 

Unexpended balances June 30, 1935: 

To credit of disbursing officers 1, 651, 815. 27 

On books of Division of Bookkeeping and Warrants 345, 020. 92 

1, 996, 836. 19 

Total fund assets June 30, 1935... 272,096.290.20 

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 Secre- 
tary 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. 



• 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. 



70 REPORT OF THE SECRETARY OF THE TREASURY 

Investments for account of the foreign service retirement and dis- 
ability fund were made during the fiscal year 1935 in special issues of 
Treasury notes in the face amount of $765,000, bearing interest at the 
rate of 4 percent per annum in accordance with the procedure out- 
lined in the Annual Report of the Secretary of the Treasury for the 
fiscal year 1927. Redemptions during the year amounted to $509,000 
face amount, including $325,000 maturing notes and $184,000 of 
notes redeemed to meet current payments from the fund. The net 
investments amounted to $256,000. 

Credits to the fund during the year aggregated $445,321.29, of 
which $179,138 was on account of deductions from basic compensa- 
tion of employees and service-credit payments, $107,083.29 repre- 
sented earnings on investments, and $159,100 was appropriated by 
Congress to 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, 1935: 

Foreign service retirement and disability fund, June 30, 1935 
Credits: 

On account of deductions from basic compensation and service-credit pay- 
ments: 

From May 24, 1924, to June 30, 1934. - $1, 618, 535. 62 

July 1, 1934, to June 30, 1935 - 179, 138. 00 

$1, 797, 673. 62 

Appropriations: 

To June 30, 1934 1,568,700.00 

Available July 1, 1934 159,100.00 

1,727,800.00 

Interest and profits on investments: 

From May 24, 1924, to June 30, 1934 401.089.17 

July 1, 1934, to June 30, 1935 107,083.29 

508, 172. 46 

Total-. 4,033,646.08 

Less checlcs paid by Treasurer of the United States on account of annuities and refunds. 
May 24, 1924, to June 30, 1935 1, 312, 038. 05 

Balance in fund June 30, 1935 2,721,608.03 

Assets: 

FCLCB QTflOILTlt PTXTlci'Ddl COSt 

$440,000 4 percent speci al Treasury notes due June 30, 1936 $440, 000. 00 

6.54,000 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 

657,000 4 percent special Treasury notes due June 30, 1939 657,000.00 

428,000 4 percent special Treasury notes due June 30, 1940 428, 000. 00 

2,693,000.00 

2,693,000 

Unexpended balances June 30, 1935: 

Treasurer of the United States, disbursing account 27,404.12 

On books of Division of Bookkeeping and Warrants 1,203.91 

28, 608. 03 

Total fund assets June 30, 1935 2,721,608.03 

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. 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 $111,000 
were made during the fiscal year 1935 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 



REPORT OF THE SECRETARY OF THE TREASURY 



71 



Secretary of the Treasury for the fiscal year 1931. Redemptions to 
meet current expenditures from the fund during the year amounted to 
$64,000 face amount, making net investments of $47,000 for the year. 
Credits to the fund during the year aggregated $550,229.82, of which 
$459,198.59 was on account of deductions from basic compensation of 
employees and service-credit payments and $91,031.23 represented 
earnings on investments. 

The following statement shows the status of the fund as of June 
30, 1935: 

Canal Zone retirement and disability fund, June 30, 1935 
Credits: 

Account of deductions from basic compensation of employees subject to 

From July l', 1931, to June 30, 1934 $3, 189, 949. 81 

July 1, 1934, to June 30, 1935 459, 198. 69 

$3,649,148.40 

Interest and profits on investments: 

From July 1, 1931, to June 30, 1934 240,265.78 

July 1, 1934, to June 30, 1935 91,031.23 

331,297.01 

Total.... - - 3,980,445.41 

Less checks paid by Treasurer of the United States, on account of annuities and refunds, 

July 1, 1931, to June 30, 1935 - 1, 587,332. 4& 

Balance in fund June 30, 1935 2,393,112.92 

Assets: 

Face amount Principal cost 

$1, 878, 000 4 percent special Treasury notes maturing June 30, 1936 $1, 878, 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 

109, 000 4 percent special Treasury notes maturing June 30, 1939 109, 000. 00 

90, 000 4 percent special Treasury notes maturing June 30, 1940 90, 000. 00 

f i- .r 2,349,000.00 

2, 349, 000 
Unexpended balances June 30, 1935: 

Treasurer of the United States, disbursing account 26, 750. 45 

On books of Division of Bookkeeping and Warrants 18, 362. 47 

44, 112. 92 

Total fund assets June 30, 1935 2,393,112.92 

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 Com- 
missioners of the District of Columbia, except that the funds are to 
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 Treasurer of the United 
States separate from the investments on account of contributions of 
teachers. During the fiscal year 1935, the Treasurer acquired by pur- 
chase or exchange for account of the deductions fund (derived from 
deductions from teachers' compensation) $1,294,250 face amount of 
United States, Federal farm loan, and Home Owners' Loan Corpora- 
tion bonds at a principal cost of $1,382,166.14, as follows: 



Class of security 


Face amount 


Principal cost 


2% percent Treasury bonds of 1955-60 


$190,850.00 
621,000.00 
385, 400. 00 
197, 000. 00 


$193, 566. 24 


4H percent Treasury bonds of 1947-52 


589, 180. 63 


4 percent consolidated Federal farm loan bonds of 1944—46 


403, 077. 40 


4 percent Home Owners' Loan Corporation bonds of 1933-51 


196, 341. 87 






Total 


1, 294, 250. 00 


1, 382, 166. 14 







72 



EEPOET OF THE SECRETARY OF THE TREASURY 



There was also purchased for account of the Government reserves 
fund $258,100 face amount of United States, consolidated Federal 
farm loan, and Home Owners' Loan Corporation bonds at a principal 
cost of $279,484.08, as follows: 



Class of security 



Face 
amount 



Principal 
cost 



2% percent Treasury bonds of 1955-60. 

4H percent Treasury bonds of 1947-52 

4 percent consolidated Federal farm loan bonds of 1944-46... 
4 percent Home Owners' Loan Corporation bonds of 1933-51 

Total 



$39, 000. 00 
147, 000. 00 
52, 100. 00 
20, 000. 00 



258, 100. 00 



$39, 645. 94 

165, 279. 38 

64, 623. 75 

19, 935. 01 



279, 484. 08 



The following statement shows the status of the combined funds 
as of June 30, 1935: 



District of Columbia teachers' retirement fund, June SO, 1935 

Credits: 

On account of deductions from basic compensation of teachers: 

From Jan. 15, 1920, to June 30, 1934 $3,694,971.36 

July 1, 1934, to June 30, 1935 296, 610. 07 

$3,991,581.43 

Appropriations: 

To June 30, 1934 3,069,940.91 

Available July 1, 1934 400,000.00 

3, 469, 940. 91 

Interest on investments: 

From Jan. 15, 1920, to June 30, 1934 1,277,416.73 

July 1, 1934, to June 30, 1935. 240, 261. 40 

1, 517, 678. 13 

Total 8,979,200.47 

Less disbursements on account of annuities, refunds, etc., Jan. 15, 1920, to June 30, 1935. 2, 710, 015. 86 

Balance in fund June 30, 1935 6,269,184.61 

Assets: 

DEDUCTIONS FUND 

PTincivo-l 

Face amount cost 

$860,200 4H percent Treasury bonds of 1947-52 $956,962.07 

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

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

48,000 SH percent Treasury bonds of 1943-47 49,500.00 

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

232,000 31.4 percent Treasury bonds of 1943-45 232,000.00 

190, 850 2^ percent Treasury bonds of 1955-60.. 193, .566. 24 

182, 000 4]'i percent Philippine Islands bonds 197, 669. 56 

16,000 4^ percent Puerto Rican bonds.. 15,962.57 

55, 320 4 percent Federal land bank bonds.. 54, 660. 95 

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

459. 400 4J^ percent Federal land bank bonds 466, 980. 25 

385, 400 4 percent consolidated Federal farm loan bonds of 1944-46. 403, 077. 40 

4, 232, 692. 74 

4, 139, 050 



GOVERNMENT RESERVES FUND 

282,000 41/4 percent Treasury bonds of 1947-52 

12,000 4 percent Treasury bonds of 1944-54 

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

199,000 3?^ percent Treasury bonds of 1943-47... 

178, 000 3?^ percent Treasury bonds of 1941-43 

39, 000 2% percent Treasury bonds of 1955-60 

55,000 m percent Puerto Rican bonds 

215,640 4 percent Federal land bank bonds 

819,600 m percent Federal land bank bonds 

52, 100 4 percent consolidated Federal farm loan bonds of 1944-46. 



313,717.51 
12, 285. 00 
31, 145. 31 
204, 701. 25 
177, 606. 56 
39, 645. 94 
55, 109. 56 
208, 050. 78 
776, 281. 48 
54, 623. 75 



1, 883, 340 



1, 873, 167. 14 

6, 105, 859. 88 

5, 291. 74 

158, 032. 99 

Total fund assets June 30, 1935 6,269,184.61 



Accrued interest paid in 1935 (on investment purchases), repayable in 1936 

Unexpended balance June 30, 1935, on books of Division of Bookkeeping and Warrants. 



REPORT OP THE SECRETARY OP THE TREASURY 73 

Longshoremen'' s and harbor workers' 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 disabihty 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. 

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, 1935: 

Longshoremen's and harbor workers' compensation fund, June 30, 1935 

Credits: 

On account of assessments: 

To June 30, 1934 - $120,000.00 

July 1, 1934, to June 30, 1935 - 22, 000. 00 

$142, 000. 00 

Interest on investments: 

To June 30, 1934 14, 059. 77 

July 1, 1934, to June 30, 1935. - 4, 323. 09 

18,382.86 

Total 160,382.86 

Less disbursements on account of current claims and expenses -.- 39, 707. 99 

Balance in fund June 30, 1935 120,674.87 

Face amount Principal cost 

$15,600 ZM percent Treasury bonds of 1944-46 $15, 600. 00 

34,500 iVi percent Treasury bonds of 1947-52 38, 646. 56 

11.550 ZM percent Treasury bonds of 1943-45 - 11, 550. 00 

10,000 3 percent Treasury bonds of 1951-55 - 9, 959. 38 

11,000 41.4 percent Federal land bank bonds 9, 680. 48 

11,000 i-Vi percent Federal land bank bonds 9. 542. 97 

11,000 4>6 percent Federal land bank bonds - 9, 171.77 

. 104,151.16 

104,650 

Unexpended balances: 

Disbursing Officer (check book balances) — 1, 623. 71 

Division of Bookkeeping and Warrants -- 14,900.00 

16,523.71 

Total fund assets June 30, 1935 - -- 120,674.87 

District of Columbia workers^ compensation fund: — This fund was 
established under the act of May 17, 1928 (45 Stat. 600), which 
extended the provisions of the act entitled "Longshoremen's and 
Harbor Workers' Compensation Act", approved March 4, 1927, 
including all amendments thereto, to apply in respect to the injury 
or death of an employee of an employer carrying on any employrnent 
in the District of Columbia, irrespective of the place where the injury 
or death occurs. The fund is derived from collections of awards 
against employers made by the United States Employees' Compensa- 
tion Commission, as compensation for death of employees resulting 

' Excludes $9,700 3J4 percent consolidated Federal farm loan bonds of 1945-55 purchased but not paid for 
until July 1, 1935. 



74 REPOET OP THE SECRETAEY OP THE TREASURY 

from injuries, in each case where no person is found to be entitled to 
such compensation, under the Longshoremen's and Harbor Workers' 
Compensation Act as extended to certain employments in the District 
of Columbia. Fines and penalties collected in connection therewith 
are also credited to the fund. One-half of each such collection is 
available as compensation for injuries increasing previous disabilities, 
the other half being available for maintenance of employees under- 
going vocational rehabilitation. Any portion of the fund which, 
in the opinion of the Commission, is not needed for current require- 
ments, is invested by the Treasurer of the United States. 

The following statement shows the status of the fund as of June 30, 
1935: 

District of Columbia workers' compensation fund, Jnne 30, 1935 

Credits: 

On account of assessments: 

To June 30, 1934 $30,460.00 

July 1, 1934, to June 30, 1935.. „ 6,000.00 

$35,460.00 

Interest on investments: 

To June 30, 1934... 1,393.07 

July 1, 1934, to June 30, 1935 1,063.03 

2,456.10 

Total... - 37,916.10 

Less disbursements on account of current claims and expenses 8, 598. 69 

Balance in fund June 30, 1935 29,317.41 

Assets: 
Face amount Principal coH 

$10, 000 2^ percent Treasury bonds of 1955-60 $10, 165. 63 

11,000 4>.i percent Federal land bank bonds of 1936-56 9,350.43 

19,516.06 

21,000 

Accrued interest paid in 1935 (on investment purchases), repayable in 1936 20.76 

Unexpended balances 

Disbursing Officer (check-book balances) 883. 52 

Division of Bookkeepine and Warrants.. 8,897. 07 

9,780. 5 » 

Total fund assets June 30, 1935 29,317.41 

Library of Congress trust fund. — Under the act of March 3, 1925, as 
amended, the 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, 1935: 



REPORT OF THE SECRETARY OF THE TREASURY 75 

Library of Congress trust fund earnings to June SO, 1935 





Income account 


Donation 


Total col- 
lected to 
June 30, 
1934 


Collected 
during fis- 
cal year 
1935 


Total col- 
lected to 
June 30, 
1935 




$821. 76 
2, 234. 71 
21, 352. 50 
740. 12 
23, 876. 86 
61. 090. 07 
16, 646. 82 
39, 129. 96 
68.90 
58, 432. 77 


$247. 20 

507. 36 

1, 352. 00 

95.27 

3, 484. 90 

6,915.95 

3, 813. 78 

4, 236. 15 

158. 04 

13, 834. 98 


$1, 068. 96 




2, 742. 07 




22, 704. 50 




835. 39 




27,361.76 




68, 006. 02 




20, 460. 60 




43,366.11 




226. 94 


Wilbur --- 


72, 267. 75 






Total 


224, 394. 47 


34, 645. 63 


259, 040. 10 







The following statement shows the principal cash account of each 
donation: 

Library of Congress trust fund — principal cash receipts, cost of investments, and 
unexpended balances, fiscal year 1935 



Donation 



Principal cash account 



Unex- 
pended 
balance 
June 30, 
1934 



Receipts 

during 

year 



Available 

during 

year 



Cost of in- 
vestments 
charged to 
principal 
account 
during 
year 



Unex- 
pended 
balance 
June 30, 
1935 



Babine 

Beethoven... 

Benjamin 

Bowker 

Carnegie 

Coolidge 

Guggenheim. 
Huntington— 
Longworth.. 
Wilbur 



$38. 16 

4.00 

26.62 

45.68 



$100. 75 



268. 38 

39.60 

33.75 

973. 05 

200. 64 



80.00 
786. 75 
745. 25 
1, 007. 50 
1, 764. 72 
539.24 



$38. 16 

104. 75 

26.62 

45.68 

80.00 

1,055.13 

784. 85 

1, 041. 25 

2, 737. 77 

739.88 



$100. 75 



906. 75 

705. 25 

1.007.50 

.', 700. 00 

201. 50 



$38. 16 
4.00 
26.62 
45.68 
80.00 

148. 38 
79.60 
33.75 
37.77 

538. 38 



Total. 



1, 629. 88 



5, 024. 21 



6, 654. 09 



5, 621. 75 



1, 032. 34 



Cash donations aggregating $1,745 were received on account of 
the Longworth Foundation. Receipts aggregating $3,279.21 were 
received from maturing investments of various donations. The fund 
exchanged $2,800 face amount of 4% percent Federal land bank 
bonds of 1934-54, which were called for redemption on July 1, 1934, 
for $2,800 face amount of 4 percent consolidated Federal land bank 
bonds due July 1, 1946, which are held for various donations. Invest- 
ments made during the year were as follows: 



76 



REPORT OP THE SECRETARY OF THE TREASURY 



Donation 



Beethoven. - 

Coolidge 

Guggenheim 
Huntington. 

Wilbur 

Longworth.. 
Do 

Total. 



Face 
amount 



$100 
900 
700 

1,000 
200 

2,200 
500 



5,600 



Securities 



4 percent consolidated Federal land bank bonds of 1946. 
do - 



-do. 
.do. 
.do. 
.do. 



2J6 percent Treasiuy bonds of 1955-60. 



Principal 
cost charged; 
to principal 

account 



$100. 75. 

906. 75 

705. 25 
1, 007. 50 

201. 50' 
2, 200. 00 

500. 00 



5, 621. 75 



The following statement shows the securities held by the Board for 
account of each donation as of June 30, 1935. 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. 

Library of Congress Trust Fund Board securities held June SO, 1935 



Name of security 



Face 
amount 
or par 

value 



Rate of 
interest 



Class of security 



Alexis V. Babine donation 



American Chain Co., Inc 

Federal land bank bonds 

United States Government 

Do 

Do 

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



Beethoven Association donation 



Canadian National Ry 

Consolidated Federal land bank bonds. 



William E. Benjamin donation 
Standard Oil Co. of California 



R. R. Bowker donation ' 



Austrian Government 

German Government 

Japanese Government 

American Telephone & Telegraph Co. 



Carnegie donation 



Commonwealth Edison Co -__ 

Missouri Pacific R. R. Co .- 

New England Telephone & Telegraph Co... 



Elizabeth Sprague Coolidge donation 



Canadian National Rys. Co 

Do 

Chicago Rys. Co 

Federal land bank bonds... 

Do 

Consolidated Federal land bank bonds 

Great Northern Ry. Co. 

Missouri Pacific R. R. Co 

New England Telephone & Telegraph Co. 

Public Service Co. of Northern Illinois 

Rio Grande Southern R. R. Co 

United States Government 

Utah Power & Light Co 

American Ship Building Co 



3,800 
500 

1, 000 
500 

(') 

(') 



10, 000 
100 



33, 800 



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



52, 000 
5,000 
25, 400 



7,000 
10, 000 

3,750 
11.640 

2,600 

900 

10, 000 

2,000 
16, 400 
13, 000 

1,000 

300 

10, 000 

6,000 



Percent 

7 

4J4 
4J4 
3M 

2K 



5 

5 

iVi 

4J-^ 

4 

7 

5 

4H 

5 

4 

3?^ 

5 



Preferred stock. 

Farm loan bonds. 

Fourth Liberty Loan bonds of 193.3-38. 

Z\4, percent Treasury bonds of 11943-45^ 

Treasury bonds of 1955-60. 

Preferred stock. 

Common stock. 



Guaranteed gold bonds. 
Consolidated farm loan bonds. 



Common stock. 



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



First mortgage bonds. 

First and refunding mortgage bonds.. 

First mortgage bonds. 



Guaranteed gold bonds. 

Do. 
First mortgage bonds. 
Farm loan bonds. 

Do. 
Consolidated farm loan bonds. 
General 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. 



I No par. 

' Life interest in six-sevenths of income retained under terms of donation. 



EEPORT OF THE SECRETARY OF THE TREASURY 77 

Library oj Congress Trust Fund Board securities held June 30, 1935 — Continued 



Name of security 


Face 
amount 
or par 

value 


Rate of 
interest 


Class of security 


Elizabeth Sprague Coolidge donation— Con. 

American Telephone & Telegraph Co 

American "Window Glass Co 

Board of Trade Building Trust of Boston 


$17, 100 
2,500 
700 
12, 400 
5,625 
800 
5,000 

700 
75, 000 

105, 000 

1,000 

49, 500 

4,100 

500 

2,200 

44, 000 

16, 300 

200 

100, 000 

3,000 

100, 800 


Percent 

... 

4 

5 

4 
4 
5 

4 
4 

5 

i^ 

4 

7 

3?^ 

4 


Common stock. 
Do. 
Do. 
Do. 


Elgin National Watch Co 


Do. 




Do. 


Public Service Co. of Northern Illinois 

Harry F. Guggenheim donation 

Consolidated Federal land bank bonds 

Harbor Commissioners of Montreal ... 


Preferred stock. 

Consolidated farm loan bonds. 
Guaranteed gold bonds. 


Archer M. Huntington donation 
Central Pacific Ry. Co 




Consolidated Federal land bank bonds 

Missouri Pacific R. R. Co. 


Consolidated farm loan bonds. 
First and refunding mortga°'e bonds 


Nicholas Longworth donation 
United States Government 


Treasury bonds of 1944-54. 


Do 


Treasurv bonds of 1955-60. 


Consolidated Federal land bank bonds.. 

James B. Wilbur donation 
Canadian National Rys . ... 


Consolidated farm loan bonds. 
Guaranteed gold bonds. 


Federal land bank bonds 


Farm loan bonds. 


Consolidated Federal land bank bonds 

Public Service Co. of Northern Illinois 

United States Government 


Consolidated farm loan bonds. 
Preferred stock. 
Treasury bonds of 1940-43. 


Do 


Treasury bonds of 1944-54. 


Total. 




783, 515 








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 Secretar}^ 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 ap- 
proved March 3, 1927, as amended by the Emergency Adjusted Com- 
pensation Act of February 27, 1931, authorized the Administrator 
of Veterans' Affairs to make loans to veterans upon their adjusted 
service certificates out of the United States Government life insur- 
ance fund. All of the funds available for investment during the 
fiscal year 1935 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, 1935, on policies and adjusted service certificates, aggregating 
$590,149,480.94. The net increase in loans on adjusted service certifi- 
cates during the year amounted to $37,255,710.36. 

Monthly reports are made by the Treasury to the Veterans' Ad- 
ministration 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 tlirough 
reports rendered to the Administrator by the safe-keeping offices. 
The investments as of June 30, 1935, were as follows: 



78 EEPORT OF THE SECEETAKY OF THE TREASURY 

Government life insurance fund, June 30, 1935 





Par value 


Principal cost 




$41,272,000.00 
14, 106. 000. 00 

2, 200, 000. 00 
300, 000. 00 

3, 300, 000. 00 
32, 550, 000. 00 
69, 200, 000. 00 


$42. 762, 867. 12 




16. 078. 333. 48 




2. 384, 625. 00 




311,906.25 




3, 344, 843. 76 




32, 477, 590. 04 




69, 742, 644. 40 






Total investments made by the Secretary of the Treasury 


162, 928, 000. 00 


166. 092, 810. 05 




124, 550, 735. 50 
465. 598. 745. 44 


124, 550, 736. 60 




465, 698. 745. 44 






Total investment made by Administrator of Veterans' Admin 


690. 149. 480. 94 


590. 149, 480. 94 








763. 077, 480. 94 


766. 242. 290. 99 







National Institute oj Health gift fund. — By the act of May 26, 1930 
(46 Stat. 379), the Secretarj^ of the Treasury is authorized to accept 
unconditional gifts for study, investigation, and research in the 
fundamental problems of the diseases of man, and for other purposes. 
It was also provided that he may accept conditional gifts, upon the 
recommendation of the Surgeon General and the National Institute 
of Health. Any such gifts are to be held in trusts and invested by 
the Secretary of the Treasury in securities of the United States. 

During the fiscal year the Secretary of the Treasury accepted an 
unconditional gift of $900 made by the Edgar O. Grossman Memorial 
Gommittee, composed of the coworkers and friends of the late Edgar 
Orrin Grossman, M, D., formerly Medical Director of the United 
States Veterans' Bureau, as a tribute to his accomplishments in the 
medical care and treatment of former members of the military and 
naval forces of the United States, Other unconditional gifts amount- 
ing to $62 were also accepted, making a total of $962 received for 
this fund. 

There were also accepted during 1935 two conditional gifts from 
the Rockefeller Foundation amounting to $20,000, of which $5,000 
is for the purpose of the publication of a history of county health 
work and $15,000 is for the purpose of aiding in any way the com- 
pletion of the statistical and epidemiological dental survey made 
by the Public Health Service in cooperation with the American 
Dental Association and State and Territorial health officers, or for 
any purpose connected with the presentation to the public of facts 
obtained by this survey. 

In order to meet expenditures of the institute for the account of 
the Ghemical Foundation donation, $1,000 face amount of 4}^ percent 
Treasury bonds of 1947-52 were sold. The receipts and expenditures 
during the year were as follows: 



EEPORT OF THE SECRETARY OF THE TREASURY 79 

National Institute of Health conditional gift fund, receipts and expenditures, 

fiscal year 1935 

Unexpended balance June 30, 1934 -. -- $1,483.60 

Receipts: 

Cash donations. Rockefeller Foundation: 

Dental survey $15,000.00 

County health work 5,000.00 

20, 000. 00 

Net earnings collected on investment account of Chemical Foundation 3,777.81 

Principal cost of security sold during year. Chemical Foundation account 1, 115.68 

Total... - 26,377.09 

Expenditures, advances to institute: 

Chemical Foundation donation $6,027. 47 

Rockefeller Foundation donation, dental survey 10, 548. 16 

18,575.63 

Unexpended balance June 30, 1935 9,801.46 

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

1935: 

National Institute of Health conditional gift fund, June 30, 1935 
Credits: 

Donations: 

Chemical Foundation.. .-. $100,000.00 

Rockefeller Foundation 20,000.00 

$120, 000. 00 

Net earnings on investments, Chemical Foundation 16, 638. 71 

Total 136,638.71 

Less advances to meet expenditures on account of the institute: 

Chemical Foundation $19,225.16 

Rockefeller Foundation, dental survey 10,548. 16 

29, 773. 32 

Balance in fund June 30, 1935 106, 865. 39 

$87,000 face amount ^M percent Treasury bonds of 1947-52, principal cost 97,063.93 

Unexpended balance to credit of the fund on the books of Division of Bookkeeping and 
Warrants 9,801.46 

Totalfund assets, June 30, 1935 106,865.39 

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, 1935, Government securities in the face 
amount of $27,710,200 for account of the Attorney General, Alien 
Property Bureau, of which $1,000,000 constituted additional purchases 
during the fiscal year 1935. 

A statement of the alien property trust fund as of September 15, 
1935, follows: 

Alien property trust fund as of Sept. 15, 1935 
Credits: 

Trusts $37,333,490.47 

Earnings on investments, etc 31, 226,453. 57 

Total -- 68,559,944.04 

Assets: Principal at 

Face amount amortized cost 

$9,800,000 4 percent Treasury bonds of 1944-54... $10,379,541.03 

3,300,000 4M percent Fourth Liberty Loan bonds.. 3,300,000.00 

5,100,000 3J.4 percent Treasury bonds of 1943-45. 5,100,000.00 

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

200,000 3M percent Treasury notes maturing Sept. 15, 1937 203,000.00 

10,200 2).i percent Treasury notes maturing June 16, 1939 10,413.56 

500,000 3 percent Treasury bonds of 1951-55... 516,193.14 

500,000 3H percent Treasury bonds of 1949-52 521,250.73 

3,220.000 2],i percent Treasury notes maturing Sept. 15, 1938 3,220,000.00 

4,730,000 2Ji percent Treasury bonds of 1955-60... 4,730,000.00 

28,334,226.59 

27, 710, 200 

Accrued interest receivable — 231,826.59 

Participating certificates issued under sec. 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 691,793.95 

Totalfund assets, Sept. 15. 1935 68,559,944.04 

16816—36 7 



80 REPORT OF THE SECRETARY OF THE TREASURY 

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

To the Attorney General, Alien Property Bureau, for— 

Distribution of income — - $200, 000 

Administrative expenses 311,500 

Total -- — 511,600 

General railroad contingent jund. — 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 sec- 
tion any carrier which received for any year a net railway operating 
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, 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 shov/ing the distribution by the Secretary of the 
Treasury of the general railroad contingent fund as of October 31, 
1933, is included in the annual report of the Secretary of the Treas- 
ury for the fiscal year 1933 as exliibit 40, page 270. Additional 
refunds were made during the fiscal year 1934, as shown on page 69 
of the annual report for that year. During the yeax ended June 30, 
1935, the Treasury made a refund of $30,000 to the Genesee & Wyo- 
ming Railroad Co. Only one item remains unpaid, $2,388.61 due the 
Central Railroad Co. of Arkansas. The existence of this corporation 
has terminated, and it is impossible to make a refund until it is 
determined who is entitled to receive payment. 

The following statement shows the status of the fund as of June 30, 
1935: 

General railroad contingent fund, June SO, 1935 
Credits: 

Excess earnings deposited in Treasury under sec. 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 Railroad 
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, 1935, under Emergency Railroad Transpor- 
tation Act of 1933 13,667,280.45 

14,472,611.93 

Balance in fund June 30, 1935 2,388.61 

Pershing Hall Memorial jund. — Under the act of Congress approved 
June 28, 1935 (Public No. 171, 74th Cong.), $482,032.92 of the fund 
entitled "Recreation Fund — Army", created by the War Depart- 
ment Appropriation Act approved March 4, 1933, was authorized 
to be appropriated for effecting, under certain conditions, a settle- 
ment of any indebtedness connected with Pershing Hall, a memorial 



EEPOET OP THE SECRETARY OP THE TREASURY 81 

already erected in Paris, France, under the auspices of the American 
Legion, Inc., to the commander in chief, officers, men, and auxiliary 
services of the American Expeditionary Forces, to the end that such 
memorial as so freed from debt may be perpetuated. It is also pro- 
vided that any balance remaining after settlement of such indebted- 
ness shall be retained by the Secretary of the Treasury as a special 
fund to be known as the "Pershing Hall Memorial Fund." The 
Secretary of the Treasury is authorized (a) to invest and reinvest any 
part or all of the corpus of this fund so remaining in interest-bearing 
United States Government bonds and retain custody thereof; and (b) 
upon request of the American Legion, Inc., the Secretary of the 
Treasury shall pay to the National Treasurer of the American Legion, 
Inc., from time to time any part of the earnings upon the fund for 
use in the maintenance and/or perpetuation of Persliing Hall. 
Although funds were authorized to be appropriated, no funds were 
appropriated during the fiscal year 1935. 

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 ad- 
vances shall not exceed $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 K percent of revenues, if any, in excess of the amount 
necessary to meet periodical payments during the period of amortiza- 
tion, 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}^ percent 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, w^ith 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 
for the construction costs of the all- American canal are not subject to 
the interest charge. To date, funds aggregating $2,421,248.41 have 
been advanced from funds amounting to $9,000,000 allocated from 
the appropriations made in the National Industrial Recovery Act, 
approved June 13, 1933, and the Emergency Appropriation Act of 
1935, approved June 19, 1934, for the construction of the ail-American 
canal. 



82 REPORT OP THE SECRETARY OP THE TREASURY 

The Boulder Canyon Project Act provides for the repayment of these 
advances, and the Secretary of the Interior has made provision for 
such repayment to begin upon the completion of the canal. 

On June 30, 1935, the hability of the Colorado Kiver Dam fund to 
the General Fund of the Treasury amounted to $86,766,956.75, rep- 
resenting advances in the sum of $80,358,083.40 and interest in the 
amount of $6,408,873.35. Upon recommendation of the Secretary of 
the Interior and in accordance with the authority contained in sec- 
tion 2 of the act of March 3, 1933, the Secretary of the Treasury de- 
ferred for 1 year the payment of the total amount of interest due on 
June 30, 1935, of $6,408,873.35. 

The status of the advances made to the fund as of June 30, 1935, 
was as follows: 

Advances to Colorado River Dam, fund, June 30, 1935 

Advances from General Fund: 

Fiscal year 19SI $1. 745, 866. 46 

Fiscal year 1932 - - 17,018,608.34 

Fiscal year 1933. 19. 709. 297^ 48 

Fiscal year 1934. 19. ,W4, 7S9. 68 

Fiscal year 1935. 22, 299, 521.44 

$80, 358, 083. 40 

Fiscal year 1931 - 25,631. .'iS 

Fiscal year 1932. 35.5.029.92 

Fiscal year 1933 1, 161. 488. 18 

Fiscal year 1934 1.933,449. .'58 

Fiscal year 1935 2.9.58,905.67 

Total... 6.434,504.93 

Less amount covered into Treasury as miscellaneous receipts... 25, 631.58 

'6,408,873.35 

Total liability to General Fund 86,766,956.75 

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 June 25, 1910 (36 Stat. 835), the 
Secretary of the Treasury advanced to the reclamation fund 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 ad- 
vanced through the transfer of $1,000,000 annually from the recla- 
mation fund to the General Fund of the Treasury beginning July 1, 
1920, and continuing 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 Feb- 
ruary 6, 1931, provided for a suspension of the annual payments for 
a period of 2 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 approved March 4, 1931, appropriated an addi- 
tional advance of $5,000,000 to the reclamation fund from the Gen- 
eral Fund, all of which was advanced between April 28, 1931, and 
November 30, 1931. 

' Payment of interest due June 30, 1935, $6,408,873.35 deferred for 1 year under sec. 2 (d) of the act of Dec. 
21, 1928, and sec. 2 of the act of Mar. 3. 1933. 



EEPOET OF THE SECRETARY OF THE TREASURY 



83 



The following statement shows the status of the account as of 
June 30, 1935: 

Charges: 

Advances from the General Fund: 

Under act of June 25, 1910 - J20.000.00O 

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 

' Installments for 1931-36 suspended. 

Division of Deposits 

The Division of Deposits is charged \vdth the administration of 
matters pertaining to the designation and supervision of Govern- 
ment depositaries and the deposit of Government funds in such de- 
positaries. The regulations of the Treasury governiug the deposit of 
public funds in depositaries are incorporated in Department Circulars 
Nos. 176 and 92 as amended. 

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, 1935: 

Number of depositaries and amount of Government deposits held on June 30, 1935 

by class of depositaries 



Depositaries 



Federal Reserve banks (including branches) 

Federal Reserve member bank depositaries: 

To credit of Treasurer of the United States 

To credit of other Government officers 

Insular depositaries fincluding 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 Goverimaent officers 

Special depositaries 

Total 




Amount 



$102, 23fi, 863. 22 



7,324,547.36 
29, 210, 792. 92 

3, 036. 906. 49 
2, 274, 967. 08 

988, 839. 44 

1. 583, .599. 58 

779, 020, 320. 27 



925, 656, 836. 36 



< In addition 257 branch banks are carried on the depositary list of the Treasury under the designation 
of the parent banks. 

2 Includes 1,974 national banks and 1,252 State banks and trust companies, of which 1,835 held deposits 
on June 30, 1935. 

During the fiscal year 1935, approximately 1,200 changes and ad- 
justments were effected within the depositary system. These adjust- 
ments are summarized in the following table: 





Member 
bank de- 
positaries 


Special de- 
positaries 


Designated 


92 

75 

250 


211 


Discontinued . . - ... 


32S 


Balances increased- .... . . 


127 


Balances decreased 


115 


23 







84 REPORT OF THE SECRETARY OF THE TREASURY 

The work of the Division of Deposits during the year was greatly 
increased as a result of the establishment and operation of new 
Government activities requiring depositary facihties. The sale of 
United States Savings Bonds by postmasters throughout the country 
and the transfer of accounts of all clerks of United States courts and 
United States marshals from the books of depositary banks to the 
books of the Treasurer of the United States under the provisions of the 
Permanent Appropriation Repeal Act, approved June 26, 1934, neces- 
sitated extensive revision of depositary arrangements. Funds of the 
Philippine Government also were transferred from the books of 
depositary banks to the books of the Treasurer of the United States. 
The liquidation of Government claims against depositary banks 
declared insolvent proceeded with orderly dispatch. 

Treasury Circular No. 176, dated September 2, 1930, was amended 
by the addition of an eighth supplement, dated April 23, 1935. Tliis 
supplement ^wdll be found as exliibit 48 on page 279. 

Section qf Surety Bonds 

On June 30, 1935, there were 64 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 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 1 domestic company and 5 branches of foreign com- 
panies holding certificates of authority authorizing them to act only 
as reinsurers on bonds in favor of the United States. The only change 
in the outstanding certificates of authority during the year was the 
issuance of one additional certificate of authority. 

Division qf 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 moneys, covering all 
departments and establishments of the Government. Other duties of 
the Division include the preparation of the annual digest of appropria- 
tions 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 1935, compiled by this Division, are shown as tables 1 
and 2, pages 296 to 315 of this report. 

Division qf Disbursement 

The Division of Disbursement, organized December 16, 1933, 
under the provisions of section 4 of Executive Order No. 6166, has 
gradually absorbed the disbursing functions formerly exercised by the 



REPORT OF THE SECRETARY OF THE TREASURY 85 

principal departments and establishments of the Government located 
in Washington, D. C, including the emergency as well as the regular 
Government activities, with the exception of the Post Office Depart- 
ment, the Panama Canal, and that portion of the War and Navy 
Departments relating to national defense. 

On June 30, 1935, the total personnel of the Division was 1,189. 
During the year the Washington office of the Division issued 26,210,425 
checks, and in addition made twice a month approximately 25,000 
payments in cash to Federal employees located in Washington. 

The Division of Disbursement continued the offices established in 
Oklahoma, Massachusetts, and North Dakota, for the purpose of 
disbursing relief administration funds in those States, and, at the 
request of the Federal Emergency Relief Administration, established 
similar offices in Ohio, Louisiana, and Georgia. 

r*>Nineteen regional offices were established during the year by the 
Division of Disbursement in the following cities: 



Albuquerque, N. Mex. 
Atlanta, Ga. 
Boston, Mass. 
Chicago, 111. 
Cleveland, Ohio. 
Dallas, Tex. 
Denver, Colo. 
Helena, Mont. 
Kansas City, Mo. 
Los Angeles, Calif. 



Minneapolis, Minn. 
New Orleans, La. 
New York City, N. Y. 
Philadelphia, Pa. 
Portland, Oreg. 
Salt Lake City, Utah. 
San Francisco, Calif. 
Seattle, Wash. 
St. Louis, Mo. 



As of June 30, 1935, the disbursing functions of 298 separate offices 
had been transferred to these regional offices. By Executive order 
the time for completing the consolidation of disbursing functions was 
extended to December 31, 1935. 

The Division continued the wo rk of making disbursements in con- 
nection with emergency purchases of livestock, seed, and commodi- 
ties under the drought relief program of the Agricultural Adjustment 
Administration in offices established for this purpose at Minneapolis, 
Kansas City, and San Francisco. An additional office for this pur- 
pose was also established in Chicago. As the work under this pro- 
gram drew to a close, the separate disbursing offices were closed and 
the remaining work was transferred to the regular regional disbursing 
offices. A temporary office was established and operated for about 
6 months at Lexington, Ky., for the purpose of making rental and 
benefit payments on tobacco under the Agricultural Adjustment 
Administration program. There has also been established an office 
in the Philippine Islands, principally for the purpose of making 
rental and benefit payments on sugar, but in addition the disbursing 
functions of other Federal offices located there have been absorbed. 

The duties of the Division of Disbursement in connection with 
disbursements under the Emergency Relief Appropriation Act of 
1935 have been referred to above. 

DIVISION OF APPOINTMENTS 

Number of employees 

There were 16,958 employees in the Treasury Department in Wash- 
ington on June 30, 1935, a net increase of 1,593 for the fiscal year. 
The principal increase occurred in the Procurement Division as a 



86 EEPORT OF THE SECRETARY OF THE TREASURY 

consequence of the expanded public works program. In the Bureau 
of Internal Revenue additional personnel was required for the admin- 
istration of various new tax laws. The principal decrease was in the 
office of the Treasurer of the United States. 

In the field service the force expanded from 45,245 on June 30, 1934, 
to 48,908 on June 30, 1935, a net gain of 3,663. The largest increases 
occurred in the field forces of the Bureau of Internal Eevenue and 
the Bureau of the Mint, the latter as a result of activities connected 
with gold and the operation of the Silver Purchase Act. 

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, 1934, through June 30, 1935, is shown in table 
49, page 436 of this report. A comparison of the number of em- 
ployees in the departmental and field services of the Treasury on 
June 30, 1934, and June 30, 1935, is contained in table 50, page 437. 

Retirement of employees 

During the fiscal year 1935 there were 596 persons retired from 
the departmental and field services of the Treasury Department. 
Under the provisions of the Civil Service Retirement Act, as amended, 
and of section 204 of the Economy Act of June 30, 1932, 207 persons 
were retired from the departmental service of the Treasury Depart- 
ment, 18 of whom were retired at their own option before the com- 
pulsory retirement age; and 237 were retired from the field service, 
17 at their own option. Under the provisions of section 8 (a) of the 
Independent Offices Appropriation Act of June 16, 1933, which pro- 
vision expired June 30, 1935, 100 persons in the departmental service 
and 52 in the field service, vvdio had served 30 years or more, were 
retired because of necessary reduction of force. 

Three employees in the field service, who had reached the retirement 
age, were retained under the authority of the President provided in 
section 204 of the Economy Act. 

Table 51, page 437, shows the number of persons retired and the 
number who have passed the compulsory retirement age retained in 
the departmental and field services of the Treasurj^ from August 20, 
1920, to June 30, 1935. 

BUDGET AND IMPROVEMENT COMMITTEE 

The Budget and Improvement Committee is responsible, under the 
direction of the Budget officer, for the preparation and examination of 
Treasury estimates of appropriations and for the improvement of ad- 
ministrative 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 A^arious appropria- 
tions and considers other matters affecting expenditures of the 
Department. 

Subsequent to the submission of the regular estimates of appro- 
priations for the fiscal year 1936, supplemental and deficiency esti- 
mates aggregating $116,856,994 were received. After examination 
by the Budget officer, with the assistance of the committee, these 
estimates were reduced to $116,781,619 and submitted to the Acting 
Director of the Bureau of the Budget. 



EEPOET OF THE SECRETARY OF THE TREASURY 



87 



Reserves amounting to $2,631,670 were set aside from ordinary- 
appropriations for the fiscal year 1935 by the Acting Director of the 
Bureau of the Budget. During the year $1,273,822 was released by 
the Acting Director, after approval of the committee, leaving 
$1,357,848 in reserve at the end of the year. For the fiscal year 
1936, the Acting Director set aside $225,350 in reserve. 

For the fiscal year 1937, heads of bureaus and offices submitted 
estimates for annual and permanent and indefinite appropriations 
aggregating $1,690,654,931. After examination by the Budget and 
Improvement Committee, items aggregating $40,573,475 were dis- 
approved in estimates for annual appropriations. There was ap- 
proved and submitted to the Acting Director of the Bureau of the 
Budget for annual appropriations, $243,429,238; for permanent and 
indefinite appropriations and special funds, $3,030,468; trust funds, 
$17,596,750; interest on the public debt, $805,000,000; and public 
debt retirements chargeable against ordinary receipts, $581,025,000, 
making a grand total of $1,650,081,456. 

COAST GUARD 

The following is a summary of the principal operations of the 
Coast Guard for the fiscal year 1935, including comparisons with the 
preceding year : 



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 certiflcates as lifeboat men _ 



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 



1935 



5,825 

32, 881 

927 

27, 671 

1,299 

$149, 720 

276 

6,777 

7,025 

191 

$19, 295 

8, 703, 579 

9,811 



Increase (+) 

or decrease 

(-) 



+228 

-1,886 

-319 

-4, 059 

-102 

+$55, 220 

+72 

-84 

-852 

-76 

-$92, 805 

+$11, 407, 470 

+3, 894 



Protection to navigation 

International service of ice observation and ice patrol. — This serv- 
ice was conducted during the season of 1935 by two cutters and one 
125-foot patrol boat, the cutters being assigned to ice patrol duty and 
the patrol boat to oceanographic observations. One of the cutters 
sailed from Boston, Mass., on March 9 to determine the extent of ice 
conditions in the Grand Banks region. It was found that icebergs 
were approaching the North Atlantic Lane Route, United States Track 
" C." Accordingly, the patrol was inaugurated on March 14, and 
steamships were routed to the more southern track " B " a month 
earlier than usual. The patrol boat sailed from Boston on March 
19 to join the ice patrol force, and the other cutter sailed from New 
York on March 22. Throughout the season the two cutters, basing at 
Halifax, Nova Scotia, maintained a continuous patrol in the ice 
regions, each vessel standing duty in the Grand Banks area for 
periods of 15 days. The patrol boat, basing at St. John's, Newfound- 



88 EEPOET OF THE SECRETARY OF THE TREASURY 

land, prepared and furnished the patrol force throughout the season 
with current maps indicating the direction and velocity of the 
masses of water in the Grand Banks area. In addition to furnishing 
information to individual ships upon request, the position of all ice 
sighted and reported was broadcast four times daily by the vessel 
on patrol. This information was disseminated in radio broadcasts 
by the Hydrographic Office. The ice season was normal, reaching 
its peak during the period April 22 to May 8, when 341 icebergs were 
reported south of the 48th parallel and 20 south of the 43d parallel. 
The southernmost berg reached as far south as the 41st parallel dur- 
ing the early part of Julj'. On July 9 the patrol was discontinued. 
The patrol boat, with the view of gaining further knowledge of con- 
ditions bearing upon the ice menace in the North Atlantic, sailed 
on an oceanographic survey of an extensive and little-known area 
lying several hundred miles east of Newfoundland and south of 
Greenland to determine the effect that conditions prevailing in this 
region may have on the drift of Arctic ice. The patrol boat will 
continue this oceanographic survey until about September 1. 

Winter patrol. — The President, on the recommendation of the 
Secretary of the Treasury of November 9, 1934, designated 14 Coast 
Guard vessels to perform special winter cruises along the coast for 
the season of 1934^35 to aid distressed vessels. The vessels engaged 
on this duty cruised 69,087 miles, and afforded assistance to TO vessels 
whose values including cargoes amounted to $2,072,195. There were 
609 persons on board the vessels assisted. The vessels boarded in 
the interest of United States laws numbered 436. 

Anchorage and movements of vessels. — During the year the Coast 
Guard maintained supervision over the enforcement of the rules and 
regulations promulgated by the Secretary of War and the Secretary 
of Commerce governing the anchorage and movements of vessels in 
jDorts and in localities where Federal regulations are in force. At 
the larger ports, Coast Guard officers, designated as " captains of 
the port ", perform this duty, and also cooperate in the enforcement 
of the regulations promulgated by the Interstate Commerce Commis- 
sion governing the handling of explosives by vessels. In smaller 
localities periodic inspections are made, and a surveillance is main- 
tained to insure compliance with the published regulations. 

International yacht races. — International yacht races were held off 
Newport, R. I., September 15 to September 25, 1934. Under au- 
thority of law, the Secretary of Commerce requested the Coast Guard 
to patrol and enforce the regatta laws during this event. Fourteen 
Coast Guard vessels, seven Navy vessels, a Navy seaplane, and several 
private craft conducted the patrol under the command of a desig'- 
nated Coast Guard officer. 

Enforcement of customs and other laws 

The usual duties of the Coast Guard in connection with the en- 
forcement of the customs, navigation, and motor-boat laws of the 
United States and the customary assignment of Coast Guard vessels 
at the principal ports of the country to assist the customs authorities 
were continued during the year. Assistance was also afforded to 
other branches of the Government in the enforcement of Federal 
laws. 



EEPOET OF THE SEORETAEY OP THE TREASURY 89 

Liquor smuggling. — The resumption of liquor smuggling on the 
Atlantic, Gulf, and Pacific coasts n^ar the close of the fiscal year 
1934 presented a problem which the Coast Guard was not fully 
prepared to meet because of material reductions in appropriations, 
personnel, and facilities. As the result, however, of a deficiency 
appropriation, the coordination of efforts with other Treasury agen- 
cies engaged in the prevention of smuggling, and through the co- 
operation of foreign governments, the smuggling of bulk cargoes of 
alcohol was greatly reduced in volume at the end of the fiscal year 
as compared with the peak of April 1935. Numerous seizures of 
foreign and domestic vessels and cargoes were made during the 
year. The prompt realization of the renewal of smuggling empha- 
sized the value of the maintenance of a highly specialized intelligence 
organization within the Service. Furthermore, the maintenance of 
an adequate preventive force for scouting the waters off our coast 
assures prompt action if the traffic recurs. 

Patrol in northern waters. — The regular annual patrol of the 
waters of the North Pacific Ocean, Bering Sea, and southeastern 
Alaska for the season of 1934, in progress at the beginning of the 
fiscal year 1935, was carried on by nine Coast Guard vessels. The 
vessels cruised 78,116 miles, assisted 6 vessels, boarded 60 vessels, 
afforded medical and dental aid to 3,055 persons, and transported 273 
persons. The dental clinic on shore at Unalaska afforded relief to 
563 persons. The patrol for the season of 1935 was in progress at 
the close of the fiscal year. 

Northern Paci-fic halibut -fishery. — The patrol, conducted annually 
by the Coast Guard for the Bureau of Fisheries, Department of Com- 
merce, in the interests of law enforcement, was performed during the 
year by three cutters and one 125-foot patrol boat. These vessels 
cruised 5,949 miles betw^een September 20, 1934, and April 27, 1935. 

CoTnmunications 

Telephone and telegraph lines and cables. — The Coast Guard owns 
and operates a coastal communication system consisting of telephone 
and telegraph lines of approximately 1,522 miles of pole line, 2,699 
miles of open wire aerial circuits, 31 miles of aerial and underground 
cables, and 642 miles of submarine cable. A number of line and 
cable replacement projects, begun during the previous year, were 
completed, and the new circuits were placed in service. Underground 
entrance cables and new switching facilities were installed at many 
stations. Old lines were replaced and partial replacement was made 
at various points. New submarine cables were laid in several locali- 
ties in place of old cables no longer serviceable. 

A scientific investigation was made of submarine cables purchased 
during recent years, and improved designs and specifications were 
prepared which will add materially to the life of cables purchased 
and laid in the future. Investigations were continued covering new 
methods and apparatus to be employed in increasing the efficiency 
and life of the telephone plants. 

Radio. — The construction of a new radio traffic station at Jackson- 
ville Beach, Fla., was completed ; and also new radio stations at the 
air stations at Salem, Mass., St. Petersburg, Fla., Biloxi, Miss., and 
Port Angeles, Wash. The addition of these new stations has greatly 



90 KEPOET OF THE SECRETARY OF THE TREASURY 

increased the efficiency of communications in the divisions in which 
they are located. The radio traffic stations at Winthrop, Mass., and 
Rockaway Point, N. Y., and the minor radio station at New London, 
Conn., were turned over to the Navy for a trial period of 2 years. 

The program for the standardization and improvement of radio 
installations on vessels and aircraft was continued. Radio equip- 
ment has been designed and developed to meet the special needs of 
aviation and practically all interference to radio reception caused by 
electrical induction has been eliminated on planes. The develop- 
ment of radio-direction finders for aircraft has progressed, and all 
€oast Guard aircraft are now equipped with direction-finding appa- 
ratus. The installation of radio equipment in lifeboats and at Coast 
Guard stations has progressed and has proved definitely, in many 
instances, the value of such a plan. 

The Coast Guard continues to make analytical studies of distress 
'Cases off the coasts of the United States in which radio plays an 
important part. The number of distress calls, made direct to the 
Coast Guard, is steadily increasing, indicating a growing dependence 
of shipping on the service. 

An officer of the Coast Guard continued to represent the Treasury 
Dei^artment on the Interdepartmental Radio Advisory Committee. 

Equipment 

Floating equipmeiit. — On June 30, 1935, there were in commission 
in the Coast Guard 36 cruising cutters, 52 harbor craft, 4 special 
craft, eighteen 165-foot patrol boats, twenty-eight 125-foot patrol 
boats, eleven 100-foot patrol boats, six 78-foot patrol boats, fifty- 
eight 75-foot patrol boats, 82 picket boats, and 24 miscellaneous 
patrol boats. Eighty-five seized boats were also in use. This float- 
ing equipment does not include the primarily life-saving boat equip- 
ment attached to Coast Guard vessels and stations. 

The program for the construction of seven 327-foot cruising cut- 
ters is still under way. During the year five 165-foot cutters, four 
110-foot harbor cutters, and nine 165-foot patrol boats were com- 
pleted and placed in operation. 

A number of harbor craft were transferred from the Bureau of 
Customs during the year, and 26 of these boats are in operation at 
the present time. Three cutters w^ere sold, one was transferred to 
the Federal Emergency Relief Administration for the use of the 
State of Michigan, and one was decommissioned. Six harbor craft 
were disposed of, three were decommissioned, and two 100-foot 
patrol boats were transferred to the Navy Department. 

In addition to the work performed during the j^ear by the repair 
depot on vessels of the service, routine and major repairs to 
vessels were made under contract with private shipyards and the 
various navy yards. Major repairs were accomplished on four cut- 
ters. Ten 125-foot patrol boats were sheathed, and new engines 
installed in six other boats of this class. 

Small hoats. — The first 52-foot motor lifeboat, embodying many 
modern improvements, was completed at the Coast Guard depot 
during the year and assigned to the Sandy Hook Coast Guard Sta- 
tion, N. J. The second such boat will be completed in August 1935, 
and will be assigned to Point Adams Coast Guard Station, Oreg. 



EEPOET OF THE SECRETARY OF THE TREASURY 91 

The pulling and motor self-bailing surfboat designs have been 
revised to the extent that balsawood buoyancy blocks have been sub- 
stituted for the side air cases and the planking has been slightly 
modified on the interior to give a flush surface, which insures a 
much higher degree of water-tightness than was formerly obtainable. 

Work is in progress on the design of a boat to supersede the 26-foot 
motor launch. Requirements of this boat call for better seaworthy 
qualities and slightly higher speed with increased carrjdng capacity. 

Contracts were awarded during the yesir for two 30-foot rescue 
boats of the sea skiif type, nine motor speed boats, and numerous 
sldffs, dories, and other miscellaneous boats. 

Experimental investigations and tests in the related fields of special 
metals, woods, marine equipment, fittings, and outfits were continued, 
as were also special investigations and research in connection with the 
accelerated corrosion of sheathing and other definite problems 
evidenced by service needs. 

Aviation. — During the year air stations were established at Biloxi,. 
Miss., Salem, Mass., St. Petersburg, Fla., and Port Angeles, Wash. 
The air station at Gloucester, Mass., was decommissioned when the 
Salem air station was commissioned. 

Funds were allotted for Iniilding new air stations at Charleston, 
S. C, and San Diego, Calif., and for a new hangar and shops at 
Cape May, N. J. Contracts were awarded for the building of two 
airplanes, a radio test plane accepted by the Coast Guard on Septem- 
ber 19. 1934, and a convertible seaplane accepted on February 20, 
1935. Nine Grumman and ten Douglas amphibians were procured on 
Navy contract during the year and are now in service. Six more 
Grumman amphibians are being constructed under Navy contract. 

The following statement indicates the activities of the various air 
stations and air patrol detachments of the Coast Guard, and shows 
the number of planes checked by Coast Guard (life-saving) stations : 

Number of planes sighted and checked at Coast Guard (life-saving) stations 15,617 

Miles cruised by aircraft 527, 756 

Area in scjuare miles searched 6, 601, 192 

Hours in the air 5, 709 

Vessels identified by aircraft 16, 225 

Planes identified by aircraft 2, 049 

Cases of assistance rendered by aircraft 143 

Emergency cases transported by air 42 

Stills located and destroyed 159 

Fifteen commissioned officers of the Coast Guard were graduated 
from the Naval Air Station, at Pensacola, Fla., as naval aviators, 
and 10 enlisted men of the Coast Guard were graduated from the 
same station as aviation pilots. 

Officers of the Coast Guard established the following world's 
records for amphibian planes: On December 20, 1934, attaining a 
speed of 191.734 miles per hour; on June 25, 1935, attaining a speed 
of 173.945 miles per hour over a 100-kilometer course with a payload 
of 500 kilograms (about 1,100 pounds) ; and on June 27, 1935, attain- 
ing an altitude of 17,877.243 feet with a payload of 500 kilograms. 

Ordnance. — During the year the new shoulder line-throwing equip- 
ment was perfected. With a modified .30 caliber Springfield rifle and 
a special projectile, a much greater average range has been attained 
than was previously possible. 

The use of the light type wrecking outfits has been extended to the 
165-foot and 125-foot patrol boats. They are now equipped to 



92 REPORT OF THE SECRETARY OF THE TREASURY 

handle minor demolition operations independently, thereby saving 
time and expense in the removal of obstructions to navigation. 

The installation of somid-powered telephone systems for fire con- 
trol and intercommunication has been completed on all electric- 
drive cutters and greater efficiency in battle practice is expected as 
a result. To the same end, deflection converters are being installed 
on 13 rangekeepers and the instruments are being modified for use 
with 5'V51 caliber guns. One 3'V50 caliber antiaircraft gim has been 
replaced by a b" /^l caliber gun, and as soon as funds are available 
similar changes will be made on other vessels of the same class. 

At the direction of the Secretary of the Treasury training of 
armed civilians of the Department in the use of small arms was 
conducted in the United States, in San Juan, P. R., and in Honolulu. 
At the close of the year 4,564 men were in training. About 3,000 
men had completed the requirements for preliminary qualification, 
and 1,324 had fulfilled the requirements for advanced qualification. 
The ships on which systematic training has been conducted have 
made excellent scores in battle practice and their records have stimu- 
lated greater interest throughout the service. Marked improvement 
was shown in small arms practice. 

The cooperation of the Army, Navy, and Marine Corps, which 
has made possible greater efficiency and economy in expenditures, 
is gratefully acknowledged. 

The academy^ stations^ hoses, repair depot, engine school, repair 

hase, etc. 

Coast Guard Academy. — During the fiscal year 69 cadets were ap- 
pointed to the academy, 54 resigned, and 31 were graduated from 
the academy. Twenty-six of the graduates received permanent com- 
missions as ensigns and five received temporary commissions as 
ensigns. There were 84 cadets under instruction at the end of the 
fiscal year. 

The 1935 practice cruise left New London, Conn., on June 1, 1935. 
The itinerary includes United States and foreign ports. 

Stations and tases. — On June 30, 1935, 242 Coast Guard (life- 
saving) stations were in an active status, and 3 shore bases were 
in commission. Rebuilding, repairs, alterations, additions, and im- 
provements were completed during the year at a large number of 
shore units, and contracts were awarded and major work was begun 
at a number of other shore units. 

Repair depot. — In the course of the year 11 Coast Guard vessels 
and boats were overhauled, reconditioned, or repaired at the repair 
depot, Curtis Bay, Md. The boat building shop at the depot con- 
structed 161 standard and miscellaneous boats. 

Engine school and repair base. — The consolidation of the reclama- 
tion plant, formerly operated at Base Nine, Cape May, N. J., with 
the engine school at Norfolk, Va., has worked to great advantage, 
since it has enabled students to take an active part in the work of 
reconditioning the various types of internal-combustion engines and 
in the conversion of aircraft engines for marine use. On June 30, 
1935, there were 36 students under instruction, and it is expected 
that in the future 100 men will complete the course each year. Dur- 
ing the year the engine school and repair base completely rebuilt 



REPORT OF THE SECRETARY OF THE TREASURY 93 

37 engines, of which 11 were installed in vessels and 23 were shipped 
to various units in the field. Approximately 250 pieces of electrical 
equipment, such as starters, generators, and magnetos were recondi- 
tioned mostly by students under instruction. Repair parts for 
certain engines were stocked and issued upon requisition. 

Engineering competition 

The engineering competition, which is conducted to stimulate 
efforts of the personnel and promote a spirit of friendly rivalry, 
tends to maintain the personnel and material in the highest possible 
state of readiness and efficiency. During the year 30 cruising cutters 
and 46 patrol boats took part in this competition. 

Personnel 

On June 30, 1935, there were on the active list of the Coast Guard, 
477 regular and 7 temporary commissioned officers ; 84 cadets ; 73 chief 
warrant officers and 519 regular warrant officers ; 154 temporary war- 
rant officers, 152 of whom were on duty with the War Department 
under orders contained in Executive order 61G9 ; 9,095 enlisted men, 
and 286 civilian employees in the field, 243 of whom were per diem 
civilian employees at the Coast Guard depot, Curtis Bay, Md. 

Recruiting. — Four main recruiting stations were in operation at the 
beginning of the fiscal year, and 3 main stations and 2 substations 
were opened during the year. Of 10,873 applicants for enlistment, 
1,068 were enlisted, 3,038 were rejected because of physical disability, 
and 6,767 rejected for other causes. Loss in personnel, other than 
through expiration of enlistments, was very low, and 82 percent of 
the men eligible to reenlist did so upon the expiration of enlistments. 

Training. — The training courses provided for enlisted men were 
availed of by a number of men who desired advancement along lines 
for which special training was necessary. The Coast Guard Institute 
at New London, Conn., continued to provide means to study for ad- 
vancement in rating, and to prepare for further training in school 
courses. The facilities of the Fort Trumbull Training Station were 
also utilized for the training of men after which they were assigned 
to field duty. Educational courses of the International Correspond- 
ence Schools of Scranton, Pa., and a radio course of the Capitol 
Radio Engineering Institute of Washington, D. C, were also fur- 
nished. During the year 535 Coast Guard Institute educational 
certificates, 154 International Correspondence Schools diplomas, and 
5 Capitol Radio Engineering Institute certificates were awarded. 

Ordnance training was carried on at the Armorers' School at the 
Coast Guard Depot, Curtis Bay, Md., and at the Naval Gun Factory 
at Washington, D. C. Men were also assigned to the Navy Parachute 
Materiel School. Lakehurst, N. J., Navy Sound Motion Picture Tech- 
nician's School, Navy Yard, Brooklyn, N. Y., and the Navy Aviation 
Instrument School, Philadelphia, Pa. 

Awards of life-samng medals 

The Secretary of the Treasury, under the provisions of law. 
awarded during the vear seven silver life-saving medals of honor in 



94 



REPORT OF THE SECRETARY OF THE TREASURY 



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. 

Approp7'lations and expenditures 

The following table shows the amounts appropriated for the Coast 
Guard for the fiscal year 1935, together with the balances of appro- 
priations from the previous year, and the expenditures and unex- 
pended balance of each appropriation. This includes an additional 
allotment of $294,868 from the National Industrial Recovery appro- 
priation, and allotments from special funds for rebuilding and im- 
proving Coast Guard stations, building or purchase of vessels for 
the Coast Guard, and working fund. Treasury, Coast Guard (Pro- 
curement Division, emergency construction). 

Appropriations, expenditures, and, unexpended balances for the fiscal year 1935 



Title of appropriation 



Salaries, OfiBce 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 

Rebuilding and improving stations 

Building or purchase of vessels 

Working fund, Treasury, Coast Guard (Procure- 
ment Division, emergency construction) 

Additional vessels 

Coast Guard Academy 2 



Total 23,495,423.13 



Amount of 
appropria- 
tion, allot- 
ment, or 
balance 



$320, 944. 00 

15, 893, 403. 00 

1, 470, 500. 00 

1, 174, 000. 00 

158, 500. 00 

136, C02. 00 

95, 487. 00 

183, 795. 00 

1, 4S5, 256. 00 

96, 349. 00 

2, 106, 699. 13 
42, 000. 00 
80, 036. 00 

76, 830. 00 
117, 525. 00 
57, 497. 00 



Expended 

and 
obligated 



$320, 933. 96 



15, 860, 

1, 447, 

1, 210, 

151, 

132, 



285. 63 
642. 97 
415.85 
813. 77 
264. 94 



101, 200. 16 

167, 

,4G8, 

95, 



382. 23 
778. 06 
709. 76 



1, 235, 408. 33 
41, 738. 21 
79, 317. 15 

76, 830. 00 



-1,683.00 



22, 388, 038. 02 



Trans- 
ferred ' 



-|-$3, 365 

-1,458 

-f 35, 000 



-f 40, 000 



/ -f 10, 417 
t -3, 365 



83. 959 



Unex- 
pended 
balance 



$1, 917. 04 

68,117.37 
22, 857. 03 
3, 584. 15 
6. 686. 23 
4, 337. 06 

1, 338. 84 

16, 412. 77 

16, 477. 94 

639. 24 

871, 290. 80 
261. 79 
718. 85 



117,525.00 
59. 180. 00 



1, 191, 344. 11 



1 Transfers: 

From civilian employees. Coast Guard $3,365 

To salaries, Coast Guard 3,365 



From: 

Collecting the internal revenue .$30,000 

Collecting the revenue from customs 2,000 

Salaries and expenses. Bureau of Narcotics 2,000 

Salaries and expenses, mints and assay offices 1,000 

To pay and allowances 35,000 

From: 

Collecting the revenue from customs 40,000 

Collecting the revenue from customs 10, 417 



35, 000 



To: 



Outfits, Coast Guard 40,000 

Civilian employees, Coast Guard 10,417 



50, 417 



50, 417 



From salaries. Coast Guard 1,458 

To salaries and expenses, Division of Disbursement 1,458 

1933 obligations canceled. 



REPORT OF THE SECRETARY OF THE TREASURY 



95 



COMPTROLLER OF THE CURRENCY 

Changes in the condition of national hanks 

The total assets of the 5,431 licensed national banks on June 29, 
1935, aggregated $26,061,065,000, in comparison with assets of $23,- 
901,592,000 reported by 5,422 licensed banks on June 30 the previous 
year. The deposits of the licensed banks in 1935 aggregated $22,518,- 
246,000, or $2,585,586,000 more than the amount reported for licensed 
banks a vear earlier. The loans and investments totaled $18,085.- 
103,000, or $1,038,807,000 more than on June 30, 1934. 

The assets and liabilities of licensed national banks on the date of 
each report from June 30, 1934, to June 29, 1935, are shown in the 
following statement : 

Abstract of reports of condition of licensed national hanks on the date of each 
report from June 30, 1934, to June 29, 1935 

[Dollars in thousands] 



June 30, 
1934 
(5,422 

banks ') 



Oct. 17, 
1934 
(5,4G6 

banks ') 



Dec. 31, 
1934 

(.5,407 
banks ') 



Mar. 4, 

1935 

(5,451 

banks) 



June 29, 
1935 
(5,431 

banks) 



ASSETS 



Loans and discounts (including rediscounts) 

Overdrafts 

U. S. Governraent securities, direct oblifrations 

Securities guaranteed by U. S. Government as to 

interest and 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 v<iult 

Balances with other banks 

Outside checks and other cash items 

Redemption fund and due from U. S. Treasurer 

Acceptances of other banks and bills of exchange or 

drafts sold with endorsement - - . 

Securities borrowed 

Other assets -. 



TotaL 



LIABILITIES 

Demand deposits, except U. S. Oovernm.ent de- 
posits, 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. 

U. S. Government and postal savings deposits 

Deposits of 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 -. 

Not secured by pledge of loans and/or 
investments _-. _. 



Circulating notes outstanding 

Agreements to repurchase U. S. Government and 

other securities sold 

Bills payable 

Rediscounts 



7, 694, 749 

2, 994 

5, 645, 741 



7, 633, 924 

4,720 

5, 837, 378 



7, 488, 052 

3.315 

6, 262, 109 



7, 489, 904 

4,543 

6, 283, S66 



7, 3G5, 226 

3,491 

6, 077, 724 



2 357, 

3, 344, 

129, 

055, 

151, 

2, 497, 

352, 

2, 79S, 

48, 

30, 



91! 
901 3 3, 
12S 
819 
970 



1,408 

2.112 

181,468 



23, 901, 592 



8,041,580 

6, 076, 625 
1, 499, 013 
1, 330, 460 



2, 985, 982 



19, 932, 660 
2, 523, 159 
17, 409, 501 



698, 293 

4,399 
13, 672 
2,007 



698, 

,495, 

135, 

653, 

162, 

,525, 

456, 

,451, 

57, 

34, 



836,425 1,095,283 
3 3,489,381 ■' 3, .543, 379^ 



1,201 

1,646 

191, 275 



750 

1,529 

203, 194 



117,486 

653, 842 

167, 113 

2, 772, 766 

391,428 

3, 478, 031 

44, 546 

32, 797 

1,556 

1,413 

194, 188 



24, 811, 390 



25, 629, 580 



25, 959, 283 



8, 848, 799 

6, 203, 777 

1, 484, 193 

971, 059 



3. 313, 564 



8, 994, 826 

6, 312, 080 
1,641,003 
1, 237, 926 



3, 489, 868 



9, 079, 618 

0, 441, 740 

1, 677, 924 
1,041,263 



3, 775, 154 



20,821,392 
2, 100, 445 
18, 720, 94 



21, 676, 303 
2, 448, 174 
19, 228, 129 



22,015,699 
2, 278, 513 
19, 737, 180 



665, 845 

4,432 

8,207 
579 



654, 456 

2,361 

7,342 

3S3 



627, 022 

5, 512 

10, 427 

340 



80, 753 

051, 463 

171,455 

3, 092, 178 

405, 513 

3, 318, 506 

51, 964 

12, OGO 

4,592 

795 

180, 023 



20,061,065 



9, 674, 923 

6, 646, 982 

1, 845, 315 

679, 655 



3, 671, 371 



22, 518, 246 

2,115,605 

20, 402, 641 



222, 095 

4,194 

3,989 

654 



1 Licensed banks which were operating on an unrestricted basis. 

' Includes Home Owners' Loan Corporation 4 percent bonds, guaranteed by the United States as ta 
interest only, the amount of which was not called for separately. 

3 Includes Home Owners' Loan Corporation 4 percent bonds, which are guaranteed by the United 
States as to interest only. 

16816—36 -8 



96 



EEPORT OP THE SECRETARY OP THE TREASURY 



Abstract of reports of condition of licensed national banks on the date of each 
report from June 30, 193Jf, to June 29, 1935 — Continued 

(Dollars in thousands] 



June 30, 
1934 
(5,422 

banks i) 



Oct. 17, 
1934 
(5,466 

banks ') 



Dec. 31, 

1934 

(5,467 

banks >) 



Mar. 4, 

1935 

(5,451 

banks) 



June 29, 
1935 
(5,431 

banks) 



LiABiUTiES — Continued 

Obligations on industrial advances transferred to the 
Federal Reserve bank - 

Acceptances of other banks and bills of exchange or 
drafts 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 

Dividends declared but not yet payable and 
amounts set aside for dividends not declared 

Other liabilities 

Capital stock (see memorandum below) 

Surplus 

Undivided profits, net, 

Reserves for contingencies 

Preferred stock retirement fund 



1,408 
133, 221 



6,683 
2,112 



41,741 



64, 363 

1, 737, 827 

854, 057 

257,311 

151, 267 

571 



1,201 
137, 892 

5,497 
1,646 

53, 898 

4,324 

50, 187 

1, 772, 513 

845, 335 

286, 184 

151, 345 

913 



750 
138, 939 

4,717 
1,529 

38, 982 

22,642 

51, 188 

1, 786, 409 

837, 888 

261,491 

141, 880 

2,320 



23 

1,556 
119, 096 

5,202 
1,413 

48, 751 

5,399 

49, 895 
1, 804, 739 
834, 878 
283, 557 
143, 728 
2,046 



37 

4,592 
85, 599 

8,171 
795 

42, 335 

21, 004 

62, 936 

1, 809, 503 

831, 846 

297, 967 

143,951 

3,151 



Total. 



23, 901, 592 



24,811,390 



25, 629, 580 



25, 959, 283 



26,061,065 



Memorandum: 

Par value of capital stock: 
Class A preferred stock. 
Class B preferred stock. 
Common stock 



401, 989 

10, 081 

1. 326, 722 



444, 626 

15, 205 

1,313,997 



464, 752 

17, 178 

1, 306, 224 



492, 685 

19, 389 

1, 294, 374 



503, 914 

21, 208 

1, 288, 848 



Total - 



1, 738, 792 



1, 773, 828 



1, 788, 154 



1, 806, 448 



1, 813, 970 



Loans and investments pledged to secure liabilities: 
U. S. Government obligations, direct and/or 

fully guaranteed 

Other bonds, stocks, and securities 

Loans and discounts (excluding rediscounts) 

Total 



2, 606, 142 
991, 388 
102, 226 



2, 404, 487 

847,317 

88, 210 



2, 695, 454 

778, 882 

84, 978 



2, 575, 262 

744, 862 

71, 278 



2, 004, 611 

720, 798 

52, 627 



3, 699, 756 



3, 340, 014 



3, 559, 314 



3, 391, 402 



2, 778, 036 



Pledged: 

Against circulating notes outstanding 

Against U. S. Government and postal sav- 
ings deposits.. 

Against public funds of States, counties, 
school districts, or other subdivisions or 
municipalities 

Against deposits of trust department 

Against other deposits 

Against borrowings 

With State authorities to qualify for the ex- 
ercise of fiduciary powers 

For other purposes 



724, 566 
1, 445, 592 



975, 448 

249,491 

176, 768 

26, 387 

82, 902 
18, 602 



695, 595 
1, 127, 074 



952, 021 

270, 849 

177, 581 

15, 116 

84, 593 
17, 185 



683, 797 
1,331,411 



986, 862 

286, 573 

155, 892 

11,992 

85, 206 
17, 581 



655, 559 
1, 153, 407 



1, 022, 472 

289, 009 

154, 086 

12, 804 

85,246 
18, 819 



225, 444 
805, 797 



1, 067, 782 

411, 138 

157, 685 

6,358 

86, 722 
17, 110 



Total. 



3, 699, 756 



3, 340, 014 



3, 559, 314 



3, 391, 402 



2, 778, 036 



Beope7iing and reorganization of national hanks 

On July 1, 1934, there remained in conservatorship, pursuant to 
the President's proclamation of March 6, 1933, 95 national banks 
with total deposits of $98,079,000. During the fiscal year 1935 the 
program with respect to reorganizing unlicensed national banks 
was completed, the last remaining conservatorship having been 
terminated on February 6, 1935. 

Of the above-mentioned banks, 83, with deposits aggregating 
$91,059,000, were licensed to reopen under old or new charters 
or were absorbed by other national banks; 4, with deposits of $491,- 



EEPORT OF THE SECRETARY OP THE TREASURY 



97 



000, were placed in voluntary liquidation or received authorization 
for the sale of their assets to State banks; and 8, with deposits of 
$6,529,000, were placed in receivership. 

At the close of the banking holiday, March 16, 1933, there were 
1,410 national banks unlicensed (including 10 State banks in the 
District of Columbia, which are under the supervision of the Comp- 
troller of the Currency), with total deposits of $1,955,072,000. In 
addition there were 6 banks for which licenses were granted but 
later revoked and 1 bank which suspended business prior to the 
banking holiday, bringing the total unlicensed banks to 1,417, with 
deposits of $1,971,960,000. 

These 1,417 unlicensed banks were disposed of as follows: 1,096, 
with deposits of $1,808,060,000, were reorganized under old or new 
charters or absorbed by other national banks; 31, with deposits of 
$11,513,000, were placed in voluntary liquidation or acquired by 
State banks ; and 290, with deposits of $152,387,000, were placed in 
receivership for liquidation under the supervision of the Comptroller 
of the Currency. 

Summary of national dcmJcs, licensed and unlicensed, from July 1, 1934, to June 

80, 1935 

[Dollars in thousands] 



Status of banks 


Number 


Deposits ' 


Unlicensed banks: 

Total, July 1, 1934 


95 
95 


$98, 079 
98, 079 


Changes, July 1, 1934, to June 30. 1935: 

Reorganizations under old charter or new 

by another national bank 

Voluntary liquidation or left the national 
Placed in receivership 


charter or absorb 
banking system 


Num- 
ber Deposits 
ed 

-. 83 $91,059 
.. 4 491 
-. 8 6, 529 






Total, June 30, 1935 
















Licensed banks: 2 

Total, July 1, 1934 


5,422 
9 


17, 423, 984 


Changes, July 1, 1934, to June 30, 1935: 

New charters issued 




Num- 
ber Deposits 
131 $123, 144 


Licensed under old charter 




7 1,966 




Restored to solvency 




.. 3 356 












Increase for year 


.. 141 125,466 




Voluntary liquidations 

Placed in receivership 

Consolidations 


... 122 69,682 
-. 1 233 
. . 8 .. 




Revocation of licenses .. 




1 147 












Reduction for year 


.. 132 70,062 




Net increase for year 




55,404 








Total, June 30, 1935 


5,431 


17, 479, 388 




1935, call) 




Total, June 30, 1935 (deposits as of June 29, 


5,431 


22, 518, 246 









' Deposits, unless otherwise indicated, are taken from condition reports as of Dec. 31, 1932, and con- 
servators' first reports. In the case of new hanks, deposits are approximately as of opening date. 

2 The number of licensed banks in various classifications in this summary differs from the number of 
banks in similar classifications in the table on p. 98, owing to the fact that only such banks as were in active 
operation during all or part of the fiscal year are included in this summary, whereas the figures in the table 
on p. 98 concern the number of banks based on their corporate existence, whether or not they were active 
during the period. 



98 



REPORT OF THE SECRETARY OF THE TREASURY 



8u7mnary of changes in memhersMp in the national hankhig system 

The authorized common capital stock of the 5,463 national banks 
in existence on June 30, 1935, was $1,292,854,881, a decrease during 
the year of $61,573,800; and the authorized preferred capital stock 
was $526,035,287, an increase of $113,071,687. The net increase in 
capital stock was $51,497,827. During the year charters were issued 
to 128 national banking associations, of which 25 had common stock 
only, aggregating $2,535,000; the remaining 103 banks had an aggre- 
gate of $7,077,000 common stock and $7,903,000 preferred stock. 

During the year 899 existing national banks took advantage of 
the provisions of the act of March 9, 1933, and increased their cap- 
ital by the issuance of preferred stock of an aggregate par value of 
$119,263,000, while 218 banks with preferred stock effected retire- 
ments of an aggregate par value of $13,426,813. Although charters 
were issued during the year to 128 banks, there was a net decrease 
of 170 in the number of banks — that is, from 5,633 to 5,463--by 
reason of voluntary liquidations, receiverships, and consolidations. 

Changes in the number and capital stock of national banks during 
the fiscal year 1935 are shown in the following summary: 

Organisation, capital stock changes, and liquidations of national haiiks during 

the fiscal year 1935 



Charters granted 

Issues of preferred capital stock (S99 banks) 2._ 
Increases of common capital stock (149 banks) ' 
Restored to solvency 



Total. 



Voluntary liquidations - 

Receiverships ^ 

Decreases of capital (643 banks) ' 

Closed under consolidation (act of Nov. 7, 1918) and capital decreases 
incident thereto 



Total. 



Net increase in preferred capital stock 

Net decrease in banks and common capital stock 

Charters in force June 30, 1934, and authorized capital stock. 



Charters in force June 30, 1935, and authorized capital stock- 



Number 
of banks 



265 
58 



332 



«170 
5,C33 



Capital stock 



Common 



$9, 612, 000 



8, 042, SCO 
1,775,000 



19,429,860 



29, 615, 250 

8, 235, 020 

43, 791, 350 

372, 100 



61, 573, 860 
1, 354, 428, 741 



1, 292, 854, 881 



Preferred 



$7, 903, 000 
119,263,000 



127, 166, 000 



667, 500 
"13,426,813 



14,094,313 



113,071,087 



412, 963, 600 
526, 035, 287 



1 103 of these banks had both common and preferred capital stock. 

2 Includes 1 increase of $250,0C0 which was efl'ected in connection with a consolidation under the act of 
Nov. 7, 1918. 

3 Includes 72 increases aggregating $2,151,550 which were effected wholly or in part by common stock 
dividends and 1 increase of $90,000 by conversion of preferred capital stock to common capital stock. 

•• Includes 9 banks with aggregate capital stock of $1,010,000 which had been previously reported in vol- 
untary liquidation. One receiver was appointed under the act of .\pr. 23, 1930. 

5 Includes 218 preferred capital stock retirements. 

6 Net decrease in number of banks in existence after adjustment of the number of receiverships for 9 
banks previously reported in voluntary hquidation. 

BUREAU OF CUSTOMS 

Collections 



The fiscal year 1935 was the second successive year since 1929 in 
which customs collections increased over those for the preceding year. 
Total collections of $346,514,550 represented an increase of 10.3 per- 



EEPOET OP THE SECRETARY OP THE TREASURY 



99 



cent over 1934 and 37.9 percent over 1933. This increase was 
largely the result of increased collections from duties on imported 
liquors and wines and on imports of relatively large quantities of 
agricultural products and their derivatives, largely in consequence 
of the drought in the summer of 1934. Collections of duties on 
imported liquors and wines in 1935 amounted to $41,018,755 as 
compared with $24,023,703 collected during the last 7 months of 
the fiscal year 1934 following repeal of the eighteenth amendment. 



Customs collections and refunds for the fiscal years 1934 and 1935 
[On basis of accounts of Bureau of Customs] 





1934 


1935 


•Collections: 


$313, 094, 971 

$133, 377 

421, 4C9 

202, 798 

150, 099 

55,750 


$344, 943, 964 


Miscellaneous: 

Sale of unclaimed and abandoned merchandise. . 
Fines 


$76, 357 
310, 684 




239, 094 


Sale of seizures (including forfeitures) 


896, 070 


All other customs receipts 


48, 381 






Total miscellaneous 


963, 493 


1, 570, 586 






Total receipts . 


314, 058, 464 

5, 849, 243 
8, 076, 988 


346, 514, 550 


Eefunds: 

Excessive duties 


7,217,114 


Drawback payments 


13, 813, 853 






Total refunds 


13,926,231 


21, 030, 967 







Volume of business 

Entries of merchandise. — The number of entries of merchandise 
increased 12.1 percent, from 2,140,414 in 1934 to 2,399,263 in 1935. 
All types of entries contributed to this increase. 

Vessel, airplane, and highway traffic. — The number of vehicles and 
passengers entering the United States from abroad increased in 
practically all cases during the fiscal year 1935 compared with the 
preceding year, as shown in the following detailed statement: 



Number of vehicles and persons entering the United States from abroad, fiscal years 

1934 and 1935 



Vehicles: 

Automobiles and busses. 

Documented vessels 

Ferries and other vessels 

Passenger trains 

Airplanes 

Other vehicles. 

Total 

Passengers by: 

Automobiles and busses. 

Documented vessels 

Ferries and other vessels. 

Passenger trains 

Airplanes. . _ 

Other vehicles 

Pedestrians 

Total.. 



1934 



8, 929, 186 

27. 308 

188, 402 

38, 420 

4,347 

308, 363 



9, 496, 026 



052, 731 
754, 190 
809, 658 
905, 021 
19, 624 
502, 368 
635, 860 



39, 679, 452 



1935 



9, 293, 535 

28, 763 

189, 6S3 

35, 836 

4, 816 

323, 952 



9, 876, 585 



25, 604, 405 

811,665 

2, 626, 930 

936, 538 

27, 001 

1, 548, 857 

10, 174, 956 



41,730,352 



Increase (+), 
decrease (— ) 



Percent 

+4.1 
+5.3 
+.7 
-6.7 
+10.8 
+5.1 



+4.0 



+6.5 
+7.6 
-6.5 
+3.5 
+37.6 
+3.1 
+5.6 



+5.2 



100 EEPORT OF THE SECRETARY OF THE TREASURY 

Drawback transactions. — The number of drawback entries increased 
11.9 percent in 1935, 17,319 such entries having been made in 1934, 
and 19,377 in 1935. Drawback payments amounted to $13,813,853 
in 1935 as compared with $8,076,988 in 1934, an increase of 71 per- 
cent. Of the notices of intent to export with the benefit of drawback, 
160,609 original notices were filed in 1934 and 177,777 in 1935; and 
50,608 in 1934 and 66,814 in 1935 were forwarded to other districts 
for final disposition. The total number of notices of intent handled 
during 1935 was, therefore, 15.8 percent greater than during 1934. 

Under authority of section 318 of the Tariff Act of 1930, the 
President, by proclamations dated November 8, December 21, and 
December 22, 1934, and January 7 and April 1, 1935, declared an 
emergency to exist and authorized the Secretary of the Treasury to 
extend the time during wliicli merchandise imported during 1929, 
1930, 1931, and 1932 may remain in warehouse under the provisions 
of sections 557 and 559 of the Tariff Act of 1930; the time during 
which proof may be furnished that wool or camel's hair imported or 
withdrawn from bonded warehouse conditionally free of duty, under 
bond, during 1930, 1931, and 1932 has been used in the manufactures 
prescribed in paragraph 1101 of the Tariff Act of 1930; and the time 
within which articles manufactured or produced with the use of 
merchandise imported during certain periods of 1930, 1931, and 1932 
may be exported with the benefit of drawback under section 313 of 
the Tariff Act of 1930. Pursuant to these proclamations, the Secre- 
tary of the Treasury issued Treasury Decisions 47367, 47473, 47474, 
47486, 47519, and 47662 granting the extensions authorized in the 
proclamations. 

Enforcement activities 

Seizures. — The total number of seizures made during 1935 for 
violations of the customs laws was 20,896, a decrease of 17,945 from 
the previous year. The greater part of the decrease reflected the 
decline in the number of lottery seizures from 22,883 in 1934 to 9,313 
in 1935, due to the practice which has been adopted of transferring a 
large portion of these cases to the Post Office authorities. The num- 
ber of liquor seizures also declined following repeal of the eighteenth 
amendment and was 5,224 in 1935 as compared with 11,721 in 1934. 

Although the number of seizures declined during 1935, the total 
value of seizures increased to $2,403,910, of which $222,214 repre- 
sented the value of seized distilled malt and fermented liquor wliich 
was not included in the value of seizures reported for 1934. On a 
comparable basis, the value of seizures was $2,181,696 in 1935 and 
$1,115,492 in 1934, or an increase of 95.6 percent in 1935. The 
greater part of tliis increase was due to larger seizures of alcohol, 
amounting to 138,040 gallons valued at $1,417,493, as compared with 
44,924 gaUons valued at $345,443 during 1934. The quantity of 
Hquor seized declined from 148,173 gallons in 1934 to 23,273 gallons 
in 1935. Seizures of malt liquor also declined from 9,865 gallons in 
1934 to 668 gallons in 1935. Liquor seizures during 1935 were con- 
fined almost entirely to the Atlantic and Gulf coasts and the Rio 
Grande River, and the majority of alcohol seizures were made along 
the Atlantic coast. 

The number of merchandise seizures during 1935 increased almost 
80 percent from 3,057 to 5,448, with a corresponding increase in value 



EEPORT OF THE SECRETARY OF THE TREASURY 101 

from $227,104 to $307,712. The value of narcotic seizures also 
showed a moderate increase, from $40,869 in 1934 to $65,663 in 1935. 

In connection with the violation of customs laws, 714 automobiles, 
99 boats, and 6 airplanes, with an aggregate value of $390,828, were 
seized, a decrease of 72 automobiles, 62 boats, and 8 airplanes from 
the number seized in 1934. Customs officers also effected 2,594 
seizures for other agencies of the Government, and detained 713 
persons for violation of immigration, narcotic, and other laws. 

Fines, penalties, etc. — Collections of fines, penalties, etc., because 
of violation of laws pertaining to the Customs Service, aggregated 
$1,445,848 as compared \vith $774,366 during 1934. Of these 
amounts, $165,441 for 1935 and $88,249 for 1934 represented the net 
proceeds from the sale of the seized articles by collectors of customs. 

Sales by order of court yielded $274,961 in 1935, or almost seven 
times the amount received from this source during the previous year. 
A large portion of the sales by both the collectors and the courts con- 
sisted of liquor and alcohol. 

Undervaluations and false invoicing, aggregating $313,299, were 
responsible for over one-fifth of the collections of fines, penalties, etc., 
for 1935. Penalties for failure to declare foreign merchandise during 
the last 2 years were responsible for only 5 percent of the total fines 
collected, whereas in 1933 and prior years they constituted from one- 
fourth to one-half of all fines collected. 

Smuggling 

Through the activity and vigilance of customs field officers, sub- 
stantial progress was made during the year in the detection and sup- 
pression of smuggling. The work of the customs personnel with 
respect to violations of customs laws and related statutes continued 
an important factor in the successful conclusion of a number of 
smuggling cases. 

The system of handling criminal cases in connection with smuggling 
has resulted in securing a high percentage of convictions. All criminal 
cases incident to seizures effected by the Customs Service were in- 
vestigated, reported, and followed through the courts by customs 
agents who collaborated with the United States attorney in the actual 
presentation of testimony during trials. 

During the year an investigation into the smuggling of grain estab- 
lished the fact that there had been smuggled into the United States 
approximately 22,000 bushels of wheat valued at $27,000, including 
duty. Many individuals were indicted in connection with this 
movement, and a majority of them pleaded guilty and were sentenced 
by the Federal courts. 

The Customs Agency Service, in cooperation with the customs 
border patrol, developed a major conspu'acy case involving the smug- 
gling of approximately 90,000 pounds of butter over the international 
boundary between Canada and the United States, which resulted in 
the institution of criminal proceedings against six individuals. 

Many investigations into the smuggling of lottery tickets and 
foreign sweepstakes were made. The principal seizure was effected 
at Philadelpliia, where 600,000 tickets, having a sale value of $900,000, 
were found concealed in a shipment of baled rags. 



102 REPORT OF THE SECRETARY OF THE TREASURY 

Other smuggling-prevention activities covered a large field of com- 
modities, including fish nets, jewelry, watch movements, and telephone 
sets. In one case, involving the smuggling of diamonds and watch 
movements from a Belgian concern, the apprehension and conviction 
effected by the customs personnel put an end to a notorious organiza- 
tion known to have been in existence for at least 6 years. 

During the year close cooperation was maintained with all enforce- 
ment agencies of the Government, and in particular with the coordi- 
nators (Coast Guard officers assigned by the Secretary to coordinate 
enforcement activities looking to the detection and prevention of the 
smuggling of liquor, alcohol, and narcotics) of the areas including the 
several customs agency districts. 

Intensive investigation of liquor-smuggling activities of a British 
Columbia distiller}^ company was conducted during the year, resulting 
in the indictment of two of its controlling officers by a Federal grand 
jury at Seattle on charges of conspiring to violate the Tariff Acts of 
1922 and 1930. After an investigation by customs personnel of 
another Canadian corporation on similar charges, an offer in com- 
promise of $225,000 was made by the company. 

The increased activities of the Customs Service with respect to the 
prevention of smuggling of narcotics resulted in the seizure of com- 
parativel}^ large quantities of these drugs, and the indictment and 
sentence of several members of large narcotic-smuggling organizations. 

Miscellaneous 

Under the provisions of the act approved June 18, 1934 (48 Stat. 
L. 998, ch. 590), for the establishment, operation, and maintenance of 
foreign trade zones in ports of entry in the United States, the Foreign 
Trade Zones Board (composed of the Secretary of Commerce, Secre- 
tary of the Treasury, and Secretary of War) on June 29, 1935, issued 
regulations for the administration of the act. Many legal questions 
arose and were considered by the Bureau of Customs in connection 
with the formulation of these regulations. 

The Bureau of Customs also participated actively in the considera- 
tion of the many legal questions arising in the administration's 
reciprocal tariff bargaining program. During the year reciprocal 
trade agreements providing for substantial reductions in duties at home 
and abroad were negotiated with 5 countries, and on June 30, 1935, 
negotiations were pending with 13 other countries. In addition to 
assisting in the formulation of the text of these agreements, par- 
ticularly the parts which result in modifications of the tariff laws, the 
Bureau of Customs prepared and disseminated information and in- 
structions to facilitate the administration of the provisions of agree- 
ments in effect, and to interpret language in the agreements about 
which controversies had arisen. 

Investigative Unit 

Port examinations.- — During the fiscal year the Port Examination 
Commission of the Customs Agency Service made examinations of the 
accounts and procedures in seven collection districts, including New 
York, with the result that numerous irregularities in the manner of 
transacting customs business were corrected. 



EEPORT OF THE SECRET AEY OF THE TREASURY 103 

Undervaluation. — Investigation of undervaluation cases continued 
as an important factor in the work of customs personnel both at home 
and abroad. Because of the increased vigilance on the part of officers 
at all ports there was an apparent decrease in the efforts of dishonest 
importers to evade the payment of lawful duties. Recoveries made 
as a result of the investigations aggregated $120,948 as compared with 
$284,590 m 1934. 

Criminal cases. — Many investigations were conducted during the 
year into the false invoicing of imported merchandise. Special 
attention was also given to the question of the foreign market value of 
merchandise imported from Mexico. Numerous cases have been dis- 
covered where merchandise from that country has not been assessed 
with the correct amount of duty. It is believed that as a result of 
these investigations appraising officers tlu-oughout the United States 
are for the first time afforded correct information as to the value 
in Mexico of imported merchandise, which covers a wide range of 
commodities. 

Employees of the Investigative Unit have played a major part in 
the results, elsewhere referred to in this report, accomplished by the 
Customs Service. Many investigations were conducted into the 
false invoicing of imported merchandise, and a vigorous eft'ort has 
been manifested by the customs agents to correct this unlaw^ful 
practice. 

It was found in one case that the importer was effecting a fraud 
upon the revenue by deducting an improper amount as trade dis- 
counts. The result of the investigation was reported to the United 
States Attorney General for proper action. In another case involving 
the same practice, the Attorney General accepted $20,991 from the 
importer as an offer in compromise in satisfaction of the Govern- 
ment's claim for duties, interest, and forfeitures value accruing on a 
series of importations made at Los Angeles, San Francisco, and 
Seattle. 

Custo7ns foreign, service. — The foreign service officers of the Cus- 
toms Service continued their efforts to establish foreign market values 
of merchandise exported to the United States, and were called upon 
from time to time to make investigations with respect to dumping, 
to the end that imported merchandise might be properly appraised. 
They also rendered invaluable service through their cooperation in 
the detection of narcotic smuggling. 

Customs information exchange. — This branch of the Customs x4.gency 
Service is directed by supervising customs agents and is the medium 
employed for disseminating all classes of information with respect to 
foreign -market values, classification of imported merchandise, and 
other pertinent and related customs data. It is likewise a clearing 
house for requests for foreign investigations by appraising officers and 
for reports submitted by Treasury attaches. The followmg statement 
summarizes the activities of the exchange during the year: 

Number 

Appraisers' reports of values received 13,323 

Appraisement appeal reports received 2,284 

Changes in value circulated 2,453 

Bequests for investigations abroad - 1,582 

Reports received in response to requests for investigations abroad 1,847 

Reports received of original investigations by Treasury attaches, and price lists received from 

American consuls -. -- 5,584 

Differences in classification reported -.- 474 



104 



EEPORT OF THE SECRETARY OF THE TREASURY 



The exchange issues weekly bulletins, one giving a memorandum of 
various price lists and Treasury attaches' reports received, and the 
other a list of requests forwarded for investigations abroad, so that 
appraising officers interested in the same line of merchandise may 
request copies of these reports. 

The supervising agent prepared memoranda for the Assistant 
Attorney General during the past year in cases where it appeared to 
him desirable to call to the attention of that officer certain questions 
of law and fact with regard to pending cases where documentary 
evidence was collected by the exchange. 

Summary. — The following statement shows the results achieved 
through the activities of the Investigative Unit during the year insofar 
as direct results have a monetary measure or can be measured by a 
count of individual cases: 

Number 

Ports examined - - -- -- - - -- 254 

Drawback investigations 1,662 

Foreign investigations conducted by members of the domestic service 1,069 

Arrests --- --- 1. 164 

Convictions 701 

Acquittals 93 

Failures to indict 233 

Indictment cases pending --- 211 

Seizures made - 1,783 

Seizures appraised -- 1,769 

Seizures released or pending 243 

Amount 

Appraised value of seized merchandise $1,287,273 

Merchandise entered free but found dutiable 24,091 

Fines, penalties, and forfeitures incurred, exclusive of court fines - 901,867 

Bail forfeitures -- - 245,218 

Fines imposed by United States courts 130,965 

Increased and additional duties collected 120,948 

Deposits as offers in compromise.-- --- - --- 731,460 

Proceeds of sale of seized merchandise --- - 105,435 

The actual recoveries and penalties covered into the Treasury as a 
result of either direct or indirect activities of the Customs Agency 
Service during the fiscal year aggregated $2,259,984, representing an 
increase of over $301,757 over the previous year. 

BUREAU OF ENGRAVING AND PRINTING 

Deliveries of currency, securities, stamps, and miscellaneous work 
by the Bureau during the year amomited to 366,380,624 sheets, as 
compared with 315,905,581 sheets for the previous year, an increase 
of 50,475,043 sheets. A comparative statement of deliveries of 
finished work follows : 

Deliveries of finislied work in the fiscal years 1934 o-ndi 1935 





Sheets 


Face value, 




1934 


1935 


1935 


Currency: 

United States notes 


4,500,001 

39, 273, 000 

20,000 

4, 527, 120 

3, 916, 600 

2, 224, 000 


950, 000 

44. 467, 000 

3,500 

1,909,959 

7,644,150 


$22, 800, 000 




943, 644, 000 




4, 200, 000, 000 




190, 634, 040 


Federal Reserve notes -- 


1, 020, 300, 000 


Federal Reserve bank notes (national cur- 










Total 


54, 460, 721 


54, 974, 609 


6, 377, 378, 040 






Bonds, notes, certificates, and bills: 


60,900^^ 
140, 484 
2, 298, 333 Ji 


57, 860 
141,83S!.S 
1, 988, 162 


359, 777, 000 


Liberty bonds 


1,117,951,200 


Treasury bonds 


8,443,664,900 



EEPORT OF THE SECRETARY OP THE TREASURY 105 

Deliveries of finished work in the fiscal years 1934 and 1935 — Continued 



Bonds, notes, certflcates, and bills— Contd. 

United States Savings 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. 
Cuban silver certificates including certifi- 
cates for the Secretary of the Treasury of 

the Republic of Cuba 

Philippine treasury certificates 

Notes for the bank of the Philippine Islands. 
Interim receipts for bonds of Home Owners' 

Loan Corporation 

Interim certificates for Puerto Rican bonds. 
Interim transfer certificates for postal sav- 
ings bonds 

Specimens: 

Treasury bonds -.- 

United States Savings 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. 

Reconstr uction Finance Corporation 

notes 



Total. 



Stamps: 

Customs 

Internal revenue: 

United States 

Philippine Islands.. 

Puerto Rican.. 

Virgin Islands 

District of Columbia 

Federal migratory bird hunting stamps. 

For experimental purposes 

Specimens, United States 

Postage stamps: 

United States — 

United States, surcharged "Canal 
Zone" 

Canal Zone. 

Philippine Islands 

Specimens, United States 

Pioofs, United States 

Postal savings stamps 

Total.. 



Miscellaneous: 

Checks 

Warrants. 

Commissions 

Certificates 

Transportation requests. 

Circular letters 

Liquor permits 

Other miscellaneous 

Blank paper.. 

Specimens 

Total 



Grand total. 



Sheets 



1934 



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% 



10 



16% 

18 



14 



9,159,234i?io 



i45, 365 

108,633,980179^04 

189, 425 

423, 200 

525 

22,440 



127H 

113, 628, 878 

15,750 
20,664 
122,976 

442?ioo 
2 
5,882 



223, 209. 2654373^,00 



24, 430, 978 

50. 440 

112,966 

3, 907, 372 

255, 470 



156, 937^ 
161,076i6 



29, 076. 359?.f< 



315,905,58175425 



1935 



2, 920, 000 
505, 450!^ 
14, 110 
750 

10, 810 

1, 262}^ 

28,246 

801, 809 

10, 402 

3, 847, 037 

7, 030, 900 

3,850 



473, 756 

1, 417, 500 

129, 900 



75 
3,000 



2\i 

1 

4^ 



19,386,7831-6 



160, 500 

127,956,4823^04 
11,000 
856, 279 
250 
97, 1461-4 
30, 887 
12 
2,094isjio4 

140,642,826i?i7 



52, 470 
892, 620 
1738^^5 



6.582 



270,709,3231277^700 



15, 713, 659 

49, 000 

27, 080J^ 

4, 460, 756 

323, 500 

474, 960 



258.512 

2,381 

60 



21,309.90S;4 



366,380,62442^700 



Face value, 
1935 



$413, 750, 000 

11,805,587,500 

5, 771, 148, 000 

300. 000, 000 

985, 250 

1, 950, 000 

15, 072, 000 

1, 736, 498, 000 

199,510,000 

2, 527, 475, 000 

7, 881, 450, 000 

358, 250, 000 



5, 000, 000 
8, 105, 000 
2, 495, 000 



40, 948, 668, 850 



Subjects 
4, 670, 000 

10. 584, 707, 787 

2, 200, 000 

60,891,800 

25, 000 

19, 429, 250 

3, 459, 344 

504 

31, 725 

13, 832, 390, 331 



4. 722, 000 

86, 780, 448 

10, 480 



658. 200 



24, 599, 976, 869 



78. 568, 295 

245, 000 

30, 972 

19, 295, 225 

1, 617, 500 

474, 960 



5, 321, 503 



105, 553, 853 



106 



EEPORT OP THE SECRETARY OF THE TREASURY 



There was expended during the year for salaries and expenses 
$8,760,831, as compared with $7,101,599 in 1934. These expenditures 
are exclusive of $288,025 and $311,221 for 1935 and 1934, respectively, 
the amounts impounded under the provisions of sections 110 and 203 
of the Economy Act. The following statement shows the appropria- 
tions, reimbursements, and expenditures for the fiscal years 1934 and 
1935: 

Appropriations, reinibursements, and expenditures for the fiscal years 1934 end 

1935 





1934 


1935 


Increase (+), 
decrease (— ) 


Appropriated by Congress, salaries and expenses ' 

Transfer from appropriation pay and allowances, Coast 


$5. 060, 680. 00 
29, 827. 00 


$4,568,060.00 


-$492,620.00 
-29, 827. 00 


Appropriation for restoration of 5 percent salary reduc- 


405,000.00 

400, 000. 00 
491, 780. 00 

3, 649, 252. 77 


+405,000.00 


Transfer from appropriation collecting the internal 




+400,000.00 






+491,780.00 


Reimbursements from other bureaus for work corn- 


2,692,005.31 


+957,247.46 






Total 


7, 782, 512. 31 


9, 514, 092. 77 


+1, 731, 580. 46 






Expended, salaries and expenses ^ - 


7, 101, 598. 56 


8, 760. 830. 88 


+1, 659, 232. 32 






Unexpended balance (including impoundments and 


680, 913. 75 


763, 261. 89 


+72, 348. 14 







' Includes $3,997.50 and $10,994 for salaries of employees transferred to the Procurement Division and 
the Division of Disbursement of the Treasury Department, in the fiscal years 1934 and 1935, respectively. 

2 An additional amount of $6,916.79 was received from sale of by-products and useless property and was 
deposited to the credit of the Treasurer of the United States as miscellaneous receipts. 

5 Includes $8,000 transferred to the Bureau of Standards for research work in each of the fiscal years 1934 
and 1935. The sums of $238,485.42 and $263,829.22 were transferred to the retirement fund in the fiscal 
years 1934 and 1935, respectively. 

Spoilage of currency increased from 2.52 percent for 1934 to 3.33 
percent for 1935. 

The following dies for new postage stamps were engraved during 
the year : 

Denomination 
Issue cents 

Special delivery air mail 16 

Connecticut Tercentenary 3 

California-Pacific International Exoosition, San Diego 3 

National parks, series 1934 2 to 10, inclusive 

An increase in the volume of new orders was sufficient to keep 
the entire force of the Bureau operating full time in the last 5 
months of the fiscal year. The rotating furlough was eliminated 
on February 1, 1935. 

The greatest demand for work during the year occurred in con- 
nection with the printing of checks, bonds, revenue stamps, and sil- 
ver certificates. All orders received were urgent, and extra shifts 
Avere frequently established until sufficient engraved stock was avail- 
able. 

The largest bond orders came from the Federal Farm Mortgage 
Corporation and the Home Owners' Loan Corporation, and aggre- 
gated more than 10,000,000 sheets. The manufacture of dies and 
plates for the various denominations of United States Saving Bonds 



EEPORT OF THE SECRETARY OP THE TREASURY 107 

required a large amount of original engraving. In addition, cer- 
tificates of indebtedness, Treasury notes, and bonds were printed 
in connection with the Treasury financing program. 

The printing of checks for the Emergency Kelief Administration 
necessitated extra shifts. Special stamps were prepared for bottled 
distilled spirits and, as a protection against their illegal use, a 
number was overprinted on each stamp, requiring an increase in the 
size of the stamps and necessitating the purchase of 500 numbering 
machines. A design was approvecl and die engraved for the new 
series of 1935 silver certificates. 

The Bureau sponsored an exhibit of printing at the Century of 
Progress Exposition in Chicago, and a similar exhibit at the Cali- 
fornia-Pacific International Exposition at San Diego. 

COMMITTEE ON ENROLLMENT AND DISBARMENT OF ATTORNEYS 

AND AGENTS 

On September 1, 1934, the Committee on Enrollment and Disbar- 
ment of Attorneys and Agents was reorganized and its number re- 
duced to three. The first work of the reorganized committee was to 
revise the regulations governing the enrollment and disbarment of 
attorneys and other agents. The new regulations made the commit- 
tee a purely administrative and judicial body and relieved it of its 
former prosecuting functions. An attorney, not a member of the 
committee, represents the Government before the committee; all 
complaints must be filed with him, and it is his duty to institute 
proceedings looking to disciplinary action. The committee conducts 
the hearings, ascertains the truth or falsity of the charges, and 
determines what kind of disciplinary action to recommend to the 
Secretary. 

The following statement summarizes the work of the committee 
for the year 1935 : 

Numier 

Applications for enrollment of attorneys and agents approvecl 2, 922 

Applications for enrollment of attorneys and agents disapproved 38 

Complaints against enrolled persons : 

Pending July 1, 1934 92 

Filed during tbe year 35 

-127 

Disposed of : 

Dismissed 21 

Disbarments 13 

Suspensions 8 

Reprimands 6 

Stricken from the rolls 7 

■ 55 

Pending June 30, 1935 72 

Charges made, names stricken from the rolls 9 

Disbarment vacated 1 

Since the organization in 1921 of the Committee on Enrollment 
and Disbarment, 39,163 applications for enrollment have been ap- 
proved and 540 disapproved. One hundred and seventy-four prac- 
titioners have been disbarred from further practice before the Treas- 
ury Department, 122 have been suspended from practice for various 
periods, and 162 have been reprimanded. In 14 cases the order of 
disbarment has been terminated and the practitioner restored to good 
standing before the Department. 



108 REPORT OF THE SECRETARY OF THE TREASURY 

BUREAU OF INTERNAL REVENUE 

General 

Internal revenue collections. — Collections from internal revenue and 
agricultural adjustment taxes during the fiscal years 1934 and 1935 
are shown in the following summary, classified according to the ad- 
ministrative organization responsible for the audit of returns, A 
detailed statement of collections appears in table 7, page 341 of this 
report. 

Summary of internal revenue collections for the fiscal years 1934 o,nd 1935 
[On basis of reports of collections, see p. 294] 



Sources 


1934 


1935 


Increase (+) or 
decrease (— ) 


Income Tax Unit: 

Corporation income tax . 


$397, 515, 851. 94 

419, 509, 487. 78 

2, 630, 615. 56 

t 50, 229, 122. 97 


$572, 117, 876. 28 

527,112,506.42 

6, 560, 482. 64 

1 961, 479. 73 


+$174, 602, 024. 34 




+107, 603, 018. 64 




+3, 929, 867. OS 




-49, 267, 643. 24 






Total -- 


869, 885, 078. 25 


1, 106, 752, 345. 07 


+236, 867, 266. 82 






Miscellaneous Tax Unit: 


80,168,344.13 
113,138,364.10 
425, 168, 897. 04 

2 3 553, 113, 926. 49 
371, 422, 885. 64 


91, 508, 121. 29 
212,111,959.23 
459, 178, 625. 46 

8 492, 626, 529. 28 
526, 222, 358. 24 


+11,339,777.16 




+98, 973, 595. 13 




+34, 009, 728. 42 


Sales taxes (stamp and excise, admissions, 
communications, checks, oleomargarine, 
etc.) .. -. .. -- 


-60, 487, 397. 21 


Agricultural adjustment taxes 


+ 154,799,472.60 






Total.. 


1,543,012,417.40 


1, 781, 647, 593. 50 


+238, 635, 176. 10 






Alcohol Tax Unit: 

Alcoholic liquor taxes: 

Deposited by collectors of internal reve- 
nue 


252, 333, 373. 97 
6, 577, 958. 65 


395, 913, 845. 99 
15,107,926.36 


+ 143,580,472.02 


Deposited by collectors of customs 


+8, 529, 967. 71 


Total. 


258, 911, 332. 62 


411,021,772.35 


+ 152,110,439.73 






Miscellaneous collections (prohibition and other). 


430, 366. 25 


13, 861. 26 


-416, 504. 99 


Grand total .. . 


2, 672, 239, 194. 52 


3, 299, 435, 572. 18 


+627, 196, 377. 66 







' Tax repealed on dividends declared subsequent to Dec. 31, 1933. 

2 Includes collections from tax on transfers of silver bullion of $606.04 in 1934 and $1,149,390.48 in 1935. 
' Excludes delinquent taxes collected under repealed laws in the amount of $520.64, which is included in 
miscellaneous collections. 

Refunds. — In the foregoing statement of collections no deductions 
were made on account of refunds, which during the fiscal year 1935 
were paid from the several appropriations as follows: 

Refunding taxes illegally collected, 1934 and prior years $16, 970, 410. 93 

Refunding taxes illegally collected, 1935 and prior years 7, 088, 553. 26 

Total.. 24,058,964.19 

Advances to Agricultural Adjustment Administration (transfer to Internal Revenue for 
refunds) 32,063,188.81 

Grand total, all refunds (interest included) 56, 122, 153.00 

In addition to the above amount, there were certain repayments as 
provided under specific appropriations for the redemption of stamps, 
representing 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 $1,426,049.97. 
Total refunds and redemptions of stamps, classified by appropriations, 
are shown in the following table: 



KEPORT OF THE SECRETARY OF THE TREASURY 



109 



Number of claims, amount of refunds and repayments, and interest allowed on each 
class of tax during the fiscal year 1935 



Appropriation and class of tax 



Number 
of claims 



Amount re- 
funded or 
repaid i 



Interest 
allowed 



Refunding taxes illegally collected for the fiscal year 1934 
and prior years, and 1935 and prior years: 

Income taxes 

Miscellaneous internal revenue taxes: 

Capital stock 

Distilled spirits 

Estate and gift 

Miscellaneous 

Narcotics 

Sales 

Silver 

Tobacco - - 

Total 

Agricultural adjustment taxes. 

Total refunds 

Repayments (not refunds of taxes erroneously collected) : 
Redemption of stamps: 

Distilled spirits 

Miscellaneous 

Narcotics 

Silver 

Tobacco.. 

Total 

Tobacco Act of Jime 28, 1934 

Total repayments 

Grand total refunds and repayments.. 



62, 663 

2,015 

2,125 

996 

150 

90 

1,344 

2 

7 



$21, 133, 663. 23 

210, 800. 69 

140, 492. 76 

1, 632, 132. 02 

156, 852. 21 

151.96 

784, 495. 42 

324. 31 

51.59 



69, 392 
78, 044 



24, 058, 964. 19 
32, 063, 188. 81 



147, 436 



56,122,153.00 



2,551 

4,377 

64 

53 

1,334 



133, 564. 46 

207, 320. 40 

209. 65 

4, 445. 95 

1, 079, 092. 99 



8,379 
36 



1, 424, 633. 45 
1, 416. 52 



8,415 



1, 426, 049. 97 



155, 851 



57,548,202.97 



$5, 511, 960. 19 

18, 687. 64 

19, 182. 76 

223, 625. 33 

1, 002. 87 

1.66 

182, 789. 23 



5, 957, 249. 68 
20, 585. 61 



5, 977, 835. 29 



197. 79 
14, 307. 76 



14, 505. 55 



14, 505. 55 



6,992,340.84 



' Including interest. 

If the above refunds and repayments during the year were deducted 
from the gross collections of $3,299,435,572.18, the net collections for 
the fiscal year 1935 would be $3,241,887,369.21. The gross collections, 
however, are used for comparative purposes in this report. 

Additional assessments. — Additional assessments resulting from 
office audits and field investigations amounted to $332,105,910.44, 
as shown in the following summary: 



Additional assessments during the fiscal year 1935, by class of tax 



Class of tax 



Amount 



Income taxes 

Miscellaneous internal revenue taxes: 

Estate 

Gift 

Capital stock 

Sales (excise) 

Distilled spirits 

Tobacco 

Other miscellaneous 

Total miscellaneous internal revenue taxes 

Agricultural adjustment taxes 

Grand total.. 



1 $240, 634, 483. 26 



21, 219, 891. 42 

390, 362. 44 

1, 071, 196. 25 

6, 152, 649. 93 

18, 787, 032. 85 

41, 678. 04 

25,112,483.98 



2 72, 775, 294. 91 



3 18, 696, 132. 27 



332, 105, 910. 44 



• Includes $232,511,940.26 from the Income Tax Unit and $8,122,543 from the Accounts and Collections 
Unit. The assessments of the Income Tax Unit include $53,472,371.77 made under the jeopardy provisions 
of sec. 279 of the Revenue Act of 1926 and sec. 273 of the Revenue Acts of 1928, 1932, and 1934. 

2 Includes $29,847,939.06 from the Miscellaneous Tax Unit, $24,140,323 from the Accounts and Collec- 
tions Unit, and $18,787,032.85 from the Alcohol Tax Unit. 

3 Includes $4,898,517.27 from the Processing Tax Division and $13,797,615 from the Accounts and Collec- 
tions Unit. 



110 



EEPOET OF THE SECRETARY OF THE TREASURY 



Cost of administration. — The amount expended and obligated in 
administering the internal revenue laws for the fiscal year 1935 was 
$42,719,338. This does not include the amounts expended for refund- 
ing taxes illegally or erroneously collected and for redemption of 
stamps, which are in no sense administrative expenses. The amount 
expended and obligated in administering the agricultural adjustment 
tax laws for the fiscal year 1935 was $4,851,674. A summary com- 
parison for the fiscal years 1934 and 1935 of the amounts obligated 
under the various appropriations for administrative expenses, the 
amounts of taxes collected, and the cost of collecting each $100 of 
revenue is as follows: 



Amounts expended, obligated, and collected, and the cost of collecting each $100 of 
revenue, fiscal years 1934 ct^d 1935 



Appropriation 


Expended and obligated 


Collected 


Cost of col- 
lecting each 
$100 of 
revenue 




1934 


1935 


1934 


1935 


1934 


1935 


Collecting the internal 
revenue - . 


1 $28, 826, 225. 73 
2, 544, 178. 39 


2 $42, 719, 338. 00 

3, 740, 502. 00 

991, 556. GO 

113,616.00 


$2, 300, 81fi, 308. 88 
371,422,885.04 


$2, 773, 213, 213. 94 

521,880,108.61 

1, 110, 874. 86 

3, 231, 374. 77 


$1.25 
.60 


$1.54 


Advances to Agricultural 
Adjustment Adminis- 
tration (transfer to 
internal revenue ad- 
ministration expenses). 

Administration of Cotton 
Act of 1934 (transfer to 
internal revenue ad- 
ministration expenses 
1934-35) 


.72 
89.26 


Advances to Department 
of Agriculture under 
Tobacco Act of June 
28, 1934 (transfer to 
internal revenue ad- 
ministration expenses, 
1934-35) 






3.51 










Total... 


31. 370, 404. 12 


47, 571, 012. 00 


2, 672, 239, 194. 52 


3, 299, 435, 572. 18 


1.17 


1.44 



' The amount expended by the Bureau of Industrial Alcohol in administering the liquor laws prior to 
consolidation with the Bureau of Internal Revenue, May 10, 1934, is not included in this figure. 

2 Includes approximately $10,700,000 for administrative expenses of the Alcohol Tax Unit, the first full 
year after the consolidation of the Bureau of Industrial Alcohol with the Bureau of Internal Revenue, and 
restoration of salary cost for the entire Internal Revenue Service. 

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 1040 A 
Returns filed on form 1040 A (returns of individuals reporting income, 
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. 



REPORT OF THE SECRETARY OF THE TREASURY HI 

Summary of work oj the Income Tax Unit for the fiscal years 1934 and 1935 



Number 



1934 



1935 



Returns on hand in Washington and in the field at beginning of year i 

Returns received during year: 

Reopened and amended - 

Original.. 

Total.- 

Total to be disposed of. 

Returns closed during year;' 

Additional assessments except jeopardy: 

Before final notice of deficiency 

After final notice of deficiency:' 

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 90-day notice of deficiency mailed 
during year 

Total not closed 



325,734 



363, 670 



87, 252 
1,920,041 


126, 833 
1,864,671 


2, 007, 293 


1,991,504 


2, 333, 027 


2, 355, 174 


84,026 

4,339 
7,255 


120,809 

3,048 
7,405 


95,620 

1,600 

34. 859 

1,830,018 


131.262 

1,769 

27. 868 

1, 784, 428 


1, 962, 097 


1, 945, 327 


363, 670 
1,913 

5,347 


402, 394 
2,913 

4,540 



370, 930 



409,847 



' Does not include returns with respect to which final notices of deficiency (90-day letters) were mailed 
prior to the beginning of the year. 

' Excludes returns closed through decisions of Board of Tax Appeals. 

' Includes some returns with respect to which final notices of deficiency (90-day letters) were mailed 
prior to the beginning of the year. 

Additional revenue. — Additional revenue made available for collec- 
tion (exclusive of jeopardy assessments) was $179,039,568.49 as com- 
pared with $194,030,746.36 the previous year. The field forces of 
the'Jncome Tax Unit secured agreements to the immediate assessment 
and collection of $23,797,541.50, while $155,242,026.99 was assessed 
after consideration in Washington. 

The additional revenues are classified in the following table to show 
the additional tax, interest, and penalty, and also the procedure 
involved in reaching a settlement with the taxpayers. 



16816 — 3e 



112 



KEPOET OF THE SECEETAEY OF THE TEEASUEY 



Additional revenue made available for collection during the fiscal years 1934 and 
1935, classified according to the tax, interest, and penalty, and the procedure 
involved 





1934 


1935 




Amount 


Percent 


Amount 


Percent 


Tax 


$151, 483, 716. 42 

38, 126, 719. 46 

2,284.213.67 

2,136,096.81 


78.1 

19.6 

1.2 

1.1 


$141, 870. 869. 40 

33, 232, 014. 07 

3, 049. 375. 29 

887, 309. 73 


79.2 




18.6 




1.7 


Rejected claims for abatement and credit 


.5 


Total -.- 


194, 030, 746. 36 


100.0 


179,039,568.49 


100.0 






Procedure involved in settlement: 

Mimeograph 3552 ' 


18,897,448.21 

41, 742, 943. 05 

38,503,162.99 
23, 420, 736. 50 
69, 330, 358. 80 


9.8 

21.8 

20.1 
12.2 
36.1 


23,797,541.50 

66, 846, 866. 58 

4,312,969.05 
13, 786, 480. 88 
69, 408, 400. 75 


13.4 


Regular procedure: 

Agreements executed by taxpayer 
without 90-day letters— 

Agreements executed by taxpayer sub- 
sequent to 90-day letters 


37.5 
2.4 


Appeals not filed within 90-day period- 
Action of Board of Tax Appeals - 


7.7 
39.0 


Total - 


191,894,649.55 


100.0 


178, 152, 258. 76 


100.0 







1 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, 1933, to 
May 31, 1934, and June 1, 1934, to May 31, 1935. 

Additional taxes were also assessed under the jeopardy provisions 
of the several revenue acts, as follows: 

Additional taxes assessed under the jeopardy provisions of revenue acts during the 
fiscal years 1934 ond 1935 i 



Under bankruptcy and dissolution procedure 
Returns believed to be fraudulently rendered 

Total assessed - 

Interest 

Penalties - 

Grand total 



1934 



$26, 223, 540. 96 
13, 425, 730. 81 



39, 649, 271. 77 
8, 875, 646. 89 
4, 771, 665. 02 



53, 296, 583. 68 



1935 



$30, 948, 136. 24 
7, 233, 565. 13 



38, 181, 701. 37 
11,325,177.44 
3, 965, 492. 96 



53, 472, 371. 77 



' The amounts shown 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. 

Final notices of deficiency (90-day letters). — During the year 14,529 
final notices of deficiency (90-day letters) were mailed by the Income 
Tax Unit, as compared with 13,003 for the previous fiscal year. 

Petitions were filed with the Board of Tax Appeals involving 31 
percent of the returns with respect to which 90-day letters had been 
issued. This compares with 41 percent during the fiscal year 1934. 

The following table shows the number of tax years involved in 
petitions filed with the Board of Tax Appeals during the fiscal years 
1932 to 1935, inclusive: 



EEPORT OF THE SECRETAEY OP THE TREASURY 



113 



Number of tax years involved in petitions filed with the Board of Tax Appeals during 
the fiscal years 1932 to 1935, by tax years 



Tax year 


1932 


1933 


1934 


1935 


Tax year 


1932 


1933 


1934 


1935 


1917 


18 

28 

28 

86 

29 

82 

66 

108 

161 

246 


9 

35 
32 
64 
37 
35 
37 
62 
65 
113 


24 
21 
18 
37 
58 
33 
60 
76 
95 
128 


8 
11 
12 
15 
20 
39 
52 
47 
92 
98 


1927 . 


849 

1,493 

5,107 

269 

4 

1 


175 

298 

1,827 

3,576 

236 

6 

1 


172 

223 

589 

1,632 

2,023 

156 

2 


143 
169 
282 


1918. — . 


1928 


1919 


1929 


1920... 


1930 .. . 




1921- 


1931 


1,002 

2,001 

104 


1922.-. 


1932 . 


1923. 


1933 


1924 


1934 




3 


1925 


Total 










1926 


8,575 


6,598 


6.347 


4.540 





Claims and overassessments. — The following table shows the number 
of refund claims adjusted and the certificates of overassessment issued, 
together with the amounts of overassessments involved, during the 
fiscal years 1934 and 1935: 

Refund claims adjusted and overassessments determined during the fiscal years 1934. 

and 1935 





1934 


1935 


Claims: 

Pending at beginning of year 


Number 

22. 434 
34, 135 


Num 


ber 
20 732' 


Filed during year . .... 


33 844 


Received from other sources ._ 


5,214 








Total to be adjusted 


56, 569 




69 790 






Allowed in full or in part 


25, 641 
10, 196 




25 052 


Rejected ..... 


11 900 






Total adjusted . . . 


35, 837 


36, 952 




Pending at end of year 


20. 732 


22, 838 




Certificates of overassessment issued when no claim had been filed- 

verassessments settled by: 

Abatement 


26,480 

Amount 
$112,371,340.67 
19, 123,0S0.94 
29, 056, 285. 26 


Amou 

$59, 938 

27. 226 

15. 621 


18, 779 

nt 
289 64 


Credit. 


775 32 




703 04 






Total 


160, 550, 706. 87 
11, 754. 027. 39 


102, 786 
5,511 


768 00 


Interest... 


960 19 








172, 304, 734. 26 


108. 298 


728 19 







Note.— The amount involved in claims filed during the year was $99,952,466.13 as compared with 
$176,132,959 94 the preceding year. Of the claims adjusted during the year the amounts rejected totaled 
$104,526,409.83 as compared with $113,340,642 51 the preceding year. 

There were also allowed during the year 10,179 collectors' claims, 
of which 8,935 recommended abatements or credits and 1,244 rec- 
ommended refunds. A collector's claim usually lists a number of 
items in favor of different taxpayers; those settled during the year 
covered 17,333 items for abatement or credit and 47,506 for refund. 

Returns on hand. — A comparative table of returns for all tax years 
on hand at the close of the past 4 years follows: 



114 KEPORT OP THE SECRETARY OF THE TREASURY 

Returns on hand in the Income Tax Unit on June 30, 1932 to 1935, by tax years 



Tax year 


1932 


1933 


1934 


1935 


1917 


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 


167 
119 
125 
163 
146 
209 
232 
281 
352 
435 


1918 


1919 


1920 


1921 


1922 


1923.- 


1924 


1925 

1926 





Tax year 



1927. 
1928. 
1929. 
1930. 
1931. 
1932. 
1933. 
1934. 



Total. 



1932 



3,713 

4,380 

10, 496 

209, 921 

1 22, 142 



1933 



2,939 
2,632 
5,236 
9,929 
208, 111 
192,211 



325, 734 



1934 



634 
1,033 
3,246 
4,298 
9,522 
297, 803 
1 45, 421 



363, 670 



1935 



507 

823 

2,214 

2,993 

4,562 

13, 643 

339, 235 

1 36, 188 



402, 394 



1 Figures are incomplete, since the preliminary work on the returns for the year just previous to the end 
of the fiscal year cannot be completed within the 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 SO, 1935 , 

by tax years 





Audit Review Division 


Conference 
Section 






Spe- 
cial 
Ad- 
just- 
ment 
Sec- 
tion 


To 




Tax year 


Individual 
returns 


Corporation 
returns 


Consoli- 
dated re- 
turns 


and Valua- 
tion Divi- 
sion 


tal 




1 

o 


-a 

1 


■3 

a 

M 

o 


a 

a 

o 


"3 
a 
[3) 
*c 
o 


a 
a> 
o, 
o 

« 


"3 
a 
"Si) 
*C 
O 


§ 

o 
o 


•3 
a 

O 


■a 

g 
& 


-2 

a 

o 


■3 
o 

o 




1917 




62 
41 
28 
51 
36 




1 

3 
6 
4 

5 




20 
14 
14 
15 
15 




2 
4 
3 
5 
2 




7 
4 
10 
11 
10 


19 
19 
27 
37 
40 




101 


1918 




85 


1919 




88 


1920 




123 


1921 




108 








Total - 




208 




19 




78 




16 




42 


142 




605 








1922 . .. 




49 
44 
53 
71 
81 
91 
127 
354 
522 
721 
1,547 


...... 

1 

4 

23 

116 

960 


7 

8 

11 

18 

30 

30 

61 

84 

112 

200 

306 


2 

2 

4 

11 

21 

19 

27 

66 

132 

208 

545 


18 
24 
30 
34 
44 
70 
82 
127 
112 
129 
78 


2 
1 
3 

6 
6 

7 

11 

62 

142 

349 

867 


2 
4 

9 

7 
16 
21 
33 
60 
56 
82 
68 


2 
3 

8 
13 
14 
31 
40 
69 
90 
256 
639 


7 

13 

18 

14 

20 

19 

34 

97 

158 

143 

147 


71 

94 

88 

108 

114 

91 

207 

475 

671 

674 

978 


6 

6 

16 

32 

43 

60 

82 

250 

576 

1,447 

6,132 


154 


1923 




187 


1924 


1 

2 
2 
2 
3 

59 

189 

518 

3,121 


209 


1925 


252 


1926 


305 


1927 


322 


1928 


534 


1929 


1,197 


1930 


1,531 


1931 


1,949 


1932 


3,124 






Total 


3,897 


3,660 


1,105 


857 


1,037 


748 


1,456 


358 


1,155 


670 


3,471 


8,650 


9,764 






1933 


5,074 
278 


517 
29 


2,514 
173 


137 
17 


1,136 
64 


29 
1 


105 


5 


696 
17 


82 


433 
21 


9,425 
532 


1,203 


1934 


68 










Total 


5,352 


546 


2,687 


164 


1,200 


30 


106 


5 


613 


82 


454 


9,957 


1,271 






Grand total . . 


9,249 


4,414 


3.792 


1,030 


2,237 


856 


1,561 


379 


1,768 


794 


4,067 


18,607 


11, 540 



Audit in the field. — There were 356,906 returns for all years pending 
for verification in the offices of the 38 field divisions of the Income 
Tax Unit on June 30, 1935, compared with 310,566 returns on hand 
June 30, 1934. 



EEPORT OF THE SECRETAEY OF THE TREASURY 115 

Changes in tax liability were recommended by the field forces in 
165,361 returns, or in 32 percent of the 520,958 returns disposed of by 
the field forces during the year. In the case of 134,218 returns, or 
81 percent of those changed, taxpayers agreed with the conclusions of 
revenue agents. The total additional tax recommended by revenue 
agents during the fiscal year was $265,967,439.62, compared with 
$203,510,465.96 in the preceding fiscal year. 

The Technical Staff 

The Technical Staff, organized November 16, 1933, considers (a) 
proposals for the settlement without further litigation of income, 
profits, e&tate, and gift taxes asserted in deficiency notices mailed 
under the various revenue acts and (b) questions involving determina- 
tions of Bureau policy, specific cases, and other matters assigned or 
submitted to it by the Commissioner of Internal Revenue. In addi- 
tion to its regular settlement work, the jurisdiction of the staff has been 
enlarged to include certain classes of compromise of income tax cases 
(excluding cases involving fraud or cases under the supervision of a 
court), applications for extension of time within which to pay income 
taxes under sections 56 (c) and 272 (j) of the Revenue Act of 1932 
and the corresponding provisions of prior revenue acts, and the 
review in behalf of the Commissioner of Internal Revenue of final 
closing agreements executed pursuant to section 606 of the Revenue 
Act of 1928. 

On July 1, 1934, the technical staff had on hand 3,770 docketed 
cases pending before the Board of Tax Appeals. During the year 
the staff received 3,347 Board dockets, considered to a conclusion 
3,058 Board cases, and settled 1,616 cases. The deficiencies proposed 
on cases recommended for settlement by the staff totaled $39,781,- 
473.88; the recomputed deficiencies (without eliminating the enforced 
credits in estate tax cases) were $21,287,302.03, making a settlement 
effectiveness of 54 percent. The settled docketed cases involving only 
income taxes showed the same settlement ratio with respect to the 
deficiency asserted in the statutory notice. During the fiscal year 
the staff' considered 1,379 so-called "90-day status cases" of which 
970 were disposed of without petitions being filed with the United 
States Board of Tax Appeals. These cases involved proposed defi- 
ciencies of $2,288,791.15 and recomputed deficiencies (not reduced by 
enforced credits in estate tax cases) of $1,217,869.73, or a settlement 
effectiveness of 53 percent. 

On July 1, 1934, the staff had on hand 1,251 compromise cases; 
1,500 cases were received during the year and 2,064 cases were disposed 
of, leaving a balance of 687 cases on June 30, 1935. 

There were 448 extension-of-time cases turned over to the staff on 
February 26, 1935; between that time and June 30, 1935, 296 cases 
were received and 560 disposed of, leaving 184 cases on hand June 
30, 1935. 

In addition 462 final closing agreements submitted pursuant to 
section 606 of the Revenue Act of 1928 were reviewed by the staff in 
behalf of the Commissioner of Internal Revenue. 

Miscellaneous Tax Unit 

The Miscellaneous Tax Unit administers all taxes other than the 
income and excess-profits taxes and the taxes applicable to alcoholic 



116 



EEPOET OF THE SECRETARY OF THE TREASURY 



beverages. The unit consists of six divisions, the titles of which are 
indicative of the general type of taxes administered. Certain taxes, 
such as the tobacco taxes, occupational taxes, stamp taxes, certain 
excise taxes, estate taxes, etc., have been collected for many years. 
Others, such as the processing and related taxes imposed under the 
Agricultural Adjustment Act and similar legislation, the tax on 
transfers of interests in silver bullion, taxes on the refining and pro- 
duction of crude petroleum, certain new excise taxes, and a more in- 
volved capital stock tax, have resulted from recent legislation and 
have operated to increase greatly the volume of work in the Miscel- 
laneous Tax Unit, with a consequent necessity for an increase m the 
personnel. 

The total collections of miscellaneous taxes for the current fiscal 
year amounted to $1,781,647,593.50, an increase of $238,635,176.10 
over the prior year. 

Estate Tax Division. — Estate tax collections for the year amounted 
to $140,440,682.34, an increase of $36,455,394.30 over the preceding 
year. Gift tax collections amounted to $71,671,276.89, and exceeded 
collections for the previous year by $62,518,200.83. Transfers of 
property by gift during the year were valued at $505,844,720, as com- 
pared with $101,792,574 in the previous year. In addition to the 
estate and gift taxes actually collected, deficiencies in the amount of 
$21,742,842 were asserted in 242 cases upon which collection was 
withheld pending a review of appeals filed with the United States 
Board of Tax Appeals. 

As a result of the audit of estate tax returns by the Bureau at 
Washington, deficiencies in tax amounting to $19,209,108.70 were 
assessed in 55.4 percent of the cases closed, as compared with $13,185,- 
549.91 assessed in 52.5 percent of the cases closed in the prior year. 
Deficiencies in the gift tax were assessed in the amount of $345,383.51 
in 2.4 percent of the cases closed, as compared with $138,097.51 
assessed in 2.3 percent of the cases closed for the previous year. 

The administrative work in connection with estate and gift tax 
returns is summarized in the following table: 

Number of estate tax and gift tax returns investigated and audited during the fiscal 

years 1934 and 1935 





Estate tax 


Gift tax 




1934 


1935 


1934 


1935 


Returns in field: 

On hand at beginning of year .. . 


1,967 
10,410 


3,449 
11,137 


1, 068 
1,045 


673 


Received for investieation 


2,152 






Total to be disposed of 


12, 377 
8,928 


14, 586 
10, 951 


2,113 
1,440 


2,825 


Major reports submitted by field force.- -. 


1,923 






On hand at end of year 


3,449 


3,635 


673 


902 






Returns in Bureau: 

On hand at beginning of year . 


4,587 

11,210 

867 


6,488 

13, 133 

177 


1,706 
3,619 


3,291 


Received.. 


11,410 


Reopened 


18 








Total to be disposed of - 


16, 664 
10. 176 


19, 798 
10, 105 


5,325 
2,034 


14, 719 


Disposed of 


11, 789 






On hand at end of year 


6,488 


9,693 


3,291 


2,930 







REPOET OF THE SECRETARY OF THE TREASURY 



117 



Number of estate tax and gift tax returns investigated and audited during the 
fiscal years 1934 and 1935 — Continued 





Estate tax 


Gift tax 




1934 


1935 


1934 


1935 


Protest letters of taxpayers as a result of tax determined by 

audit: 


98 
864 


236 
1,374 




16 




2,'j 


107 








962 
726 


1,610 
1,124 


25 
9 


123 


Disposed of by Estate Tax Division 


41 








236 


486 


16 


82 






Final agreements (sec. 606 of the Revenue Act of 1928) : 


288 
132 


3 
1 




















420 
417 


4 
4 




















3 


















1243 


I 147 













1 Included in returns disposed of, above. 

Refunds of estate and gift taxes allowed, with interest, totaled 
$1,632,132,02. Tax in the amount of $265,346.79, including interest 
of $71,538.22, was refunded as a result of judgment claims filed in 
20 cases. The following table shows the estate and gift tax claims 
for refund and abatement on hand at the beginning of the year and 
the claims received and disposed of during the year: 

Estate tax and gift tax claims on hand, received, and disposed of during the fiscal 

year 1935 





Estate tax claims 


Gift tax claims 




Refund 


Abatement 


Refund 


Abatement 




Num- 
ber 


Amount 


Num- 
ber 


Amount 


Num- 
ber 


Amount 


Num- 
ber 


Amount 


Claims filed: 

On hand July 1, 1934. 
Received 


156 

589 

13 


$3, 181, 507. 54 

1,381,018.14 

57, 524. 33 


5 
213 


$1,973.28 
8,000,878.29 


9 

29 


$7, 724. 61 
3, 573, 565. 47 






2 


$6, 639. 16 




















Total to be dis- 
posed of. .- 


758 


4,620,050.01 


218 


8,002,851.57 


38 


3,581,290 08 


2 


6, 639. 15 






Allowed. 


476 
93 


1, 013, 266. 43 
1,597,021.98 


209 
2 


7, 992, 257. 40 
1, 173. 56 


17 
2 


4,141.64 
11, 129. 23 


2 


6, 639. 15 












Total disposed of. 


569 


2, 610, 288. 41 


211 


7, 993, 430. 96 


19 


15, 270 87 


2 


6, 639. 15 


On hand June 30, 
1935 


189 


2, 009, 761. 60 


7 


9, 420. 61 


19 


3, 566, 019. 21 












No claims filed, overas- 
sessments allowed.. 


413 


365, 240. 16 
222, 390. 25 


185 


10,296,340.96 


90 


25,858.46 
1, 235. 08 


11 


46, 393. 90 
















Total allowed in- 
cluding interest- 


889 


1,600,896.84 


394 


18, 288, 598. 36 


107 


31, 235. 18 


13 


53,033.05 



Note.— In addition to the above, $169,074.98 was abated as uncollectible in 27 estate tax cases, and $3,836.29 
was abated as uncollectible in 2 gift tax cases. 



118 



REPORT OF THE SECRETARY OP THE TREASURY 



Tobacco Division. — Collections of tobacco taxes for the year 
amounted to $459,178, 625.46, which represents the largest annual 
collection from this source since these taxes were first imposed. The 
collections show an increase of $34,009,728.42, or approximately 8 
percent over the previous year, and $8,839,564.96 more than the 
previous high collections in 1930. The sum of $385,459,570.66, or 
84 percent of the total tobacco taxes received, was collected on small 
cigarettes, which represents a new high in collections from this source; 
but collections on large cigarettes and small cigars declined. 

A detailed comparison of the tobacco taxes collected during the 
last 2 fiscal years follows: 

Tobacco taxes collected during the fiscal years 1934 and 1935 



Source 


■1934 


1935 


Increase (+) or 
(-) 


decrease 


Amount 


Percent 


Cigars (large): 

Class A 


$8, 101, 364. 10 

117,781.47 

2, 888, 281. 55 

459,415.87 

66, 453. 27 


$8, 485, 474. 10 

200, 030. 28 

2, 546, 256. 63 

406, 023. 39 

55, 074. 74 


+$384,110.00 
+82, 248. 81 
-342, 024. 92 
-53, 392. 48 
-11,378.53 


+4.74 


Class B 


+69. 83 


Class C - -- 


-11.84 


Class D -- 


-11.62 


Class E - -- 


-17. 12 






Total 


11,633,296.26 


11,692,859.14 


+59, 562. 88 


+.51 




173, 018. 13 

637, 496. 55 

349,661,945.45 


143, 738. 75 

17, 317. 56 

385,459,570.66 


-29, 279. 38 

-620,178.99 

+35, 797, 625. 21 


-16.92 




-97.28 


Cigarettes (small) 


+10.24 




55, 298, 629. 34 
6, 788, 191. 13 


54, 372, 414. 27 
6,511,662.53 


-926, 215. 07 
-276, 528. 60 


-1.67 


Snuff 


-4.07 






Total- 


62, 086, 820. 47 


60,884,076.80 


-1, 202, 743. 67 


-1.94 




3, 266. 00 

957, 694. 58 

15, 359. 60 


4,994.39 

963, 758. 16 

12, 310. 00 


+1, 728. 39 
+6, 063. 58 
-3, 049. 60 


+52. 92 




+.63 


Cigarette tubes - 


-19.85 




425,168,897.04 


459, 178, 625. 46 


+34, 009, 728. 42 


+8.00 







Silver Tax Division. — The Silver Tax Division was organized in 
July 1934, for the purpose of administering the tax imposed under 
the Silver Purchase Act of 1934, approved June 19, 1934. Collections 
of silver tax for the year amounted to $1,149,390.48; and adjustmenta 
by way of refunds and redemptions amounted to $4,770.26. 

Sales Tax Division. — The yield from the taxes administered by the 
Sales Tax Division was $491,477,138.80, a decrease of $61,636,702.29 
from the previous year. This decrease is due mainly to a reduction 
in the rate of tax applicable to gasoline from !){ cents to 1 cent a 
gallon, effective January 1, 1934; the repeal of the tax on checks as of 
January 1, 1935, and of taxes on candy, soft drinks, and boats; the 
reduction in the rate of tax on sales of produce for future delivery; 
and the elimination of the tax on articles made of fur selling for less 
than $75 and on articles of jewelry selling for less than $25. 

There was no legislation enacted during the current year which 
repealed or modified any of the taxes administered by the Sales 
Tax Division. The manufacturers' excise taxes and other taxes 
imposed under the Revenue Act of 1932, as amended, which would 



REPORT OF THE SECRETARY OF THE TREASURY 



119 



have terminated at the end of this year, were continued in effect until 
June 30 or July 31, 1937, by Public Resolution No. 36, approved 
June 28, 1935. 

A comparison of the various taxes collected during the last 2 fiscal 
years is shown in the following table: 

Collections of taxes administered by the Sales Tax Division during the fiscal years 

1934 and 1935 



Source 


1934 


1935 


Increase (+) or 
decrease (— ) 


Documentary stamps: 

Bonds of indebtedness, capital stock issues, etc. . 
C apital stock sales or transfers 


$16, 259, 304. 76 
38, 065. 999. 47 
7, 847, 743. 08 
4,406,384.68 


$17, 934, 776. 98 
15, 747, 362. 59 
3, 950, 544. 00 
4, 351, 299. 40 


+$1, 675, 472. 22 
—22, 318, 636. 88 


Sales of produce (future delivery) 


—3, 897, 199. 08 


Playing cards.. 


— 55,085.28 






Total 


66,579,431.99 


41, 983, 982. 97 


—24 595 449 02 






Oleomargarine: 

Colored 


44, 871. 50 
603, 398. 25 
827, 960. 57 


84,800.77 

898. 121. 82 

1,066,053.91 


+39, 929. 27 


Uncolored. 


+294, 723. 57 


SoRCial taxes 


+238 093.34 






Total 


1,476,230.32 


2, 048, 976. 50 


+572,746 18 






Adulterated butter . ... . 


1, 462. 47 

9, 690. 03 

3, 830. 50 

1.59 


3, 992. 55 
4, 928. 34 
4, 525. 93 
1, 003. 58 


+2, 530 08 


Renovated butter. 


—4, 761. 69 


Mixed flour . 


+695 43 


Filled cheese 


+ 1,001.99 






Total 


14, 984. 59 


14, 450. 40 


—534. 19 






Manufacturers' excise taxes.. . 


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 


309, 255, 051. 59 
9,479,721.47 
32, 577, 256. 30 

18,411,925.22 
1, 329, 508. 88 
2,317,619.30 

25, 645, 138. 70 


—47, 595, 507. 48 


Transportation of oil by pipe line 


—899, 648. 12 


Electrical energy .. 


—557 150.96 


Telegraph, telephone, cable, and radio messages, 
etc 


+317, 239. 96 


Leased wires, etc, (telegraph and telephone) 

Safe deposit boxes 


+ 173,394.29 
—398, 231. 37 


Checks 


— 15,738 059.96 






Total 


463, 714, 185. 10 


399, 016, 221. 46 


-64, 697, 963. 64 






Admissions 


14,613,414.42 
5, 986, 150. 46 


15, 379, 397. 16 
5, 784, 494. 99 


+765, 982. 74 


Dues and initiation fees 


-201, 655. 47 






Total 


20, 599, 564. 88 


21, 163, 892. 15 


+564, 327. 27 






Pistols and revolvers 


52, 980. 41 
495, 270. 18 
181, 193. 62 


60, 237. 83 
580, 613. 00 
383, 868. 24 


+7, 257. 42 


Narcotics . .. . . . . 


+85, 342. 82 


Delinquent under repealed laws 


+202, 674. 62 






Total 


729, 444. 21 


1, 024, 719. 07 


+295, 274. 86 






Coconut, etc., oils processed 




24, 457, 091. 25 

1, 7.59, 789. 67 

8, 015. 33 


+24,457,091.25 


Crude petroleum processed, refined, etc 




+1, 759, 789. 67 


National Firearms Act .- - 




+8, 015. 33 








Total.. 




26, 224, 896. 25 


+26,224 896.25 








Grand total 


1 553, 113, 841. 09 


491,477,138.80 


-61, 636, 702. 29 





1 The collections of capital stock tax, which were included in a similar table in the annual report for 1934 
are now shown in the statement of the Capital Stock Tax Division. 

The claims for refund and abatement of taxes and redemption of 
stamps, received and adjusted in the Sales Tax Division during 1934 
and 1935 are shown in the following table: 



120 



EEPOET OP THE SECRETARY OF THE TREASURY 



Claims for refund and abatement received and disposed of during the fiscal years 1934 

and 1955 



1934 



1935 



On hand at beginning of year. 
Eeceived or reopened 



Total 

Transferred to Capital Stock Tax Division, January 1, 1935 

Transferred to Bureau of Industrial Alcohol, December 13, 1933.. 

Total to be disposed of 

Adjusted - 



On hand at end of year. 



Number 

8,881 
29, 531 



38, 412 

"z,m 



35, 239 
28, 122 



Claims allowed. 



7,117 



Amount 
i, 402, 950. 35 



Number 

7,117 
13, 713 



20. 830 
1,500 



19, 330 
14, 034 



5,296 



Amount 
$3, 479, 098. 19 



There were 8,269 sales tax credit cases totaling $3,139,846.29 on 
hand at the beginning of the year; 11,763 cases amounting to $4,990,- 
122.03 were received; 15,519 cases amounting to $6,259,598.66 were 
disposed of, leaving on hand at the end of the year 4,513 sales tax 
credit cases amounting to $1,870,369.66. 

A total of $737,974,518.22, representing 1,131,858 items, was 
approved by the Commissioner on miscellaneous assessment lists. 
There was included in these lists $29,847,939.06 representing 32,454 
additional assessments resulting from office audit and field investiga- 
tion. The interest paid and assessed on the miscellaneous tax lists 
amounted to $4,174,607.53. The miscellaneous lists do not include 
the processing and related taxes, the taxes on the transfers of interest 
in silver bullion, or the taxes collected on the sale of stamps. 

During the year there were received and examined 607,720 returns 
filed by taxpayers in connection with taxes administered by the Sales 
Tax Division. 

The number of offers in compromise submitted in settlement of 
liabilities incurred in connection with sales, tobacco, estate, gift, 
narcotics, capital stock, and miscellaneous stamp and special taxes, 
and the aggregate amounts thereof received and disposed of are 
shown in the following table: 

Offers in compromise received and disposed of during the fiscal years 1934 o,nd 1935 





1934 


1935 




Number 


Amount 


Number 


Amount 


On hand at beginning of year . .. 


9,898 
25,168 


$391, 287. 95 
627, 182. 48 


4,865 
9,489 


$465, 170. 90 


Received during year 


474, 817. 67 






Total to be disposed of 


35,066 


1, 018, 470. 43 


14, 354 


939, 988. 57 






Accepted . ..... .. 


23, 242 

926 

6 

6,027 


389,894.83 

83,418.71 

235. 00 

79, 750. 99 


6,990 

1,518 

9 


115 890 43 


Rejected. 


182,870 49 


Withdrawn. 


445. 00 


Transferred to Bureau of Industrial Alcohol ' 










Total disposed of 


30, 201 


553, 299. 53 


8,517 


299,205 92 






On hand at end of year 


4,865 


465, 170. 90 


6,837 


640, 782. 65 





' The duties and functions of the Miscellaneous Tax Unit relating to alcoholic liquor offers in compromise 
were transferred to the Bureau of Industrial Alcohol on December 13, 1933. 



EEPORT OF THE SECRETARY OP THE TREASURY 



121 



Processing Tax Division. — A total of $526,222,358.24 was collected 
during the year from taxes administered by this Division, of which 
amount $521,880,108.61 represented processing, compensating, and 
floor stock taxes imposed under the Agricultural Adjustment Act, 
as amended; $1,110,874.86 represented taxes imposed under the pro- 
visions of the Cotton Act, approved April 21, 1934; and $3,231,374.77, 
taxes imposed under the provisions of the Tobacco Act, approved 
June 28, 1934. Collections of taxes administered by the Processing 
Tax Division are summarized as follows: 

Collections of processing and related taxes during the fiscal years 1934 and 1935, by 

commodities 



Commodity and tax 



Wheat: 

Processing. 

Compensating 

Floor (wholesale) - 
Floor (retail)..-.. 



Total- 



Cotton: 

Processing 

Compensating 

Floor (wholesale) . 
Floor (retail) 



Total. 



Tobacco: 

Processing. 

Compensating 

Floor (wholesale). 
Floor (retail) 



Total. 



Field corn: 

Processing 

Compensating 

Floor (wholesale). 
Floor (retail) 



Total. 



Hogs: 

Processing 

Compensating 

Floor (wholesale). 
Floor (retail) 



Total. 



Paper and jute: 

Processing... 

Compensating 

Floor (wholesale). 
Floor (retail) 



Total. 



Sugarcane and sugar beets: 

Processing 

Compensating 

Floor (wholesale) 

Floor (retail) 



Total. 



Peanuts: 

Processing 

Compensating. 

Total 



1934 



$104, 038, 634. 96 

20, 774. 75 

10,941,402.43 

2, 620, 362. 68 



117,621,174.82 



85, 713, 359. 52 

1, 086, 773. 45 

46, 375, 040. 40 

11,592,059.27 



144, 767, 232. 64 



15,873,985.81 

155, 209. 07 

1, 814, 629. 01 

244, 602. 16 



18, 088, 426. 05 



3, 413, 305. 32 

18, 450. 05 

9S2, 676. 73 

81,761.64 



4, 496, 193. 74 



70, 716, 192. 12 

33, 289. 21 

6, 166, 969. 51 

118,160.40 



77,034,611.24 



6,251,648.11 

916, 342. 01 

3, 006, 960. 26 

69, 880. 40 



9, 244, 830. 78 



140, 020. 78 
30, 395. 59 



170, 416. 37 



1935 



$123, 564, 486. 59 

27, 744. 27 

249. 622. 94 

19, 078. 43 



123, 860, 932. 23 



93, 253, 443. 98 

1, 799, 354. 68 

771, 125. 07 

102, 377. 98 



95, 926, 301. 71 



32,161,943.21 

236, 479. 52 

311,083.18 

15, 995. 53 



32, 725, 501. 44 



6, 760, 471. 65 

48, 663. 08 

38, 843. 65 

1,651.49 



6, 849, 629. 87 



184, 380, 029. 76 

186, 591. 68 

32, 766. 28 

1, 621. 74 



184, 601, 009. 46 



2. 855, 500. 01 

131, 697. 10 

222, 996. 64 

11,513.52 



3, 221, 707. 27 



55, 599, 571. 49 

3, 809, 586. 71 

11, 314, 081. 05 

370, 731. 40 



71, 093, 970. 65 



3, 569, 523. 39 
2, 412. 62 



3,571,936.01 



122 



REPORT OF THE SECRETARY OF THE TREASURY 



Collections of processing and related taxes during the fiscal years 1934 and 1935, by 

commodities — Continued 



Commodity and tax 


1934 


1935 


Rice: 




$1. 582. 55 






27, 537. 42 










Total 




29, 119. 97 






1, 110, 874. 86 


Tobacco sales. 




3, 231, 374. 77 




$371, 422, 885. 64 


626,222,358.24 







Returns filed during the year under the provisions of the Agricul- 
tural Adjustment Act, as amended, the Cotton Act, and the Tobacco 
Act are shown in the following table: 

Number of returns filed during the fiscal year 1935, by commodities 



Agricultural Adjustment Act: 

Wheat 

Cotton 

Field corn 

Hogs 

Tobacco 

Paper and jute. 

Sugarcane and sugar beets. 

Peanuts 

Rice 



Total 

Cotton Ginning Act. 
Tobacco Act 



Processing 

tax 



53, 121 

14, 104 

114,335 

182, 945 

67, 991 

2,675 

5,78S 

563 

134 



441, 656 



Import 
compen- 
sating tax 



Floor tax 
(wholesale) 



3, 273 
3,376 
1,066 
1,097 

65, 920 
2,299 

60, 493 



137, 524 



Floor tax 
(retail) 



3,914 
12, 092 
4,020 
4,484 
7, 640 
4,563 
95, 649 



132, 362 



Total 



64, 363 
60, 746 
122,867 
190, 199 
143, 186 
11,587 
168, 443 
732 
297 



762, 420 

70, 065 

3,613 



A summarization of the number and amount of all claims for re- 
fund, credit, and abatement received and adjusted in the Division 
during the fiscal year follows: 

Claims for refund, credit, and abatement received and disposed of during the fiscal 

year 1935 



Number 



Amount 



Agricultural Adjustment Act, as amended: 
Export refunds: 

On hand July 1, 1934 

Received 

Reopened 

Allowed 

Rejected 

On hand June 30, 1935 

Charitable and other refunds: 

On hand July 1, 1934 

Received 

Reopened 

Allowed 

Rejected 

On hand June 30, 1935 

Credit: 

On hand July 1, 1934 

Received 

Reopened 

Allowed 

Rejected 

On hand June 30, 1935 



15, 582 
54,325 
1,230 
61, 425 
2,015 
7,697 

9,078 

41,071 

276 

34, 528 

5,078 
10, 819 

1,417 
11, 448 

6,422 
830 
5,613 



$6, 164, 504. 44 

20, 232, 661. 22 

59, 189. 90 

23,431,363.50 

1, 433, 671. 82 

1, 591, 320. 24 

2, 851, 526. 52 

i 115, 040, 666. 89 

39, 037. 96 

12, 963, 546. 82 

29, 551, 395. 11 

75, 416, 289. 44 

1, 083, 949. 10 
6, 686, 652. 77 

2, 273, 233. 09 
813,301.23 
4, 684, 067. 55 



> Includes claims approximating $70,461,000, based on the alleged unconstitutionality of the J^gricultural 
Adjustment Act and related legislation. 



EEPOET OF THE SECRETAEY OF THE TREASURY 



123 



Claims for refund, credit, and abatement received and disposed of during the fiscal 

year 1935 — Continued 



Number 



Amount 



Agricultural Adjustment Act, as amended— Continued. 
Abatement: 

On hand July 1, 1934 

Received 

Reopened 

Allowed -. 

Rejected 

On hand June 30, 1936 

Uncollectible: 

On hand July 1, 1934 

Received-. - 

Reopened 

Allowed -- 

Rejected-. 

On hand June 30, 1935 

Tobacco Act: 

On hand July 1, 1934 

Received 

Reopened 

Allowed 

Rejected.. 

On hand June 30, 1936 

Cotton Ginning Act: 

On hand July 1, 1934 

Received - -- 

Reopened- .-- 

Allowed 

Rejected.- 

On hand June 30, 1935 --- 

Total claims: 

On hand July 1, 1934 

Received 

Reopened 

-Allowed 

Rejected 

On hand June 30, 1935 



1,891 
3,030 
28 
3,302 
469 
1,178 



1,864 
1 

1,728 

14 

189 


9,140 



50 

1,262 

7,828 



101 




101 

28, 034 
120, 979 
1,535 
107, 455 
9,668 
33, 425 



$12, 057. 850. 15 
4, 520, 572. 67 
17, 376. 85 
9, 987, 687. 37 
2, 495, 009. 72 
4, 113, 102. 58 

2, 381. 57 

183, 464. 34 

18.32 

76, 660. 77 

5. 635. 50 

103, 567. 96 


597, 987. 98 



5. 052. 10 

165, 504. 98 

427, 430. 90 



64,246.85 






64, 246. 85 

22,160,211.78 
147, 326, 252. 72 
115,623.03 
48, 737, 543. 65 
34, 464, 518. 36 
86, 400, 025. 52 



The number of offers in compromise considered during the year 
was 534 involving a total amount of $91,828.96. 

Assessment of 697,992 items representing a tax liability of $588,- 
218,914.52 was made during the year on the processing tax lists. 
This amount includes 5,652 additional assessments totaling $4,898,- 
517.27 as a result of office audit or field investigation. 

Capital Stock Tax Division.- — Collections of capital stock tax during 
the year amounted to $91,508,121.29, an increase of $11,339,777.16, 
or approximately 14 percent over the preceding year. 

As the result of the audit of capital stock tax returns 5,673 assess- 
ments involving $894,806.71 were made. 

The claims for refund and abatement of capital stock taxes, penal- 
ties, and interest received and adjusted in the Capital Stock Tax 
Division are shown in the follo^ving table. 



124 



EEPORT OF THE SECRETARY OF THE TREASURY 



Claims for refund and abatement received and disposed of during the fiscal years 1934 

and 1935 



Claims 


1934 


1935 


On hand at beginning of year . . . . 


Number 

5 
2,613 


Number 

1,500 


Received or reopened - - _ 


3,800 








Total 


2,618 
1,118 


5,300 


Adjusted. - 


4,410 








On hand at end of year 


1,500 

Amount 
$124, 453. 86 


890 


Allowed 


Amount 
$390, 348. 43 







Alcohol Tax Unit 

On June 30, 1935, the following legitimate producers and distribu- 
tors of alcohol and alcohoUc beverages, and users of tax-free alcohol, 
were under the supervision of the Alcohol Tax Unit: 36 alcohol dis- 
tilleries; 89 whisky, rum, and gin distilleries; 137 brandy distilleries; 
70 alcohol warehouses; 137 wliisky, rum, gin, and brandy warehouses; 
1,107 wineries; 88 bonded wine storerooms; 702 breweries; 383 rec- 
tifying plants; 4,510 wholesale liquor dealers; 40 denaturing plants; 
68 bonded dealers in specially denatured alcohol; 4,155 bonded manu- 
facturers using specially denatured alcohol; and 5,966 hospitals, 
laboratories, and educational institutions using tax-free alcohol. 

Enjorcement Division. — The Enforcement Division is responsible 
for the investigation, detection, and prevention of willful and fraudu- 
lent violations of the internal revenue laws relating to distilled 
spirits, wines, and fermented malt liquors. The Division plans and 
coordinates the enforcement functions of the 15 administrative dis- 
tricts, supervises the activities of the investigators, and provides for 
their general instruction. 

During the year 15,712 stills having an aggregate mash capacity of 
2,853,739 gallons were seized, and in connection therewith 21,373,107 
gallons of mash were found and destroyed. Investigators also seized 
863,375 gallons of spirits and 4,837 automobiles and trucks. The 
total appraised value of property seized amounted to $5,632,145. 

A total of 31,625 persons were arrested for Federal Uquor law viola- 
tions, but, in the case of 2,104 persons, the arrests were made by 
State and local officers on information furnished by investigators of 
the Alcohol Tax Unit. During the year, 25,408 cases were reported 
to United States attorneys. 

During the year, 283 applications for pardon, and 3,377 applica- 
tions for parole were received; and 282 apphcations for pardon and 
2,841 applications for parole were examined and reports submitted. 

Audit Division: — There were on hand at the beginning of the year 
5,728 claims for refund, redemption, abatement, and uncollectible 
claims, aggregating $1,202,406.35. During the year 20,587 claims 
were received, in the amount of $7,695,095.31. Of the claims to be 
disposed of, 19,064 were allowed and 1,943 were rejected, in the 
aggregate amount of $5,405,245.47, leaving on hand at the end of the 
year 5,308 claims, aggregating $3,492,256.19, classified as follows: 
442 refund claims amounting to $707,076.97; 420 redemption claims, 



REPORT OP THE SECRETARY OP THE TREASURY 125 

$4,394.94; 1,243 abatement claims, $1,121,084.30; and 3,203 uncol- 
lectible claims, $1,659,699.98. 

At the beginning of the year 14,991 offers in compromise, aggre- 
gating $176,578.69, were on hand; and during the year, 45,362 offers 
were received, the total amounting to $600,682.54. Of the foregoing, 
49,809 offers, amounting to $387,962.38, were accepted; 1,013, 
amounting to $60,628.20, were rejected; and 82, amounting to 
$9,597.25, were withdrawn; leaving 9,449 offers, aggregating $319,- 
073.40, at the end of the year. 

The audit of floor tax returns required by the Liquor Taxing Act 
of 1934 was completed during the year. There were 75,804 returns 
filed, reporting floor taxes aggregating $8,699,139.17. 

The Tax Section certified to the Commissioner 1,304 assessment 
Hsts, which carried 24,673 items, totaling $18,787,032.65, listed by 
the Section, and 213,357 items, aggregating $19,283,749.68, hsted by 
collectors. 

Laboratory Division. — The Laboratory Division comprises a chem- 
ical laboratory in Washington, D. C, and 14 branch laboratories 
located throughout the country. These laboratories perform all the 
chemical work for the Bureau of Internal Revenue and Bureau of 
Narcotics, as well as work for the Federal Alcohol Control Adminis- 
tration and Bureau of Customs. 

A new distillery procedure was initiated which transferred the 
major portion of the manual labor previously performed by Govern- 
ment officers to distillery employees. This procedure made it possible 
to release 133 storekeeper-gagers from distillery supervision for 
assignment to the Retail Liquor Dealer Section. 

Accounts and Collections Unit 

The Accounts and Collections Unit, which is the central adminis- 
trative organization for the 64 collection districts, is divided into 3 
divisions: The CoUection Accounting Division; the Collectors' Per- 
sonnel, Equipment, and Space Division; and the Disbursement 
Accounting Division. 

Collection Accounting Division. — There were filed in collectors' 
offices during the year 8,313,342 tax returns, compared with 9,144,268 
for the previous year, a decrease of 830,926. Of the total tax retiir-is 
filed in 1935, there were 5,295,352 income tax returns compared with 
4,933,376 filed during the previous year, an increase of 361,976. 

Approximately 2,140,000 individual income tax returns, filed on 
form 1040-A, were audited and closed in collectors' offices during 
the year, and 4,242,479 information returns were verified. In con- 
nection with this audit work 60,268 income tax returns were in- 
vestigated. 

A total of 10,432,005,552 revenue stamps, valued at $941,713,682.42, 
was issued to collectors of internal revenue and the Postmaster Gen- 
eral, compared with 9,351,968,114 stamps, valued at $833,901,971.05, 
issued during 1934. Stamps returned by collectors and by the 
Postmaster General amounted to $45,068,828.09, compared with 
$52,946,424.83 for 1934. 

After the appropriate administrative procedure, collectors of inter- 
nal revenue transmitted to the Bureau, or otherwise disposed of, 
238,251 claims as compared with 151,470 during 1934, an increase of 



126 EEPOET OF THE SECRET ABY OF THE TREASURY 

86,781. The number of claims on hand at the close of the fiscal year 
1935 was 7,481, compared with 6,878 at the close of the previous year. 
The increase in the number on hand at the end of the year was due 
principally to the increase in the number of claims filed during the 
year and to the necessity of corresponding with processing taxpayers 
for additional information before the claims could be forwarded to 
the Bureau. 

During the year an average of 2,205 deputy collectors made 576,120 
revenue-producing investigations in connection with the verification 
of returns, the discovery of delinquent returns, and the serving of 
warrants for distraint. The amount of tax involved in these inves- 
tigations was $81,001,961, including $54,178,708 collected and 
$26,823,253 reported for assessment. The average number of inves- 
tigations made per deputy was 264, and the average amount of tax 
collected and reported for assessment was $36,735. The average 
salary of the deputy collectors during the year was $1,970; and the 
average travel expense, $463. It will be seen that for every $2,433 in- 
vested in the services of a deputy collector $36,735 was returned to the 
Government in collections and amounts recommended for assessment. 

The $81,001,961 collected and assessed for the fiscal year 1935, 
represents the largest amount produced by the field deputy collectors 
since 1920 when the present system of keeping production records 
went into effect, and the greatest amount in the history of the Bureau. 
The amounts involved for the various types of work were: 



Collected 



Reported for 
assessment 



Verification of tax returns. 

Delinquent taxpayers 

Warrants for distraint 

Total 



$4,129,111 
15, 108, 117 
34, 941, 480 



$11, 183, 739 
15, 639, 514 



54, 178, 708 



26, 823, 253 



There were 118,221 warrants for distraint served by deputy collec- 
tors during the year, and on June 30, 1935, there were 62,132 warrants 
in the hands of the field forces for collection as compared with 52,425 
on June 30, 1934. 

Special attention has been given to the discovery of the various 
classes of delinquent taxes and to the collection of back taxes. That 
these efforts have been successful is evidenced by the fact that the 
total collections of such back taxes during the year, amounted to 
$185,641,136.64, which is $18,641,136.64 m excess of the estimates 
for the year. 

The supervisors of accounts and collections submitted 105 reports 
covering their examinations of the accounts of the various collectors' 
ofiices compared with 100 reports submitted during 1934. Every 
collector's office was examined at least once and most of them twice 
during the year. 

Collectors^ Personnel, Equipment, and Space Division. — The organi- 
zation of the processing tax divisions in collectors' offices was further 
strengthened and perfected to facilitate the collection of the proc- 
essing, import compensating, and floor taxes imposed upon the 
various agricultural commodities under the Agricultural Adjustment 
Act, as amended. A force of 1,606 permanent and temporary office 



REPORT OF THE SECRETARY OF THE TREASURY 127 

and field employees was authorized to handle this work in the 
collection districts. 

It was necessary during the year to set up a special section in each 
collector's office in cotton producing districts to administer the tax 
collection provisions of the Bankhead Cotton Control Act. During 
the ginning season, when the work was at its peak, there were 391 
permanent and temporary ofl&ce and field employees assigned to the 
several districts. 

In order to carry out the tax provisions of the Kerr-Smith Tobacco 
Control Act it was necessary to authorize additional assistance in 
the several tobacco-producing districts. During the period when 
this work was at its peak there were 85 temporary office and field 
employees. 

Through the cooperation of the Federal Emergency Relief Adminis- 
tration special projects were inaugurated in certain collection districts 
for the purpose of investigating miscellaneous taxes on the manufac- 
ture of jewelry, radios, furs, sporting goods, cosmetics, admissions and 
dues, and documentary stamps. The first project was started in the 
third New York collection district on November 1, 1934. Similar 
projects were subsequently inaugurated in the first and second New 
York collection districts, the Chicago district, the Milwaukee 
district, the Philadelphia and Pittsburgh districts, the Buffalo 
district and more recently projects were authorized in the Los Angeles 
and San Francisco districts. Approximately 800 workers were 
employed and, while two of the projects were in operation only a com- 
paratively short time, $5,021,911.80 in taxes have been collected or 
reported for assessment. The organization of these forces was accom- 
plished under the direction of the supervisors of accounts and collec- 
tions in charge, and in addition to the workers assigned to the miscel- 
laneous tax investigations, approximately 330 relief workers were 
assigned to the District Supervisors, Alcohol Tax Unit, for conducting 
investigations and making inspections of retail liquor dealers. 

Disbursement Accounting Division. — The Disbursement Accounting 
Division is charged with keeping the internal revenue appropriation 
accounts and expenditures and is responsible for the administrative 
examination required by law of the accounts of 64 collectors of in- 
ternal revenue, 38 internal revenue agents in charge of divisions, and 
15 supervisors in charge of alcohol tax districts, including the Philip- 
pine Islands branch of the collection district of Maryland, and in- 
ternal revenue salary payments made by the collector of customs at 
San Juan, P. R. The administrative examination of the accounts of 
District Supervisors, Alcohol Tax Unit, was transferred to this divi- 
sion effective July 1, 1934, together with some of the personnel pre- 
viously engaged on that work. The appropriation, accounting, and 
the auditing work has been considerably above normal throughout 
the year as a result of the Bureau's administrative duties in connec- 
tion with assessing and collecting the processing taxes. 

Office of the Assistant General Counsel 

The activities of the office of the Assistant General Counsel for the 
Bureau of Internal Revenue embrace the whole field of Federal taxa- 
tion in connection with the preparation and presentation to the United 
States Board of Tax Appeals of defense in all appeals; the review of 
refunds, credits, and abatements, in excess of $20,000; the deciding 

16816 — 36 10 



128 



EEPORT OF THE SECRETARY OF THE TREASURY 



and advising in various administrative and internal revenue tax mat- 
ters referred by the Secretary of the Treasury, the Under Secretary, 
or an Assistant Secretary, by the General Counsel for the Department 
of the Treasury, by the Commissioner or the Assistant to the Com- 
missioner, by the heads of the administrative units of the Bureau, by 
collectors of internal revenue, by other branches of the Government, 
and by individual correspondence; the preparation, at the request of 
the Department of Justice or of United States attorneys, of data for 
use in the prosecution or defense of tax cases (civil and criminal) in 
suit, and otherwise complying with their requests for assistance in 
such cases; and the preparation, revision, and publication of regula- 
tions. Treasury decisions, mimeographs, and rulings for the guidance 
of the officers and employees of the Bureau of Internal Revenue and 
others interested. The office is divided into six divisions, viz, Appeals, 
Civil, Interpretative, Penal, Review, and Legislative and Regulations. 

Assistant General Counsel's Committee. — The Assistant General 
Counsel's Committee, formed on Jidy 5, 1933, is composed of five 
members. The committee receives and passes upon cases from all 
divisions of the office referred to it by the Assistant General Counsel, 
the special assistants, and the general assistants. During the fiscal, 
year 1935 the Committee received 256 cases and disposed of 237, 
leaving 19 cases pending, 

Reorganization Section. — The Bankruptcy, Receivership, and Reor- 
ganization Section received 1,654 reorganization cases during the 
year and closed 164 cases involving claims of $8,093,075.94, which 
were settled for $3,847,764.03. _A total of 1,249 bankruptcy and 
receivership cases were closed involving claims of $6,457,088.57, 
upon which $2,554,482.86 were collected. 

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 the year 5,867 cases were closed while 3,816 
new cases were filed. At the end of the year there were pending 23 
gift tax cases involving $452,164; 504 estate tax cases involving 
$73,240,290; and 9,896 income tax cases involving $419,955,963; or a 
total of 10,423 cases involving $493,648,417. Of this number, 9,405 
were pending before the Board and 1,018 were in appellate courts on 
appeal from Board decisions. 

Cases filed with and closed before the Board of Tax Appeals during the fiscal years 

1934 and 1935 



Cases 



1934 



Number 



Amount 



1935 



Number 



Pending at beginning of year 
Filed during year 

Total 

Closed during year: 

By default, etc 

By decision on merits 

By agreed settlement 

Total. - 

Pending at close of year 



18, 080 
3,976 



$574, 257, 340 
83, 692, 291 



22, 056 



657, 949, 631 



574 
1,518 
7,490 



9, 582 



209, 456, 551 



12, 474 



448, 493, 080 



12, 474 
3,816 



16, 290 



500 
1,615 
3,752 



5,867 



$448, 493, 080 
184,819.113 



633, 312, 193 



139, 663, 776 



10, 423 



493, 648, 417 



EEPOET OP THE SECEETARY OF THE TEEASURY 



129 



Civil Division. — The Civil Division, in cooperation with and at the 
request of the Department of Justice, assists in the handling and 
preparation for trial of 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. The trials of such cases 
and arguments upon appeals are 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 1935 ^ 



Number 
of cases 



Amount in- 
volved 



Pending July 1, 1934: 

In court - 

For suit by the United States. 



Total 

Lien cases in court. 



Grand total. 



Received during year: 

Suits by taxpayers 

For suit by the United States. 



Total 

Suits involving liens. 



Grand total. 



Closed during year: 

Cases, exclusive of lien cases. 
Suits involving liens.. 



Total. 



Pending June 30, 1935 (exclusive of lien cases). 
Pending June 30, 1935 (including lien cases)... 



2, 686 $216, 949, 145. 81 
205 I 4,889,613.93 



2,891 
1,210 


221, 838, 759. 74 




4,101 




661 
258 


23,070,502.86 
6, 852, 633. 36 


919 
1,120 


28, 923, 136. 22 




2,033 




963 
895 


60,244,430.54 


1,858 





2,847 
4,282 



190, 517, 465. 42 



< Excludes bankruptcy, receivership, insolvency, compromtse, and liquor cases. 

Results obtained in cases closed during the fiscal year 1936 ^ 




Number 
of cases 


Amount 
claimed 


Recovered 
from tax- 
payers 


Amount 
refunded 




692 
271 


$45,843,636.65 
14, 400, 793. 89 




$8,895,940.32 


Suits and claims by the United States. 


$7, 762, 995. 78 






Total 


963 


60, 244, 430. 54 


7,762,995.78 


8, 895, 940. 32 







I Excludes bankruptcy, receivership, insolvency, compromise, lien, and liquor cases. 



130 REPOKT OF THE SECRETARY OF THE TREASURY 

Civil cases pending in courts July 1, 1934 a^<^ 1935 ' 



July 1, 


July 1, 


1934 


1935 


1.877 


1,813 


125 


117 


576 


548 


6 


4 


17 


21 


86 


77 



District courts 

Circuit courts of appeals 

Court of Claims 

Supreme Court --. 

State courts and miscellaneous 

Pending payment of judgment claims. 

Total 



2,686 



2,580 



» Excludes bankruptcy, receivership, insolvency, compromise, lien, and liquor cases. 

The number of Civil Division cases tried by the Department of 
Justice and also the number decided by the courts are shown in the 
following table: 

Tax cases tried and decided by the Federal courts during the fiscal year 1935 



Courts 



Cases 
tried 



Cases decided 



For the 
Govern- 
ment 



Against 
the Gov- 
ernment 



Partly for 
and partly 
against the 
Govern- 
ment 



Total 



District courts.. 

Circuit courts of appeals 

Court of Claims ... 

Supreme Court 

Total 



Ill 

38 

82 

3 



183 

43 

61 

1 



277 

82 

85 

3 



234 



288 



138 



447 



Compromise Section. — The Section is charged with the responsibility 
of considering and passing upon all offers submitted in compromise of 
tax liability arising in the Miscellaneous Tax Unit of the Bureau, 
except those involving criminal prosecution, fraud penalties, or specific 
penalties. It is also charged with the solution of legal problems 
arising in the collection of taxes from banks in liquidation, from tax- 
payers who have made assignments of assets for the benefit of 
creditors, and from estates of deceased taxpayers. 

During the fiscal year 493 cases handled in this Section were closed 
by acceptance of offers in compromise and the collection of filed claims 
in the aggregate amount of $2,747,961.38. The following table 
shows the volume of cases handled by this Section: 

Pending at beginning of year 1,246 

Received during year 1, 523 

Total to be disposed of 2, 768 

Closed or in process of closing 1,240 

Pending at end of year 1,628 



EEPORT OF THE SECRETAEY OF THE TREASURY 



131 



The number of cases pending and in process of closing on June 30, 
1935, and the tax hability involved are shown in the following table: 





Pending 


In process of closing 




Number 


LiabUity 


Number 


Liability 




300 
43 
899 
119 
167 


$2, 027, 866 
1,221,110 

12,002,630 

280, 936 

1, 112, 220 


148 
32 


$115, 558 


Installment offers in compromise. 


2, 719, 309 


Decedent estates. . . 






















Total 


1,528 


16,644,662 


180 


2, 834, 867 







Interpretative Division. — This Division is charged with the prepara- 
tion of opinions relating to the administrative construction of internal 
revenue laws and the editing of matter for publication in the Internal 
Revenue Bulletin. During the year it disposed of 3,039 jacketed 
cases, an increase of 802 over the preceding year, in addition to miscel- 
laneous work. 

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 percentage 
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. It decides 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 revenue acts, should be 
reopened, because of "fraud or malfeasance, or misrepresentation of 
a material fact", and upon informers' reward claims under section 
3463 of the Revised Statutes. 

The following table summarizes the work of the Division during 
the last two fiscal years: 

Cases received and disposed of by the Penal Division during the fiscal years 19S4 

and 1935 



Cases 


1934 


1935 


Pending at beginning of year . 


1,123 
1,634 


1,624 


Received during year - -- - . _ _- 


1,266 








Total to be disposed of 


2,757 
1,233 


2.790 


Disposed of _ _ _._ _ - 


1,588 








Pending at end of year 


1,524 


1,202 







132 EEPOKT OF THE SECRETARY OF THE TREASURY 

Remew Division. — This Division reviews cases involving refunds, 
credits, and abatements of internal revenue taxes. It prepares public 
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 or refunds in excess of $75,000, as required by section 710 
of the Revenue Act of 1928; and participates in conferences and 
negotiations in other Bureau agencies on cases involving proposed 
overpayments. 

There were 585 cases disposed of during the year involving reduc- 
tions in taxes aggregating $76,532,905.86. In 141 of these cases 
memoranda were prepared. The allowances were reduced by adjust- 
ments in this Division in the amount of $2,829,048.32. Some of the 
principles involved in these adjustments also affected the disposition 
of other cases pending elsewhere in the Bureau. Public decisions 
were promulgated in 406 cases, and memoranda were submitted 
to the Joint Congressional Committee in 23 cases. 

As heretofore this Division has regularly afforded conferences in 
cases in which issues appeared to require action contrary to the 
taxpayer's contentions. 

Legislative and Regulations Division. — This division is charged with 
preparing, reviewing, and revising regulations under the various 
revenue laws, and considering defects in, and proposed amendments 
to, such laws; preparing reports on revenue legislation introduced 
in the Congress; and rendering assistance in the drafting of new 
revenue legislation. During the year it received 803 cases and 
disposed of 513. 

Intelligence Unit 

The principal work of the Intelligence Unit consists in the investi- 
gation of tax-fraud cases. This work is performed in cooperation 
with internal revenue agents and deputy collectors. During the 
year there were 621 investigations of alleged evasion of income tax 
and of this number 159 cases were recommended for prosecution. 
On this charge there were 50 convictions, with 1 acquittal, and a per- 
centage of convictions in cases actually disposed of in court of 97.67 
percent. Investigation of these cases resulted in recommendation for 
assessment of additional taxes and penalties aggregating $20,212,161. 

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 some jurisdictions 
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. 

There were also investigated during the fiscal year 147 cases of 
charges against employees in the Internal Revenue Service resulting 
in the separation from the service of 89 employees and the prosecu- 
tion of 15, of which number 11 have been convicted and 4 have not 
been tried. 

There were 2,901 investigations of applications of attorneys and 
agents to practice before the Treasury Department and 88 investiga- 
tions of charges against enrolled agents and attorneys, resulting in 
the disbarment of 13, the suspension of 8, the reprimand of 6, and 
rejection of applications of 37, 



EEPORT OF THE SECRETARY OF THE TREASURY 133 

There were investigated 5,253 cases of miscellaneous character, 
which included investigations of the field employees of the Alcohol 
Tax Unit; of a number of cases for the Bureau of Narcotics, the 
Federal Alcohol Control Administration, the Customs Service, and 
National Bank Examiners; and of persons under consideration for 
appointment to various positions in the Treasury Department, 
including officials of branches other than the Bureau of Internal 
Revenue. 

LEGAL DIVISION 

Organization of the Legal Division, begun the latter part of Jmie 
1934, was completed during the fiscal year 1935. The General 
Counsel, head of the Division, and six Assistant General Counsel 
have charge of all legal matters of the Department. 

During the year the Legal Division prepared analyses and recom- 
mendations with respect to approximately 650 congressional bills 
affecting the Department. The Division also collaborated with the 
legislative counsel of both Houses of Congress and furnished tech- 
nical assistance to congressional committees, particularly in matters 
relating to banking, taxation, and social security legislation. 

The Division drafted, among other documents. Executive orders 
and proclamations relating to newly mined domestic silver, national- 
ization of silver, restrictions imposed on payment of money out of 
the German special deposit account, allocation of relief funds for 
continuance of rural health service, and the release of property held 
by the Alien Property Bureau ; and the Secretary's orders and regu- 
lations covering the exportation of silver and importation of foreign 
silver coin and transactions in foreign exchange. The Division also 
cooperated with the Department of Justice in preparing a large num- 
ber of cases in which the Treasury was interested, most outstanding 
of which were the so-called " gold clause cases." During the year, 
83 formal legal opinions and numerous informal opinions were pre- 
pared for the information and guidance of the administrative officers 
of the Department. The legal sufficiency of a number of applications 
for relief projects was passed upon and approximately 5,000 surety 
bonds were examined and approved. 

The Division conducted several legal research projects, includ- 
ing an analysis of the disposition of Treasury criminal cases in 
United States District Courts, a general survey of criminal law 
enforcement problems affecting the Department, and a compilation 
of statistics concerning Treasury offenders. Progress was also made 
in analyzing the causes of congestion in income tax and custwns 
litigation. The work of compiling State and municipal ordinances 
and court decisions relating to public health matters was carried 
forward during the year. Regulations were drafted governing the 
admission, custody, and discharge of persons at United States nar- 
cotic farms and assistance was rendered to State authorities in con- 
nection with the adoption and enforcement of the uniform State 
narcotic law. 

Legal questions were considered in connection with the formula- 
tion of regulations, issued June 29, 1935, by the Foreign Trade Zones 
Board (composed of the Secretaries of Commerce, Treasury, and 
War) respecting the act approved June 18, 1934, for the establish- 
ment, operation, and maintenance of foreign trade zones in the 



134 REPORT OF THE SECRETARY OF THE TREASURY 

United States. Assistance was also rendered in formulating the text 
of foreign trade agreements negotiated with 5 countries and in the 
course of negotiation with 13 other countries. 

The Division was concerned during the year with the legal aspects 
of the acquisition of 382 sites for construction purposes. A total of 
951 contracts covering construction and related work were prepared, 
and more than 2,000 contracts prepared by the Branch of Supply of 
the Procurement Division and by other agencies of the Department 
were examined for legal suflB^ciency. 

A revised edition of " Coast Guard Courts and Boards ", and 
instructions for the guidance of Customs and Coast Guard officers 
in the enforcement of the Oil Pollution Act of 1924 were prepared 
during the year. In addition to reviewing the record of proceedings, 
the Division prepared the action of the reviewing authority in 88 
general court cases, 166 summary court cases, and 287 deck court 
cases, and in 208 boards of inquiry, inquest, and investigation. It 
reviewed also as to legal aspects the record of proceedings in 116 
retiring board cases. Twenty-one claims against the Government 
involving Coast Guard units and five claims of the Government 
against private parties involving Coast Guard units were examined 
and approjDriate action in such cases was advised. A total of 23 
life-saving medal of honor cases were examined and the necessary 
action taken to bestow awards in 7 such cases. 

In the field of taxation the Division prepared and presented to the 
United States Board of Tax Appeals the defense in all appeals; 
reviewed and finally disposed of refunds, credits, and abatements in 
all cases where the amount involved exceeded $20,000; decided and 
advised in various administrative and Internal Revenue matters, 
including matters arising in corporate reorganization under section 
77B of the Bankruptcy Act; prepared data for use in the prosecu- 
tion or defense of tax cases (civil and criminal) in suit; handled 
the preparation and publication of regulations. Treasury decisions, 
and rulings for the guidance of officers and employees of the Bureau 
of Internal Revenue and others concerned; and reviewed a large 
number of cases of offers in compromise, extensions of time to pay 
tax, and closing agreements before transmission from the Commis- 
sioner of Internal Revenue to the Secretary for approval. The Divi- 
sion also acted on 922 petitions for the remission or mitigation of the 
forfeiture of vehicles and other property which had been seized by 
Government officers for violations of the laws pertaining to the manu- 
facture, sale, and transportation of alcohol. 

BUREAU OF THE MINT 

Institutions of the Mint Service 

During the fiscal year 1935, six Mint Service institutions were in 
operation : The coinage mints at Philadelphia, San Francisco, and 
Denver; the assay office at New York, which handles much import- 
export gold ; 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 larger institutions 
and also serve the public by making assays of ores and bullion. Elec- 
trolytic refineries are operated at the New York, Denver, and San 
Francisco institutions. 



EEPOKT OP THE SECRETARY OF THE TREASURY 135 

Coinage 

The United States mints executed during the fiscal year 608,414,207 
pieces of domestic coin and 68,500,401 pieces for foreign governments, 
a total of 676,914,608 pieces. This compares with the prior year's 
total of 65,674,250 pieces consisting of 46,634,250 pieces of domestic 
coin and 19,040,000 pieces of foreign coin. The output of coins 
during the year has been exceeded only twice — in 1918 when the 
total was 766,887,460 pieces, and in 1920, 809,708,484 pieces. 

The 1935 output of domestic coins consisted of 134,166,204 pieces 
of silver coin, including 5,635,557 silver dollar pieces, and 474,248,- 
003 pieces of minor coin, of which 412,266,000 pieces were bronze 
1-cent coins. The value of the domestic coinage executed was 
$39,131,127.65, as compared with the prior year's $3,499,125. The 
coinage mints operated for long periods on the basis of 2 or 3 shifts 
daily. The great demand for domestic coin during the year reflected 
increased business activity. 

The foreign coinage executed consisted of 67,100,401 silver pieces^ 
200,000 nickel pieces, and 1,200,000 bronze pieces, for Mexico, Cuba, 
Panama, Honduras, Nicaragua, Colombia, and Venezuela. The for- 
eign orders were extraordinarily la^ge and were occasioned, in part, 
by the rise in the price of silver, which necessitated withdrawal from 
circulation and replacement of the silver coins of some countries 
because the silver in the old coins would produce greater returns, 
when marketed, than the face value of the coins. 

Bullion deposit transactions 

A new high record was established during the year for the num- 
ber of bullion deposit transactions of the mints and assay offices. 
The total was 226,701 as compared with 115,870 for the preceding 
year, 73,238 in 1933, 54,105 in 1932, and 36,098 in 1931. The increase 
over 1934 was more than 95 percent, and over 1931, 528 percent. 
Receipts of both gold and silver in the form of newly mined metals, 
secondary material, and imports, and receipts of the nationalized 
domestic holdings of refined silver, were very large and necessitated 
large increases in personnel. 

Gold operations 

Gold acquired by the mints and assay offices during the year 
amounted to $1,301,432,727.11 ; gold transfers to the mints and assay 
offices consisted of $34,692,338.60 of bullion from the Federal Reserve 
banks, and $1,524,989,826.51 of domestic coin from other Treasury 
offices. Intermint service institution transfers amounted to $2,081,- 
805,348.96. These items total $4,942,920,241.18, which compares with 
$989,932,126.68 for the prior year. 

The acquisitions include $120,091.28 of gold received at $20.67 + 
per fine ounce, which had not previously been surrendered under 
the nationalization orders; the increment to $35 per fine ounce 
amounted to $83,245.09. The intermint institution transfers con- 
sisted almost wholly of gold shipped from the San Francisco Mint 
to the Denver Mint for storage. 



136 



EEPOET OF THE SECEETAEY OF THE TEEASUEY 



Silver operaticy)is 

Silver acquired during the year totaled 437,798,807 fine ounces, at 
an average cost of 53 + ^ per fine ounce and a total cost of $232,435,- 
879. The acquisitions consist of the following : 



Item 



Newly-mined domestic silver 

Nationalized silver - 

Purchase Act silver 

Silver contained in gold bullion deposits, etc 

Silver received in exchange for Government stamped bars 

Total 



Amount 
(fine ounces) 



30, 863, 349 

112,301,335 

293, 737. 702 

599, 422 

296, 999 



437, 798, 807 



Value 



$20,214,113 
56, 162, 471 

155, 587, 533 
310. 834 
160, 928 



232, 435, 879 



United States coin received for recoinage totaled 5,878,270 fine 
ounces, with a recoinage value of $8,125,809; silver deposited in trust 
by other governments totaled 18,007,498 fine ounces ; and silver trans- 
fers between Mint Service institutions amounted to 176,401 fine 
ounces. These items plus the silver acquired during the year 
amounted to 461,860,976 fine ounces, as compared with 55,707,098 
fine ounces for the previous year. 

During the year 242,324,825 fine ounces of silver were revalued to 
$1.29+ per fine ounce, the statutory monetary value, and set up as 
security against silver certificates. The monetai^' value was $313,- 
308,863 ; the cost, $124,320,771 ; and the seigniorage, $188,988,092. 

The open market price of silver in New York (mean of bid and 
asked) during the fiscal year 1935 averaged $0.5764. The lowest point 
was $0.463125 on July 23, 24, and 26, 1934; and the highest, $0.813125 
on April 26, 1935. The prior year average was $0.4254, and the range 
was $0.353125 to $0.470625. 

The price paid under the President's proclamations for newly mined 
domestic silver was $0.6464+ per fine ounce until April 9, 1935, 
$0.7111+ until April 23, and thereafter $0.7757 + . 

C onwieniorative coins 

The following commemorative half-dollar coins of new design were 
executed during the year : 



Event 



Arkansas, centennial of statehood - 

Connecticut, tercentennial of founding 

Hudson, N. Y., 150th anniversary of founding 



Date of law 



May 14, 1934 
June 21, 1934 
May 2, 1935 



Pieces 



500, 000 
25, 000 
10, 000 



Commemorative half dollars which have been authorized but not 
yet issued are as follows : 



Event 


Date of law 


Pieces 




May 2, 1935 
May 3, 1935 
June 6, 1935 


50, 000 


California-Pacific International Exposition 


250, 000 




10, 000 







Rejlneries 

The electrolytic refinery at Denver remained closed throughout the 
year by reason of more urgent activities. The refineries at New York 
and San Francisco produced during the year 2,388,328 fine ounces 



REPORT OF THE SECRETARY OP THE TREASURY 137 

(81.9 tons) of electrolytically refined gold, as compared with 2,387,- 
817 fine ounces (81.8 tons) cluring the previous year; and 1,336,572 
fine ounces (45.8 tons) of electrolytically refined silver, as compared 
with 703,284 fine ounces (24.1 tons) in the prior year. 

The stock of gold and silver in unrefined bullion on hand increased 
by about 80 tons to 1,009 tons, as compared with the prior year's 
increase of 99 tons. 

Stock of coin and inonetary hullion in the United States 

On June 30, 1935, the estimated stock of domestic coin in the 
United States was $991,097,706, of which $545,641,802 was standard 
silver dollars, $312,416,169 subsidiary silver coin, and $133,039,735 
minor coin. 

The stock of gold bullion, including coin, held in the Treasury on 
the same date was valued at $9,115,380,809, an increase over the 
previous year of $1,259,200,253 ; the stock of silver bullion was 482,- 
989,512 fine ounces, an increase of 423,512,556 fine ounces. 

Production of gold and silver 

Domestic gold production during the calendar year 1934 was 
3,091,183 fine ounces with a value of $108,191,400 at $35 per ounce, 
as compared with 2,556,246 fine ounces with a value of $52,842,300 
at $20.67+ per ounce in 1933. The output was about 61 percent 
in quantity of that for the record year 1915, when the total was 
4,887,604 fine ounces, valued at $101,035,700 at $20.67+ per ounce. 

Domestic silver production during 1934 totaled 32,725,353 ounces, 
valued at $21,155,784 on the basis of the Government's buying price 
of 64 + per ounce, as compared with 23,002,629 ounces, valued at 
$8,050,920, for 1933. 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 
1934 is estimated at $14,232,795. Gold returned from industrial use 
exceeded the total used by industry by $61,694,490, as compared with 
an excess of $5,792,700 during the previous year. 

Silver used in the arts is estimated at 39,678,603 fine ounces, of 
which 11,492,425 fine ounces was new material. 

As compared with the prior year, silver consumption increased 
about 700,000 ounces while gold consumption decreased about 
417,000 ounces. 

Appropriations^ expenses^ and income 

Regular appropriations available for the Mint Service during the 
fiscal year 1935 totaled $1,108,559; additions for salary rate restora- 
tions, $50,688 ; allotments for meeting emergency expenses, $2,009,161 ; 
and reimbursements to appropriations for services rendered, $604,- 
681 ; making a grand total of $3,773,089. 

Expenses amounted to $3,573,606, of which $3,475,340 was charge- 
able to appropriations and $98,266 chargeable to income. 

The regular income realized by the Treasury from the Mint Service 
aggregated $13,899,655, of which $9,179,144 was seigniorage. The 



138 



EEPORT OF THE SECRETARY OF THE TREASURY 



seigniorage on silver dollar coin was $2,823,827; on subsidiary silver 
coin, $380,632; and on minor coin, $5,974,685. Extraordinary income 
aggregated $189,071,337 of which $188,988,092 was seigniorage on 
silver bullion revalued to $1.29-1- per ounce, and $83,245 was the 
increment to $35 per ounce on revalued gold. 

The number and value of deposits, transfers, gross income, and 
expenses for the fiscal year 1935, and the number of employees on 
June 30, 1935, at each institution are shown in the following table: 

Deposits of gold and silver, income, expenses, and number of employees, by 
institutions, fiscal year 1935 



Institution 


Num- 
ber of 
deposits 
of gold 
and 
silver 


Num- 
ber of 
Mint 
Service 
trans- 
fers 


Monetary 
value of gold 

and silver 
received, 
including 
transfers 


Gross 
regular 
income 


Gross 
expense 


Excess of 
income (4-) 
or of ex- 
pense (-) 


Num- 
ber of 
employ- 
ees, 
June 30, 
1935 


Philadelphia--- 


65, 458 

70, 813 

13,288 

59, 989 

4,909 

6,065 




2,646 
2,733 
794 
6 





$224, 550, 480 

599, 471, 312 

2, 782, 906, 816 

1, 895, 055, 104 

2, 932, 678 

12, 172, 925 




$5, 802, 949 

2, 480. 100 

2, 217, 986 

3, 346, 562 

13, 212 

37, 915 

931 


$1, 149, 802 

533, 631 

479, 132 

633, 158 

31, 582 

34, 453 

102 


$-t-4, 653, 147 

-f 1, 946, 469 

-i-1, 738, 854 

-t-2, 713, 404 

-18,370 

-f-3, 462 

+829 


839 




378 


Denver 


265 




283 


New Orleans 


18 


Seattle-- . 


15 


Discontinued field oflBces.— 





Total - . 


220, 522 



6,179 



5, 517, 089, 315 



13, 899, 655 



2, 861, 860 
1 737, 005 


-Hl,037,795 
-737, 005 


1,798 


Bureau of the Mint 


65 


Grand total 


220, 522 


6,179 


5, 617, 089, 315 


13, 899, 655 


3,598,865 


4-10, 300, 790 


1,853 






Prior fiscal year 


115,870 


3,176 


1, 039, 079, 658 


3,118,918 


1, 248, 749 


-Fl, 870, 169 


607 







» Includes $624,496 for transportation of bullion, principally for gold movement from San Francisco to 
Denver mints. 

BUREAU OF NARCOTICS 

EnfoTcenbent activities 

The Bureau's policy of directing its principal enforcement activ- 
ities against major narcotic law violators has resulted in a progressive 
reduction in the supply of narcotics available to the domestic illicit 
traffic. This is indicated by the continued high prices of the drug in 
the illicit market, the high degree of adulteration found in drugs 
seized, and the marked decrease in the drugs seized, this decrease 
being noted in the seizures made at ports and borders. Greatly in- 
creased activities on the part of narcotic enforcement officers resulted 
in increased seizures in the internal traffic, and an increase in the viola- 
tions reported. The total violations reported by narcotic officers ex- 
ceeded those reported during the previous year by approximately 35 
percent. 

The decrease in the supplies of smuggled narcotics has forced ped- 
dlers and addicts to turn more and more to the channels of legitimate 
distribution for their supply. The robbery of wholesale and retail 
stocks, the forgery and false execution of narcotic prescriptions, and 
the improper prescribing and dispensing of narcotics are accordingly 
becoming more of an enforcement problem. Of the total violations 
reported during the year, 33 percent involved persons registered under 
the law, as compared with 30 percent involving such persons during 
the year 1934, 18 percent during 1933, and 14 percent during 1932. 
However, due to measures initiated by the Bureau to provide in- 



EEPORT OF THE SECRETARY OF THE TREASURY 



139 



■creased safeguards and more secure places of storage for narcotic 
stocks in the hands of registrants, the number of thefts reported 
and the amounts of drugs involved declined slightly during the year. 

The Bureau solicits and continues to receive the cooperation of 
State and municipal enforcement agencies. The activities of these 
agencies become more effective with the adoption and enforcement of 
the Uniform State Narcotic Law. The law was adopted with little 
or no amendment during the fiscal year 1935 in 18 States — Arizona, 
Colorado, Connecticut, Delaware, Georgia, Indiana, Louisiana, Mary- 
land, Massachusetts, Nebraska, New Mexico, North Carolina, Ohio, 
Oklahoma, Oregon, South Dakota, Utah, and West Virginia. This 
makes a total of 26 States which have adopted this legislation. It 
had been previously adopted by Florida, Kentucky, Nevada, New 
York, New Jersey, Khode Island, South Carolina, and Virginia. 

The following table shows the number of cases of violation, by reg- 
istered and nonregistered persons, of the narcotic laws and the cases 
disposed of during the fiscal year as reported by Federal narcotic 
enforcement officers: 

Violations of the narcotic laws and the cases disposed, of duri/ng the fiscal year 

1935 



Eegistered persons 



Federal court 



State court 



Nonregistered persons 



Federal court 



State court 



Pending July 1, 1934 

Reported during 1935: 

Federal 

Joint 

Total to be diS' 
posed of. 

Convicted: 

Federal 

Joint 

Acquitted: 

Federal 

Joint 

Dropped: 

Federal 

Joint - 

Compromised: ' 

Federal 

Joint 

Total disposed of.. 
Fending June 30, 1935... 



Sentences imposed 

Federal 

Joint 

Total 

Fines imposed: 

Federal 

Joint 

Total 



912 



2,068 
38 



3,018 



1,211 

3,146 
1,041 



5,398 



218 
13 



1,179 
23 



1,843 
533 



748 
142 



478 
8 

1,948 

1,070 



1 
1 

3,036 

1,462 



384 
25 



409 



$33, 376. 25 
2,505.00 

35, 881. 25 



3,934 



4,883 



$501.00 
425.00 



926.00 



$100, 949. 00 
11, 797. 03 



112, 740. 03 



232 

192 



305 
194 



12 



$19, 649. 74 
6, 528. 54 



25, 178. 28 



» Represents 99 cases involving tax liability which were closed on payment of taxes and penalties in the 
sum of $872.18; and 389 cases which were compromised in the sum of $31,498.50. 

Note.— Federal cases are made by Federal oflacers working independently, while joint cases are made by 
Federal and State officers working in cooperation with each other. 



140 EEPORT OF THE SECKETARY OF THE TREASURY 

Extent and trend of narcotic traffic 

On June 30, 1935, there were 325,465 registrants under the Harri- 
son Narcotic Law, as amended, 206 as importers and manufacturers, 
1,405 as wholesale dealers, 51,080 as retail dealers, 148,317 as prac- 
titioners, and 124,457 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 120,490 pounds of opium were imported, as com- 
pared with importations of 131,194 pounds during the previous year, 
or a decrease of 10,704 pounds. Coca leaves were imported for medic- 
inal purposes only and amounted to 194,132 pounds, as compared 
with importations of 246,679 pounds during the previous year, or a 
decrease of 52,547 pounds. 

Exports of narcotic drugs of all kinds amounted to 1,551 ounces 
in 1934 and 1,579 ounces in 1935, or an increase of 28 ounces. The 
drugs exported during 1935 involved 38,824 taxable ounces of 
products. 

The net quantity of pure drugs of all kinds sold to domestic pur- 
chasers by manufacturers amounted to 375,248 ounces, as compared 
with sales of 374,622 ounces during the previous year. 

DIVISION OF PRINTING 

Treasury Department Order No. 10, of April 23, 1935, changed the 
name of the Division of Supply to the Division of Printing, and 
transferred to the Procurement Division the purchasing functions 
and the storage and distribution of stationery supplies. 

The Division of Printing transacts all of the Treasury Depart- 
ment's printing and binding business with the Government Printing 
Office. This involves the placing of all orders, the handling of all 
inquiries regarding deliveries, estimates of cost, copy, proof, instruc- 
tions, and the auditing of vouchers covering payments in connection 
therewith. It is charged with editing and preparing weekly 
" Treasury Decisions " under customs, internal revenue, narcotics, 
and other laws; preparing semiannual bound volumes thereof, and 
maintaining a mailing list for their distribution. It is also charged 
with the responsibility of authorizing engraving work to be done by 
the Bureau of Engraving and Printing for all Government depart- 
ments and establishments unless money, bonds, or stamps are in- 
volved; control over newspaper and periodical advertising for the 
Treasury Department; binding confidential Department records; and 
the warehousing and distribution of blank books and forms for Wash- 
ington and field offices of the Department. Appropriations to the 
Department for printing and binding and for purchases of station- 
ery supplies are under the administrative control of the Division. 

The total expenditures ^ of the Division during each of the past 2 
fiscal years are shown in the following table : 



1 The table showing expenditures from allotments made to the Division from various 

appropriations, formerly appearing in tlie report of the Pivision O' Sniiplv is included 
in the report of the Branch of Supply, Division of Procurement. (See p. 147.) 



EEPORT OF THE SECRETARY OP THE TREASURY 141 

Expenditures for the fiscal years 193Jf and 1935, by appropriations 



Appropriation 



Printing and binding, Treasury Department 

Printing and binding. Treasury Department 1935-36 (second deficiency) . 

Printing and binding, other appropriations 

Ptationery, Treasury Department.- 



1 $597, 638. 51 



282, 420. 69 
359, 248. 74 



1, 239, 307. 94 



1935 



1 $672, 639. 00 

5, 000. 00 

333, 224. 32 

454, 599. 80 



1, 465, 463. 12 



1 Includes receipts from sales of customs forms (reimbursed to the appropriation). 

Printing and hinding 

The appropriation for printing and binding for the fiscal year 
1935 was $525,000. This amount proved insufficient to cover the needs 
of the Treasury Department, and $78,750 was transferred from the 
appropriation " Collecting the Internal Revenue, 1935 ", as well as 
$24,750 from the indefinite appropriation carried in the act of March 
28, 1934, which provides funds to cover the increased cost due to 
legislation reducing hours of labor in the Government Printing Office. 
It was also necessary to obtain $17,500 in the First Deficiency Act. 
With these additions, $646,000 was available from appropriations 
for 1935. Due to the heavy demands made on the Department for 
printing and binding, it later was necessary to obtain additional 
funds in the Second Deficiency Act of 1935-36, in the sum of $48,760. 
Of this amount, $5,000 was applied to cover encumbrances for 1935. 
Thus there was available from appropriations a grand total of 
$651,000 for printing and binding for the Treasury Department in 
the fiscal year 1935. 

Reimbursements of $26,839 from sales of customs forms increased 
the total available amount to $677,839. Of this sum, $677,639 was 
expended, leaving an unobligated balance of $200. In addition, 
$333,224 was expended from appropriations other than the printing 
and binding appropriation made by Congress, bringing the total 
expenditure to $1,010,863. 

Appropriations, expenditures, and reimbursements for printing and binding for 
the fiscal years 1934 and 1935 ^ 

SUMMARY 





1934 


1935 




$575, 000. 00 


$646, 000. 00 


Printing and binding Treasury Department, 1935-36 (second deficiency) .. 


5, 000. 00 




23, 714. 50 
282. 420. 69 


26, 839. 00 


Expended from other appropriations 


333, 224. 32 






Total available 


881, 135. 19 
880,059.20 


1,011,063.32 




1,010,863.32 








1.076.99 


200.00 







' Figures subject to slight variations, due to necessary delays in receiving bills from the Public Printer 
for certain items until pending worli is completed after the close of each fiscal year. 



142 



REPORT OF THE SECRETARY OF THE TREASURY 



Appropriations, expenditures, and reimbursements for printing and "binding for 
the fiscal years 19S4 and 1935 — Ck)iitinuecl 

EXPENDITURES PROM APPROPRIATIONS FOR PRINTING AND BINDINO, 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 Alcoliol 

Bureau of Narcotics - -- 

Chief Clerk and Superintendent -.- -- 

Coast Guard -- 

Commissioner of Accounts and Deposits.. - 

Comptroller of the Currency 

Custodians of public buildings 

Customs - -- -- 

Division of Disbursement 

Division of Supply (Printing) ^ 

General Supply Committee (Procurement— Bureau of Supply) ' 

Government Actuary.. 

Internal Revenue - 

Mint-. 

National bank depositaries 

Public Debt Service 

Public Health .- 

Secret Service 

Supervising Architect (Procurement— Public Works Bureau) '.. 

Treasurer of the United States 

Miscellaneous and department stock 

Total 



1934 



1935 



$8. 701. 77 


$8,874.72 


449. 45 


496.02 


23, 684. 55 


27, 290. 86 


4, 134. 92 


4,976.53 


19, 248. 21 




4, 474. 36 


3,840.71 


1, 562. 17 


638. 40 


18, 151. 31 


23, 080. 16 


394. 32 


882. 61 


27, 133. 20 


26, 101. 29 


2 710. 33 


(2) 


31, 969. 16 


61,701.12 


595. 07 


642. 77 


7, 022. 75 


3 4, 139. 43 


i 41, 552. 79 


2 44, 795. 77 


1, 683. 39 


1, 782. 10 


227, 325. 90 


292,267.38 


5, 583. 85 


6, 923. 28 


1, 787. 62 


1, 602. 77 


10. 445. 35 


12, 688. 20 


60, 477. 87 


54,747.39 


723. 40 


696. 97 


2 3, 700. 66 


s 6, 671. 34 


13, 818. 95 


12, 196. 62 


68, 692. 68 


65,064.66 


673,924.01 


660,800.00 



2 In October 1933, there were transferred to the Procurement Division the custodians of public buildings, 
■General Supply Committee, and OfHce of Supervising Architect. 

3 In April 1935, title changed to Division of Printing. 

REIMBURSED AND EXPENDED FROM OTHER APPROPRIATIONS 



1934 



1936 



Administration of the Cotton Act, 1934 (transferred to Internal Revenue, 

administrative expenses) 

Advances to Department of Agriculture under Tobacco Act of June 28, 1934 

(transferred to Internal Revenue, administrative expenses) 

Advances to Agricultural Adjustment Administration: 

Division of Disbursement 

Internal Revenue ..- 

Treasurer of the United States 

Civil Works Administration - 

Collecting the revenue from customs 

Contingent expenses, national currency: 

Comptroller of the Currency 

National Bank Redemption Agency - 

Customs Service, Puerto Rico Tarifl Fund 

Emergency Conservation Fund.. 

Emergency Relief, administrative expenses 

Expenses, Emergency Banking, Gold Reserve and Silver Purchase Acts — 

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 

Fuel yard. Procurement Division 

General Expenses, Agricultural Adjustment Administration (transferred 

to Treasury Department, Division of Disbursement) --. 

Insolvent National Bank Fund 

National Industrial Recovery - 

Procurement Division 

Salaries and expenses, Bureau of Engraving and Printing 

Salaries and expenses. Division of Disbursement 

Salaries and expenses, national bank examiners — 

Working Fund, Emergency Relief 

Working Fund, Home Owners' Loan Corporation 

Working Fund, Treasury Department: 

Division of Disbursement 

Public Health Service 

Treasurer of the United States 



Customs Service, blank forms. 
Total 



$5, 545. 07 



73, 174. 95 
809. 01 

90, 475. 57 
268. 75 

1, 636. 31 
14. 190. 70 



53.95 



1, 585. 74 

8, 917. 79 

34, 186. 36 

108. 21 

33, 200. 20 

31.63 

594.00 
215. 50 
851. 84 



704.99 

2, 864. 67 

9, 945. 71 

3, 028. 39 

31.35 



282, 420. 69 
23, 714. 50 



306, 135. 19 



$57, 487. 35 

1, 376. 04 

821.94 

46, 015. 33 

2, 103. 12 

2, 262. 05 



356. 87 

2, 233. 53 

12.76 



28, 038. 27 
12, 920. 54 



125, 589. 75 
27.21 



1,941.47 

648. 97 

122. 53 

1, 023. 25 

584. 32 

20, 792. 18 

10, 639. 56 



15, 431. 07 

83.10 

2, 713. 11 



333, 224. 32 
26, 839. 00 



360, 063. 32 



EEPORT OP THE SECRETARY OF THE TREASURY 

Stationery supplies 



143 



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 1934 and 1935 





1934 


1935 


Appropriations . 


$325, 000. 00 
34, 513. 08 


$413, 000. 00 
42, 100. 00 


Reimbursements.- 




Available credits -.. . . . 


359, 513. 08 
359, 248. 74 


455 100 00 


Total expenditures - . . 


454 599 80 






Balance . . 


204. 34 


500 20 







Departvienf advertising 

Authorizations to publish advertising were issued to 4,604 news- 
papers and periodicals in the fiscal year 1935, compared with 2,605 
in 1934, an increase of 1,999. The expenditures authorized were 
$37,911.20 in 1934 and $57,060.42 in 1935, an increase of $19,149.22. 

Engraving worh 

A total of 99,756,992 certificates, checks, commissions, drafts, trans- 
portation 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 1935, compared with 142,025,685 in the preceding year. 

PROCUREMENT DIVISION 

The functions of all agencies pertaining to policies and methods of 
procurement, warehousing and distribution of property, facihties, 
structures, improvements, equipment, and supplies are consohdated 
in the Procurement Division, which comprises two main branches, 
the Branch of Supply and the Public Works Branch. 

During the fiscal year 1935 the Procurement Division took an impor- 
tant part in the organization of the Works Progress Administration 
and in the formulation of its policies especially with respect to con- 
tracts and purchases. The Executive order of May 6, 1935, directed 
the Secretary of the Treasury, through the Director of Procurement, 
to purchase, or to provide a system for the purchase of, all materials, 
supplies, and equipment to be procured from funds allotted under the 
Emergency Rehef Appropriation Act of 1935. The basis for the 
Executive order of June 24, 1935, defining the methods of procedure 
under which projects shall be prosecuted was prepared by the Division. 

Branch of Supply 

The Branch of Supply determines policies and methods of procure- 
ment, warehousing, and distribution of property, equipment, and sup- 

1681(>— 36 11 



144 EEPOET OF THE SECRETARY OF THE TREASURY 

plies. During the fiscal year 1935, further consolidation of functions 
was effected, including: The transfer of the purchasing functions and 
activities involving the storage and distribution of stationery and 
suppHes of the Division of Supply of the Treasury Department; 
transfer of all records of the General Counsel pertaining to real estate 
acquired by the United States in nonpayment of debts; and transfer 
of the functions of the Federal Contract Board, the Federal Specifica- 
tions Board, and the Federal Standard Stock Catalog Board, which 
were abolished. The regulations of the Secretary of the Treasury and 
the Attorney General issued on February 27, 1935, provide that for- 
feitures of distilled spirits, including pure and denatured alcohol and 
wines, shall be reported to the Director of Procurement and disposed 
of as provided by regulations governing the operations of the Branch 
of Supply. 

In connection with purchases made during the fiscal year, 17,409 
bids were received involving 51,398 samples, and 6,789 contracts were 
awarded, the value of which aggregated approximately $37,000,000. 

Consolidated contracts were executed during the year covering 
tank car, tank wagon, and steel drum deliveries of motor gasoline for 
all Federal activities in 12 States, and, effective July 1, 1935, covering 
drayage service for all Federal activities in 55 cities. 

Material, supplies, and equipment received at the Federal warehouse 
amounted to 26,723,095 pounds, and deliveries to departments and 
establishments aggregated 21,681,459 pounds. The number of items 
stocked in the warehouse increased from 850 on July 1, 1934, to 1,925 
on June 30, 1935. 

The fuel yards issued and delivered to the departments and estab- 
lishments 318,706 tons of coal, 247 co^-ds of wood, 10 tons of charcoal^ 
71 tons of coke, and 70,338 barrels of oil, valued at $1,925,266. Stor- 
age and reimbursable work performed amounted to $42,296. 

The typewriter repair shop completed 1,579 overhauls and 13,265 
adjustments of typewriters for Government activities in Washington, 
representing charges of $20,601. 

The Federal Real Estate Section handled 4,013 requests for clear- 
ance to lease property, 84 applications to purchase, 39 applications 
to sell real property, and 93 transfers of land or buildings among the 
departments and establishments, including 57 C. C. C. camps declared 
surplus by the Director of Emergency Conservation Work. In the 
active Federal buikUngs, 129 assignments of space to Federal activ- 
ities v/ere cfi'ectcd, and 84 assignments of space were made in aban- 
doned Federal buildings. 

The Federal Traffic Section issued 2,636 routing orders, covering 
29,666 cars, in addition to routing 6,068 less-than-carload shipments, 
and furnished 51,952 rate quotations to the departments and estab- 
lishments. 

The Federal Specifications Division promulgated 112 new specifi- 
cations, 50 revisions, and 93 amendments to Federal specifications, 
bringing the total specifications in effect to 989. In addition 76 new 
proposed specifications and 61 proposed revisions were submitted to 
the departments for comment and criticism. 

The Federal Surplus Property Section handled 2,821 lists of surplus 
property in the field, effecting 2,270 transfers to Federal activities 
and granting 1,583 clearances for sale. There were transferred to 
Federal activities 6,856 gallons of forfeited alcohol and 820 gallons of 



EEPORT OF THE SECRETARY OF THE TREASURY 145 

whisky. Proceeds from the sale of surplus property at auction and 
waste material in the District of Columbia amounted to $89,765. 

The Motor Equipment Section completed 3,287 repair orders and 
dispensed 203,035 gallons of gasoline and 7,118 gallons of oil. 

During the fiscal year numerous requests of executive departments 
to deviate from standard forms were handled, recommendations were 
submitted to the Director of Procurement for the revision of standard 
forms, and studies were made of contracts and contract procedure. 

The Federal Catalog Section accomplished considerable work in 
connection wdth the preparation and revision of sections 1, 2, and 3 of 
the Federal Standard Stock Catalog, together wdth checking and 
arranging the stock lists of the various departments and estabhsh- 
ments. 

There were 135 Federal business associations, whose membership 
comprises Federal officials and employees, actively functioning as 
agents of the Director of Procurement. The associations rendered 
considerable assistance to the Procurement Division in the preparation 
and execution of consohdated drayage contracts, and made distinct 
achievements in the loan of property and surveys of electric power 
consumed by Federal activities. 

Until certain sections of the National Industrial Recovery Act were 
declared invalid, the Branch of Supply acted as general liaison officer 
between the Government activities and the National Recovery 
Administration in matters arising from the application of Executive 
Order No. 6646. 

The financial status of the Branch of Supply at the close of the fiscal 
year 1935 is shown on the attached statements: 

Statement of the working assets of the Branch of Supply for the fiscal year 19S5 

Inventory, June 30, 1934: 

Warehouse (marked-up basis) $242, 378. 68 

Less warehouse mark-up 11, 541. 84 

Warehouse (cost) - $230,836.84 

Fuel yard (cost) - 14, 579. 28 

Motor equipment (cost) 5, 297. 50 

Typewriter repairs (cost) 210. 00 

Opening inventory $250,923. 62 

Purchases 5, 534, 243. 63 

Total — - 5, 785, 167. 25 

Lesscost of goods sold.. 5,173,3.36.06 

Closing inventory June 30, 1935: 

Warehouse (marked-up basis) 594, 166. 32 

Less warehouse mark-up 28, 170.24 

Warehouse (cost) 565,990.08 

Fuel yard (cost) 37, 538. 34 

Motor equipment (cost).. - 7,058. 50 

Typewriter repairs (cost) 1, 244. 27 

Closing inventory, June 30, 1935 611,831. 19 



146 REPORT OF THE SECRETARY OF THE TREASURY 

Balance sheet of the Branch of Supply as of June SO, 1935 

ASSETS 
Current assets: 

Treasury cash - --- - - *i5"'55f fE 

Disbursing ofBcer's cash -- -- 145, i.ii. 4/ 

Disbursing olEcer's cash, special deposit - - ^°> ''A- '^ 

Liberty bonds in trust - - IVkK IVo 11 2,400.00 

Accounts receivable •l'^"^' '^^■i- *" 

Less undistributed receipts - -.- -28.37 

560, 284. 09 

Accounts receivable, typewriter repairs ^'?^7qq 

Accounts receivable, general fund revenue. - - 8, 417. 39 

Total current assets - - --- - 910, 995. 36 

Inventories and deferred charges: 

Inventory, warehouse (cost) - 6b5, 990.US 

Inventory, fuel yard stores --- 37, 538. 34 

Inventory, garage stores --- --- I'25?'ot 

Inventory, typewriter repair stores..- 1,-44.27 

— ■ ■ Gil, 031.19 

Inventory, rejected material 12. 889. 40 

Unbilled costs (appropriations) ^'^'^^•^^ 

Deferred charges, 1934 and prior years... -- 13, 453. 96 

Advances, Supply Division --- 450.79 

Total inventories and deferred charges.. 642. 530. 73 

Equipment - 18, 883. 80 

Less reserve for depreciation 9,974.48 

Land, buildings, donated. 4821984.32 

Equipment, donated 127, 327. 65 

Total fixed assets 619, 221. 29 

Total assets — 2,172,747.38 

LIABILITIES 
Current liabilities: 

Unvouchered invoices - - $462, 636. 70 

Special deposit obligations 38, 771. 79 

Liberty bond accountability 2,400.00 

Surplus property accountability 8, 417. 39 

Rejected material returnable to contractors. 12, 889. 40 

Total current liabilities.. .- 525, 115. 28 

General fund revenues, 1934 i 121, 999. 39 

General fund revenues, 1935 138, 300. 44 

Total reserves. 260, 299. 83 

Fixed liabilities, appropiiations and surplus: 

Property and equipment, donated.. 610, 311.97 

Unencumbered appropriations.. 5,592.46 

Unliquidated expenses, appropriations 13, 797. 84 

Capital, general supply fund 751,734.85 

Surplus, general supply fund 2, 873. 50 

Surplus, reserve, typewriter repairs, general fund revenue 3, 021. 65 

Total fi.xed liabilities.. 1. 387, 332. 27 

Total liabilities. 2,172,747.38 

In view of the transfer of the purchasing functions of the Division 
of Supply to the Procurement Division, the following statement of 
expenditures by the Division of Supply for the fiscal year 1934 and 
approximately 10 months of the fiscal year 1935 is included in the 
report of the Branch of Supply: 

t General fund revenue transferred to miscellaneous receipts during July 1935. 



EEPOKT OF THE SECRETARY OF THE TREASURY 



147 



Expenditures by Division of Supply for the fiscal year 1934 o,nd 10 months of 1935, 

by appropriations i 



Bureaus and offices, and titles of appropriations 



1834 



1935 



Chief Clerk and Superintendent: 

Contingent expenses, Treasury Department 

Library - 

Working fund, Civil Works Administration 

National Industrial Recovery, Emergency Council - 

Total -- 



$105,961.73 

464. 41 

140, 514. 76 



$48, 935. 39 

759. 08 

528. 98 

17, 588. 02 



246, 940. 90 



Division of Bookkeeping and Warrants, contingent expenses, public moneys. 
Bureau of Customs, collecting the revenue from customs. 



1,952.07 



333, 082. S3 



Public Health Service: 

Pay of personnel and maintenance of hospitals - 

Quarantine service -- --- 

Interstate quarantine .service -- 

Maintenance, National Institute of Health , 

National Institute of Health, conditional gift fund 

Field investigations ..- 

Preventing the spread of epidemic diseases 

Preventing the spread of epidemic diseases, 256,632 typhus 

Expenses. Division of Venereal Diseases,. 

Control of biologic products 

Books 

Studies of rural sanitation — 

Educational exhibits 

Expenses, Division of Mental Hygiene 

Working fund, Civil Works 

Working fund, Beltsville (Md.) public works.. 

Working capital fund, narcotic farms.. 

Working fund. Treasury Department emergency relief 

National Industrial Recovery . 

Department of Justice transfers to Public Health Service: Medical and 
hospital services, penal institutions ".-. 



1, 500, 239. 65 

173,112.84 

874. 12 

33, 899. 80 



17, 144. 56 
43,011.69 



3,231.31 
12,991.30 
418.36 
311.33 
421.39 
260. 83 
44, 750. 45 
34.87 



78, 266. 39 
84, 144. 35 



Total. 



1,993,113.24 



Procurement Division: 

Branch of Supply 

Public Works Branch (account public buildings): 

Repairs and preservation 

Mechanical ouipment 

Vaults and safes. — 

General expenses 

Furniture and repairs 

Operating supplies 



8, 650. 51 

82, 539. 64 

115,517.82 

10, 433. 68 

55, 368. 34 

478, 797. 68 

859, 426. 58 



Total. 



1, 610, 734. 25 



Bureau of Internal Revenue: 

Collecting the internal revenue 

Advances to Agricultural Adjustment Administration (transfer to In- 
ternal Revenue, administrative expenses) 

Administration of Cotton Act ' 

Advances to Department of Agriculture under Tobacco Act 

Total 

Bureau of Narcotics, salaries and expenses.. 

Bureau of Industrial Alcohol, salaries and expenses 



165, 411. 51 
304, 762. 81 



470, 174. 32 



4, 485. 06 



25, 260. 09 



Public Debt Service: 

Expenses of loans (act Sept. 24, 1917, as amended and extended). 
Public Debt Service 



83, 577. 52 
14, 732. 22 



Total 

Division of Disbursement, salaries and expenses 

Total appropriations and allotments 

Purchases from appropriations from which no allotments were made. 



98, 309. 74 



n, 783. 74 



4,811,836.24 
559, 502. 21 



Grand total. 



5, 371, 338. 45 



67.811.47 
3, 616. 05 



342, 272. 90 



1, 558, 519. 90 

95, 772. 55 

412. 44 

29, 580. 00 

200. 00 

13, 425. 42 

20, 184. 75 

19.40 

3, 636. 40 

8, 006. 74 

425. 50 

271.32 

120. 34 

238, 382. 00 

1, 749. 55 



35, 984. 37 

1, 487. 30 

83, 864. 24 

47, 134. 78 



2,139,177.00 



5, 069. 08 

108, 059. 85 
118, 999. 19 
3, 194. 75 
50, 000. 00 
42, 347. 06 
29, 183. 01 



356, 852. 94 



394, 833. 80 

158, 101. 52 

360, 047. 25 

5, 134. 05 



918, 116. 62 



14, 321. 16 



107, 625. 29 
12, 215. 95 



119,841.24 



52, 337. 64 



4, 014, 347. 02 
517, 640. 15 



4, 531, 987. 17 



' In previous annual reports this table was shown under the Division of Supply. 



148 REPORT OF THE SECRETARY OF THE TREASURY 

Public Works Branch 

The functions of the Public Works Branch are to collect and pre- 
pare for submission to Congress data and estimates for public building 
projects; to acquire land for public building sites; to prepare plans, 
specifications, and estimates for public building construction and to 
take bids and award contracts therefor; to supervise the construc- 
tion, remodeling, extension, etc., of public buildings; to repair all 
public buildings formerly under control ol the Treasury Department, 
which were transferred to the custody of the Post Office and Interior 
Departments under Executive order of June 10, 1933; and to operate, 
repair, equip, and maintain all public buildings in the custody of the 
Treasury Department outside of the District of Columbia. 

Office of the Supervising Architect. — During the year an advisory 
committee on engineering was established, consisting of 5 consulting 
engineers, 2 of whom are specialists in mechanical and electrical 
engineering and 3 in structural engineering. This committee was ap- 
pointed to assist the Supervising Architect in a review of the present 
practice and procedure of the engineering departments to determine 
any necessary changes with, respect to the selection of suitable designs 
for buildings. As a result a Manual of Design in the form of a code 
is being prepared to serve as a guide in the development of plans and 
specifications for new structures. The committee has also under- 
taken the solution of special engineering problems assigned to it in 
connection with specific building projects. 

A directive board was established to study the requirements of 
each project in its preliminary stage, taking into consideration the 
best utilization of the site selected, the general character of the 
design in its broad sense, the selection of the most appropriate ma- 
terials for construction and finish, the availability of local materials, 
the relationship of the proposed building to its surroundings, and the 
development of an equitable balance in the use of materials that will 
spread the benefits of the public building program as much as possible 
among all producing industries. 

Office oj the Supervising Engineer. — The reorganization of this office, 
completed during the year, has resulted in improved coordination of 
the work. To facilitate control of the various functions and widely 
distributed personnel engaged in field work, the United States and its 
immediate territories were divided into eight districts, with head- 
quarters located in a city in each district. Approximately 15,000 
persons were employed directly and 100,000 persons indirectly in the 
execution of more than 1,500 contracts, ranging from $500 to 
$10,000,000. 

The facility to make immediate site surveys and soil investigations 
at any place within the United States was perfected during the year. 

An important adjunct of the Supervising Engineer's Office is the 
activity of an independent corps of special inspection engineers 
whose reports represent individual criticism of design, construction, 
and personnel. Their suggestions are finding valuable reflection in 
the character of design, nature of materials, and methods of con- 
struction used in public buildings. 

Section of Pointing and Sculj)ture. — This section was organized on 
October 16, 1934, for the purpose of securing suitable paintings and 
sculpture for the embellishment of public buildings and to stimulate 
the development of art in this country. 



EEPOKT OF THE SECRETAKY OP THE TREASURY 



149 



The executives of the section are in close touch with the art devel- 
opments throug:hout the country as the result of their work in directing 
the former Public Works of Art Project of the Treasury Department. 
Under their direction competitions were instituted for national, re- 
gional, and State projects. These competitions were open and in- 
vited, and it is estimated that about 800 artists participated. During 
the year 824 sketches by 352 artists were passed upon by local com- 
mittees and submitted to the Procurement Division. 

During the year the section reviewed 854 public buildings in con- 
nection with art projects. Of these, 286 projects were authorized, 
121 are still under consideration, and 447 were discarded for lack of 
space or insufficient funds. 

The section publishes periodically a bulletin containing information 
about the projects that are under way and about those which it ex- 
pects to initiate. During the year 575 photographs of the works of 
various artists were added to the large photographic file which had 
been transferred to the section from the Public Works of Art Project. 

A number of artists were placed in civilian conservation camps by 
the section. In this connection, 100 painters have been placed in 
camps and 3,000 pictures have been received from them. 

At the beginning of the fiscal year 1936, the section will be supple- 
mented by the Treasury Relief Art Project, designed to select from 
artists on the relief roils about 450 painters and sculptors to create 
murals and sculptures for. public buildings. 

Original public building program. — During the year 124 projects, 
with a total limit of cost of $259,565,882, were completed under the 
original public building program. Of the 735 construction projects 
previously under contract, 702, with a total limit of cost of $430,207,564, 
were completed by June 30, 1935; and 33 projects, with a total limit 
of cost of $12,792,575, remained under contract. 

Program under the Public Works Administration. — The number of 
allotments for public buildings by the Administration of Public Works 
under the National Recovery Act, approved June 16, 1933, was re- 
duced during the year from 465 to 442, due chiefly to the fact that the 
Post Office Department was able to eft'ect reductions in the cost of 
leases of property for post office uses to an extent that rendered the 
construction of proposed new buildings unnecessary. Additional au- 
thorizations increased the total of the allotments during the year 
from $67,410,788 to $70,850,768. 

The status of work under this program on June 30, 1935, is shown 
in the following table: 



status 



Number of 
projects 



Limit of cost i 



Authorized by the Public Works Administration 

Completed 

Under contract ., 

Bids in, on the market, or in specification stage. 

Drawing stage 

Sites selected and surveys ordered 

Sites advertised for, examined, and awaiting selection. 

Total , 



442 


$70, 850, 768. 56 


27 


2, 978, 675. 36 


283 


45, 806, 288. 19 


101 


16, 559, 295. 00 


17 


1, 713, 510. 00 


3 


779, 000. 00 


11 


3, 014, 000. 00 



70, 850, 768. 55 



1 Includes augmentations from the $2,500,000 fund provided by the Emergency Appropriation Act of 
June 19, 1934. 



150 



REPORT OF THE SECRETARY OF THE TREASURY 



The value of contracts awarded both for land and construction and 
of certain administrative expenses incident thereto, as of June 30, 
1935, was $47,990,207.87, leaving $22,860,560.68 unobligated. 

Belief program. — The Emergency Relief and Construction Act of 
1932, approved July 21, 1932, authorized and appropriated $100,000,- 
000 for public building projects. Under the act of March 31, 1933, 
all moneys previously appropriated for public works, unless obligated 
in connection with projects on which actual construction had been 
commenced, or might be commenced within 90 days, were allocated 
to the conservation program. The following table gives an accounting 
to June 30, 1935, of the appropriation for public building projects 
under the Emergency Relief and Construction Act: 

Appropriated ---- -- - $100,000,000.00 

Transferred to: 

Emergency Conservation fund $92,875,200.00 

Office appropriations 308,241.65 

~ — 93, 183, 441. 65 

Retained by Public Works Branch. 6,816,558.35 

Expended to June 30, 1931 - 4,570,792.52 

Obligated but not expended, June 30, 1934 - 557,222.37 

— 5, 128, 014. 89 

Unobligated balance, June 30, 1934 - 1,688,543.46 

Fiscal year 1935: 

Purchase of 9 sites, etc., $185,276.95. from funds obligated but not expended on June 30, 
1934 ($557,222.37). Net cancelation of obligations 371,945.42 

Unobligated balance, June 30, 1935 - 2,060,488.88 

Emergency construction program. — In the Emergency Appropriation 
Act approved June 19, 1934, $65,000,000 was appropriated for the 
emergency construction of public buildings outside the District of 
Columbia, to be selected by the Secretary of the Treasury and the 
Postmaster General from public building projects specified in state- 
meuts 2 and 3 in House Report 1879, Seventy-third Congress. There 
was pIso authorized the expenditure of $2,500,000 from Public Works 
Administration funds for permitting increases up to 10 percent in the 
limits of cost of both Public Works Administration and Emergency 
Construction projects when the bid of the lowest responsible bidder 
exceeds the amount previoush^ made available for any project. 

Under this legislation, 355 projects were selected during the year 
with a total limit of cost of $65,166,945. The status of work under 
this program on June 30, 1935, is shown in the following table: 



status 



Number of 
projects 



Limit of cost ' 



Authorized 

Completed 

Under contract 

Bids in, on market, or in specification stage , 

Drawing stage 

Sites selected and surveys ordered 

Sites advertised for, examined, and av^aiting selection 

Total. 



$65, 166, 945 



1 


50, 000 


160 


22, 901, 145 


118 


23, 131, 500 


56 


17, 508, 300 


3 


170, 000 


17 


1, 406, 000 



65, 166, 945 



1 Includes augmentations from the $2,500,000 fund provided by Emergency Appropriation Act of June 19, 
1934. 

The value of contracts awarded both for land and construction 
and the amount of certain administrative expenses incident thereto 
as of June 30, 1935, were $25,310,169.86, leaving $39,856,775.14 
unobligated. 



EEPORT OF THE SECRETARY OF THE TREASURY 



151 



Private architectural services. — Under the authorization by Con- 
gress for the employment of private architects to the extent deemed 
necessary by the Secretary of the Treasury, contracts had been made 
at the end of the fiscal year 1934 with architectural firms for 301 
projects. During the fiscal year 1935, 61 additional contracts were 
made and 194 of those previously in force were terminated or settled, 
leaving 168 contracts in force at the end of the fiscal year 1935. 

Administration and cost of Federal buildings under the control of 
the Treasury Department. — The administration, number, and cost of 
completed buddings under the control of the Treasury Department 
(exclusive of land) as of June 30, 1935, are shown in the following 
table. The control of these buildings is charged to the Procurement 
Division, and repairs thereto are payable from annual appropriations 
for repairs to pubhc buildings. 



Buildings administered by — 



Post OfHce Department 

Interior Department 

Procurement Division 

Procurement Division, Federal buildings (old) which have reverted to cus- 
tody of the Treasury Department. 

Bureau of the Mint 

Chief Clerk, Treasury Department 

Public Health Service, marine hospitals 

Public Health Service, quarantine stations.. 

Total.. 




489, 965, 279. 68 



1 Includes 20 vacant buildings, 40 old buildings used by emergency relief agencies, 10 old buildings used 
by other Government agencies, and 4 old buildings rented for commercial purposes. 

2 Includes Public Health Building, Cincinnati, Ohio; Public Health Building, Philadelphia, Pa.; and 
National Institute of Health, Washington, D. C. 

Expenditures. — Expenditures for all purposes by the Public Works 
Branch during the fiscal year 1935, together with outstanding con- 
tract liabilities and unencumbered balances of appropriations, are 
shown in the following statement: 



Expenditures and contract liabilities charged against appropriations for the fiscal 
year 1935, and unencumbered balances as of June 30, 1935 



Statutory roll 

Sites and additional land 

Construction of nevi' buildings 

Extension to buildings _ 

Miscellaneous special items 

Administrative expenses. Public Works Administra- 
tion projects 

Emergency Appropriation .\ct, June 19, 1934: 

Administrative expenses, emergency construction 

projects 

Administrative expenses, emergency repairs projects. 
Emergency repairs to public buildings, etc 

Unallotted appropriations 

Furniture for triangle buildings 

Lands and other property of the United States 

Repairs and preservations of public buildings 

Mechanical equipment for public buildings 

Vaults and safes for public buildings 

> Includes .$215,000 reserve 1934. 
» Includes $350,000 reserve 1934. 
« Includes $200,000 reserve 1934. 
< Includes $254,355 reserve 1934. 



Expenditures 



$286, 242. 08 

6,998,371.19 

33, 484, 105. 71 

9,530,931. 12 

725, 516. 21 

2, 952, 806. 36 



2,010,041.82 
100, 020. 62 
613, 650. 88 



280, 082. 95 



623, 784. 80 

528, 561. 93 

11, 676. 57 



Contract lia- 
bilities charged 
against appro- 
priation 



$77 92 

10, 052, 889! 39 

43, 909, 556. 53 

4, 352, 565. 98 

408, 363. 82 

506, 053. 27 



473, 033. 88 
'233,''836."70' 



89, 539. 90 



208,646.11 

114.148.81 

9, 038. 81 



Unencumbered 

balances, June 

30, 1935 



1 $286, 313. 53 

274, 062. 50 

56,567,101,98 

11, 423, 695. 91 

257, 499. 08 

3,605,119.11 



3, 678, 738. 52 

39, 379. 38 

552, 518. 42 

5, 193, 516. 32 

102, 831. 15 

350. 00 

2 492, 948. 64 

3 294, 161. 35 
* 407, 323. 41 



152 



REPORT OF THE SECRETARY OF THE TREASURY 



Expenditures and contract liabilities charged against appropriations for the fiscal 
year 1935, and unencumbered balances as of June SO, 1935 — Continued 



Expenditures 



Contract lia- 
bilities charged 
against appro- 
priation 



Unencumbered 

balances, June 

30, 1935 



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 

Total - 



$88, 910. 34 
321, 602. 68 
587, 145. 62 
81, 562. 21 
490, 582. 06 
1, 209, 131. 34 



$75, 314. 72 
262,4)3.29 

37, 622. 63 

6, 841. 16 

820. 898. 07 

10, 500. 00 



» $3, 103, 949. 26 
« 447, 606. 78 

^ 1, 406, 376. 15 
8 390, 798. 86 
6 138, 920. 88 

10 6, 799, 600. 18 



60, 925, 326. 49 



61, 571, 334. 99 



95, 462, 811. 41 



« Includes $2,660,043 reserve 1934. 

fl Includes $337,231 reserve 1934. 

? Includes $1,043,525 reserve 1934. 

« Includes $388,063 reserve 1934. 

• Deficit. 

w Includes $2,920,000 reserve, 1934; $5,000, 1935. 

The following table, pursuant to the act approved June 6, 1900 
(31 Stat. 592), shows the total expenditures to June 30, 1935, for all 
purposes for buildings constructed by the Treasury Department. 

Cumulative expenditures, by types, on each class of public buildings constructed by 
the Treasury Department to June 30, 1935 



Construction 



Extension, al- 
terations and 
special items 



Annual repairs 



Total expendi- 
tures, June 30, 
1935 



Post-ofEce, courthouse, customhouse 

buildings, etc - - 

Courthouse buildings. 

Customhouse buildings 

Marine hospital buildings. 

Post-offlce buildings 

Quarantine-station buildings 

Miscellaneous buildings 

Total 



$172, 823, 803. 08 
10, 438, 173. 80 
24,117,842.94 
14,483,153.11 
186, 369, 284. 50 
3, 714, .505. 75 
134, 330, 289. 36 



$35, 096, 989. 97 
602, 920. 94 
3, 483, 632. 55 
7, 668, 358. 72 
14, 906, 133. 03 
3,093,649.15 
10, 305, 300. 85 



429, 334. 18 
628, 583. 79 
875, 570. 39 
121, 077. 39 
463, 632. 21 
930, 540. 40 
520,040.12 



$229, 350, 127. 23 
11,669,678.63 
30,477,045.88 
26, 272, 589. 22' 
214, 739, 049. 74 
8, 702, 845. 61 
151, 155, 630. 33 



646, 277, 052. 54 



75, 156, 985. 21 



50, 968, 778. 48 



672, 366, 966. 64- 



Post-office, courthouse, customhouse build- 
ings, etc 

Courthouse buildings 

Customhouse buildings 

Marine hospital buildings 

Post-office buildings 

Quarantine-station buildings 

Miscellaneous buildings 

Administrative expenses, Public Works 
Administration projects ' 

Administrative expenses, emergency con- 
struction projects ' 

Administrative expenses,emergencyrepau's. 
Unallotted appropriations .-. 



Total. 



Cost of sites 



$47, 123, 513. 79 

5, 339, 034. 69 

3, 886, 922. 33 

892, 172. 53 

74, 889, 222. 67 

328, 837. 60 

57,211,127.12 



Liabilities chargeable against 
appropriations ' 



Sites 



$69, 500. 00 



, 909, 095. 89 
15, 000. 00 
59, 293. 50 



I, 670, 830. 73 10, 052, 889. 39 48, 670, 486. 33 



Buildings 



$3, 491, 439. 07 

2, 685, 350. 96 

317.00 

1, 171, 265. 04 

23, 079, 677. 91 

570, 028. 78 

17, 672, 407. 57 



Unencum- 
bered balanc 
of appropria- 
tions, June 
30, 1935 



$9, 507, 517. 09 

2,289,559.20 

784, 158. 96 

207, 900. 40 

35, 244, 696. 80 
422, 336. 65 

20, 066, 190. 37 

3, 605, 119. 11 

3, 678, 738. 52 

39, 379. 38 

5, 193, 516. 32 



81,039,112.80 



1 Administrative expenses for Public Works Administration projects were $506,053.27; and for emergency 
construction projects, $473,033.88. 



EEPORT OF THE SECRETARY OF THE TREASURY 



153 



PUBLIC DEBT SERVICE 

Division of Loans and Cnrrency 

This Division is the active agent of the Secretary of the Treas- 
ury for the issue of all public debt obligations of the United States 
and for conducting transactions 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 Gov- 
ernment offices. It also counts and delivers to the Destruction Com- 
mittee 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 1935. Complete details of all trans- 
actions in public debt securities are presented in formal statements 
elsewhere in the report. 

Issues, retirements, and transactions in stock of United States and insular 
securities during the fiscal year 1935 

[Par value] 





Registered 


Nonregistered 


Total 


ISSUES 

Stock shipments: 

To Federal Reserve banks: 




$5, 238, 484, 900. 00 
I 16, 354, 617, 650. 00 


$5, 238, 484, 900. CO 






I 16,3.54,617,650.00 


To Postal Service 


$288,216,250 

872, 281, 270 
992, 830, 750 


288, 216, 250. 00 


Issues by the Division: 


66,163,460.00 
121, 587, 000. 00 


938, 444, 730. 00 




1,114,417,750.00 








2, 153, 328, 270 


21, 780, 853, 010. 00 


23, 934, 181, 280. 00 






RETIREMENTS 


639, 841, 690 
999, 033, 935 

504, 860, 925 


474, 576, 060. 00 
1, 124, 238. 25 

33, 090. 00 


1,114,417,750.00 




1, 000, 158, 173. 25 


Retired on other accounts (i. e., claims, credit 
and exchange authorization retirements) 


504, 894, 015. 00 




2, 143, 736, 550 


475, 733, 388. 25 


2, 619, 469, 938. 25 






STOCK ACTIVITIES 

Received from Bureau of Engraving and Print- 


2, 625, 402, 360 
37, 642, 840 


26, 167, 086, 000. 00 
764, 654, 200. 00 


28, 792, 488, 360. 00 


Canceled and delivered to Ilegister of Treasury: 


802, 297, 040. 00 


Detached matured coupons (4,620,943 
pieces— amount $336,250,385. 10) . 





1 Includes Treasury bills available for either original issue or exchange in the amount of $5,771,148,000. 

United States ^Savings Bonds. — During the year the Division_ re- 
ceived from the Bureau of Engraving and Printing 2,920,000 United 
States Savino-s Bonds with a maturity value of $413,750,000. Of 
these bonds 1,343,750, with a maturity value of $288,216,250, were 
delivered to the post offices, leaving a balance on hand of 1,576,250 
bonds with a maturity value of $125,533,750. Sales and redemptions 



154 



REPORT OF THE SECRETARY OF THE TREASURY 



of these bonds, monthly, since the first month of issue are shown in 
the following table : 

Sales and redeiirptioiis of United States Sav-inys Bunds, moiithhj, March to 

June 1935 







N'umber 


of pieces, by denomination 


Sale price 


Maturity 


Month 


$25 


$50 


$100 1 $500 


$1,000 Total 


value 




Sales 


March . . 


52, 079 
23, 837 
16, 879 
15, 193 


33, 455 
17, 197 
13, 039 
11,892 


74, 873 
43, 366 
31,046 
28, 131 


27, 153 
16, 021 
11,622 
9,914 


27,713 
17,912 
13, 807 
12, 480 


215,273 
118,333 
86, 393 
77,610 


$38, 813, 643. 75 
23, 786, 156. 25 
17, 847, 393, 75 
15, 918, 393. 75 


$51, 751, 525 




31,714,875 


May . - 


23, 796, 525 




21,224,525 






Total 


107, 988 


75, 583 


177,416 


64,710 


71,912 


497, 609 


96, 365, 587. 50 


128, 487, 450 








Redemptions prior to maturity 


May - . 


405 
911 


158 
537 


344 

958 


82 
256 


133 
205 


1, 125 

2, S67 


$172,038.75 
358, 818. 75 


$229, 425 




478,425 






Total. 


1,316 


695 


1,302 


338 


341 


3,992 


530, 887. 50 


707, 850 







Individual registered accounts. — In connection with registered pub- 
lic debt issues, individual accounts are maintained and interest is 
paid periodically in the form of checks. The interest-bearing 
accounts open on June 30, 1935, were as follows : 





Number of 
accounts 


Principal 


Interest-bearing loans: 


40, 910 

159, 947 

418, 484 

18 


$823, 340, 430 


Liberty bonds .. 


185, 571, 350 




1, 976, 373, 350 


Treasury notes and certificates of indebtedness. 


633, 242, 000 






Total interest-bearing loans.- 


619,359 


3, 618, 527, 130 



There were 394,004 individual accounts closed for registered Lib- 
erty bonds, Victory notes, special Treasury notes, pre-war issues and 
Treasury bonds, and 178,234 accounts were decreased, representing 
the retirement of securities amounting to $1,898,416,180 par value. 
In connection with the same loans 234,704 new accounts amounting 
to $3,069,160,170 principal were opened. A total of 40.631 changes 
of address 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 1,521,751 checks amounting to $92,586,157.19. 
On registered securities of the pre-war loans 84,955 checks for $17,- 
192,699.25 were issued and on registered Treasury notes and cer- 
tificates of indebtedness interest payable by four checks amounting 
to $17,062,984.61 was certified to Ihe Treasurer. There were re- 
ceived from the Bureau of Engraving and Printing 1,788,300 checks 
as stock and there was canceled and delivered to the Destruction 
Committee stock consisting of 264,848 valid checks and 16,483 void 
checks. 

Claims. — Claims for relief on account of lost, stolen, destroyed, and 
mutilated securities handled by the Division during the fiscal year 
were as follows : 



EEPORT OF THE SECRETARY OF THE TREASURY 



155 





Number of 
claims 


Niunber of 
securities 


Par amount 
of securities 


On hand June 30, 1934 __ 


8,710 
2.736 


25,887 
6,594 


$3, 945, 783. 25 
1, 374, 029. 29 


Received _. 




Total... 


11,446 


32, 481 


5, 319, 812. 54 




Settled by- 
Reissue or redemption of securities 


1,798 

1,051 

30 

172 


4,131 

1,696 

43 

658 


529, 654. 04 

843, 815. 00 

7, 200. 00 

3 242 50 


Recovery of securities 


Disallowance of claims 


Other disposition ' 






Total settled.- 


3,051 


6,528 


1, 383, 911. 54 






8,395 


25, 953 


3, 935, 901. 00 





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 securi- 
ties amounting to $414,770,750 were in safe-keeping for various Gov- 
ernment offices, against which formal audited receipts were outstand- 
ing. Throughout the year securities amounting to $314,867,150 were 
received for safe-keeping and receipts therefor issued, and securi- 
ties amounting to $267,937,150 were delivered from safe-keeping 
upon the surrender of outstanding receipts, leaving a balance of 
securities amounting to $461,700,750 in safe-keeping June 30, 1935. 

Mutilated fwper and redeemed currency. — Mutilated paper veri- 
fied and delivered to the Destruction Committee consisted of 129,938,- 
825 sheets and coupons, of which 129,643,811 sheets and coupons 
were received from the Bureau of Engraving and Printing and 
295.014 sheets from the Division of Paper Custody. 

Redeemed currency, unfit for circulation, counted and delivered to 
the Destruction Committee during the year amounted to 654,174,295 
pieces, representing $1,403,473,867.33, detailed as follows: 

Number of pieces and amount of redeemed currency delivered to the Destruction 
Committee during the fiscal year 1935 





Old series 


New series 


Currency 


Number of 
pieces 


Face value 


Number of 
pieces 


Face value 


TJ nited States notes . . . 


578, 202 
1, 404, 316 


$1, 855, 749. 00 
1, 725, 424. 00 


59, 097, 523 


$244, 916, 451 


Silver certificates 




Silver certificates, 1928 


532, 061, 202 

144,628 

39, 732, 862 

20, 815, 538 


532,055 918 


Silver certificates, 1933 






1, 446, 280 


Silver certificates, 1934 






76, 509, 372 


Gold certificates -.- -. 


329, 818 
1,571 
8,635 


7, 183, 710. 00 
7, 650. 00 
1, 973. 33 


537, 771, 340 


Treasury notes . . . . . . 




Fractional currency 












Total- - 


2, 322, 542 


10, 774, 506. 33 


651, 851, 753 


1, 392, 699, 361 



156 



REPORT OF THE SECRETARY OF THE TREASURY 



PiMic'dy. — 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 3,323,300 printed circu- 
lars were distributed to the public during the year. 

Other activities. — In addition to the regular activities of the 
Division, securities of various Government instrumentalities were 
received from the Bureau of Engraving and Printing and issued as 
follows : 

Securities of Goxiernment instrumentalities received and issued, fiscal year 1935 





Received 


Issued 


On hand June 30, 1935 


Securities 


Pieces 


Par amount 


Pieces 


Par amount 


Pieces 


Par amount 


Home Owners' Loan 
Corporation: 
Registered - 


129, 000 
6, 882, 700 


$860, 000, 000 
7, 001, 450, 000 


19, 806 
4, 536, 876 


$233, 264, 000 
4, 206, 741, 325 


130, 674 
3,062,999 


$652, 829, 000 


Coupon - 


3, 089, 722, 625 






Total - 


7,011,700 


7, 861, 450, 000 


4, 556, 682 


4, 500, 005, 325 


3, 193, 673 


3, 742, 551, 625 






Federal Farm Mortgage 
Corporation: 
Registered .. 


58, 037 
1, 965, 000 


729, 875, 000 
1, 797, 600, 000 


67, 799 
1, 620, 050 


371, 724, 900 
1, 417, 401, 600 


39, 788 
377, 674 


678, 806, 000 




414, 476, 700 






Total 


2, 023, 037 


2, 527, 475, 000 


1,687,849 


1, 789, 126, 500 


417, 462 


1, 093, 282, 700 






Consolidated Federal 
farm loan bonds or the 
Federal land banks: 


25, 000 
460, 000 


66, 220, 000 
833, 400, 000 


4,615 
319, 235 


11,721,100 
537, 039, 000 


20, 284 
141,992 


54, 026, 400 


Coupon 


297,476,000 






Total 


485, 000 


899, 620, 000 


323, 850 


548, 760, 100 


162, 276 


351, 502, 400 






Reconstruction Finance 
Corporation: 
Coupon 


3,850 


358, 250, 000 


1,981 


108, 650, 000 


21,911 


1, 722, 820, 500 






Grand total.. 


9, 523, 587 


11,646,795,000 


6, 570, 362 


6. 946, 541, 925 


3, 795, 322 


6, 910, 157, 225 



Register of the Treasury 

The Register of the Treasury conducts the final audit and has 
custody of all retired public debt securities, including interest 
coupons and checks; and, in addition, he performs a like function 
with respect to the securities of the Home Owners' Loan Corpora- 
tion and the Federal Farm Mortgage Corporation, the consolidated 
obligations of the Federal land banks, and bonds of insular posses- 
sions retired on account of exchanges for other securities. 

The Register renders monthly certification to the Comptroller 
General of all public debt securities redeemed by the Treasurer of 
the United States and establishes credits due the Federal Reserve 
banks and the Division of Loans and Currency for securities for- 
warded by them on account of exchanges, replacements, transfers 
of registration, etc. 



EEPORT OP THE SECRETARY OF THE TREASURY 



157 



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 1935 : 



Summary of securities retired, fiscal year 1935 



Security 



United States securities: 

Pre-war loans 

Liberty loans 

Treasury bonds 

Treasury notes 

Certificates of indebtedness.- 

Treasury bills 

Treasury (war) savings securities 

United States Savings Bonds 

Interest coupons 

Interest checks 

Other securities: 

Home Owners' Loan Corporation: 

Securities 

Interest coupons 

Interest checks 

Federal Farm Mortgage Corporation: 

Interest coupons 

Interest checks 

Consolidated Federal farm loan: 

Interest coupons 

Interest checks 



Total. 



United States securities: 

Pre-war loans 

Liberty loans 

Treasury bonds 

Treasury notes 

Certificates of indebtedness 

Treasury bills.. 

First 3}^ percent Liberty loan interim cer 
tiflcates.. 

other securities- 
Insular possessions loans. 

Home Owners' Loan Corporation securities.. 
Federal Farm Mortgage Corporation secur 

ities 

Consolidated Federal farm loan securities 

Total 



Bearer 



Pieces 



Amount 



Registered 



Pieces 



Amount 



Redeemed 



169 
,164,411 
60 
63,813 
63, 137 
51, 067 
112, 898 



14, 111, 643 



133, 422 
760,689 



531, 769 
89, 751 



$18. 620. 00 
4,081,411,250.00 

555, 000. 00 
1,302,646,700.00 
1,522,470,300.00 
3, 326, 590, 000. 00 

149, 081. 40 



545, 285, 169. 92 



242, 016, 200. 00 
60, 080, 571. 50 



20,116,725.00 
2, 477, 212. 00 



25, 082, 829 11, 103, 816, 829. 82 706, 385 1, 010, 169, 401. 66 



2,699 
667, 921 



131 

81 



5,499 
3,992 



7,108 



17, 625 
'"'719' 



$1, 782, 210. 00 
785, 397, 200. 00 



32, 973, 000. 00 
175, 900, 000. 00 



126,434.18 
630, 887. 50 



7.43 

3, 197, 000. 00 
'4,'634,'923."75 



5, 608, 858. 80 
""ii8,'880."6o 



Retired on account of exchanges for other securities, 
etc. 



2,582 

484, 356 

347, 276 

273, 005 

14,913 

7,115 

15 



3, 052, 833 



871, 490 
14, 139 



5, 067, 727 



$867, 860. 00 

598, 748, 950. 00 

1,517,350,250.00 

4, 724, 796, 450. 00 

331, 547, 500. 00 

863, 421, 000. 00 

1, 000. 00 

3, 000. 00 

1,414,828,525.00 

402, 296, 200. 00 
21, 738, 500. 00 



9, 875, 599, 235. 00 



47, 099 

98,941 

67, 832 

6 

5 



2,193 
6,249 

7,805 
146 



230, 276 



$356, 095, 540. 00 

213,566,900.00 

441, 572, 300. 00 

124, 195, 000. 00 

5, 000, 000. 00 



4, 234, 000. 00 
54, 847, 550. 00 



239,710,300.00 
421. 400. 00 



1, 439, 642, 990. 00 



158 REPORT OF THE SECRETARY OF THE TREASURY 

Summary of securities retired, fiscal year 1935 — Continued 



Security 



Bearer 



Pieces 



Amount 



Registered 



Pieces Amount 



Unissued stock retired 



United States securities: 

Pre-war loans 

Liberty loans.-. -. 

Treasury bonds - 

Treasury notes 

Certificates of indebtedness 

Treasury bills 

Interest coupons. 

Other securities: 

Insular possessions loans 

Home Owners' Loan Corporation: 

Securities - — 

Interest coupons 

Federal Farm Mortgage Corporation: 

Securities - 

Interest coupons 

Consolidated Federal farm loan: 

Securities 

Interest coupons 



Total. 



United States securities: 

Pre-war loans 

Liberty loans... 

Treasury bonds 

Treasury notes. 

Certificates of indebtedness 

Treasury bills 

Treasury (war) savings securities 

United States Savings Bonds.. 

First 3^ percent Liberty loan interim certifi- 
cates 

Interest coupons 

Interest checks 

Other securities: 

Insular possessions loans 

Home Owners' Loan Corporation: 

Securities 

Interest coupons 

Interest checks 

Federal Farm Mortgage Corporation: 

Securities 

Interest coupons 

Interest checks. 

Consolidated Federal farm loan: 

Securities — 

Interest coupons 

Interest checks 



Total 36,999,240 24,277,086,061.34 



107, 730 

8 

132, 376 

132, 593 

19, 025 

, 281, 082 



1,309 
710, 773 



3, 583 
439. 424 



20, 781 



6, 848, 684 



$462, 266, 200. 00 
217,550.00 
509, 339, 100. 00 
825, 746, 000. 00 
983, 378, 000. 00 
463, 615, 237. 83 



1,503,375.00 
37, 737, 361. 89 



4, 014, 600. 00 
9, 017, 367. 80 



835, 204. 00 



3, 297, 669, 996. 52 



17, 080 
2,045 
2,323 



3,690 
106 



27, 327 
101 



52, 672 



$2,774,240.00 
2, 867, 400. 00 
6, 369, 200. 00 



25, 632, 000. 00 
521, 000. 00 



111,828,800.00 
472, 500. 00 



150, 465, 140. 00 



Recapitulation 



2,751 
, 756, 497 
347, 344 
469, 194 
210, 643 
77,207 
112,898 



15 
, 392, 725 



187. 564 
471,462 



875, 073 
,971,193 



14, 139 
110,532 



$886, 480. no 
5,142.426,400.00 
1.518, 122.800.00 
6, 536, 7S2. 250. 00 
2, 679, 763, 800. 00 
5,173,389,000.00 
149, OSl. 40 



1, 000. 00 
1,008,900,407.75 



3, 000. 00 



1, 658, 348, 100. 00 
97,817,933.39 



406. 310, 800. on 
29, 134, 092. 80 



21, 738, 500. 00 
3,312,416.00 



66, 878 

768, P07 

70, 155 

137 



5,499 
3,992 



2 
5,883 
6,963 



7,108 
35, 132 



17, 625 

247 

"'"7i9" 



$360, 651, 990. 00 

1,001,831,500.00 

447,941,500.00 

157, 168, 000. 00 

180, 900, 000. 00 



126, 434. 18 
530, 887. 50 



7.43 
29. 866, 000. 00 
58, 565, 550. 00 



4, 534, 923. 75 
351, 539, 100. 00 



5, 608, 858. 80 

893, 900. 00 

'"'ii8,'880."66 



333 2,600,277,531. 



Note.— Redeemed figures include unaudited receipts for May and June settlements, with exception of 
interest coupons, the June settlement of which has not been received. 

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 and other securities, United States currency, 
stamps, etc., and miscellaneous securities and documents in the Bu- 
reau of Engraving and Printing. Numerous administrative audit 
functions are performed in connection with the foregoing. The 



REPORT OF THE SECRETARY OF THE TREASURY 



159 



Division also maintains control accounts for various classes of un- 
issued currency in reserve stocks of the Treasurer of the United States 
and the Comptroller of the Currency, and conducts administrative 
examinations 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, 79 physical audits were conducted, involv- 
ing securities, currency, paper, interest checks, etc.. amounting to 
over $53,000,000,000 in face value and 86,000,000 in number of pieces. 

The Division determined and certified credits to the cumulative 
sinldng 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, ani 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 of expenditures to be made on account of retirements for 
the sinking fund and other special accounts, and prepared state- 
ments showing the accountability of Federal Reserve banks for 
public debt securities for the use of Federal Reserve Board exam- 
iners in their periodical examinations of those banks. Numerous 
data pertaining to public debt transactions for various interested 
offices and individuals were also compiled. 

During the fiscal year the personnel of this Division increased 
from 111 to 210 employees. The additional personnel was necessary 
on account of the greatly increased activities of the Division in con- 
nection with transactions involving various issues of bonds of the 
Home Owners' Loan Corporation and the Federal Farm Mortgage 
Corporation, and of consolidated Federal farm loan bonds of the 
Federal land banks. 

Division of Pafer Custody 

A summary of the operations of the Division of Paper Custody 
during the fiscal year 1935 is presented in the following tables : 

Receipts and) issues of distinctive and nondistinctive paper during the fiscal year 

1925 



Kind 



Distinctive paper for United States currency, Federal 
Reserve notes, Federal Reserve bank notes, and 
national bank currency, 12 subjects -.. 

United States bond paper 

Parchment, artificial parchment, and parchment deed 
paper.- 

Miscellaneous paper - 

Distinctive paper for Cuban currency 

Distinctive paper for Philippine Islands currency 

Postal card for Philippine Islands. 



Total. 



On hand 

July 1, 

1934 



Receipts 



Issues 



Sheets 



18, 076, 923 
5, 269, 116 

148, 271 
616, 146 



483, 426 
873 



24, 594, 755 



1 58, 935, 573 
1 17, 912, 680 

177, 755 
290, 700 
750, 900 



111,984 



78, 179, 592 



56, 948, 248 
17, 569, 051 

205, 160 
331,887 
511,466 
483, 250 
93,013 



76, 142, 075 



On hand 

June 30, 

1935 



20, 064, 248 
5, 612, 745 

120, 866 

574, 959 

239, 434 

176 

19, 844 



26, 632, 272 



« 2,844.923 sheets transferred from United States currency paper to bond paper account. 
16816—36 12 



160 



REPORT OF THE SECRETARY OF THE TREASURY 



Federal Reserve notes, series 1928 and series 1934, received and issued during 

the fiscal year 1935 

[000 omitted] 



Federal Reserve bank 



Federal Reserve notes, series 1928 



On hand 

July 1, 

1934 



Received 



Issued 



On hand 

June 30, 

1935 



Federal Reserve notes, series 
1934 1 



Received 



Issued 



On hand 

June 30, 

1935 



Boston-- 

New York 

Philadelphia - 

Cleveland 

Richmond 

.Atlanta 

Chicago 

St. Louis 

Minneapolis- 
Kansas City- 
Dallas 

San Francisco 

Total— 



$354, 680 
303, 760 
410,680 
421, 540 
239, 440 
205, 880 
740, 360 
139, 580 
121,300 
181,300 
178, 180 
220, 460 



$21, 720 
172, 080 
46, 860 
37, 680 
19, 080 
8,880 
67, 260 
16, 920 
25, 620 
14, 760 



$76, 
113, 
70, 
87, 
72, 
39, 
126, 
50, 
27, 
31, 
17, 
61, 



$299, 920 
362, 680 
387, 540 
371,380 
186, 320 
175, 120 
681,380 
105, 800 
119,560 
164, 520 
160, 980 
159, 460 



$53, 760 
279, 600 
47, 520 

8,040 
45, 960 

2,400 
75,060 
43, 560 
27, 540 

6,000 



$158, 000 



4,900 



$53, 760 

121, 600 

47,520 

8,040 

45, 960 

2,400 

75, 060 

38, 660 

27, 540 

6,000 



3, 517, 160 



430, 860 



773, 360 



3, 174, 



589, 440 



162, 900 



426, 540 



> None on hand July 1, 1934. 

There were no transactions in Federal Reserve bank notes, series 
1929, during the year, the amount on hand remaining at $450,800,000. 

Destruction Comnuttee 

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 1935 : 



Division of Loans and Currency and Treas- 
urer of the United States: 
New series: 

United States notes -, 

Silver certificates-- --. 

Gold certificates 

Silver certificates (act of 1933) 

Silver certificates (act of 1934) 

Old series: 

United States notes.. 

Silver certificates 

Gold certificates 

Treasury notes 

Fractional notes 

Total... 

■Comptroller of the Currency and national 
bank agents: 
New series: 

National bank notes (5 percent ac- 
count) 

National bank notes (retired) 

Unissued vault stock 

Old series: 

National bank notes (5 percent ac- 
count) 

National bank notes (retired) 

Federal Reserve bank notes (retired) 

Total 



59, 057, 793 

532, 453, 702 

21, 547, 564 

144, 228 

39, 202, 962 



652, 406, 249 



566, 695 
1, 374, 807 

329, 818 
1,571 
8,635 



2, 281, 526 



654, 687, 775 



29, 418, 303 

22, 386, 553 

1, 190, 188 



146, 523 

213,871 
28, 571 



52, 995, 044 



388, 965 



53, 384, 009 



Face value 



$244, 658, 551. 00 

532,448,418.00 

551, 491, 840. 00 

1, 442, 280. 00 

75, 161, 222. 00 



$1,405,202,311.00 



1, 821, 049. 00 

1,689,224.00 

7,183,710.00 

7, 650. 00 

1, 973. 33 



242, 289, 457. 50 

190, 068, 575. 00 

11, 617, 965. 00 



1, 891, 140. 00 

2, 693, 655. 00 

52, 640. 00 



10,703,606.33 
1, 415, 905, 917. 33 



443, 975, 997. 50 



4, 637, 435. 00 
448, 613, 432. 50 



•' All currency under the head of "Pieces" is expressed in whole notes. 



EEPORT OF THE SECRETARY OF THE TREASURY 



161 



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) . 



ilnternal Revenue Bureau: 

Miscellaneous stamps from Stamp Divi- 
sion 

Miscellaneous stamps from Stamp Di- 
vision ("obsolete and surplus") 

Stamp Division (cotton bale tags) 

Miscellaneous stamps from Tobacco Di- 
vision 

Sales Tax Division 

Alcohol Tax Unit... 

Silver Tax Unit ..- 

Processing Tax Unit 



Register of the Treasury: 

Interest coupons, unissued 

Interest coupons, unissued Federal Re- 
<!erve bank _.. 

Coupon bonds and notes. Federal Re- 
serve bank (unissued) 

Bearer certificates of indebtedness (un- 
issued) 

Bearer Treasury bills (unissued) 

Registered Treasury savings certificates 
(unissued) _ 

Thrift stamps (redeemed) 

Registered war-savings stamps (re- 
deemed) 

Nonregistered war-savings stamps (re- 
deemed) 

Treasury savings stamps (redeemed) 

Federal farm loan bonds and coupons... 



PublicIDebt Service, photostats. 



Division of Loans and Currency, Security 
Section, inteiest checks 



Grand total. 



Division of Loans and Currency (Bureau of 
Engraving and Printing spoilage): 

Money of all kinds 

Poftiv^'e stamps 

Internal revenue stamps 

Bonds and certificates of indebtedness... 

Customs and miscellaneous stamps 

Postal savings certificates. 

Experimental, security paper.. 

Cuban currency 

Void coupons 



Division of Loans and Currency (Division 
of Paper Custody): 

Bond paper 

Cuban currency 



Grand total. 



Pieces 



121, 809, 226 

987, 654 

6, 760, 376 



129, 557, 256 



56, 260 



56,260 



9, 234, 

454, 

154, 

276, 
163, 

37, 
1, 019, 



474 

357 

223 

417 
591 

824 
657 



7,469 



226. 
3, 

148, 



140 
640 
373 



11, 726, 165 



367 



284, 481 



849. 696, 313 



Face value 



$1,168,077,705.00 
17,210,250.00 
60, 670, 500. 00 



$1, 245, 958, 455. 00 



45, 068, 828. 09 
108, 809, 743. 97 



1,024,561.83 

89, 799. 11 

46, 274. 44 

2, 606. 89 

5, 049. 95 



155,046,864.28 



283, 302, 304. 24 

36, 263, 041. 32 

746, 106, 550. 00 

1, 818, 236, 000. 00 
10, 295, 733, 000. 00 

10, 298, 400. 00 
254, 914. 25 

37, 336. 62 

1, 035, 448. 42 

3. 640. 00 

203,418,797.91 



13, 394, 689. 432. 76 



16, 660, 214, 101. 87 



Sheets 



1, 924, 

7, 038, 

3, 500, 

1,950. 

2,14!, 

254, 

2 

35; 



800' H2 

914591 3,^800 

8.58 n^o 4 

6151H2 

69041^0 

822 

707 

296% 



Coupons 



295, 007 

7 



17,749,706'297%o4oo 



295,014 



18,044,72012879^0400 



111,894,109 



111,894,109 



PUBLIC HEALTH SERVICE 

Division of Sanitary Reports and Statistics 

Health conditions in the United States, as revealed by mortality 
statistics, were good during the calendar year 1934. The preliminary 
mortality rate for 28 States was 10.9 per 1,000 population, as compared 
with 10.5 in 1933, the lowest ever recorded for these States. 



162 



REPORT OF THE SECRETARY OF THE TREASURY 



An outbreak of poliomyelitis (infantile paralysis) occurred in 
California in May 1934 and spread over most of the Pacific Coast 
States and into Nevada, Arizona, Montana, and Idaho. In May 
1935 an outbreak occurred in the northeastern part of North Carolina, 
not including; the coast section, and spread into southeastern Virginia. 
After the close of the fiscal year, increases in the prevalence of polio- 
myelitis were reported in New York, several of the New England 
States, and other parts of the country. 

The work of collecting information concerning outbreaks of dis- 
eases dangerous to the public health and the current prevalence of 
these diseases was continued throughout the fiscal year. The data 
were made available to public health officers and other sanitarians 
throughout the United States by publication in the weekly Public 
Health Reports and by special bulletins. A total of 230.921 copies of 
publications was distributed as compared with 179,370 in the pre- 
ceding fiscal year. 

Divisio7i of Foreign and Insular Quarantine 




Inspections by quarantine officers during the fiscal year 19S5 



Vessels 



Passengers 



Seamen 



Ports in continental United States. 
Insular ports 

Foreign ports, prior to embarkation 

Total 



12,482 

2,612 

168 



544,255 
133,149 
43,860 



981,361 

219, 852 

2,079 



721, 264 



1,203,292 



Of a total of 4,081 airplanes, carrying 34,135 persons, which 
arrived at 57 airports of entiy in the United States from foreign 
countries requiring quarantine inspection, only 2,636 airplanes, 
carrying 30.249 persons, of whom 1,991 were aliens, were inspected 
by medical officers of the Public Health Service prior to entry, due 
to arrivals at airports of enti-^' at which medical officers are not 
available. 

Fumigations were made of 1,147 vessels either for the destruc- 
tion of rats or because of some contagious disease. Examinations 
for plague infection were made of 4,207 of the 5,951 rats retrieved 
following fumigation. 

No importation of a quarantinable disease into the United States 
or its possessions occurred during the year. 

The International Sanitary Convention for Aerial Navigation, 
opened for signature at The Hague on April 12, 1933, and signed 
on behalf of the United States on April 6, 1934, was ratified by the 
United States on June 13, 1935, and will become effective on Novem- 
ber 22, 1935. Twelve nations had ratified the convention at the close 
of the fiscal year. 

At the suggestion of the Public Health Service, the Consular Regu- 
lations of the United States were amended to authorize American 



REPORT OF THE SECRETARY OF THE TREASURY 163 

consular officers in foreign ports to authenticate, at ports of issuance, 
foreign certificates of deratization exemption as well as foreign cer- 
tificates of deratization issued under the provisions of article 28 of 
the International Sanitary Convention of Paris (1926 revision). 

The Public Health Service has recommended favorable considera- 
tion on the part of the United States of a proposal submitted by the 
International Office of Public Health at Paris to amend article 25 
of the International Sanitary Convention of Paris (1926 revision) 
so as to permit under special circumstances the fumigation of a ves- 
sel arriving from plague-infected ports before or during the unload- 
ing of its cargo and also to permit a repetition of such fumigation 
if necessary to complete deratization of the vessel. 

At the request of the Quarantine Service of Habana, Cuba, the 
Public Health Service discontinued its routine supervision of mari- 
time fumigations performed by officers of the Port Quarantine Serv- 
ice of Cuba for deratization purposes on vessels in Cuban ports des- 
tined to proceed to United States ports. 

Medical exammation of aliens. — Medical officers at the various 
ports of entry in the United States examined 730,777 alien passengers 
and 696,562 alien seamen. Of these numbers, 14,569 passengers and 
1,250 seamen were certified to the proper immigration officials, in 
accordance with the act of February 5, 1917, as being afflicted with 
some mental or physical defect or disease. 

At the request of the Commissioner General of Immigration and 
Naturalization, medical officers of the Public Health Service were 
authorized, upon request of immigration officials, to make physical 
examinations, in accordance with the standards set forth by the 
United States Civil Service Commission, of nominees tentatively 
selected by immigration officials for appointment to the position of 
immigration patrol inspector. 

Because of the high mortality rate from malaria now existing 
in the southern part of Texas, and in an effort to restrict the intro- 
duction of malaria into the United States from Mexican territory, 
medical officers of the Public Health Service on duty at Texas- 
Mexican border stations were directed, in cooperation with the State 
Health Officer of Texas, to make a microscopic examination of the 
blood of any arriving person suspected of having malaria, and to 
notifj^ the Texas State Health Department of the name and destina- 
tion of persons with malaria released for entry into the United 
States. 

Examination of prospective immigrants abroad. — A total of 35,978 
applicants for immigration visas was examined by medical officers 
in American consulates in foreign countries. Of this number 23,868 
were examined in Eurojoe and the remainder in the Western Hemi- 
sphere. Of those examined, 574 in Europe and 130 in the Western 
Hemisphere were reported by the medical officers to the American 
consuls as having one or more of the defects or diseases requiring 
exclusion; and 4,745 in Europe and 1,443 in the Western Hemisphere 
were reported as being afflicted with a disease or condition which 
was likely to affect their ability to earn a living. Only two of the 
aliens examined in foreign countries to whom visas had been issued 
were certified upon arrival at United States ports as being afflicted 
with a defect or disease requiring deportation. 



164 EEPOET OF THE SECEETAEY OF THE TEEASUEY 

Division of Domestic Quarantine 

Through the use of a special fund of $1,000,000 made available- 
by the Federal Emergency Relief Administration it was possible 
for the Public Health Service to resume cooperative financial as- 
sistance to rural health organizations, both in reenforcing the per- 
sonnel in existing county organizations and in establishing such units 
in counties not theretofore so provided. In 1934 there were 540 
whole-time county or other local rural unit health services, represent- 
ing a gain of 10 over the preceding year. 

Trachoma-prevention activities m cooperation with the States were 
continued in Missouri, Kentucky, and Tennessee, 4,057 persons hav- 
ing been examined to determine the presence of the disease. In the 
field clinics and dispensaries, 1,933 treatments were given, while 704 
patients were admitted to hospitals. 

Plague-control measures were continued in California and on the 
Island of Maui, Hawaii, where trapping and poisoning of rats, as 
well as experimental work on control procedure, were conducted as 
a part of the program previously inaugurated. No human case of 
plague was reported in California during the year, but rodent plague 
in ground squirrels was reported in San Luis Obispo, Modoc, and 
Lassen Counties. Because of a human case of plague in Lake 
County, Oreg., at the beginning of the fiscal year, investigations 
were made through the use of a new mobile field laboratory, as a 
result of which two foci of rodent plague infection were found in 
Oregon and Montana. Extermination of rats by ship fumigation 
was continued in San Francisco but no infection was discovered. 

In order to determine the efficiency of State control over sanita- 
tion of the shellfish industry in interstate commerce, surveys and. 
inspections of shellfish-growing areas were continued. A total of 
1,915 State certifications was approved during the year. 

Approximately 45 percent of the time of the sanitary engineering 
field force was spent in assisting other Federal agencies in the 
solution of various sanitation problems. This represents a con- 
siderable increase over the volume of service rendered in previous 
years, due in part to allotments from the Public Works Administra- 
tion to these Federal agencies for public works projects. In addi- 
tion to the engineering services given the National Park Service 
and the Bureau of Indian Affairs, cooperative assistance was also 
afforded the Public Works Branch of the Procurement Division, the 
Bureau of Prisons, the Lighthouse Service, and others. 

With the cooperation of State health agencies, the certification 
of sources of water used by interstate railroads, busses, vessels, and 
airplanes was continued. Of 2,269 water supplies used by inter- 
state carriers, 95 percent were inspected and certified. Of vessels 
engaged in interstate traffic, 51 percent were reinspected and given 
certificates indicating compliance with the regulations governing 
drinking-water systems. 

The study of pollution of the Hampton Roads area in the lower 
Chesapeake Bay, undertaken with funds allotted by the Public Works 
Administration, was closed at the end of the fiscal year. Assistance 
was also rendered a number of States engaged in stream pollution 
investigations. 



REPORT OF THE SECRETARY OF THE TREASURY 165 

An outstanding activity was the use of work-relief labor made 
available by the Federal Emergency Relief Administration on pub- 
lic health projects. Sanitary outdoor toilets were constructed in 
rural districts, malaria control drainage projects were carried out, 
and abandoned mines were sealed to prevent the pollution of streams 
by acid wastes. A project for the control of endemic typhus fever 
consisted in rat-flea surveys, rat extermination, and the promotion 
of rat-proofing of buildings. 

Division of Scientific Research 

The program of cancer research was continued during the year. 
The investigations pursued at the Office of Cancer Investigations 
located at the Harvard Medical School, Boston, Mass., included 
studies of the biological effects of radiation, resistance and suscepti- 
bility to malignant growths, and biochemical and cytological studies. 

At the National Institute of Health, cancer research included an 
investigation of the effects of certain chemical agents upon the vari- 
ous phases of mitosis in Atnoeha proteus^ a continuation of the study 
of growth of the Walker 256 rat mammary carcinoma in vivo and in 
tissue culture, and an attempt to influence the growth of a spontane- 
ous mammary tumor of the mouse. 

Heart disease investigations dealt with the geographical distribu- 
tion of the etiological types of heart disease in the United States, the 
methods of reporting, recording, and statistically presenting heart 
disease mortality, the epidemiology of rheumatic heart disease in a 
locality, and the etiology of rheumatic heart disease. 

Clinical observations of leprosy were directed toward the develop- 
ment of better criteria for the diagnosis of cases in the early stage& 
of the disease, including determination of the significance of a posi- 
tive Wassermann or Kahn test in differentiating leprosy from 
syphilis, the administration of a heterologous antigen to produce a 
mild fever and leukocytosis, and the administration of small doses 
of colloidal and soluble bismuth preparations to stimulate acute 
progressions with succeeding regressions. 

As a result of studies of malaria control by means of the drugs 
atabrine and plasmochin, it was concluded that drug treatment does 
not control the malaria rate in the tropics, although it does improve 
the general health of the population and its capacity to work. 

During the year seven different foodstuffs were tested for their 
pellagra-preventive value by animal experimentation. Rabbit meat, 
lean pork shoulder, and chicken were found to be good sources of the 
pellagra-preventive vitamin ; cottonseed meal and evaporated peaches 
to be relatively poor sources of the vitamin ; and prunes and canned 
beets to contain little or none of the pellagra-preventive vitamin. 

Tlie net usable production of Rocky Mountain spotted fever 
vaccine was 248.4 liters, an increase of 36.6 liters over the 1934 pro- 
duction. This amount was sufficient for the immunization of about 
60,000 persons. Cases of spotted fever were reported for the first 
time from the States of Illinois and Oklahoma, making a total of 
34 States in which spotted fever is known to be endemic. 

Child hygiene activities have been related to a study of the hear- 
ing of school children, studies of physical status, growth, and de- 



166 EEPOKT OF THE SECRETAEY OF THE TREASURY 

velopment of children, and a study of midwifery as practiced by 
colored midwives in Virginia and North Carolina. Data obtained 
from the dental examination of over a million and a half school 
children in 26 States are being analyzed in an effort to determine 
the dental needs of children of school age. 

Studies were made of the manufacturing processes and their rela- 
tions to skin hazards in 22 plants employing 8,770 persons. About 
5,000 employees of these plants were examined for industrial skin 
diseases. 

The study of the effect of dust exposure on the health of miners in 
the anthracite coal fields of Pennsylvania, conducted at the request 
of the Governor of the State, with the cooperation of operators and 
workers, has been completed. Other industrial hygiene studies have 
included a series of injections of dusts of known chemical and petro- 
graphic composition into guinea pigs to determine the nature of the 
injury caused by these dusts when injected into the body tissue and, 
therefore, their relative harmfulness; an investigation of the rela- 
tion of pulmonary infection to pneumoconiosis; a study of silicosis 
and tuberculosis in zinc and lead miners; the pollution of air; and the 
incidence of illness among industrial workers. 

Milk sanitation investigations dealt with the effect of variations 
in pH concentration and the effect of variations in buffer concentra- 
tion upon the thermal resistance of the Public Health Service test 
organism used in testing milk pasteurization equipment. As a result 
of these tests it was determined that future studies of pasteuriza- 
tion equipment should be conducted at a pH concentration of 7.2 or 
a buffer concentration of ni/675. Further studies were made of the 
bactericidal treatment of milk cans by means of hot air, and it was 
concluded that a temperature of 170° F. for 30 minutes would de- 
vitalize all milk-borne pathogens. 

Sugar researches were continued, with special reference to studies 
on the oxidation of sucrose, the action of various acidic hydrolyzing 
agents on methyl glycosides, and on the 4-carbon sugar threose. 

As a result of enzyme researches on invertase, a relatively con- 
venient method has been developed for obtaining concentrated 
solutions of this enzyme. 

Studies of various phases of the relation of sickness to the depres- 
sion have shown that sickness among those on relief greatly exceeds 
sickness among those of reasonably comfortable economic status and 
those with very low incomes but not on relief. The high rate in 
this group suggests that the relief population contains a dispro- 
portionately large number of persons who have chronic diseases or 
physical defects or who are susceptible to frequent attacks of acute 
illness. 

Experimental and observational data collected in recent years 
have indicated the desirability of practical limits of pollution for 
lakes and streams, for the avoidance of nuisance conditions, and for 
ihe protection of surface sources of public water supplies. Studies 
have been continued in sewage treatment to determine the condi- 
tions which affect detrimentally the biological activity upon which 
purification of sewage by the activated sludge process depends. A 
series of experimental observations has been instituted dealing with 



EEPORT OF THE SECRETARY OF THE TREASURY 167 

the physical and biochemical changes occurring in sewage sludge 
deposits under conditions approaching those of natural streams. 

Reports on the eastern type of Rocky Mountain spotted fever and 
typhus fever have shown a definite increase in the number of cases 
of typhus in some of the Southern States, spotted fever remaining 
practically the same. 

Studies of epidemic encephalitis indicate that immunity to the 
St. Louis type of encephalitis is wide-spread in the United States. 
Experiments also have shown that the instillation of alum into the 
nostrils of white mice tends to render them less susceptible to intra- 
nasal infection with this virus. It was found that monkeys treated 
intranasally with sodium aluminum sulphate solution were rendered 
resistant to intranasal instillation of the poliomyelitis (infantile 
paralysis) virus. 

Studies on the epidemiology of the amoebic dysentery outbreak 
originating in Chicago in 1933 were completed. Work has now been 
initiated with special reference to the bacillary type of dysentery as 
it occurs among Indians of the Southwest. 

The epidemiology of the California outbreak of poliomyelitis in 
the summer of 1934 was investigated. The epidemic was mild and 
showed a tendency to attack older children and young adults to a 
greater extent than did epidemics of former years. 

Division of Marine Hospitals and Relief 

The marine hospitals and other relief stations treated a daily 
average of 4,936 in-patients and 3,153 out-patients. There were 
49,018 patients who received hospital treatment during the year, 
as compared with 42,611 the previous year. Hospital and -out- 
patient care was furnished at marine hospitals and other relief 
stations to a total of 332,034 beneficiaries. The number of hospital 
days was 176,032 more than last year. 

During June 1935, funds became so limited that it was necessary 
to reduce the number of in-jDatients in marine and contract hospitals 
from 4,945 on June 1 to 4,455 on June 30. Operation of the hospitals 
became exceedingly difficult on account of inadequate appropriations 
and personnel. Because of an increase in the number of old-line 
beneficiaries, and because of Civil Works Administi'ation patients for 
w'hose care no additional funds were provided, together with a steady 
rise in the cost of hospital supplies, it was necessar^^ in June to secure 
a release of additional funds from the Treasury. 

Notwithstanding the increased prices for supplies, the per diem 
cost of operation was kept down to $3.31. This was accomplished 
b}^ keeping personnel at the lowest practicable number and by fore- 
going replacement and repair of equipment in normal amount. 

Division of Venerea], Diseases 

Among the activities concerned with venereal diseases are investi- 
gations related to the control of syphilis and gonorrhea, to clinical 
studies of syphilis, and to experimental work in the laboratory. 

The control work has been of a general character and has been 
conducted in cooperation with State and local health departments. 
An attempt has been made to obtain more complete morbidity re- 



168 KEPOET OF THE SECRETARY OF THE TREASURY 

ports of syphilis and gonorrhea by releasing monthly statements of 
the number of new cases of these diseases reported to State health 
departments. 

From studies of the trend of the venereal diseases in this country, 
covering representative areas with more than 25,000,000 people, it is 
estimated that 1,555,000 new cases of gonorrhea and 518,000 new cases 
of syphilis annually seek treatment in the United States. 

The results of the study to evaluate serodiagnostic tests for syphilis 
indicate the relative value of the tests which have been described 
by the serologists of the United States. By further evaluating 
serologic tests for syphilis in State and local laboratories it will be 
possible to measure the adaptability of each test for workers other 
than the original serologist who described the test. 

A series of scientific papers on the treatment of cardiovascular 
syphilis has been completed. These papers represent a portion of 
the clinical studies which have been under way for 6 or T years and 
are based upon records provided by 5 of the leading clinics of the 
country. In addition to the studies of the treatment of cardio- 
vascular syphilis, a scientific paper was also published on the results 
attained by the modern treatment of early syphilis as compared with 
the treatment employed several decades ago. 

The informative and educational program has been continued. 
For physicians the monthly abstract journal, Venereal Disease In- 
formation, has served a very useful function and its circulation has 
increased. References to current medical literature and reprints of 
scientific articles have been furnished to physicians and health offi- 
cers. Pamphlets pertaining to the prevention and treatment of the 
A^enereal diseases and to sex education have also been available for 
general distribution. 

The Public Health Service Clinic at Hot Springs National Park, 
Ark., continued to treat a constantly increasing number of patients, 
who came to seek the beneficial effects of the waters of Hot Springs. 
Approximately two-thirds of these individuals are infected with 
venereal disease. 

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 nar- 
cotic drugs; administrative functions incident to the establishment 
of narcotic farms; provision of medical and psychiatric services for 
the Federal penal and correctional system; and cooperation with 
other agencies interested in various phases of the work of the 
Division. 

Studies of the nature of drug addiction were continued at the 
United States Penitentiary Annex, Fort Leavenworth, Kans., dur- 
ing the first half of the year. Experimental investigations were 
conducted on the value of certain substitutes for morphine. All of 
these substitutes were found to have addictive properties similar to 
morphine. Studies were also undertaken in connection with the 
treatment of drug addiction. 

A process for manufacturing dihydrodesoxymorphine-D was pat- 
ented and its custody lodged, ex officio, with the Secretary of the 
Treasury. Further studies of the addiction liability of this new 



REPORT OP THE SECRETARY OP THE TREASURY 



169 



substance were carried on among cancer patients, the results of which 
indicate that the substance in question has very limited clinical value 
and exceedingly dangerous addictive properties. 

Further information concerning the incidence and other factors 
in drug addiction were collected during the year, and several publi- 
cations were issued on the various phases of this subject. 

The first United States Narcotic Farm at Lexington, Ky., was 
formally dedicated and opened by the Surgeon General on May 25, 
1935. Admissions were accepted on and after May 29, 1935, and at 
the close of the fiscal year 280 persons had been admitted for the 
treatment of drug addiction. Preliminary plans for th esecond in- 
stitution at Fort Worth, Tex., have been approved, and it is antici- 
pated that the contract for the necessary buildings will be accepted 
early in the autumn of 1935. 

Tne Attorney General has requested the Public Plealth Service to 
extend the psychiatric work conducted for the Federal penal and 
correctional system to all Federal courts. 

Division of Personnel and Aceov/nts 

Personnel. — The reduction of the personnel in marine hospitals 
and quarantine stations, made necessary by decreased appropriations, 
and the increase in the number of patients has presented adminis- 
trative problems. At the hospitals for the past few years it has been 
necessary to assign medical internes to duties which should be 
performed by more experienced medical officers. 

On July 1, 1935, the regular commissioned corps of the Public 
Health Service consisted of 335 commissioned officers and 64 reserve 
officers on active duty. Other personnel of the service totaled 5,896, 
not including 4,643 collaborating and assistant collaborating epidemi- 
ologists who served at nominal compensation and who were for the 
most part officers or employees of State and local health organizations. 

Financial statements. — Following is a statement of appropriations 
and expenditures for the fiscal year 1935 : 



Appropriation 



Appropri- 
ated 



Received 

from other 

sources 



Total 
available 



Expended 



Salaries, Office of Surgeon General 

Pay, etc., commissioned officers 

Pay of acting assistant surgeons 

Pay of otiier 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 

Preventing the spread of epidemic diseases, 1935-36 

Pield 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 

Working Capital Fund 

Payment to officers and employees in foreign countries 
due to appreciation of foreign currency 



$274, 113 

1, 397, 600 

270, 000 

877, 500 

25, 160 

60, 000 

450 

4, 915, 000 

322, 150 

199, 718 

8,000 

209,313 

35, 495 

25, 032 

39, 524 

58, 808 

I 390, 000 

1,000 

1 65, 000 



$18, 967 

196, 736 

19, 111 

71, 237 

30 



1, 126, 079 
9,'405' 



23, 960 

319 

379 

2,060 

3,447 
3,184 



49, 100 



$293, 080 

1, 594, 342 

289, 111 

948, 737 

25, 190 

50,000 

450 

6,041,079 

322, 150 

209, 123 

8,000 

233, 273 

35, 814 

25, 411 

41, 584 

62, 255 

393, 184 

1,000 

65, 000 

49, 100 



$291, 689 

1, 577, 596 

275, 924 

936, 331 

24, 737 

49, 055 

448 

6,041,079 

306, 733 

205, 003 

1,515 

229, 184 

34, 686 

25, 267 

41, 141 

62, 106 

387, 992 

986 

47, 135 

46, 668 



Total. 



2 9, 163, 869 



1, 624, 014 



10, 687, 883 



10, 585, 275 



' $65,000 transferred to "Working Capital Fund," narcotic farm, 
s Statement does not include expenditure of $7,490 from trust funds. 



170 



REPORT OF THE SECRETARY OF THE TREASURY 



Expenditures from allotments of funds from other bureaus and 
offices for direct expenditure during the fiscal year 1935 were as 
follows : 



Appropriation 


Allotted 


Expended 




$304, 899 

1 432, 478 

459, 748 

37. 795 

943, 533 

75 


$304, 899 


Department of Justice, medical and hospital service, penal Institutions 


432, 297 
459, 748 




37, 795 




943, 533 




75 






Total - - -- 


2, 178, 528 


2, 17S, 347 







1 Includes $14,000 transferred under acts of Mar. 29, 1934, and Feb. 13, 1935. 



The revenues derived from operations of the Public Health Service 
during the year and covered into the Treasury as miscellaneous 
receipts were as follows: 



Source 



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 building: 

Sale of refuse, garbage, and other by-products 

Sale of livestock and livestock products... 

other revenues 

Total 

Trust fund receipts: 

Sale of effects of deceased patients 

Inmates' funds 

Grand total. 



$218, 534. 52 

35, 979. 39 

11,328.01 

561.94 

9, 312, 14 

2, 417. 00 

398. 45 

1, 257. 10 

1,241.60 

377. 90 

235. 21 



281, 643. 26 

955. 76 
1, 363. 78 



283, 962. 80 



DIVISION OF RESEARCH AND STATISTICS 

The Division of Research and Statistics in the Office of the Sec- 
retary of the Treasury and the position of Director of Research and 
Statistics were created by kn order of the Secretary dated Septem- 
ber 17, 1934. By the terms of the order the Director of Research 
and Statistics exerci.ses responsibility for the production, analysis, 
and publication of statistics, and the conduct of economic research 
in all branches of the Department. 

The Division, which absorbed the duties of the Section of Finan- 
cial and Economic Research, pursues intensive research in the fields 
of taxation. Federal financing, and monetary problems, and supplies 
information and analyses over a broad range of economic subjects. 

Taxafhn 

A continuing function of the research staff of the Division is the 
preparation of estimates of tax receipts for the current and the 
succeeding fiscal years. This work involves estimates in detail of 
receipts from each source of Federal revenue. Research is likewise 



EEPORT OP THE SECRETARY OP THE TREASURY 171 

undertaken in connection with all changes in the Federal tax struc- 
ture. Studies are also in process relating to the extent and char- 
acter of conflicting and overlapping taxation by Federal, State, and 
local governments. 

Federal finmicing 

The Division acts in a research capacity to the Secretary of the 
Treasury in problems relating to Treasury financing. Domestic 
conditions affecting the financing are analyzed, and foreign methods 
of financing are studied. 

Mone tary proh lems 

The Division is charged with the responsibility of providing data, 
surveys, analyses, and reports on a broad range of domestic and 
foreign economic subjects to aid the Secretary of the Treasury in 
connection with the monetary problems arising out of the operation 
of the stabilization fund, the international movements of gold, the 
relationship of the dollar to foreign currencies, and the exe aition 
of the provisions of the numerous acts pertaining to the purchase of 
gold and silver. 

The Emergency Banking Act of March 9, 1933, the Farm Relief 
Act of May 12, 1933, the London Silver Agreement of July 22, 1933, 
the Gold Reserve Act of January 30, 1934, the Silver Purchase Act 
of June 19, 1934, and the various Presidential orders contain pro- 
visions for action by the Secretary of the Treasury the performance 
of which requires careful economic analysis of the numerous factors 
involved. Among the subjects which call for constant study are pro- 
duction, stocks, use, and movements of gold and of silver ; short-term 
and long-term capital movements; foreign exchange movements and 
controls; foreign central bank policies and actions; and those eco- 
nomic and financial conditions in foreign countries which have a 
direct bearing on these problems. 

Machinery has been set up to obtain detailed reports weekly from 
all banks, brokers, and dealers, of changes in bank balances held by 
foreigners, and in balances held abroad by Americans, and of all 
international security transactions and foreign exchange operations. 
These data are tabulated and analyzed, and reports are made weekly 
to the Secretary, 

Studies of price and exchange movements and of the results of 
current changes in international balances of payments and trade, 
are also carried on to determine the position of the dollar in relation 
to other currencies. 

Actuar-ial analysis 

The Government Actuary, who is a member of the Division of 
Research and Statistics, makes various studies relating to insur- 
ance, pensions, and finance, and serves as a member of the Federal 
Board of Actuaries under the provisions of the Civil Service Retire- 
ment Act. The Social Security Act requires the Secretary of the 
Treasury to include in his annual report the actuarial status of the 
old-age reserve account. The actuarial work in this connection will 
be performed by the Government Actuary. 



172 KEPORT OF THE SECRETARY OF THE TREASURY 

SECRET SERVICE DIVISION 

During the fiscal year 1935, 3,657 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 statutes relating to the 
Treasury Department. Of this number, 1,562 were note counter- 
feiters and note passers, 57 were note raisers and passers of altered 
currency, 779 were coin counterfeiters and coin passers, 529 were 
check forgers, 15 were apprehended for negotiating stolen or forged 
bonds, 5 were held for fraudulent negotiation of adjusted service 
certificates, 15 were arrested for violating the Gold Reserve Act of 
1934, and 191 for miscellaneous offenses; and 504 were dismissed. 

Ten new counterfeit issues were discovered, all photo-mechanical 
productions and, for the most part, deceptive and warranting 
distribution of descriptive warning circulars. In addition, 66 coun- 
terfeits of varying types of workmanship were discovered in dif- 
ferent sections of the country. The latter issues generally were 
extremely crude productions and were quickly suppressed. 

Counterfeit notes aggregating $1,418,464 were captured or seized 
during the year by operatives of the Service. This total includes 
altered currency aggregating $4,270, of which $980 was made and 
passed in foreign countries, and fractional currency amounting to 
$276.25. Counterfeit coins to the amount of $74,847.27 were con- 
fiscated by agents in connection with raids and subsequent arrests, 
and $94 of counterfeit foreign notes and coins were also seized. 

In connection with investigations and arrests, operatives cap- 
tured or seized 349 metal plates, 249 film and glass negatives for 
printing counterfeit obligations and securities, 241/2 steel dies, 57 
metal molds, 466 plaster molds, and 3 wood molds for counterfeit- 
ing coins, and a large quantity of miscellaneous paraphernalia and 
materials. 

Of the counterfeit notes captured during the year, a total of 
$379,539 was used in evidence against the makers and passers, and 
$1,140 of altered notes were likewise used in evidence in the pros- 
ecution of note raisers and passers of altered notes. Counterfeit 
coins totaling $5,101.64 were also used in evidence in cases of this 
character. 

Of the cases brought to trial, 1,885 persons were convicted and 
sentenced, 168 were acquitted, 828 are awaiting action of the 
courts, while others were variously disposed of, some being com- 
mitted to insane asylums and others delivered to the military and 
police authorities. The 504 persons who were dismissed after hav- 
ing been apprehended in company with known criminals are listed 
as suspects and their records are known to the Service. 

Agents during the year conducted investigations of 2,374 check 
cases, 57 bond cases, and 3 war savings stamp cases. In check case 
investigations, the sum of $5,262.51 was received in restitution and 
transmitted to the Department., 

There were referred to the Service for investigation 62 cases from 
the Veterans' Administration, involving violation of the World War 
Adjusted Compensation Act; 30 cases from the Farm Credit Ad- 
ministration, involving offenses against the Farm Loan Act; and, 



EEPOET OF THE SECEETARY OP THE TEEASUEY 



173 



424 cases involving violation of the Gold Reserve Act of 1934. 
Inquiries in 173 cases were received from the Procurement Division 
for information concerning prospective bidders on Government 
supplies. 

TREASURER OF THE UNITED STATES 

Public moneys are received and disbursed through the accounts'of 
the Treasurer of the United States with designated Government 
depositaries 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 for 
the fiscal years 1934 and 1935 are compared in the following table. 
The figures used in this table and throughout this section of the 
report (pp. 173 to 177, inclusive), are on the basis of daily Treasury 
statements (revised) . (For an explanation of accounts, see p. 294 ; and 
for an explanation of bases, see p. 293.) 



1934 



Increfise (+) or 
decrease (— ) 



Receipts: 

General and special accounts 

Trust accounts: 

Increment resulting from reduction in 

the weight of the gold dollar 

Seigniorage 1 

Other trust accounts 



$3, 121, 431, 991. 22 
2,811,397,066.15 



161, 273, 515. 81 



$3, 800, 972, 151. 02 



1, 722, 751. 97 
140,111,441.47 
237, 358, 693. 94 



+$679, 540, 159. 80 



-2, 809, 674, 314. 18 
+140,111,441.47 
+76, 085, 178. 13 



Total. 



6, 094, 102, 573. 18 



4, 180, 165, 038. 40 



-1,913,937,534.78 



Expenditures: 

Transactions in checking accounts of govern- 
mental agencies (net) 

Chargeable against increment on gold: 

Exchange stabilization fund 

Melting losses, etc 

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

Retirement of national bank notes 

Public debt retirements chargeable against 

ordinary receipts 

All other expenditures. 



2-437,074,669.08 



-437, 074, 669. 68 



2, 000, 000, 000. 00 



359, 86^ 092. 90 
6, 909, 789, 429. 56 



675, 121. 93 



20, 931, 857. 34 
91,415,650.00 



573, 557, 250. 00 
6,984,397,309.27 



-2,000,000, 
+675, 



+20, 931, 
+91,415, 



+213, 692, 
+ 74,607, 



000. 00 
121. 93 



857. 34 
650. 00 



157. 10 
879. 71 



Total. 



9, 269, 654, 522. 46 



7, 233, 902, 518. 86 



-2,035,752,003.60 



Excess of expenditures over receipts, including 
trust funds 



3, 175, 551, 949. 28 



3, 053, 737, 480. 46 



-121,814,468.82 



1 Represents the seigniorage resulting from the issuance of silver certiflcates equal to the cost of the 
silver acquired under the Silver Purchase Act of 1934 and the amount returned for the silver received under 
the President's Proclamation dated August 9, 1934. 

2 Represents transfers aggregating $333,245,377.93 of balances in checking accounts of special agencies 
of the Government as of May 31, 1935, and net transactions since that date of $103,829,291.75. 



174 



REPORT OF THE SECRETARY OF THE TREASURY 



Receipts and expenditures on account of the principal of the public 
debt during the fiscal year 1935 were as follows: 



Class 



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 notes (Federal Deposit Insurance Corporation series) -. 

Treasury bonds 

United States Savings 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 

Eeserve bank notes. 



Total. 



Receipts 



$4, 007, 066, 000. 00 



213, 600, 000. 00 

4, 678, 89.3, 500. 00 

41, 400, 000. 00 

765, 000. 00 

111,000.00 

90, 000, 000. 00 

100, 000, 000. 00 

3,351,392,950.00 

62, 567, 043. 75 



11.88 



25, 718, 880. 00 
554, 166, 925. 00 



13,125,681,310.63 



Expenditures 



$3, 326, 590, 000. 00 
1, 522, 470, 300. 00 

175, 900, 000. 00 

1, 302, 646, 700. 00 

32, 400, 000. 00 

509, 000. 00 

64, 000. 00 



555, 000. 00 

530, 887. 50 

21,825.50 

100, 916. 00 

1, 788, 406, 650. 00 

280, 200. 00 

456, 050. 00 

3, 077, 600, 050. 00 

69, 650. 00 

1, 799, 500. 00 

3, 303. 33 

247,310,320.00 



11,477,714,352.33 



Public debt retirements chargeable against ordinary receipts, in- 
cluded in the above public debt expenditures, were as follows: 

Cumulative sinking fund - - $573,000,000 

Forfeitures, gifts, etc... 557, 250 

Total - 573,557,250 

The gold holdings of the Treasury as of June 30, 1934 and 1935, 
valued at $35 an ounce, are shown in the following table: 



Account 



June 30, 1934 



June 30. 1935 



Increase (+) or 
decrease (— ) 



Reserve against gold certificates outstanding 

Gold certificate fund, Federal Reserve Board 

Redemption fund. Federal Reserve notes 

Reserve against United States notes and TreaS' 

ury notes of 1890 

Exchange stabilization fund 

Gold in General Fund 

Total - - 



$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 



$787, 646, 039. 00 

5,509,710,115.48 

22, 879, 855. 28 

156, 039, 430. 93 

1, 800, 000, 000. 00 

839, 368, 051. 28 



-$170,816,990.00 

+ 1,536,377,526.82 

-2,842,866.45 



-103,254,734.85 



7, 856, 180, 556. 45 



9,115,643,491.97 



+1, 259, 462, 935. 52 



The increase in the gold holdings was made up as follows: 

Purchases by mints and assay offices on account of imports, etc., (valued at $35 an 
ounce) $1,255,254,691.36 

Received under the order of the Secretary of the Treasury of Dec. 28, 1933, (valued at 
$20.67+ an ounce) 2,485,492.19 

Increment resulting from reduction in the weight of the gold dollar 1, 722, 751. 97 

Total- 1,259,462,935.52 

Paper currency of each class issued and redeemed during the fiscal 
year 1935 and the amounts outstanding, including Treasury holdings, 
on June 30, 1934 and 1935, were as follows: 



REPORT OF THE SECRETARY OF THE TREASURY 



175 



Class 


Outstanding 
June 30, 1934 


Issued 


Redeemed 


Outstanding 
June 30, 1935 




$1,141,200,779 

498, 018, 431 

346, 681, 016 

1, 191, 000 

3, 350, 987, 755 
160, 666, 263 
962, 130, 553 


$15, 455, 600 
922, 561, 500 
237, 756, 000 


$368, 883, 530 

604, 815, 044 

237, 756, 000 

7,650 

1, 622, 700, 655 

76, 316, 140 

436, 942, 828 


$787, 772, 849 

815, 764, 887 

346, 681, 016 

1,183,350 

3, 492, 853, 620 

84, 35i 373 

773 116 746 






Treasury notes of 1890 




1, 764, 566, 520 

4,250 

247, 929, 020 


Federal Reserve bank notes - 








Total -.. 


6, 460, 875, 797 


3, 188, 272, 890 


3, 347, 421, 847 


6, 301, 726, 840 





The paper currency held by Treasury offices and Federal Reserve 
banks on June 30, 1935, was as follows: 



Class 



Held in Treas- 
ury offices and 
by Federal Re- 
serve banks 
and agents in 
custody for the 
Treasurer, U. S. 



Held by Fed- 
eral Reserve 
banks 



Total 



Gold certificates.. 

Silver certificates 

United States notes 

Treasury notes of 1890 

Federal Reserve notes 

Federal Reserve bank notes 
National bank notes 

Total 



$126,810 

5,751,210 

1,884,332 

1,776 

15, 974, 500 

1, 584, 027 

I 33, 650, 201 



$670, 479, 090 
108, 539, 486 
59, 379, 479 



253, 966, 025 

1, 300, 790 

35, 203. 270 



$670, 
114, 
61, 

269, 
2, 



605, 900 
290, 696 
263,811 
1,776 
940, 625 
884, 817 
863, 471 



58, 972, 856 



1, 128, 868, 140 



1,187,840,996 



1 Includes $4,021,100 held by the Comptroller of the Currency for destruction. 

The amount of United States paper currency shipped during the 
fiscal year 1935 from the Treasury in Washington to Treasury offices, 
Federal Reserve banks and branches, and others amounted to 
$1,139,905,458, an increase of $347,740,378 as compared with the 
previous year. Of this increase, approximately 78 percent was on 
account of the shipment of silver certificates. 

The proceeds of currency counted into the Treasurer's cash by the 
National Bank Redemption Agency amounted to $536,073,329.30, 
of which $442,232,784 was in national bank notes, $58,191,395 in 
Federal Reserve bank notes, $35,571,305 in Federal Reserve notes, 
and $77,845.30 in United States currency. 

Canceled Federal Reserve notes amounting to $1,157,491,400 were 
received from Federal Reserve banks and branches for credit of 
Federal Reserve agents. 

During the year the Treasurer's office authorized and directed 
shipments or transfers of current 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 $49,780,361.60. Ship- 
ments and transfers of gold coin and bullion and of uncurrent silver 
and minor coins to the mints from the Treasury in Washington and 
from the Federal Reserve banks and branches were authorized in the 
amounts of $914,097,129.68 and $10,751,356.20, respectively. 

16816—36 13 



176 



EEPORT OF THE SECRETARY OF THE TREASURY 



Public moneys on deposit in designated Government depositaries 
on June 30, 1935, exclusive of items in transit on that date, amounted 
to $925,656,836.36 and were distributed as follows: 



Class of depositary 



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. 



To credit of 
Treasurer 



$102, 236, 863. 22 

779, 020, 320. 27 

8, 228, 196. 56 



968, 839. 44 
2, 133, 257. 29 



892, 587, 476. 78 



To credit of 
other Govern- 
ment officers 



$9,503,081.79 

21,982,678.21 

1, 583, 599. 58 



33, 069, 359. 58 



Government and other securities held in custody by the Treasurer 
on June 30, 1935, amounted to $19,484,166,144, whereas the 
amount held on June 30, 1934, was $19,035,094,929, an increase of 
$449,071,215. The purposes for which the securities were held and 
the amounts thereof as of June 30, 1934 and 1935, were as follows: 



Purpose for which held 



June 30, 1934 



June 30, 1935 



To secure national bank note circulation 

To secure deposits of public moneys in depositary banks 

To secure Postal Savings 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 



$737, 023, 670 

52, 920, 506 

738, 868, 235 

17, 500, 558, 708 

5, 595, 160 

107, 650 

21,000 



$143, 743, 910 

50, 645, 700 

408, 308, 238 

18,875,310,556 

6, 022, 390 

114,350 

21,000 



19, 035, 094, 929 



19, 484, 166, 144 



The number of pieces of public debt principal obUgations examined, 
verified, and redeemed during the yesir was 4,105,416 as compared 
with 1,888,858 for the previous fiscal year. 

Checks in payment of interest on the registered obligations of the 
United States verified and paid, numbered 1,584,328, and amounted 
to $112,222,836.04. Interest coupons of Government obligations 
examined, verified, and paid, numbered 15,736,679 and amounted 
to $645,737,720.56. 

The checks issued by the Treasurer of the United States in 
payment of interest on the registered obligations of governmental 
agencies and insular governments numbered 30,796 and amounted 
to $11,276,747.55. Coupons of obligations of governmental agencies 
and insular governments paid numbered 6,759,856 and amounted to 
$87,387,646.91. 

Funds were advanced to United States disbursing officers by ac- 
countable warrants issued in an aggregate amount of $7,054,861,015.02. 
Warrants aggregating $13,143,937,106.27 were also issued covering 
public debt principal and interest payments by the Treasurer. 
Treasurer's checks aggregating $124,811,711.37 were issued on settle- 
ment warrants in payment of claims settled by the Comptroller 
General. 

Drafts were purchased in payment of claims settled in 57 different 
kinds of foreign currencies for the Comptroller General and for other 



EEPORT OF THE SECRETARY OF THE TREASURY 177 

departments and bureaus of the Government at a total cost of 
$170,290.61. 

Checks drawn on the Treasurer of the United States by Government 
disbursing officers and paid during the year numbered 71,340,442, 
a decrease of 33,276,202 checks as compared with the previous year. 
Balances to the credit of disbursing officers and Government agencies. 
in 4,690 accounts on June 30, 1935, amounted to $1,277,067,364.17, 
an increase of $417,916,496.93 over the total of such balances in, 
4,467 accounts on June 30, 1934. 

WAR FINANCE CORPORATION 

(In liquidation) 

By the act of Congress approved March 1, 1929, the liquidation of 
the War Finance Corporation's assets remaining after the close of 
business, April 4, 1929, and the winding up of the affairs of the 
Corporation thereafter were transferred to the Secretary of the 
Treasury. During the fiscal year ended June 30, 1935, the liquida- 
tion of the Corporation was continued. 

Pursuant to an order of the Secretary of the Treasury approved by 
the President January 24, 1935, the disbursing functions of the War 
Finance Corporation were transferred, under the provisions of 
Executive Order No. 6166 of June 10, 1933, as amended, to the 
Division of Disbursement effective February 1, 1935, together with the 
personnel engaged in the performance of such disbursing functions. 

The Corporation has outstanding only $10,000 of its original capital 
of $500,000,000, capital stock of $499,990,000 having been retired at 
par. During the year the Corporation collected the balance due on 
the security taken by the Corporation in the reorganization of an 
industrial company which had received an advance during the war. 
The liquidation of this war loan advance in full enabled the Corpora- 
tion to pay into the Treasury on March 1, 1935, the sum of $100,000, 
increasing to $64,731,271.70 the amount paid into the Treasury on 
account of earnings. 

The amount advanced b}^ the Corporation for all purposes, from 
its creation, not including such part of new applications as represented 
proceeds used to retire other advances, was $690,431,100, of which 
$688,604,140 has been repaid. 

The total assets carried on the Corporation's books on June 30, 
1935, amounted to $130,192.77, which consisted of cash of $122,220. 15; 
furniture and fixtures of $1; and agricultural and livestock loans 
(including expense advances of $372.22) of $7,971.62. During the 
year no expense advances were made. The total receipts amounted 
to $129,676.94, including repayments aggregating $128,201.86, of 
which $10,825.96 was appHed on account of the Corporation's agri- 
cultural and livestock loans and $117,375.90 on account of war loans. 
Total expenditures, excluding $100,000 paid into the Treasury, 
amounted to $5,838.43. 



EXHIBITS 



179 



THE PUBLIC DEBT 

Issues and redemptions of United States bonds, notes, and certificates of 

indebtedness 

Exhibit 1 

Offering of lYz percent Treasury notes of series D-1936, 2^2 percent Treasury 
notes of series D-193S, and 3l^ percent Treasury bonds of 1944-^6 {addi- 
tional) 

On September 10, 1934, Secretary of the Treasury Morgentliau offered for 
subscription two series of Treasury notes and au issue of bonds in excliange 
for Treasury certificates of indebtedness of series TS-1934 maturing September 
15, 1934, and Fourtla Liberty Loan 4^^ percent bonds called for redemption 
October 15, 1934. In the related press release it was stated that the amount 
cf Treasury certificates maturing September 15, 1934, was $524,748,500, and the 
amount of Fourth Liberty Loan bonds eligible for exchange for the new securi- 
ties was slightly less than $1,250,000,000. 

[Treasury notes, series D-1936. Department Circular No. 522] 

Treasury Department, 
Washington, September 10, 1934. 

EXCHANGE OFFERING OF NOTES 

The Secretary of the Treasury, pursuant to the authority of the Second Lib- 
erty Bond Act, approved September 24, 1917, as amended, offers for subscrip- 
tion, at par, 1% percent notes of the United States, designated Treasury notes 
of series D-1936, in payment of which only Treasury certificates of indebted- 
ness of series TS-1934, maturing September 15, 1934, may be tendered. The 
amount of the offering is limited to the amount of Treasury certificates of 
indebtedness of series TS-1934 tendered and accepted. 

DESCRIPTION OF NOTES 

The notes will be dated September 15, 1934, and will bear interest from that 
date at the rate of 1^^ percent per annum, payable semiannually on March 15 
and September 15 in each year. They will mature September 15, 1936, 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 taxa- 
tion (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. Banking institutions generally will 
handle applications for subscribers, but only the Federal Reserve banks and 
the Treasurv Department are authorized to act as official agencies. 

181 



182 REPORT OF THE SECRETARY OF THE TREASURY 

Subject to the reservations made in the next succeeding paragraph, all sub- 
scriptions will be allotted in full. 

The Secretary of the Treasury reserves the right to reject any subscription, 
in whole or in part, and to close the books as to any or all subscriptions at 
any time without notice; and any action he may take in these respects shall 
be final. Allotment notices will be sent out promptly upon allotment. 

TERMS OF PAYMENT 

Payment at par for any notes allotted under this circular must be made on or 
before September 15, 1934, or on later allotment, and may be made only in 
Treasury certificates of indebtedness of series TS-1934, maturing September 15, 
1934, which will be accepted at par, and should accompany the subscription. 

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, pre- 
scribe supplemental or amendatory rules and regulations governing the offering 
which will be communicated promptly to the Federal Reserve banks. 

Henky Morgenthau. Jr.. 
Secretary of the Treasury. 



[Treasury notes, series D-1938. Department Circular No. 523] 

Treasury Department, 
Washington, September 10, 193.^. 

EXCHANGE OFFERING OF NOTES 

The Secretary of the Treasury, pursuant to the authority of the Second 
Liberty Bond Act, approved September 24, 1917, as amended, offers for sub- 
scription, at par, 2% percent notes of the United States, designated Treasury 
notes of series D-1938, in payment of which only Fourth Liberty Loan 414 
percent bonds of 1933-38 included in the second call for redemption on October 
15, 1934 (hereinafter referred to as second-called Fourth 4%'s),^ may be 
tendered. 

The amount of the offering is limited to the amount of second-called Fourth 
414 's tendered and accepted. Fourth Liberty Loan bonds not included in the 
second call for redemption on October 15, 1934, will not be accepted for ex- 
change under this circular.^ 

In addition to the exchange offering under this circular, holders of second- 
called Fourth 41/4's are also offered the privilege of exchanging all or any part 
of such called bends for 3^/4 percent Treasury bonds of 1944—46, which offering 
is set forth in Department Circular No. 524, issued simultaneously with this 
circular. 

desckiption of notes 

The notes will be dated September 15, 1934, and will bear interest from that 
date at the rate of 2^^ percent per annum, payable semiannually on March 15 

^ Pursuant to the second call for partial redemption (see Department Circular No. 509, 
dated Apr. 13, 1934) all outstanding Fourth Liberty Loan 4% percent bonds of 1933-38 
bearing serial numbers ending in 2 or 8 (in the case of permanent coupon bonds preceded 
by the distinguishing letter B or H, respectively) have been called for redemption on 
Oct. 15, 1934, on which date interest on such bonds will cease. 

=* First-called Fourth 414's (which ceased to bear interest 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), and uncalled Fourth 4i^'s bear 
serial numbers ending in 3, 4, 5, 6, or 7 (in the case of permanent coupon bonds pre- 
ceded by the distinguishing letter C, D, E, F, or G, respectively). 



REPORT OF THE SECRETARY OF THE TREASURY 183 

and September 15 in each year. They will mature September 15, 1938, and 
will not be subject to call for redemption prior to maturity.^ * * * 

Bearer notes with interest coupons attached will be issued in denominations 
of $50, $100, $500, $1,000, $5,000, $10,000, and $100,000. The notes will not be 
issued in registered form. 

APPLICATION AND ALLOTMENT 

Applications will be I'eceived at the Federal Reserve banks and branches and 
at the Treasury Department. Washington. * * * 

TERMS OF PAYMENT 

Payment at par for any notes allotted under this circular must be made on or 
before September 15, 1934, or on Inter nllotment, and may be made only in 
.second-called Fourth 4i/4's, which will be accepted at par, and sliould accompany 
the subscription. If any subscription is rejected, in whole or in part, the 
second-called Fourth 414's tendered therewith and not accepted will be returned 
to the subscriber. 

Interest on second-called Fourth 41/4's tendered and accepted will be paid 
in full to October 15, 1934, on wiiich date interest on all second-called Fourth 
41/i's will cease. Such payments will be made, in the case of coupon bonds, 
through payment of coupons dated Oetol)er 15, 1934, when due. which coupons 
must be detached by holders before presentation of the bonds for exchange for 
the notes offered hereunder, and, in the case of registered bonds, through the 
issue of interest checks in regular course for final interest due October 15, 1934, 
in favor of the holders of record on September 15, 1934. 

SURRENDER OF SEC0ND-CALLB:D FOURTH 4l/4'S ON EXCHANGE 

Coupon bonds. — Second-called Fourth 4Vi's in coupon form tendered in ex- 
change for Treasury notes offered hereunder, should be presented and sur- 
rendered to a Federal Reserve bank or to the Treasurer of the United States 
and should accompany the application. All coupons bearing dates subsequent to 
October 15, 1934,* should l)e attached to such coupon bonds when surrendered, 
and if any such coupons are missing, the application must be accompanied with 
cash payment equal to the face amount of the missing coupons.^ The bonds 
must be delivered at the expen.se and risk of the holder. Facilities for trans- 
portation of bonds by registered mail insured may be arranged between incor- 
porated banks and trust companies and the Federal Reserve banks, and holders 
may take advantage of such arrangements when available, utilizing such incor- 
porated banks and trust companies as their agents. Incorporated banks and 
trust companies are not agents of the United States under this circular. 

Registered bonds. — Second-called Fourth 4i/i's in registered form tendered 
in exchange for Treasury notes offered hereunder, should be assigned by the 
registered payee or assigns thereof to " The Secretary of the Treasury for ex- 
change for Treasury notes of series D-1938 ", 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 applica- 
tion to a Federal Reserve bank or to the Treasury Department, Division of 
Loans and Currency, Washington. 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 * * * 

Henry Morgenthau, Jr., 
Sea-etftry of the Treasury. 



' Omittpd portions similar to corresponding sections of Department Circular No. 
522. p. 181. 

* It will be noted that second-called Fourth 4Vi:'s in coupon form tendered in exchange 
for 3^^ percent Treasury bonds under Department Circular No. 524 must have the Oct. 15, 
19.34, coupons attach^^d as the interest represented by such coupons will be applied to 
the accrued interest on the .SVt percent Treasury bonds issued in exchange and the bal- 
ance paid on delivery of such bonds or in-omptly following allotment. 

''The final coupon attached to temporary coupon bonds became due on Oct. 15, 1920. 
The holders of any such temporary bonds which are included in the second call for partial 
redemption on Oct. 15. 19.''.4, will receive the past due interest from Oct. 15, 1920, 
if such bonds are tendered for exchange under this circular. 



184 KEPORT OF THE SECRETARY OF THE TREASURY 

[Treasury bonds of 1944-46. Department Circular No. 524] 

Treasury Department, 
Washinffton, Septemljer 10, 19S4- 

EXCHANGE OFFERING OF BONDS 

The Secretary of the Treasury, pursuant to the authority of the Second 
Liberty Bond Act, approved September 24, 1917, as amended, for refunding pur- 
poses, invites subscriptions, at par witli an adjustment of accrued interest as 
of September 15, 1934, from the people of the United States, for 3i/4 percent 
Treasury bonds of 1944-^6, in payment of wliich only Fourth Liberty Loan 4% 
percent bonds of 1933-38 included in the second call for redemption on October 
15, 1934 (hereinafter referred to as second-called Fourth 4i/4's) may be ten- 
dered.^ The amount of the additional issue of 3^/4 percent Treasury bonds of 
1944-46 will be limited to the amount of second-called Fourth 4i/4's tendered 
and accepted. Fourth Liberty Loan bonds not included in the second call for 
redemption on October 15, 1934, will not be accepted for exchange under this 
circular.^ 

In addition to the exchange offering under this circular, holders of second- 
called Fourth 41/4 's are also offered the privilege of exchanging all or any part 
of such called bonds for 'ly^ percent Treasury notes of series D-1938, which 
offering is set forth in Department Circular No. 523, issued simultaneously with 
this circular. 

DESCRIPTION OF BONDS 

The bonds now offered will be an addition to and will form a part of the 
series of 3% percent Treasury bonds of 19 41 46 issued pursuant to Department 
Circular No. 508, dated April 4, 1934, are identical in all respects therewith, 
will be freely interchangeable, and are described in the following quotation from 
said Circular No. 508: 

" The bonds will be dated April 16, 1934, and will bear interest from that 
date at the rate of 314 l^ercent 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 
principal 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 
Secretary of the Treasury. 

" The bonds shall be exempt, both as to principal and interest, from all tax- 
ation now or hereafter imposed by tlie United States, any State, or any of the 
possessions of the United States, or by any local taxing authority, except (a) 
estate or inheritance taxes, and (b) graduated additional income taxes, com- 
monly 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, associ- 
ation, 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 
conversion. 



^ Footnote omitted here, see footnote 1, p. 182. 
2 Footnote omitted here, see footnote 2, p. 182. 



REPORT OF THE SECRETARY OF THE TREASURY 185 

" The bonds will be subject to the general regulations of the Treasury De- 
partment, now or hereafter issued, governing United States bonds." 

APPLICliTION AND ALLOTMENT 

Applications will be received at the Federal Reserve banks and branches and 
at the Treasuiy Department, Washington. Banking institutions generally will 
Jiandle applications for subscribers, but only the Federal Reserve banks and the 
Treasury Department are authorized to act as official agencies. 

Subject to the reservations made in the next succeeding paragraph, all sub- 
sci'iptions will be allotted in full. 

The Secretary of the Treasury reserves the right to reject any subscription, 
in whole or in part, and to close the books as to any or all subscriptions at any 
time without notice ; and any action he may take in these respects shall be final. 
Allotment notices will be sent out promptly upon allotment. 

TERMS OF PAYMENT 

Payment at par and accrued interest to September 15, 1934, for any bonds 
allotted under this circular must be made on or before September 15, 1934, 
or on later allotment. Payment of the principal amount may be made only 
in second-called Fourth 41/4's, which will be accepted at par, and should accom- 
pany the subscription. If any subscription is rejected, in whole or in part, 
the second-called Fourth 4iA's tendered therewith and not accepted will be 
returned to the subscriber. 

Interest on second-called Fourth 41/4's tendered and accepted will be paid 
in full to October 15, 1934. In the case of coupon bonds accepted in exchange 
such interest will be anticipated and paid upon the terms and conditions 
hereinafter prescribed. Interest on all second-called Fourth 4i/4's will cease on 
October 15, 1934. 

Coupon bonds. — Coupon bonds tendered in payment should have coupons 
dated October 15, 1934, as well as all subsequent coupons attached ; sy^ per- 
cent Treasury bonds in coupon form issued in exchange will have all coupons 
attached, including the coupon maturing October 15, 1934, and a payment of 
the amount by which the 414 percent coupon maturing October 15, 1934, exceeds 
the accrued interest from April 16 to September 15, 1934, of the 3^4 percent 
coupon maturing October 15, 1934 (such excess being $7.752732 per $1000 
principal amount), will be made upon delivery of the 3l^ percent coupon bond; 
314 percent Treasury bonds in registered form issued in exchange will bear 
interest from September 15, 1934 ; and a payment of the full amount of the 
4l^ percent coupon maturing October 15, 1934, will be made promptly following 
allotment. 

Registered bonds. — Interest on registered bonds tendered in payment and 
accepted will be payable on October 15, 1934, to the holders of record on 
September 15, 1934, the date of closing of the transfer books; Sy^ percent 
registered bonds issued in exchange for registered bonds will bear interest 
from September 15, 1934, and no cash payment for accrued interest will be 
required ; 31,4 percent Treasury bonds in coupon form issued in exchange for 
registered bonds will have all coupons attached, including the coupon maturing 
October 15, 1934; accordingly, a cash payment for accrued interest from 
April 16 to September 15, 1934 ($13.497268 per $1,000 principal amount), must 
accompany the application. 

StIEBENDEE OF SECOND-CALLED FOUETH 4l/4'S ON EXCHANGE 

Coupon bonds. — Second-called Fourth 4i/i's in coupon form tendered in ex- 
change for Treasury bonds offered hereunder, should be presented and sur- 
rendered to a Federal Reserve bank or to the Treasurer of the United States 
and should accompany the application. Coupons dated October 15, 1934,' and 
all coupons bearing dates subsequent to October 15, 1934, should be attached 

3 It will be noted that second-called Fourth 414's in coupon form tendered In exchange 
for 21/1 percent Treasury notes of series D-1938 under Department Circular No. 523 
will not have the October 15, 1934, coupon attached ; and there will, accordingly, be no 
anticipation of interest upon exchange for notes under such circular. 



186 EEPOET OF THE SECRETARY OF THE TREASURY 

to sucli coupon bonds when surrendered, and if any such coupons are missmg, 
the application must be accompanied with casli payment equal to the face 
amount of the missing coupons/ The bonds must be delivered at the expense 
and risk of the holder. 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. 

Registered bonds. — Second-called Fourth 4Vt's in registered form tendered 
in exchange for Treasury bonds offered hereunder should be assigned by the 
registered payee or assigns thereof in accordance with the general regulations 
of the Treasury Department governing assignments for transfer or exchange 
in one of the foniis hereafter set forth, 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. The bonds must 
be delivered at the expense and risk of the holder. If Treasury bonds are 
desired registered in the same name as the so-called Fourth 4i^'s sur- 
rendered, the assignment should be to " The Secretary of the Treasury for 
exchange for Treasury bonds of 1944-46 " ; if Treasury bonds are desired regis- 
tered in another name, the assignment should be to " The Secretary of the 

Treasury for exchange for Treasury bonds of 1944--i6 in the name of 

" ; if Treasury bonds in coupon form are desired, the assign- 
ment should be to " The Secretary of the Treasury for exchange for Treasury 
bonds of 1944-46 in coupon form to be delivered to " 

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, pre- 
scribe supplemental or amendatory rules and regulations governing the offering 
which will be communicated promptly to the Federal Reserve banks. 

Henry Mokgenthau, Jr., 
Secretm-y of the Treasury. 



Exhibit 2 



Allotments on excJmnge subscriptions, Treasury notes of series D-1936 and series 
D-193S, and Treasury bonds of 19^-If6 {from press releases, Sept. IS, 17, 19, 
21, and 25, Oct. 1, 193J,, and Jan. 3, 1935, revised'') 

On September 12, 1934, Secretary of the Treasury Morgenthau announced that 
the subscription books for the exchange offering of 1% percent Treasury notes of 
series D-1936 would close at the close of business September 13, 1934. Sub- 
scriptions aggregating $514,066,000 were received for these notes, which were 
open only to the holders of Treasury certificates of indebtedness maturing 
September 15, 1934. 

The subscription books for the offering of 2% percent Treasury notes of series 
D-1938 closed at the close of business September 24, 1934. Subscriptions for 
these notes, offered in exchange for Fourth Liberty Loan bonds called for 
redemption on October 15, 1934, aggregated $596,416,100. 

The subscription books for the offering of the additional issue of 3i/4 percent 
Treasury bonds of 1944--46 remained open until the close of business October 11, 
1934. Subscriptions for these bonds, also issued in exchange for the called 
Fourth Liberty Loan bonds, aggregated $456,898,300. 

The amount offered of each of the three issues was limited to the amount of 
tenders accepted of maturing Treasury certificates or called Fourth Liberty Loan 
bonds for which the particular issue was offered in exchange. Allotments were 
divided among the several Federal Reserve districts and the Treasury as follows : 



* Footnote omitted here, see footnote 5, p. 183. 

= Revised Nov. 23 and Dec. 31, 1984, and Jan. 30 and Apr. 30, 1935. 



BEPORT OF THE SECRETARY OF THE TREASURY 



187 



Federal Reserve district 



Treasury 

notes, series 

D-1936 



Treasury 

notes, series 

D-1938 



Treasury 
bonds of 
1944-46 



Boston , 

New York 

Pliiladelphia.. 

Cleveland 

Richmond 

Atlanta , 

Chicago , 

St. Louis , 

Minneapolis.. 
Kansas City.. 

Dallas -. 

San Francisco 
Treasury 

Total... 



$14, 273, 500 

382, 247, 500 

10, 027, 000 

12, 988, 000 

4, 247, 000 

7, 408, 000 

40, 616, 000 

15, 521, 500 

10, 422, 000 

6, 158, 000 

3, 964, 500 

5, 051, 000 

1, 142, 000 



514, 066, 000 



$37, 582, 750 

376, 985, 050 

17, 288, 800 

26, 527, 050 

7, 914, 800 

3, 557, 950 
64, 102, 450 
12, 447, 950 
10, 478, 300 
11,954,400 

6, 827, 250 
15, 472, 750 

5, 276, 600 



696, 416, 100 



$20, 098, 800 
134,381,300 
24, 179, 600 
62,271,900 
21,968,150 
10, 842, 300 
65, 578, 400 
28, 372, 400 
12, 235, 400 
25, 946, 550 
9, 010, 450 
20, 886, 500 
21, 126, 550 



456,898,300 



Exhibit 3 

Partial redemption on April 15, 19S5, of Fourth Liberty Loan battids before 

inatii,rity {third call) 

Oil October 12, 1934, Secretary of the Treasury Morgenthau issued a third 
call for the redemption on April 15, 1935, of three series of outstanding 414 
percent Fourth Liberty Loan bonds. This call included about $1,870,000,000 of 
bonds. 

The first call, issued October 12, 1933, included about $1,880,000,000 of bonds- 
called for redemption on April 15, 1934 ; and the second call, issued April 13, 
1934, included about $1,250,000,000 of bonds called for redemption on October 
15, 1934. Through refunding during the previous 12 months about $2,750,000,000 
of bonds under the first two calls were exchanged for other interest-bearing 
obligations of the United States, while about $380,000,000 of the bonds either 
were paid or were to be paid in cash. 

The text of the formal notice of call of October 12, 1934, was as follows : 

To Holders of Fourth Liberty Loan y/14 Percent Bonds of 1933-38 and Others- 
Concerned: 

Public notice is hereby given : 

1. All outstanding Fourth Liberty Loan 4i/i percent bonds of 1933-38 (Fourth 
41/4 's) bearing serial numbers the final digit of which is 5, 6, or 7 (such serial 
numbers in the case of permanent coupon bonds being prefixed by the corre- 
sponding distinguishing letter E, F, or G, respectively), are hereby called for 
redemption on April 15, 1935, on which date interest on such bonds called for 
redemption will cease. 

2. This third 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 pre- 
scribed by the Secretary of the Treasury. 

3. Outstanding Fourth 4i/4's bearing serial numbers (and prefix letters) other 
than those designated are not included in or affected by this third call for 
partial redemption. 

Holders of the Fourth 4Vt's now called for redemption on April 15, 1935., 
may, in advance of that date, be offered the privilege of exchanging their third- 
I called bonds for other interest-bearing obligations of the United States, in 
which event public notice will hereafter be given. 

Full information regarding the presentation and surrender of Fourth iVv's 
I under this call is given in Department Circular No. 525, dated October 12, 1934.. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 



Treasury Department, Washington, October 12, IDSfj. 



188 REPORT OF THE SECRETARY OF THE TREASURY 

The circ-ular governing the redemption of these bonds was as follnws : 

[Department Circular Xo. 525] '. 

Treasury Department. 
Washington, October 12. 193.'f. 
To Holders of Fourth Liberty Loan ^i/4 percent Bonds of 1933-3S. and Others 
Concerned : 

I. NOTICE OF THIRD CALL FOR PARTIAL REDEMPTION BEFORE MATUBITY OF FOURTH 
LIBERTY LOAN 4^4 PERCENT BONDS OF 10 3:j-oS (FOURTH 4l/i'S)^ 

1. All outstanding Fourth LibL-rty Loan 414 percent bonds of 1933--3S ( Fourth 
414's) bearing serial numbers the final digit of which is 5, G. or 7 (such 
serial numbers in the case of permanent coupon bonds being prefixed by the 
corresponding distinguishing letter E, F, or G, respectively), are hereby called 
for redemption on April 15, 1935, on which date interest on such bonds called 
lor redemption will cease. 

2. This third call for partial redemption is made pursuant to the provision 
for redemption contained in the bonds and in Treasury Department Circular 
No. 121. datetl September 28. 1918, under which the bonds Avere originally issued, 
the bonds to be redeemed having been determined by lot in the manner pre- 
?^cribed by the Secretary of the Treasury. 

3. Outstanding Fonrth 4^/4'^ bearing serial numbers (and prefix letters) other 
than those designated are not included in or affected by this third call for 
partial redemption. 

II. TRANSACTIONS IN THIRD-CALLED AND UNCALLED BONDS 

1. The bonds included in the third call for partial redemption on April 15, 
1935, are hereby designated third-called Fourth 4i4:'s. 

2. The Treasury Department and the Feiieral Reserve banks, as fiscal agents 
of the United States, will observe the division of Fourth 4i/4"s into four classes, 
first-called, second-called, third-called, and uncalled bonds.^ Hereafter, in all 
transactions affecting third-called and uncalled Fourth 41,4's: (1) Only bonds 
falling within tlie class third-called will be issued upon exchange or transfer 
of third-called bonds, and (2) only bonds falling within the class uncalled 
will be issued upon exchange or transfer of uncalled bonds. Exchanges or 
transfers as between third-called and uncalled Fourth 4i/4's will not be per- 
mitted. Denominational exchanges of coupon bonds within the class third- 
called will terminate on April 15. 1935. Transfers and exchanges of registered 
bonds within the class third-called will terminate on March 15, 1935. the date 
of the closing of the transfer books. 

3. Pursuant to 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, as modified by Department Circulars No. 501. dated 
October 12, 1033, and No. 509, dated April 13. 1934. are further modified to 
accord with the provisions of paragraph 2 of this section. 

III. PAYMENT OB EXCHANGE 

1. Payment of third-called bonds on April 15, 1935. — Holders of third-called 
Fourth 4i4's will be entitled to have such bonds redeemed and paid at par 

1 Fourth 4i4.'s (temporary coupon, permanent coupon, and resi.stered) 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 lette'-s -X to K 
(omitting I> being used, which letters, in order, rotate with and corresponil to the final 
digits 1 to 0. respectively. 

2 First-called Fourth 414's (called for redemption on Apr. 15. 1934 — Department Circu- 
lar No. 501. dated Oct. 12. 1933) bear serial numbers ending in 9. 0. or 1 (in the 
case of permanent coupon bonds preceded by the distiuEruishing letter .7. K. or A, 
T-espectively) : second-called Fourth 4Vt's (called for redemption on Oct. 15. 1934 — 
Department Circular No. 509, dated Apr. 13, 1934) bear serial numbers ending in S or 
2 (in the case of permanent coupon bonds preceded by the distinguishinff letter H or 
B. respectively); third-called Fourth 41/4*8 (called for redemption on Apr. 15, 1935) bear 
serial number's ending in 5. 6. or 7 (in the case of permanent coupon bonds preceded 
bv tbe distinguishing letter E, F, or G, respectively) : and uncalled Fourth 4i't's bear serial 
numbers ending in" 3 or 4 (in the case of permanent coupon bonds, preceded by tbe 
distinguishing letter C or D, respectively). 



EEPOET OF THE SECRETAEY OF THE TREASURY 189 

on April 15, 1935, with interest in full to that date. After April 15, 1935, in- 
terest will not accrue on any such bonds included in the third call for partial 
redemption. (Instructions for presentation of such third-called bonds for 
redemption on Apr. 15, 1935, are set forth in sees. IV and V of this circular.) 
2. Optional exchange offering. — Holders of third-called Fourth 414's may, in 
advance of April 15, 1935, be offered the privilege of exchanging all or any 
part of their third-called bonds for other interest-bearing obligations of the 
United States, in which event due public notice will be given. Holders who 
desire to avail themselves of any exchange privilege, if and when offered, 
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 exchange offering, instructions then given 
in the public announcement should be followed in presenting third-called bonds 
for exchange.) 

IV. REDEMPTION OF THIRD-CALLED FOURTH 4l4'S 

1. Presentation and surrender of coupon botK^s.— Third-called Fourth 4i^'s 
in coupon form should be presented and surrendered to any Federal Reserve 
bank or branch, or to the Treasurer of the United States, Washington, D. C, 
for redemption on April 15, 1935. The bonds must be delivered at the expense 
and risk of holders (see par. 7 of this section) and should be accompanied 
by appropriate written advice (see form P. D. 1416 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 April 15, 1935, which become payable on that date, should 
be detached from any third-called Fourth 414's before such bonds are presented 
for redemption on April 15, 1935, and such coupons should be collected in 
regular course when due. All coupons pertaining to such bonds bearing dates 
subsequent to April 15, 1935, must be attached to 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 redemption, 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 subsequently be presented.^ 

3. Presentation and surrender of registered bO)ids. — Third-called Fourth 4iy4's 
in registered form must be assigned by the registered payees or assigns there- 
of, 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 
suri'endered to any Federal Reserve bank or branch, or to the Division of Loans 
and Currency, Treasury Department, Washington, D. C, for redemption on 
April 15, 1935. The bonds must be delivered at the expense and risk of holders 
(see par. 7 of this section) and should be accompanied by appropriate written 
advice (see form P. D. 1417 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. 

4. If the registered holder of record, or an assignee holding under proper 
assignment from the registered holder of record, or a duly constituted repre- 
sentative 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 Secre- 
tary 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. 



3 The final coupon attached to temporary coupon bonds became due on Oct. 1.5. 1020. 
The holder.s of any such temporary bonds which are included in the tliird call for 
partial redemption on Apr. 15. 1935, will receive all past-due interest from Oct. 15. 1920. 
when the bonds are redeemed pursuant to such call. Any coupons now attached to any 
.*uch temporary bonds should be detached and collected in regular course. 



190 REPORT OP THE SECRETARY OF THE TREASURY 

5. Assignment in blauk, 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 bond becomes 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. 

6. Final interest due on April 15, 1935, on any third-called Fourth 4%'s in 
registered form will be paid by checks issued in regular course in tlie same 
manner as if such bonds had not been called for redemption. 

7. Transportation of honds. — Bonds presented for redemption under this 
circular must be delivered to a Federal Reserve bank or branch, or to the 
Ti-easury Department, Washington, D. C, at the expense and risk of the 
holder. Coupon 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 assign- 
ments 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 THIKD-OAliED FOURTH 4l4's FOR REDEMPTION 

1. In order to facilitate the redemption of third-called Fourth 414 's on April 
15, 1935, any such bonds may be presented and surrendered in the manner here- 
in prescribed in advance of that date but not before March 15, 1935. Such 
early presentation by holders, on and after March 15, 1935, and well in advance 
of April 15, 1935, will assure 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 third call for partial 
redemption are presented to Federal Reserve banks or branches, and not direct 
t!o the Treasury Department. 

3. As hereinbefore provided: (1) Coupons due Api'il 15, 1035, should be 
detached from any permanent coupon bonds included in the third 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 registered 
bonds included in the third 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 April 15, 1935. 

VI. GENERAL PROVISIONS 

1. Any further information which may be desired regarding the partial re- 
demption of third-called Fourth 4i/i's under this circular may be obtained from 
any Federal Reserve bank or branch, or from the Treasury Department, Wash- 
ington, D. C, where copies of the Treasury Department's regulations governing 
assignments may also be obtained. 

2. As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to perform any necessary acts under this circular. The Secfo- 
tary of the Treasury may at any time, or from time to time, prescribe supple- 
mental or amendatory rules and regulations governing the matters covered by 
this circular, which will be communicated promptly to Federal Reserve banks. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 

I.MPOETANT Note. — Fourtli 414's called for redemption oti Apr. 15, 1935, shonld be 
presented well in advance of that date but not before Mar. 15, 1935, and the instructions 
given in thi.s circular should be followed. If an exchange opportunity is afforded, and 
third-called Fourth 4i4:'s are to be presented for exchange, the instructions given in 
subsequent announcement should be followed. Information concerning tlie redemption of 
third-called Fourth 4i4:'s on Apr. 15, 1935. 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 tlieir facilities 
in the matter of arranging redemption or exchange, it is suggested that holders of 
third-called Fourth 414's consult their own bank or trust company. 



REPORT OF THE SECRETARY OF THE TREASURY 



191 



FOR COUPON BONDS 

[Form PD 1416. For registered bonds use Form PD 1417] 

Form op^ AD\^CE to Accompany Thibd-called Fourth Libekty Loan 4%, Per- 
cent Bonds (Fourth 4^/4 's) in Coupon Form Presented for Redemption on 
April 15, 1935 

To the Federal Reserve Bank of , 

or 
Treasurer of the United^ States, Washington, D. C: 
Pursuant to the provisions of Treasury Department Circular No. 525, dated 
October 12, 1934, the undersigned presents and surrenders herewith for re- 
demption on April 15, 1935, $ , face amount of third-called Fourth 

Liberty Loan bonds in coupon form, with coupon due October 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 PD 1417. For coupon bonds use form PD 1416] 

Form of Advice to Accompany Third-Called Fourth Liberty Loan 4^4 Per- 
cent Bonds (Fourth 4%'s) in Registered Form Presented for Redemption 
ON April 15, 1935 

To the Federal Reserve Bank of , 

or 
Treiasury Department, Division of Loans and Currency, 

Washington, D. C: 
Pursuant to the provisions of Treasury Department Circular No. 525, dated 
October 12, 1934, the undersigned presents and surrenders herewith for redemp- 
tion on April 15, 1935, $ , face amount of third-called 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 













16816— 3( 



192 REPORT OF THE SECRETARY OF THE TREASURY 

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 



Exhibit 4 



Offering of SVs peroent Treasury bonds of 1949-52, iVs percent Treasury notes 
of series E-1936, and 2y>i. perce..: Treasur j notes of serie» A-1939 {additional) 

On December 3, 1934, Secretary of the Treasury Morgenthau offered for sub- 
scription an issue of Treasury bonds and two issues of Treasury notes as described 
in the following circulars. In the related press release it was stated that about 
$992,496,500 of maturing Treasury certificates of indebtedness and about $137,- 
000,000 of interest on the public debt would be payable on December 15, 1934. 

[Treasury bonds of 1949-52. Department Circular No. 526] 

Treasury Department, 
Washington, December 3, 1934. 



offering of bonds 

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 tlie people of the United States, for SVs percent 
bonds of the United States, designated Treasury bonds of 1949-52. The amount 
of the offering is $450,000,000, or thereabouts. 

DESCRIPTION OF BONDS 

The bonds will be dated December 15, 1934, and will bear interest from that 
date at the rate of 3l^ percent per annum, payable semiannually on June 15 and 
December 15 in each year until the principal amount becomes payable. They 
will mature December 15, 1952, but may be redeemed at the option of the United 
States on and after December 15, 1949, in whole or in part, at par and accrued 
interest, on any interest day or d.-iys, on 4 montlis' notice of redemption given in 
such manner as tlie Secretary of the Treasury shall prescribe. In case of par- 
tial redemption the bonds to be redeemed will be determined by such methods 
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. 

Tlie 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 posses- 
sions of the United States, or by any local taxing authority, except (a) estate 
or inheritance taxes, and (b) graduated additional income taxes, commonly 
known as surtaxes, and excess-profits and war-profits taxes, now or hereafter 
imposed by the United States, upon the income or profits of individuals, partner- 
ships, associations, or corporations. The interest on an amount of bonds author- 
ized liy tli(^ Second Liberty Bond Act, approved September 24. 1917. as amended, 
the principal of which does not exceed $5,000, owned by any individual, partner- 
ship, 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 
conversion. 

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 cinipon and registered bonds, and for 
the transfer of registered bonds under rules and regulations prescribed by the 
Secretary of the Treasury. 



EEPORT OF THE SECRETARY OF THE TREASURY 193 

The bonds will be subject to the general regulations of the Treasury Depart- 
ment, now or hereafter prescribed, 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. Applica- 
tions, unless made by an incorporated bank or trust company, must be accom- 
panied by payment in full or by payment of 5 percent of the amount of bonds 
applied for. The Secretary of the Treasury resenes the right to close the boiks 
as to any or all subscriptions 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 of 
all of said methods or such other methods of allotment and classification of 
allotments 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. Subject to these reservations, sub- 
scriptions for amounts up to and including $10,000 will be given preferred allot- 
ment, and all other subscriptions will be allotted on an equal percentage basis. 
Allotment notices will be sent out promptly upon allotment, and the basis of 
allotment will be publicly announced. 

PAYMENT 

Payment at par and accrued interest, if any, for bonds allotted hereunder 
must be made or completed on or before December 15, 1934, or on later allot- 
ment. In every case where pajment 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 iDermitted to make payment by credit for bonds allotted to it for itself 
and its customers up to any amount for which it shall be qualified in excess of 
existing deposits, when so notified by the Federal Reserve bank of its district. 

GENEKAL PROVISIONS 

As fiscal agents of the United States, Federal Reserve banks are autliorized 
and requested to receive subscriptions^ * * * 

Henry Morgenthau, Jr. 
Secretary of the Treasury. 



[Treasury notes, series E-lOoG. Department Circular No. 527] 

Treasury Department, 
Washington, December 3, 193Jf. 
The Secretary of the Treasury, pursuant to the authority of the Second 
Liberty Bond Act, approved September 24, 1917, as amended, offers for sub- 
scription, at par and accrued interest, IVs percent notes of the United States, 
designated Treasury notes of series E-1936. The amount of the offering is 
$450,000,000, or thereabouts, with the right reserved to the Secretary of the 
Treasury to increase the offering by an amount sufficient to accept all sub- 
scriptions for which Treasury certificates of indebtedness of series TD-1934, 
maturing December 15, 1934. are tendered in payment and accepted. 

description of notes 

The notes will be dated December 15, 1934, and will bear interest from that 
date at the rate of IVs percent per annum, payable semiannually on June 
15 and December 15 in each year. They will mature June 15, 1936, and will 
not b esubject to call for redemption prior to maturity." * * * 

1 Omitted portion similar to corresponding section of Department Circular No. .524, 

p. 184. ^. - ,T Ko*) 

-Omitted portions similar to corresponding sections of Department Circular No. 5-^, 
p. ISl. 



194 REPORT OF THE SECRETARY OF THE TREASURY 

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. If 
payment is to be made in cash, each application, unless made by an incorpo- 
rated bank or trust company, must be accompanied by payment in full or by 
payment of 5 percent of the amount of notes applied for. The Secretary of 
the Treasury reserves the right to close the l)ooks as to any or all subscriptions 
or classes of subscriptions at any time without notice. 

Tlie 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 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 allotments 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. Subject 
to these reservations, cash subscriptions for amounts up to and including 
$10,000 will be given preferred allotment, all other cash subscriptions will 
be allotted on an equal percentage basis, and subscriptions in payment of which 
Treasury certificates of indebtedness of series TD-1934 are tendered will be 
allotted in full. Allotment notices will be sent out promptly upon allotment, 
and the basis of allotment will be publicly announced. 



Payment at par and accrued interest, if any, for notes allotted on cash sub- 
scriptions must be made or completed on or before December 15, 1934, or on 
later allotment. In every case where payment is not so completed, the 5 per- 
cent 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 notes 
allotted on cash subscriptions to it for itself and its customers up to any 
amount for which it sliaU be qualified in excess of existing deposits, when so 
notified by the Federal Reserve bank of its district. Treasury certificated 
of. indebtedness of series TD-1934, maturing December 15, 1934, will be accepted 
at par in payment for any notes subscribed for and allotted and such payment 
should be made when the subscription is tendered. 

GENERAL PROVISIONS 

As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to receive subscriptions * * *, 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 



[Treasury notes, series A- 1939. Department Circular No. 528] 

Treasury Department, 
Washington, December 3, 193Jf. 
The Secretary of the Treasury, pursuant to the authority of the Second 
Liberty Bond Act, approved September 24, 1917, as amended, offers for sub- 
scription, at par, an additional amount of 2% percent notes of the Unitetl 
States, designated Treasury notes of series A-1939, in payment of which 
only Treasury certificates of indebtedness of series TD-1934, maturing Decem- 
ber 15, 1934, may be tendered. The amount of the offering is limited to the 
amount of Treasury certificates of indebtedness of series TD-1934 rendered 
imd accepted. 

DESCRIPTION OF NOTES 

The notes now offered will be an addition to and will form a part of the 
series of 2% percent Treasury notes of series A-1939 issued pursuant to 
Department Circular No. 513, dated June 4, 1934, are identical in all respects 



KEPORT OF THE SECRETARY OF THE TREASURY 195 

therewith (except that interest on the notes issued under this circular will 
accrue from Dec. 15, 1934), will be freely interchangeable, and are described 
in the following quotation from said circular no. 513 : 

"The notes will be dated June 15, 19'34, and will bear interest from that 
date at the rate of 2% percent per annum, pa.vable 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 denomina- 
tions of $100, $500, $1,000, $5,000, $10,000, and $100,000. The notes will not be 
issued in registered form." 

As interest on the notes issued under this circular will accrue from December 
15, 1934, notes will be delivered hereunder with coupon no. 1, dated December 
15, 1934, detached. 

APPLICATION AND AI>L0TMEN¥ 

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. The 
Secretary of the Treasury reserves the riglit to close the books as to any or 
all subscriptions 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 allotments in full upon applications for smaller amounts and to mnke 
reduced allotments upon, or to reject, applications for larger amounts, to 
make classified allotments or to make allotments upon a graduated f-cale, 
or to adopt any or all of said methods or such other methods of allotment and 
classification of allotments 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. Subject 
to these reservations, all subscriptions will be allotted in full. Allotment 
notices will be sent out promptly upon allotment. 

PAYMENT 

Payment at par for notes allotted hereunder must be made or completed on 
or before December 15, 1934, or on later allotment, and may be made only in 
21/4 percent Treasury certificates of indebtedness of series TD-1984, maturing 
December 15. 1934, which will be accepted at par, and should accompany the 
subscription. 

GENERAL PROVISIONS 

As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to receive subscriptions ^ * * *. 

Henry Morgenthau. Jr., 
Secretary of the Treafitinj. 

Exhibit 5 

Subscriptions and allotments, Treasury bonds of 1949-52 and Treasury notes 
of series E-1936 and series A-1939 (from press releases, Dec. Jf, 5, 7, and 12, 
193.',, revised") 



^ Omitted portion similar to corresponding section of Department Circular No. 522, 
p. 181. 

2 Revised Jan. 4, 19.3.5. 



196 



REPORT OF THE SECRETARY OF THE TREASURY 



Ou December 4, 1934, Secretary of the Treasury Morgenthau amiouiieed tlutt 
the .subscription books for the cash offering of 3Vs percent Treasury bonds of 
1949-52 closed at the close of business December 3, 1934. Reports received from 
the Federal Reserve banks show that for this offering, which was for $450,000,- 
000 or thereabouts, total subscriptions aggregated $2,334,467,500. Subscriptions 
in amounts up to and including $10,000 were allotted in full and those in 
amounts over $10,000 were allotted IS percent but not less than $10,000 on any 
one subscription. 

The subscription books for the offering of 1% percent Treasury notes of 
series E-19o6 also closed at the close of business on December 3, 1934, for ihe 
receipt of cash subscriptions, but remained open until the close of business 
December 6, 1934, for the receipt of subscriptions for which payment was tend- 
ered in Treasury certificates of indebtedness of series TD-1934, maturing 
December 15, 1934. 

For the cash offering of Treasury notes of series E-1936, which wa< for 
$450,000,000 or thereabouts, subscriptions aggregated $3,036,009,900. Cash 
subscriptions in amounts up to and including $iO,000 were allotted in full, and 
those in amounts over $10,000 were allotted 14 percent, but not less than 
$10,000 on any one subscription. Exchange Subscriptions for the Treasury 
notes of series E-1936 aggregated $210,132,500 and were allotted in full. 

The subscription books for the offering of the additional issue of Treasury 
notes of series A-1939, issued only in exchange for Treasury certificates of 
indebtedness of series TD-1934, maturing December 15, 1934, closed at the 
close of business December 6. 1934. Total subscriptions, amounting to $765.- 
192,500, were allotted in full. 

Subscriptions and allotments for the three issues 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 

Minneapolis.. 
Kansas City.. 

Dallas 

San Francisco 
Treasury 

Total-., 



Treasury bonds of 1949-52 



Cash subscrip- 
tions received 



Total subscrip- 
tions allotted 



Treasury note- 

of series A-1939, 

total exchauge 

subscriptions 

receiv 'd and 

alli-tted 



$158. 

1, 153, 

150, 

133, 

90, 

100, 

181, 

60, 

14, 

51, 

63, 

176, 



772, 550 
531, 100 
161, 650 
854,700 
110,350 
158, 600 
022, 750 
931, 500 
382, 400 
402,200 
126, 100 
982, 700 
30, 900 



$33, 113, 

224, 204, 

30, 513, 

29, 059. 

18, 586, 

23, 974, 

42, 919, 

16, 969, 

0, 577, 

14, 302, 

17, 223, 

34, 903, 

30, 



600 
500 
500 
200 
350 
600 
050 
400 
400 
300 
200 
100 
900 



$22, 706, 000 

473, 903, 500 

13, 623, 500 

13,141,500 

54, 654, 000 

4, 696, 500 

112,596,000 

14,011,000 

18, 679, 000 

13, 482, 000 

8.821,600 

12,168,000 

2,810,000 



2, 334, 467, 500 



491, 377, 100 



765. 192, 500 





Treasury notes of series E-1936 


Federal Reserve dis- 
trict 


Cash subscrip- 
tions received 


E.xchange sub- 
criptions re- 
ceived 


Total sub- 
scriptions re- 
ceived 


Total cash 

subscriptions 

allotted 


Total sub- 
scriptions al- 
lotted 




$189, 587, 500 

1, 450, 222, 900 

185, 565, 400 

201, 292, 000 

132, 939, 500 

98, 886, 900 

287, 435, 900 

72, 900, 300 

52, 846, 500 

82, 481, 200 

70, 038, 300 

211,861,500 

12,000 


$10, 375, 000 
148, 868, 000 

1, 965, 500 

2, 226, 500 
2, 681, 500 

77, 000 

36,452,000 

736, 500 

1, 081, 000 

2, 266, 000 

66, 000 

3, 277, 600 

60, 000 


$199, 962, 500 


$30, 603, 000 


$40, 978, 000 


New York 


1,599,090,900 ! 214,282,000 
187,530,900 ! 27,069,400 


363, 150, 000 


Philadelphia 


29, 034, 900 




203, 618, 500 

135,621,000 
98. 963, 900 

323. ^H7, 900 
73. 036, 800 
53, 927, 500 
84, 747, 200 
70, 104, 300 

215,139,000 
72, 000 


29, 787, 000 
21,633,000 
18, 233. 400 
48, 616, 700 
14, 322, 300 
9, 479, 000 
16, 670, 200 
14, 108, 400 
31, 667, 500 
12, 000 


32, 013, 500 


Richmond 


24, 314, 500 




18, 310, 400 


Chicago 


85, 068, 700 


St. Louis 


15, 058, 800 


Minneapolis 


10, 560, 000 


Kansas City 


18, 936, 200 


Dallas. 


14, 174, 400 


San Francisco 


34, 945, 000 


Treasury 


72,000 






Total 


3, 036, 069, 900 210. 132. 600 


3.246,202,400 


476, 483, 900 


686. 616. 400 











REPORT OP THE SECRETARY OF THE TREASURY 197 

Exhibit 6 

Offering of United States Saving Bonds, scries A 

On March 1, 1935, the Secretary of the Treasury offered for sale, through the 
Postal Service. United States Savings Bonds, series A, as described in the 
following cii'cular : 

l Department Circular No. 529] 

Treasuey Department, 
Washington, Fehruary 25, 1935. 

OFFERING OF UNITED STATES SAVINGS BONDS, SEiRlElS A 

The Secretary of the Treasury, pursuant to the authority of the Second 
Liberty Bond Act, approved September 24, 1917, as amended, offers for sale, 
to the people of the United States, through the Postal Service, an issue of bonds 
of the United States, designated United States Savings Bonds, series A, which 
will be issued on a discount basis, will mature in 10 years, but will be redeem- 
able before maturity at the option of owners. Beginning March 1, 1935, these 
bonds will be on sale at post offices of the first, second, and third classes and 
at selected post offices of the fourth class, in amounts of $25 (maturity value) 
and multiples thereof; and they will continue to be on sale until this offering 
is terminated by notice given by the Secretary of the Treasury to the Post- 
master General. 

DESCRIPTION OF BONDS OFFERED 

United States Savings Bonds, series A, will be issued only in registered form, 
in denominations of $25, $50, $100, $500, and $1,000 (maturity value), at prices 
hereinafter set forth, and will bear the name and address of the owner, the 
date as of which issued, and the date of maturity, which on original issue shall 
be inscribed thereon by the authorized postmaster at the time of issue. All 
such Savings Bonds are to be dated as of the first day of the month in which 
the issue price is received, and will mature and be payable 10 years from such 
issue date. They may be redeemed prior to maturity (but not within 60 days 
after the issue date), at the owner's option, in accordance with the table of 
redemption values appearing at the end of this circular, and set forth on the 
face of each bond. No interest will be paid on Savings Bonds, but the purchase 
price has been fixed so as to afford an investment yield of about 2.9 percent 
per annum compounded semiannually if the bonds are held to maturity. If 
the owner exercises his option to redeem his bond prior to maturity the yield 
will be less, varying with the respective redemption values. 

. The Savings Bonds will not be transferable,, and will be payable only to the 
owlier named thereon, except in case of death or disability of the owner or 
as a result of judicial proceedings, and then only in accordance with regulations 
prescribed from time to time by the Secretary of the Treasury. (See Treasury 
Department Circular No. 530, dated Feb. 25, 1935.) Savings Bonds issued 
through a post office shall be valid only if inscribed with the owner's name and 
address, dated the first day of the month in which the issue price is received, 
and duly delivered by an authorized postmaster; they will bear the facsimile 
signature of the Secretary of the Treasury, the seal of the Treasury Depart- 
ment will be impressed thereon, and they will bear the post-office dating stamp. 

The Savings 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 tlie possessions of the United States, or by any local taxing authority, except 
(a) estate or inheritance taxes, and (&) 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 individ- 
uals, partnerships, associations, or corporations. The interest on an amount 
of bonds authorized by the Second Liberty Bond Act, approved September 24, 
1917, as amended, the principal of which does not exceed in the aggregate 
$5,000, owned by any individual, partnership, association, or corporation, shall 



198 REPORT OP THE SECRETARY OP THE TREASURY 

be exempt from the taxes provided for in clause (b) above. For the purposes 
of determining taxes and tax exemptions, the increment in value of Savings 
Bonds represented by the difference between the price paid and the redemption 
value received (whether at or before maturity) shall be considered as interest. 

PXJECHASE 

Savings Bonds of series A may be purchased for cash, at post offices of the 
first, second, and third classes, and at selected post offices of the fourth class, 
at any time while this offer is in effect ; and, subject to regulations prescribed 
by the board of trustees of the Postal Savings System, the withdrawal of postal 
savings deposits, without loss of interest, will be permitted for the purpose of 
acquiring Savings Bonds. The issue prices of the various denominations of these 
bonds follow : 

Denomination (maturity value) Issue price 

$25 $18.75 

50 37. 50 

100 . 75. 00 

500 375. 00 

1, 000 , 750. OO 

It shall not be lawful for any one person at any one time to hold Savings 
Bonds issued during any one calendar vear in an aggregate amount exceeding 
$10,000 (maturity value). 

DELIVEEY AND SAFEKEEPING OF BONDS 

Postmasters from whom Savings Bonds may be purchased are authorized to 
deliver such bonds duly inscribed and dated upon receipt of the purchase price. 
Deliveries should not be accepted by any purchaser until he has verified that 
his name and address are duly inscribed on the face of the bond and that the 
bond is duly dated the first day of the month in which he made payment of 
the purchase price. 

Any Savings Bonds will be held in safekeeping by the Secretary of the Treas- 
ury if the purchaser so desires, and in this connection the Secretary will utilize 
the facilities of the Federal Reserve banks as fiscal agents of the United States. 
The purchaser may arrange for such safekeeping at the time he purchases his 
bond or subsequently. Postmasters generally will assist owners in arranging 
for safekeeping, but will not act as safekeeping agents. 

PAYMENT AT MATURITY OB ON REDEMPTION PRIOR TO MATURITY 

Payment of any Savings Bond in accordance with its terms at maturity, or at 
the appropriate redemption value prior to maturity ( but not within 60 days after 
the issue date), will be made following presentation and surrender of the bond, 
by registered mail or otherwise, at the expense and risk of the owner, to the 
Treasury Department, Division of Loans and Currency, Washington, D. C, or 
to any Federal Reserve bank, with the request for payment appearing on the 
back of the bond duly executed by the owner and certified by any United States 
postmaster from whom United States Savings Bonds may be purchased (authen- 
ticated by the imprint of his post-office dating stamp), by an executive officer 
of an incorporated bank or trust company (authenticated by the impress of the 
corporate seal of the bank or trust company), or by any other person duly desig- 
nated by the Secretary of the Treasury for the purpose. Payment will be made 
by check drawn to the order of the owner, promptly after discharge of registra- 
tion at the Treasury Department. In case of the death or disability of the 
registered owner, instructions should be obtained from the Treasury Department, 
Division of Loans and Currency, Washington, D. C, before the request for pay- 
ment is executed. Postmasters generally will assist holders in securing pay- 
ment at or before maturity, but they will not make payment of Savings Bonds. 



EEPORT OF THE SECRETARY OF THE TREASURY 



199 



GENERAL PEOVISIONS 

All bonds issued pursuant to this circular shall be subject to regulations pre- 
scribed from time to time by the Secretary of the Treasury. Such regulations 
may require, among other things, reasonable notice in case of presentation of 
Savings Bonds for redemption prior to maturity. The initial regulations govern- 
ing Savings Bonds are contained in Treasury Department Circular No. 530, 
dated February 25, 1935. 

The Secretary of the Treasury may designate agencies other than post offices 
for the sale of Savings Bonds of this series, and he reserves the right to refuse 
to issue or permit to be issued hereunder any such Savings Bonds in any case or 
class of cases if he deem such action to be in the public interest. The Secretary 
of the Treasury further reserves the right to terminate this offer at any time, 
on notice to the Postmaster General. 

Postmasters of the first, second, and third classes, and selected postmasters 
of the fourth class, under regulations promulgated by the Postmaster General, 
and Federal Reserve banks, as fiscal agents of the United States, are authorized 
to perform such fiscal agency services as may be requested of them in connection 
with the issue, delivery, safekeeping, redemption, and payment of Savings Bonds. 

The Secretary of the Treasury may at any time or from time to time supple- 
ment or amend the terms of this circular, information as to which will be 
promptly furnished to the Postmaster General and to Federal Reserve banks. 

Henry Morgenthaxt, Jr., 
Secretary of the Treasury. 

Table showing how United States Savings Bonds of series A increa.se in value 
during successive half-years following issue : 



Maturity value- 
Issue price. 



$25. 00 
18.75 



$50. 00 
37.50 



$100 
75 



$500 
375 



$1,000 
750 



Redemption values after the issue date 



First year 

1 to IH years- - 
1J4 to 2 years- - 

2 to 2}4 years -- 
2^ to 3 years-. 

3 to VA years-. 
3H to 4 years.. 

4 to 414 years. - 
4J^ to 5 years. - 

5 to 5}^ years.. 
614 to 6 years. - 

6 to 6)^ years.. 
6}4 to 7 years.. 

7 to 714 years.. 
7}4 to 8 years.. 

8 to 8}^ years.. 
8J^ to 9 years. - 

9 to9J^ years.. 
Qi4 to 10 years.. 
Maturity value 



18.75 


37.50 


75 


375 


19.00 


38.00 


76 


380 


19.25 


38.50 


77 


385 


19.50 


39.00 


78 


390 


19.75 


39.50 


79 


395 


20.00 


40.00 


80 


400 


20.25 


40.50 


81 


405 


20.50 


41.00 


82 


410 


20.75 


41.50 


83 


415 


21.00 


42.00 


84 


420 


21.25 


42.50 


85 


425 


21.50 


43.00 


86 


430 


21.75 


43.50 


87 


435 


22.00 


44.00 


88 


440 


22.50 


45.00 


90 


450 


23.00 


46.00 


92 


460 


23.50 


47.00 


94 


470 


24.00 


48.00 


96 


480 


24.50 


49.00 


98 


490 


25.00 


50.00 


100 


500 



750 
760 
770 
780 
790 
800 
810 
820 
830 
840 
850 
860 
870 
880 
900 
920 
940 
960 
980 
1,000 



Exhibit 7 

Sales of United States Savings Bonds from March 1 to June SO, 1935 {from 
press releases, July 15 and Aug. 12, 1933 ') 

Amounts collected from sales of United States Savings Bonds during the first 
4 months the bonds were on sale amounted to $90,365,588. As these bonds 
are sold on a discount basis and increase in 10 years, through accumulated 
interest, by SSVs percent, these sales represent a maturity value of $128,487,450. 

Amounts collected by States, arranged in order of their total sales for the 4 
months, were: 



^ Revised. 



200 



REPORT OF THE SECRETARY OF THE TREASURY 



Amounts collected from sales of United States Savings Bo^ids, hy States and hy 
months,^ March 1 to June 30, 1935 



state 



Illinois 

New York _ 

Ohio 

Missouri 

Iowa.- 

Pennsylvania 

Kansas 

Minnesota 

Michigan ._- 

Texas 

Indiana 

Wisconsin 

California 

Nebraska _. 

Massachusetts 

Kentucky 

Oklahoma 

North Carolina 

New Jersey... 

West Virginia 

Washington 

District of Columbia 

Tennessee 

Virginia 

Florida 

Oregon 

Colorado 

North Dakota 

Montana 

Georgia 

South Dakota 

Maryland 

Arkansas 

Louisiana 

Mississippi 

South Carolina 

Alabama 

Connecticut 

Maine 

Idaho 

Rhode Island... 

New Mexico 

Utah _. 

Arizona 

New Hampshire 

Wyoming 

Vermont 

Nevada 

Delaware 

Hawaii 

Alaska 

Puerto Rico 

Virgin Islands 

Total cash receipts. 
Matmity value 



March 1935 



101, 131. 
210, 356. 
550, 262. 
248, 968. 
960, 050. 
792, 500. 
457, 775. 
646, 306. 
118,131. 
052, 525. 
296, 956. 
966, 825. 
313, 137. 
260, 300. 
826, 818. 
714, 656. 
569, 006. 
743, 362. 
638, 325. 
397, 368. 
403,631. 
376, 425. 
567, 468. 
465, 450. 
455, 850. 
383, 531. 
413,118. 
248, 718. 
421, 293. 
281,456. 
226, 725. 
38R, 137. 
327, 956. 
329, 062. 
216, 900. 
175, 856. 
193, 031. 
178, 443. 
117,506. 

88, 125. 
106, 087. 
113,512. 
100,931. 

70, 856. 

70, 143. 

75,131. 

55, 031. 

36, 356. 

28, 837. 
6, 318. 
4, 668. 
4, 06S. 
356. 



38, 799, 750. 00 
51, 733, 000. 00 



April 1935 



$2, 243, 

2, 003, 

1, 736, 

1, 638, 

1, 377, 

1, 123, 

1, 133, 

1,519, 

807, 

913, 

1,041, 

671, 

681, 

653, 

321, 

354, 

325, 

368, 

310, 

326, 

305, 

215, 

231, 

228, 

234, 

244, 

307, 

274, 

185, 

196, 

215, 

144, 

182, 

143, 

155, 

117, 

133, 

92, 

72, 

107, 

64, 

50, 

60, 

61, 

49, 

35, 

50, 

13, 

19, 

6, 

10, 

7, 



775. 00 
025.00 
868. 75 
037. 50 
881. 25 
968. 75 
081. 25 
575. 00 
093. 75 
312. 60 
281. 25 
531. 25 
281. 25 
475.00 
412. 50 
431. 25 
593. 75 
287. 50 
462. 50 
493. 75 
081. 25 
681. 25 
787. 50 
975.00 
056. 25 
293. 75 
443. 75 
125.00 
400.00 
106. 25 
625. 00 
037. 50 
981. 25 
306. 25 
418.75 
225.00 
256. 25 
418. 75 
675. 00 
137. 50 
106.25 
981. 25 
318. 75 
950. 00 
706. 25 
625. 00 
100. 00 
068. 75 
858. 25 
187. 50 
0B7. 50 
031, 25 
375, 00 



23, 767, 293. 75 
31, 689, 725, 00 



May 1935 



$1, 392, 

934, 

1,091, 

1,429, 

1, 791, 

863, 

852, 

844, 

679, 

587, 

864, 

675, 

420, 

595, 

271, 

276, 

312, 

220, 

168, 

329, 

297, 

233, 

149, 

197, 

169, 

166, 

145, 

183, 

102, 

230, 

207, 

114, 

155, 

105, 

104, 

117, 

63, 

66, 

51, 

51, 

47, 

33, 

38, 

26, 

30, 

55, 

21, 

29, 

4, 

11, 

IP. 

11, 



750.00 
818.75 
718. 75 
106.25 
243. 75 
718. 75 
243. 75 
875. 00 
556. 25 
325.00 
318. 75 
468. 75 
075,00 
256. 25 
068.75 
131.25 
900,00 
875, 00 
056,25 
493. 75 
881. 25 
437. 50 
793. 75 
868. 75 
556. 25 
650.00 
050. 00 
318. 76 
581. 25 
793, 75 
150,00 
618, 75 
831.25 
506,25 
456. 25 
937. 50 
187. 50 
300.00 
768, 75 
487, 50 
418. 75 
543, 75 
381. 25 
737. 50 
450.00 
068. 75 
281, 25 
737, 50 
668, 75 
512,50 
968, 75 
568, 75 
243, 75 



17, 837, 756, 25 
23, 783, 675, 00 



June 1935 



$1,411, 
787, 
1,241, 
1,09,^ 
963, 
910, 
850, 
649, 
753, 
470, 
663, 
867, 
546, 
442, 
232, 
257, 
314, 
168, 
242, 
261, 
249, 
389, 
140, 
178, 
184, 
208, 
110, 
173, 
135, 
96, 
124, 
100, 
65, 
89, 
89, 
81, 
65, 
47, 
59, 
33, 
35, 
50, 
28, 
42, 
33, 
16, 
15, 
17, 
3, 
5, 
3, 



631,25 
050. 00 
887. 50 
318. 75 
187. 50 
631. 25 
443, 75 
987. 50 
243, 75 
118,75 
993, 75 
693, 75 
937, 50 
368, 75 
275,00 
343, 75 
550, 00 
056, 25 
306.25 
731. 25 
506. 25 
618. 75 
025, 00 
518. 75 
593. 75 
481.25 
025, 00 
118. 75 
150.00 
375,00 
031. 25 
218.75 
606. 25 
612. 50 
231. 25 
712,50 
718,75 
175, CO 
231. 25 
168. 75 
343. 75 
943. 75 
631.25 
318. 75 
975. 00 
631. 25 
356. 25 
700,00 
562, 50 
662. 50 
206. 25 
531.25 
150.00 



15, 960, 787, 50 
21, 281, 050, 00 



Total, March 1 

to June 30, 

1935 



$9, 149, 287. 50 

6, 935, 250. 00 

6, 620, 737. 50 

6,411,431.25 

6, 092, 362. 50 

4, 690, 818. 75 

4, 293, ,543. 75 

4, 660, 743. 75 

4, 358, 025. 00 

4, 023, 281. 25 

3, 839, 550. 00 

3,181,518.75 

2,961,431,25 

2, 951, 400, 00 

1, 651, 575, 00 

1,602,562.50 

1,522,050,00 

1, 500, 581, 25 

1, 359, 150, 00 

1, 315, 087. 50 

1, 256, 100. 00 

1, 195, 162. 50 

1, 089, 075, 00 

1, 070, 812. 50 

1, 044, 056. 25 

1, 002, 956. 25 

975, 637. 50 

879, 281. 25 

844, 425. 00 

804, 731. 25 

773, 531. 25 

745, 012, 50 

732, 375, 00 

667, 387. 50 

566, 006. 25 

492, 731. 25 

455, 193. 75 

384, 337. 50 

301, 181. 25 

279, 918. 75 

252, 956. 25 

248, 981. 25 

234, 262. 50 

201,862.50 

184, 275. 00 

182, 456. 25 

141, 768. 75 

96, 862. 50 

56, 925, 00 

29, 681. 25 

28,931.25 

25, 200. 00 

1, 125. 00 



96, 365, 587. 50 
128, 487, 450. 00 



^ On the basis of post-office reports, subj'ect to adjustment, see note p. 24. 



Exhibit 8 

Offering of 2% percent Treasury 'bonds of 1955-60 and 1% percent Treasury 

notes of series A-1940 

On March 4, 1935, the Secretary of the Treasury announced an offering of 
2% percent Treasury bonds of 1955-60 in exchange for Fourth Liberty Loan 
414 percent bonds called for redemption on April 15, 1935 (third call) and an 
offering of 1% percent Treasury notes of series A-1940 in exchange for 2^^ 
percent Treasury notes of series C-1935, maturing March 15, 1935. In the re- 
lated press release it was stated that about $1,870,000,000 of Fourth Liberty 



EEPOET OF THE SECRETARY OF THE TREASURY 201 

Loan bonds were included in the third call for redemption, on April 15, 1935. 
and that about $528,000,000 of Treasury notes of series G-1935 were to mature 
on March 15, 1935. 

[Treasury bonds of 1955-60. Department Circular No. 531] 

TEE14.SUEY DeI'AETMHNT, 

Washington, March -J, 1935. 
The Secretary of the Treasury, pursuant to the authority of the Second Lib- 
erty Bond Act, approved September 24, 1917, as amended, for refunding pur- 
poses, invites subscriptions from the people of the United States for 2Ys 
percent bonds of the United States, designated Treasury bonds of 1955-60, in 
payment of which only Fourth Liberty Loan 4i/4 percent bonds of 1933-38 
included in the third call for redemption on April 15, 1935 (hereinafter re- 
ferred to as third-called Fourth 4i/4's) may be tendered.^ Treasury bonds of 
1955-60 will be issued at par and accrued interest, if any, and third-called 
Fourth 41/4's will be received in payment at pai-, with an adjustment of ac- 
crued interest as of March 15. 1935. on the third-called Fourth 414's so received. 
The amount of the offering will be limited to tlie amount of third-called 
Fourth 414's tendered and accepted. Fourth Liberty Loan bonds not included 
in the third call for redemption on April 15, 1935, will not be accepted for 
exchange under this circular.'' 

DESCRIPTION OF BONDS 

The bonds will be dated March 15, 1935, and will bear interest from that date 
at the rate of 2% percent per annum, payable semiannually, on September 
15, 1035, and thereafter on March 15 and September 15 in each year until 
the principal amount becomes payable. They will mature March 15, 1960. but 
may be redeemed at the option of the United States on and after March 15. 
1955, 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 
redeemetl will be determined by such method as may be prescribed by the 
Secretary of the Treasury. From the date of redemption designaied in any 
such notice, interest on the bonds called for redemption shall cease. 

The bonds shall be exempt, both as to principal and interest, fioni all taxii- 
tion now or hereafter imposed by the United States, any State, or any of tlu' 
possessions of the United States, or by any local taxing authority, except (a) 
estate or inheritance taxes, and (b) graduated additional income taxes, com- 
monly known as surtaxes, and excess-profits and war-profits taxes, now on 
hereafter imposed by the United States, upon the income or profits of individ- 
uals, partnerships, associations, or corporations. The interest on an amount 
of bonds authorized by the Second Liberty Bond Act. approved S^M'tember 24. 
1917, as amended, the principal of which does not exceed in the aggregate $5,000, 
owned by any individual, partnership, association, or corporation, shall be 
exempt from the taxes provided for in 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. 

Bearer bonds with interest coupons attached, and bonds registered as to 
principal 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 
Secretary of the Treasury. 



^ Pursuant to the third call for partial rodomption (see Department I'ircnlar No. 525, 
dated Oct. 12, 1934) all outstanding Fourth Liberty Loan iV^, percent bonds of 1933-38 
bearing serial numbers ending in 5. 6. or 7 (in the case of permanent coupon bonds 
preceded by the distinguishing letter E, F, or G. respectively) have been called for redemp- 
tion on Apr. 15, 1935, on which date interest on such bonds will cease. 

-First-called Fourth 414's (which ceased to bear interest on Apr. 15, 1934) bear serial 
numbers ending in 9, 0, or 1 (in the case of permanent coupon bonds preceded by ^he 
distinguishing letter J. K, or A, respectively), second-called Fourth 414's (which ceased 
to bear interest on Oct. 15, 1934) bear serial numbei's ending in 2 or 8 (in the case 
of permanent coupon bonds preceded by the distinguishing letter B or H, respectively), and 
uncalled Fourth 414's bear serial numbers ending in 3 or 4 (in the case of permanent 
coupon bonds preceded by the distinguisliing letter C or D, respectively). 



202 REPORT OP THE SECRETARY OP THE TREASURY 

The bouds will be subject to the general regulations of the Treasury De- 
partment, now or hereafter prescribed, 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. The Secre- 
tary of the Ti-easury reserves the right to close the books as to any or all sub- 
scriptions or classes of subscriptions at any time without notice * * *.^ 

Subject to these reservations', all subscriptions will be allotted in full. 
Allotment notices will be sent out promptly upon allotment. 

TERMS OF PAYMENT 

Payment at par and accrued interest, if any. for bonds allotted hereunder 
must be made or completed on or before March 15, 1935, or on later allotment, 
and may be made only in third-called Fourth 414's, which will be accepted at 
par with an adjustment of accrued interest thereon as of March 15, 1935, and 
should accompany the subscription. If any subscription is rejected, in whole 
or in part, the third-called Fourth 4i4:'s tendered therewith and not accepted 
will be returned to the subscriber. 

Coupon bonds. — Third-called Fourth 4Vi's in coupon form tendered in pay- 
ment should have coupons dated April 15, 1935, as well as all subsequent cou- 
pons attached, and accrued interest from October 15, 1934. to March 15, 1935,'' 
will be paid to the subscribers. 

Registered bonds. — As checks for interest covering the full 6-month i)eriod 
from October 15, 1934, to April 15, 1935, will be issued on April 15, 1935, to 
holders of record on March 15, 1935, of third-called Fourth 414's in regis- 
tered form, tenders of such registered bonds hereunder must be accompanied 
b.^• payment of an amount equal to the interest to accrue thereon from March 
15 to April 15, 1935.' 

SLTBRENDE^l OF THIRD-CALLED FOURTH il'S ON EXCHANGE 

Coupofi bonds. — Third-called Fourth 414's in coupon form tendered in ex- 
change for Treasury bonds offered hereunder, should be presented and sur- 
rendered to a Federal Reserve bank or to the Treasurer of the United States, 
and should accompany the application. Coupons dated April 15, 1935, and 
all coupons bearing dates subsequent to April 15, 1935, should be attached to 
such coupon bonds when surrendered, aaid if any such coupons are missing, 
the application must be accompanied by cash payment equal to the face amount 
of the missing coupons." The bonds must be delivered at the expense and 
risk of the holder. Facilities for transportation of bonds by registered mail 
insured may be arranged between incorporateil banks and trust companies 
and the Federal Reserve banks, and holders may take advantage of such ar- 
rangement's 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. 

Registered bonds. — Third-called Fourth 4^4 's in registered form tendered 
in exchange for Treasury bonds offered hereunder should be assigned by the 
registered payee or assigns thereof in accordance with the general regulations 
of the Treasury Department governing assignments for transfer or exchange 
in one of the forms hereafter set forth, 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. The bonds must 



' Omitted portions similar to corresponiling sections of Department Circular. No. 526. 
p. 192. 

< Accrued interest at 4i/i. percent from Oct. 15, 1!».';4 to Mar. 15. 1935. on $1,000 
third-called Fourth 4i4's (151 days) is $17.6304!i45. 

s Interest from Mar. 15 to Apr. 15, 1935. on $1,000 third-called Fourth 4yi's (31 days) 
is $3.6195055. 

" The final coupon attached to temporary coupon bonds became due on Oct. 15, 1920. 
The holders of any such temporary bonds which are included in the third call for 
partial redemption on Apr. 15, 1935, will receive the past due interest from Oct. 15. 
1920, if such bonds are tendered for exchange under this circular. 



EEPORT OF THE SECRETARY OF THE TREASURY 203 

be delivered at the expense and risk of ttie tiolder. If Treasury bonds are 
desired registered in the same name as the third-called Fourth 4i^'s sur- 
rendered, the assignment should be to " The Secretary of the Treasury for 
exchange for Treasury bonds of 1955-60 " ; if Treasury bonds are desired regis- 
tered in another name, the assignment should be to " The Secretary of 
the Treasury for exchange for Treasury bonds of 1955-60 in the name 

of " ; if Treasury bonds in coupon form are desired, the 

assignment should be to " The Secretary of the Treasury for exchange for 
Treasury bonds of 1955-60 in coupon form to be delivered to " 

GBNEaiAL PROV^SIONS 

As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to receive subscriptions * * */ 

Hknry Morgenthau. Jr., 
Secretary of the Treasury. 



[Treasury notes, series A-1940. Department Circular No. 532] 

Treasury Department. 
Washington, March If, 1935. 
The Secretary of the Treasury, pursuant to the authority of the Second 
Liberty Bond Act, approved September 24, 1917, as amended, invites subscrip- 
tions, at par, from the people of the United States, for 1% percent notes of the 
United States, designated Treasury notes of series A-1940, in payment of 
which only Treasury notes of series C-1935, maturing March 15, 1935, may 
be tendered. The amount of the offering will be limited to the amount of 
Treasury notes of series C-1935 tendered and accepted. 

DESCRIPTION OF NOTES 

The notes will be dated March 15, 1935, and will bear interest from that 
date at the rate of 1% percent per annum, payable semiannually, on Septem- 
ber 15, 1935, and thereafter on March 15 and September 15 in each year. 
They will mature March 15, 1940, 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 taxa- 
tion (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 Treasui'y 
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 he Lssued 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. 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 
Secretary of the Treasury reserves the right to close the books as to any 
or all subscriptions 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 allotments in full upon applications for smaller amounts and to make 
reduced allotments upon, or to reject, applications for larger amounts, to make 



' Omitted portion similar to corresponding section of Department Circular No. 524, 
p. 184. 



204 



EEPORT OP THE SECRETARY OF THE TREASURY 



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 allotments 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. Subject 
to these reservations, all subscriptions will be allotted in full. Allotment 
notices will be sent out promptly upon allotment. 



Payment at par for notes allotted hereunder must be made or completed 
on or before March 15, 1935, or on later allotments, and may be made only 
in 21/4 percent Treasury notes of series C-1935, maturing March 15, 1935, which 
will be accepted at par and should accompany the subscription. 

GENERAL PEOVISIONS 

As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to receive subscriptions * * *.* 

Henet Moegenthau, Jr., 
Secretary of the Treasury. 



Exhibit 9 



Allotments on exchange subscriptions, Treasury bonds of 1955-60 and Treasury 
notes of series A-1940 {press releases. Mar. 7, 9, 18, and 25, and Apr. 
2, 1935) 

The subscription books for the offering of Treasury notes of series A-1940 
closed at the close of business March 8, 1935, and the subscription books for 
the offering of Treasury bonds of 1955-60 closed at the close of business March 
27, 1935. The amounts of these offerings, which were entirely on an exchange 
basis, were limited respectively to the amounts of Treasury notes of series G- 
1985 and third-called Fourth 4i/i's tendered in payment and accepted. The 
allotments for the two issues were divided among the several Federal Reserve 
districts and the Treasury as follows : 



Federal Reserve 
district 


Treasury 
bonds of 
1955-60 


Treasury 

notes of 

series 

A-1940 


Federal Reserve 
district 


Treasury 
bonds of 
1955-60 


Treasury 

notes of 

series 

.A-1940 


Boston. 

New York 


$57,935,600 
866,580,450 

82, 285, 150 
105, 287, 200 

38, 60S, 500 

18, 469, 100 
177, 354, 850 

46, 750, 000 


$11,318,800 

315,785,600 

9, 349, 000 

14, 485, 900 

28, 403, 700 

7, 574, 100 

67, 471, 200 

7, 159, 600 


Minneapolis 

Kansas City . 


$21, 225, 900 
38,765, 150 
16, 245, 300 
49, 426, 850 
39,088,600 


$5, 680, 100 
8, 443, 900 
16. 634, 000 
20, 445, 900 


Philadelphia 

Cleveland.. . 


Dallas 

San Francisco 


Richmond 

-\tianta. 

Chicago 

St. Louis 


Treasury 

Total 


1, 132, 400 


1,558,022,650 513.884.200 



Exhibit 10 



Call for redemption of 2 percent consols of 1930 and 3 percent Panama Canal 
loan bonds of 1916-36 and 1918-38 on July 1 and August 1, 1935, respectively 

On ^larch 9, 1935, the Treasury issued the following release : 

Secretary of the Treasury Morgenthau announced today (Mar. 9) that 

the 2 percent consols of 1930 would be called by the Treasury on March 11 

for redemption on Julv 1, 1935, and the 2 percent Panama Canal loan bonds' 

of 1916-36 and 1918-38 for redemption on August 3, 1935. About $600,000,- 



^ Omitted portion similar to corresponding section of Dtpartment Circular N( 
p. 181. 



EEPORT OF THE SECRETARY OF THE TREASURY 205 

000 of tlie consols and about $75,000,000 of the Panama Canal bonds are now 
outstanding. These bonds bear the circulation privilege. 

In retiring these bonds, the Treasury will make use of the free gold 
resulting from the reduction in the weight of the gold dollar. The Treasury 
proposes to issue to the Federal Reserve banks an amount of gold certificates 
about equal to the bonds being retired. The gold certificates will be issued 
under the authority of the Gold Reserve Act of 1934, and for every gold 
certificate so issued there will be withdrawn from the General Fund of the 
Treasury and held as security an amount of gold equal to the gold certificates 
so issued. 

By a provision of the Federal Home Loan Bank Act, enacted July 22, 1932, 
all bonds of the United States bearing an interest rate of 3% percent per 
annum, or less, were given the circulation privilege for a period of 3 years. 
This provision expires July 22, 1935. At that time, banks with circulating 
notes outstanding under this temporary authorization will have to replace the 
bonds, now serving as security, with lawful money to retire their outstanding 
notes thus secured. 

The retirement of the 2 percent consols and the 2 percent Panama Canal 
bonds, and the expiration of the temporary authorization for issuance of 
national bank notes against other bonds will accomplish a simplification of 
the currency system through the eliminatiou of national bank notes, an action 
contemplated at the time of the passage of the Federal Reserve Act. More 
than $500,000,000 of the bonds being called are now on deposit with the 
Treasurer as security for this type of currency. 

The Federal Reserve bank notes authorized as emergency currency in the 
Emergency Banking Act of 1933 are now in process of retirement. National 
bank notes will be retired as rapidly as they are presented to the Treasury. 
It is expected that the great majority will be canceled within a year. This 
will leave as permanent circulation Federal Reserve notes, silver certificates, 
and United States notes. Additional Federal Reserve notes will be issued to 
replace the national bank notes as they are retired, and as demand arises. The 
gold certificates to be delivered to the Federal Reserve banks will form added 
reserves against which Federal Reserve notes may be issued. 

At the time the gold content of the dollar was reduced, a gold increment 
of $2,812,000,000 was realized. Of this amount, $2,000,000,000 was placed in the 
stabilization fund. Congress has appropriated $139,000,000 for loans to in- 
dustry through the Federal Reserve banks, some $13,500,000 of which has 
been used for that purpose. Congress has appropriated an indefinite sum to 
meet losses in melting gold coins estimated at $8,000,000, and has authorized 
an appropriation of over $23,000,000 for the Philippine currency fund. This 
leaves free gold of $642,000,000 which will now be used as a basis for debt 
retirement. 

As the outstanding national bank notes are retired and replaced with Fed- 
eral Reserve notes, these items will disappear from the public debt statement 
entirely. The total amount of outstanding currency should not be changed as 
a result of this program. National bank notes will merely be replaced by 
Federal Reserve notes. The effect on member bank reserves will be imma- 
terial. 



The texts of the formal notices of call were as follows : 
To Holders of the 2 Percent Consols of 1930, and Others Concerned: 

1. Public notice is hereby given that all outstanding United States 2 percent 
consols of 1930, dated April 1, 1900, issued under authority of the act of 
Congress approved March 14, 1900, are called for redemption on July 1, 1935. 

2. For the purpose of terminating interest on July 1, 1935, this call shall be 
effective as of April 1, 1935. Accordingly, interest on all outstanding 2 percent 
consols of 1930 will cease 3 months thereafter, that is, on July 1, 1935. 

3. Full information regjirding the presentation and surrender of 2 percent 
consols of 1930 for redemption on July 1, 1935, will be given in a Treasury 
Department circular to be dated April 1, 1935. 

Henry Morgenthau, Ji*. 
Secretary of the Treasury. 
Treasury Department, WasliingtO)}, ]\[arch 11, 1!)S5. 



206 REPORT OF THE SECRETARY OF THE TREASURY 

To Holders of the 2 Percent Bonds of the Panama Canal Loan, Series of, 

1916-3€ and Series of 1918-38, and Others Concerned: 

Public notice is hereby given that all outstanding United States 2 percent 
bonds of the Panama Canal loan, series of 1916-36, dated August 1, 1906, and 
series of 1918-38, dated November 1, 1908, issued under authority of the act 
of Congress approved June 28, 1902, are called for redemption on August 1, 
1935, and will cease to bear interest on that date. 

Full information regarding the presentation and surrender of the 2 percent 
bonds of the Panama Canal loan, series of 1916-36 and series of 1918-38, for 
redemption on August 1, 1935, will be given in a Treasury Department circular 
to be dated April 1, 1935. 

Henky Mokgenthau, Jr. 
Secretary of the Treastiry. 

Treastjry Department, Washington, March 11, 1935. 



Tlie circulars governing the redemption of these bonds were as follows : 
[Redemption of consols of 19.30. Department Circular No. 533] 

Treasury Department, 

Washington, April 1, 1935. 
To Holders of 2 Percent Consols of 1930, and Others Concerned: 

I. NOTICE OF call FOR REDEMPTION OF 2 PERCENT CONSOLS OF 1930 

On March 11, 1935, the following public notice of call for redemption was 
given : 

(Notice of call is omitted here, see p. 205.) 

II. REDEMPTION OF 2 PERCENT CONSOLS OF 1930 

l'nr.suant to the call for redemption, as set forth in section I of this circular, 
the I'ollowing rules and regulations are hereby prescribed to govern the presen- 
tation and surrender of the 2 percent consols of 1930 for redemption on July 
1, 1935 : 

1. Payments of called bonds on July 1, 1935. — Holders of any outstanding 
2 percent consols of 1930 will be entitled to hare their bonds redeemed and 
paid at par on July 1, 1935, with interest in full to that date. After July 1, 
1935, interest will not accrue on any such bonds. 

2. Presentation and surrender of registered bonds. — Two percent consols of 
1930 in registered form 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 
one of the forms hereinafter set forth, and thereafter should be presented and 
surrendered to any Federal Reserve bank or branch, or to the Division of 
Loans and Currency, Treasury Department, Washington, for redemption on 
July 1, 1935. The bonds must be delivered at the expense and risk of owners, 
and should be accompanied by appropriate written advice. In order to facili- 
tate redemption on July 1, 1935, such registered bonds sliould be presented, and 
surrendered well in advance of that date. Such early presentation will insure 
prompt payment of principal and final interest when due. In all cases checks 
in payment of principal and final interest will be mailed to the address given 
in the advice accompanying the bonds surrendered. 

3. If the registered payee, or an assignee holding under proper assignment 
from the registered payee, desires that payment of the principal and final 
installment of intei'est be made to him. the bonds should be assigned by such 
payee or assignee, or by a duly constituted representative, to " The Secretary 
of the Treasury for redemption." If it is desired, for any reason, that pay- 
ment be made to some other person, without intermediate assignment, the 
bonds should be assigned to " The Secretary of the Treasury for redemption 

for the account of ", inserting the name and address 

of the person to whom payment is to be made. A representative or fiduciary 
should not assign for payment to himself individually, unless expressly author 
ized to do so by the instrument under which he is acting; he may, however, 
assign for payment to himself in his representative or fiduciary capacity. 



EEPORT OF THE SECRETARY OF THE TREASURY 207 

4. Assignments in blank, or assignments having similar effect, should be 
avoided, if possible, in order not to lose the protection afforded by registration. 
However, such assignments will be recognized, but in that event payment will 
be made to the person surrendering the bond for redemption, since under such 
assignment the bond becomes in effect payable to bearer. 

5. The transfer books for 2 percent consols of 1930 in registered form will 
not close prior to July 1, 1935, for the payment of interest on that date, and 
final interest due on July 1, 1935, will be covered by payments to be made 
simultaneously with payments made on account of principal. 

6. Bonds held by the Treasurer of the United States in tritst. — Two percent 
consols of 1930 in registered form on deposit with the Treasurer of the United 
States on July 1, 1935, to secure circulating notes of national banks, or to 
secure deposits of public money or postal savings funds, may be redeemed 
upon assignment as follows : 

(a) If deposited to secure circulating notes of national banks, the board of 
directors of the national bank concerned should, by appropriate resolution, 
authorize the Comptroller of the Currency to withdraw the bonds on deposit 
and to redeliver such bonds to the Treasurer of the United States, and should 
further authorize the Treasurer of the United States to assign such bonds to 

" The Secretary of the Treasury for redemption for account of 

", inserting in such form the name of the person or corporation to 

whom payment is to be made. If the proceeds of redemption are to be paid to 
the bank executing the resolution, its name should be inserted ; if such pro- 
ceeds are to be paid to someone other than such bank, the name of that person 
or corporation should be inserted ; and if such proceeds are to be applied toward 
retirement of the circulating notes secured by such bonds,' the following should 

be inserted : " Treasury of the United States for account of " 

(name of bank executing the resolution). A certified copy of such reso- 
lution, together with the Treasurer's receipt for the bonds on deposit, should 
be forwarded to the Comptroller of the Currency, Treasury Department, 
AVashington. 

(&) If deposited to secure deposits of public money or postal savings funds, 
the board of directors of the bank or trust company should, by appropriate 
resolution, authorize the Treasurer of the United States to withdraw the 
bonds and assign them to " The Secretary of the Treasury for redemption for 

account of ", inserting in such form the name of the 

person or corporation to whom payment is to be made. If other collateral 
is substituted the name of the bank or trust company executing the resolution, 
or the name of any other person or corporation, may be inserted. If such 
proceeds are to be applied to the reduction of the deposits secured by the 
bonds, the following should be inserted : " Treasurer of the United States for 
account of " (name of bank or trust company exe- 
cuting the resolution). A certified copy of such resolution, together with the 
Treasurer's receipt for the bonds on deposit, should be forwarded to the 
Treasurer of the United States, Division of Securities, Washington, accom- 
panied by the collateral to be substituted for the bonds, in case a substitutiin 
is to be made. 

(c) The Comptroller of the Currency, or the Treasurer of the United States, 
will forward appropriate resolution forms to each bank or trust company having 
2 percent consols of 1930 on deposit as security for the above accounts. 

7. Presentation and surrender of coupon bonds. — A small amount of 2 per- 
cent consols of 1930 in coupon form remain outstanding, without coupons at- 
tached covering interest accruing since April 1, 1930. Any such bonds should 
be presented and surrendered for redemption on July 1, 1935, to any Federal 
Reserve bank or branch, or to the Treasurer of the United States, Washington. 
The bonds must be delivered at the expense and risk of the holder, and should 
be accompanied by appropriate written advice. Checks in payment of principal 
and accrued interest from April 1, 1930, to July 1, 1935, on such coupon bonds 
will be mailed to the address given in the advice accompanying the bonds when 
surrendered. 



» The circulation privilege temporarily conferred by tbe act of July 22, 1932, on all 
United States bonds bearing interest at a rate not exceeding 3% percent per annum will 
expire July 22, 1935 ; 2 percent bonds of the Panama Canal Loan of 1916-36 and 1918-38 
have been called for redemption on Aug. 1, 1935. 

16816 — 36 15 



208 REPORT OF THE SECRETARY OF THE TREASURY 

III. GENERAL PROVISIONS 

1. Any further information which may be desired regarding the redemption 
of the 2 percent consols of 1930 on July 1, 1935, under this circular may be 
obtained from any Federal Reserve bank or branch, or from the Treasury 
Department, Washington. 

2. As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to perform any necessary acts under this circular. The Secretary 
of the Treasury may at any time, or from time to time, prescribe supplemental 
or amendatory rules and regulations governing the matters covered by this 
circular, which mil be communicated promptly to Federal Reserve banks. 

Henet Moegenthau, Jr., 
Secretary of the Treasury. 



[Redemption of Panamas of 1916-36 and 1918-38. Department Circular No. 534] 

Treasury Department, 

Washington, April 1, 1935. 
To Holders of 2 Percent Bonds of the Panama Canal Loan, Series of 1916-36, 
and Series of 1918-38, and Others Concerned: 

I. NOTICE OF CALL FOR REDEMPTION BEFORE MATURITY OF THE 2 PERCENT BONDS OF 
THE PANAMA CANAL LOAN, SERIES OF 191C-3G AND SERIES OF 1918-3 8 

On March 11, 1935, the following public notice of call for redemption before 
maturity was given : 

(Notice of call is omitted here, see p. 206.) 

II. REDEMPTION OF 2 PERCENT BONDS OF THE PANAMA CANAL LOAN 

Pursuant to the call for redemption, as set forth in section I of this circular,, 
the following rules and regulations are hereby prescribed to govern the pre- 
sentation and surrender of the 2 percent bonds of the Panama Canal Loan, 
series of 1916-36, and series of 1918-38, for redemption on August 1, 1935 : 

1. Payment of called bonds on August 1, 1935. — Holders of any outstanding 
2 percent bonds of the Panama Canal Loan will be entitled to have their bonds 
redeemed and paid at par on August 1, 1935, with interest in full to that date. 
After August 1, 1935, interest will not accrue on any such bonds. 

2. Presentation and surrender of registered bonds. — Two percent bonds of the 
Panama Canal Loan in registered form must be assigned by the registered 
payees or assigns thereof, or by their duly constituted representatives, in ac- 
cordance with the general regulations of the Treasury Department governing 
assignments, in one of the forms hereinafter set forth, and thereafter should 
be presented and surrendered to any Federal Reserve bank or branch, or to 
the Division of Loans and Currency, Treasury Department, Washington, for 
redemption on August 1, 1935., The bonds must be delivered at the expense and 
risk of owners and should be accompanied by appropriate written advice. In^ 
order to facilitate redemption on August 1, 1935, such registered bonds should 
be presented and surrendered well in advance of that date. Such early presen- 
tation will insure prompt payment of principal and final interest when due. 
In all cases checks in payment of principal and final interest will be mailed 
to the address given in the advice accompanying the bonds surrendered. 

3. If the registered payee, or an assignee holding under proper assignment 
from the registered payee, desires that payment of the principal and final in- 
stallment of interest be made to him, the bonds should be assigned by such, 
payee or assignee, or by a duly constituted representative, to " The Secretary of 
the Treasury for redemption." If it is desired, for any reason, that payment 
be made to some other person, without intermediate assignment, the I^onds 
should be assigned to " The Secretary of the Treasury for redemption for the 

account of ", inserting the name and address of the person 

to whom payment is to be made. A representative or fiduciary should not 
assign for payment to himself individually, imless expressly authorized to do 
so by the instrument under which he is acting; he may, however, assign for 
payment to himself in his representative or fiduciary capacity. 

4. Assignments in blank, or assignments having similar effect, should be 
avoided, if possible, in order not to lose the protection afforded by registration. 



REPORT OF THE SECRETARY OF THE TREASURY 209 

However, such assignments will be recognized, but in that event payment will 
be made to the person surrendering the bond for redemption, since under such 
assignment the bond becomes in effect payable to bearer. 

5. The transfer booksi for 2 percent Panama Canal bonds in registered form 
will not close prior to August 1, 1935, for the payment of interest on that date, 
and final interest due on August 1, 1935, will be covered by payments to be 
made simultaneously with payments made on account of principal. 

6. Bonds held hy the Treasurer of the United States in trust. — Two percent 
Panama Canal bonds in registered form on deposit with the Treasurer of the 
United States on August 1, 1935, to secure circulating notes of national banks, 
or to secure deposits of public money or postal savings funds, may be redeemed 
upon assignment as follows : 

(a) If deposited to secure circulating notes of national banks, the board of 
directors of the national bank concerned should, by appropriate resolution, 
authorize the Comptroller of the Curency to withdraw the bonds on deposit and 
to redeliver such bonds to the Treasurer of the United States, and should 
further authorize the Treasurer of the United States to assign such bonds 

to " The Secretary of the Treasury for redemption for account of 

", inserting in such form the name of the person or corporation to 

whom payment is to be made. If the proceeds of redemption are to be paid 
to the bank executing the resolution, its name should be inserted ; if such 
proceeds are to be paid to some one other than such bank, the name of that 
person or corporation should be inserted ; and if such proceeds are to be 
applied toward retirement of the circulating notes secured by such bonds,^ the 
following should be inserted : " Treasurer of the United States for account of 
" (name of bank executing the resolution). x\ certi- 
fied copy of such resolution, together with the Treasurer's receipt for the bonds 
on deposit, should be forwarded to the Comptroller of the Currency, Treasury 
Department, Washington. 

(ft) If deposited to secure deposits of public money or postal savings funds, 
the board of directors of the bank or trust company should, by appropriate 
resolution, authorize the Treasurer of the United States to withdraw the bonds- 
and assign them to " The Secretary of the Treasury for redemption for account 

of ", inserting in such form the name of the person 

or corporation to whom payment is to be made. If other collateral is substi- 
tuted the name of the bank or trust company executing the resolution, or the 
name of any other person or corporation, nniy be inserted. If such proceeds are 
to be applied to the reduction of the deposits secured by the bonds, the following 

should be inserted : " Treasurer of the United States for account of 

", (name of bank or trust company executing the resolution). 

A certified copy of such resolution, together with the Treasurer's receipt for 
the bonds on deposit, should be forwarded to the Treasurer of the United States, 
Division of Securities, Washington, accompanied by the collateral to be sub- 
stituted for the bonds, in case a substitution is to be made. 

(c) The Comptroller of the Currency, or the Treasurer of the United States, 
will forward appropriate resolution forms to each bank or trust company 
having 2 percent Panama Canal bonds on deposit as security fbr the above 
accounts. 

7. Presentation and surrender of eoupon 'bonds. — A small amount of 2 percent 
Panama Canal bonds in coupon form are outstanding. Any such bonds should 
be presented and surrendered for redemption on August 1, 1935, to any Federal 
Reserve bank or branch, or to the Treasurer of the United States, Washington. 
Coupons dated August 1, 1935, should be detached from such bonds when pre- 
sented, and collected in regular course, and coupons bearing subsequent dates 
should be attached to the bonds when presented. The bonds must be delivered 
at the expense and risk of the holder and should be accompanied by appro- 
priate written advice. Checks in payment of principal will be mailed to the 
address given in the advice accompanying the bonds surrendered. 

III. GENERAL PROVISIONS 

1. Any further information which may be desired regarding the redemption 
of the 2 percent Panama Canal bonds of August 1, 1935, under this circular 



- The circulation privilege temporarily conferred, by the act of July 22, 1932, on all 
United States bonds bearing; interest at a rate not exceeding ?>^/k percent per annum 
will expire July 22, 1935 ; 2 percent consols of 1930 have been called for redemption on 
July 1, 1935. 



210 EEPOET OF THE SECEETARY OF THE TEEASUEY 

may be obtained from any Federal Reserve bank or branch, or from the Treas- 
ury Department, Washington. 

2. As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to perform any necessary acts under this circular. The Secre- 
tary of the Treasury may at any time, or from time to time, prescribe supple- 
mental or amendatory rules and regulations governing the matters covered 
by this circular, which will be communicated promptly to Federal Reserve 
banks. 

Henky Moegenthau, Jr., 
Secretary of the Treasury. 



Exhibit 11 

Call for redemption of First Liberty Loan bonds of 1932-47 on June 15, 1935 

On March 14, 1935, Secretary of the Treasury Morgenthau announced that 
all outstanding Fii-st Liberty Loan bonds, including those of the original issue 
and those subsequently issued on conversion, would be called for redemption 
on June 15, 1935. 

The First Liberty Loan, in the form of 3^2 percent bonds, was originally 
issued June 15, 1917, in the total amount of $1,989,455,550. Subsequently three 
conversion privileges arose and the 3^/^ percent bonds were in part converted 
into other First Liberty Loan bonds bearing interest at 4 or 4^4 percent, and 
the 4 percent bonds issued on conversion were largely converted into 4i/4 per- 
cent bonds. First Liberty Loan bonds outstanding on February 28, 1935, were 
divided among the four issues as follows : 

First 31/2 's $1, 392, 226, 250 

First converted 4's 5,002,450 

First converted 414's 532,489,100 

First-second converted 414's 3, 492, 150 

Total 1, 933, 209, 950 

The test of the formal notice of call follows: 
To Holders of First Liberty Loan Bonds of 19S2-Jf7, and Others Concerned: 
Public notice is hereby given : 

1. All outstanding First Liberty Loan bonds of 1932-47 are hereby called 
for redemption on June 15, 1935. The various issues of First Liberty Loan 
bonds (all of which are included in this call) are as follows: 

First Liberty Loan Sy^ percent bonds of 1932-47 (First 31/2's), dated June 15, 
1917; 

First Liberty Loan converted 4 percent bonds of 1932-47 (First 4's), dated 
November 15, 1917; 

First Liberty Loan converted 4^4 percent bonds of 1932-47 (First 414's), 
dated May 9, 1918 ; and 

First Liberty Loan second converted 4^4 percent bonds of 1932-47 (First- 
second 414's), dated October 24, 1918. 

2. Interest on all such outstanding First Liberty Loan bonds will cease on 
said redemption date, June 15, 1935. 

3. Full information regarding the presentation and surrender of First Liberty 
Loan bonds for redemption under this call will be given in a Treasury Depart- 
ment circular to be issued later. 

4. Holders of First Liberty Loan bonds now called for redemption on June 15, 
1935, may, in advance of that date, be offered the privilege of exchanging all 
or any part of their called bonds for other interest-bearing obligations of the 
United States, in which event public notice will hereafter be given. 

Heney Morgenthau, Jr., 
Secretary of the Treasury. 
Tkeastjry Department, 

Washington, March H, 1935. 



The circular governing the redemption of the First Liberty Loan bonds is as 
follows : 



KEPORT OF THE SECRETARY OF THE TREASURY 211 

[Depaitment Circular No. 535] 

Treasury Department, 

Washington, April 22, 19S5. 

To Holders of First Liberty Loan Bonds of 1932-4T, and Others Concerned: 

I. NOTICE OF CALL FOE BEDEMPTION BEFORE MATURITY 

On March 14, 1935, the following public notice of call fox* redemption was 
given: 

[Notice of call is omitted here, see p. 210.] 

U. OPTIONAL EXCHANGE OFFERING 

1. Holders of First Liberty Loan bonds, called for redemption on June 15, 
1935, are offered the privilege, for a limited period beginning April 22, 1935, 
of exchanging all or any part of their called bonds, either (1) for 278 percent 
Treasury bonds of 1955-60, or (2) for 5-year 1% percent Treasury notes of 
series A-1940, both bonds and notes being dated and bearing interest from 
March 15, 1935. 

2. Full information concerning the optional exchange offering of Treasury 
bonds is set forth in Treasury Department Circular No. 530, and full informa- 
tion concerning the optional exchange offering of Treasury notes is set forth in 
Treasury Department Circular No. 537, both circulars being dated April 22, 
1935. As the privilege of exchanging First Liberty Loan bonds will be ac- 
corded for a limited period only and may be terminated at any time without 
notice, holders of First Liberty Loan bonds who desire to take advantage of 
either offering should act promptly, following the instructions given in the 
Treasury Department circulars referred to above, copies of which may be 
obtained from any Federal Reserve bank or branch, or from the Treasury 
Department, Washington, D. C. 

III. RULES AND REGULATIONS GOVERNING REDEMPTION OF FIRST LIBEIRTY LOAN BONDS 

Pursuant to the call for redemption, as set forth in section I of this circular, 
the following rules and regulations are hereby prescribed to govern the presen- 
tation and surrender of First Liberty Loan bonds for redemption on June 15, 
1935: 

1. Paijment of called bonds on June 15, 1935. — Holders of any outstanding 
First Liberty Loan bonds will be entitled to have such bonds redeemed and 
paid at par on June 15, 1935, with interest in full to that date. After June 15, 
1935, interest will not accrue on any First Liberty Loan bonds. 

2. Presentation and suirender of coupon bands. — First Liberty Loan bonds 
in coupon form should be presented and surrendered to any Federal Reserve 
bank or branch, or to the Treasurer of the United States, Washington, D. C, 
for redemption on June 15, 1935. 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. 1435 attached hereto). Checks 
in payment of principal will be mailed to the address given in the form 
of advice accompanying the bonds surrendered. 

3. Coupons dated June 15, 1935. which become payable on that date, should 
be detached from any First Liberty Loan bonds before such bonds are pre- 
sented for redemption on June 15, 1935, and such coupons should be collected 
in regular course when due. All coupons pertaining to such bonds bearing dates 
subsequent to June 15, 1935, must be attaclied to any such bonds when pre- 
sented 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 redemption, 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 subsequently be presented.^ 



1 First 4's, First 4i4's, and First-second 4i4's were originally issued in temporary form. 
The final coupon attached to such temporary bonds became due on Dec. 15, 1919, June! 
15, 1920, and Dec. 15, 1920, respectively. The holders of any such temporary bonds 
will receive all past due interest to June 15, 1935, when such bonds are redeemed pur- 
suant to the call. Any coupons now attached to such temporary bonds should be 
detached and collected in regular course. 



212 REPORT OF THE SECRETARY OF THE TREASURY 

4. Preftentation anrl surrender of registered lionds. — First Liberty Loan bonds 
in registered fonu 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 thereafter should 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 redemp- 
tion on June 15, 1935. The bonds must be delivered at the expense and risk 
of holders (see par. 8 of this section) and should be accompanied by appro- 
priate written advice (see form P. D. 1436 attached hereto). In all cases 
checks in payment of principal and final interest due will be mailed to the 
address given in the form of advice accompanying the bonds surrendered. 

5. If the registered payee, or an assignee holding under proper assignment 
'from the registered payee, desires that payment of the principal and final 
installment of interest be made to him, the bonds should be assigned by such 
payee or assignee, or by a duly constituted representative, to " The Secretary 
of the Treasury for redemption." If it is desired, for any reason, that payment 
be made to some other person, without intermediate assignment, the bonds 
should be assigned to " The Secretary of the Treasury for redemption for the 

account of ", inserting the name and address of the person to whom 

payment is to be made. A representative or fiduciary should not assign for 
payment to himself individually, unless expressly authorized to do so by the 
instrument under which he is acting; he may, however, assign for payment to 
himself in his representative or fiduciary capacity. 

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 bond becomes 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 June 15, 1935, on registered bonds of the First Lib- 
erty Loan will be paid with the principal in accordance with the assignments 
On the bonds surrendered. Transfers and exchanges involving registered bonds 
will be permitted up to the close of business on May 31, 1935, but not after 
that date. 

8. Transportation of bonds. — Bonds presented for redemption under this cir- 
cular must be delivei-ed to a Federal Reserve bank or branch, or to the Treas- 
ury Department, Washington, D. C, at the expense and risk of the holder. 
Coupon 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 trans- 
portation of bonds by registered mail insured may be arranged between incor- 
porated banks and trust companies and the Federal Reserve banks, and holders 
may take advantage of such arrangements when available, utilizing such incor- 
porated banks and trust companies as their agents. Incorporated banks and 
tnist companies are not agents of the United States under this circular. 

IV. TIME OF PRESENTATION OF CALLBa) BONDS FOR EEDEMPTION 

1. In order to facilitate the redemption of First Liberty Loan bonds on June 
15, 1985, any such bonds should be presented and surrendered in the manner 
herein prescribed well in advance of that date, but not before May 15, 1935. 
Such early presentation by holders will assure 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 the bonds are presented to Federal Reserve 
banks, or branches, and not direct to the Treasury Department. 

3. As hereinbefore provided: (1) coupons due June 15, 1935, should be de- 
tached from any permanent coupon bonds when such bonds are presented for 
redemption on that date, such coupons to be collected when due; and (2) final 
Interest due on any registered bonds will be paid with the principal amount. 

4. If First Liberty Loan bonds called for redemption on June 15, 1935, are 
to be presented for exchange for 2% iiercent Treasury bonds of 195.5-GO, in- 
structions given in Treasury Department Circular No. 536 should be followed ; 
if to be presented for 1% percent Treasury notes of series A-1940, instructions 



EEPORT OF THE SECRETARY OF THE TREASURY 



213 



given in Treasury Department Circular No. 537 should be followed; if to be 
presented for redemption on June 15, instructions given in this circular should 
1)6 followed. 

V. GENEEAL PEOVISIONS 

1. Any further information which may be desired regarding the redemption 
of First Liberty Loan bonds under this circular may be obtained from any 
Federal Reserve bank or branch, or from the Treasury Department, Wash- 
ington, D. C, where copies of the Treasury Department's regulations governing 
assignments also may be obtained. 

2. As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to perform any necessary acts under this circular. The Secretary 
of the Treasury may at any time, or from time to time, prescribe supplemental 
or amendatory rules and regulations governing the matters covered by this 
circular, which will be communicated promptly to Federal Reserve banks. 

Henry Moroenthau. Jr., 
Secretary of the Treasury. 

FOR COUPON BONDS 

[Form PD 1435. For registered bonds use form PD 1436] 
Use separate form for each issue 

Form of Advice to Accompany First Liberty Loan Bonds in Coupon Form 
Presented for Redemption on June 15, 1935 

To THE Federal RESE3iVE Bank of , 

or 
Trbusuber of the United States, 

Washington, D. C. 

Pursuant to the provisions of Treasury Department Circular No. 535, dated 
April 21, 1935, the undersigned presents and surrenders herewith for redemption 

on June 15, 1935, $ , face amount of First Liberty Loan bonds in 

coupon form, with coupon due December 15, 1935, and all subsequent coupons 
attached, as follows : 

Title of issue: 

(Use short title — see note) 



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 __. 

Note.— The titles of the four issues of First Liberty Loan bonds follow: 

Title Short title 

First Liberty Loan 3M% bonds of 1932-47 First 3l4's 

First Liberty Loan converted 4% bonds of 1932-47 First 4's 

First Liberty Loan converted iii% bonds of 1932-47 First 4H's 

First Liberty Loan second-converted 4J^% bonds of 1932-47 First-second iH's 



214 



REPORT OF THE SECRETARY OF THE TREASURY 



FOR REGISTERED BONDS 

[Form PD 1436. For coupon bonds use form PD 1435] 

Use separate form for each issue 

FoEM OF Advice to Accompany First Libekty Loan Bonds in Registered Form 
Presented for Redemption on June 15, 1935 

To the Federal Reserve Bank of , 

or 
Treasury Department, Division of Loans and Currency, 

Washington, D. C: 
Pursuant to the provisions of Treasury Department Circular No. 535, dated 
April 22, 1935, the undersigned presents and surrenders herewith for redemp- 
tion on June 15, 1935, $ , face amount of First Liberty Loan bonds 

in registered form, inscribed in the name of and duly 

assigned to " The Secretary of the Treasury for redemption ", as follows : 

Title of issue: 

(Use short title — see note) 



Number of bonds 


Denomina- 
tion 


Serial numbers of bonds 


Face 
amount 




$50 

100 

600 

1,000 

5,000 

10, 000 

50,000 

100. 000 




$ 


















































Total 















and requests that remittance covering payment of principal and final interest 
be forwarded to the undersigned at tlie address indicated below. 

Signature 

Name (please print) 

Address in full 

Date 

Note.— The titles of the 4 issues of First Liberty Loan bonds follow: 

Title Short title 

First Liberty Loan Z}4% bonds of 1932-47 First 3]4's 

First Liberty Loan converted 4% bonds of 1932-47 First 4's 

First Liberty Loan converted 4 Ji% bonds of 1932-47 First 4Ji's 

First Liberty Loan second-converted i}4% bonds of 1932-47 First-second 4}i's 



Exhibit 12 



Call for redemption on October 15, 1935, of Fourth Liberty Loan bonds before 

maturity (final call) 

On April 14, 1935, Secretary of the Treasury Morgenthau announced the call 
of the balance of the Fourth Liberty Loan 4^4 percent bonds of 1938-38 for 
redemption on October 15, 1935. The Fourth Liberty Loan bonds included in 
this fourth and final call amounted to about $1,250,000,000. 

Bonds of the Fourth Liberty Loan were originally issued under date of 
October 24, 1918, in the amount of about $6,965,000,000. Subsequent to their 
issue, and prior to the first call for partial redemption, which was made on 
October 12, 1933, nearly $700,000,000 of these bonds were retired. The first 
three calls for partial redemption paved the way for the retirement of about 
$5,000,000,000 more, leaving about $1,250,000,000 outstanding. Of the $5,000,- 



KEPORT OF THE SECRETARY OP THE TREASURY 215 

000,000 of bonds included in the first three calls, about $4,315,000,000 were 
exchanged for other interest-bearing obligations, and about $320,000,000 more 
have been paid in cash. Most of the remaining $365,000,000 were to be re- 
deemed on April 15 or shortly thereafter. 

The text of the formal notice of call was as follows : 

To HoMers of Fourth Liherty Loan JfVi Percent Bonds of 1933-38, and Others 
Concerned: 

Public notice is hereby given : 

1. All outstanding Fourth Liberty Loan 4% percent bonds of 1933-38 
(Fourth 414*8) bearing serial numbers the final digit of which is 3 or 4 (such 
serial numbers in the case of permanent coupon bonds being prefixed by the 
corresponding distinguishing letter O or D, respectively), are hereby called for 
redemption on October 15, 1935, on which date interest on such bonds called 
for redemption will cease. 

2. Full information regarding the presentation and surrender of Fourth 
414 's for redemption under this call will be given in a Treasury Department 
circular to be issued later. 

3. Holders of Fourth 4i/4's now called for redemption on October 15, 1935, 
may, in advance of that date, be offered the privilege of exchanging all or any 
part of their called bonds for other interest-bearing obligations of the United 
States, in which event public notice will hereafter be given. 

Henry Mokgenthau, Jr., 
Secretary of the Treasury. 
Tebl^vsuby Depaktment, 

Washington, April 13, 1935. 



The Department circular governing the redemption of the bonds was as 
follows : 

[Department Circular No. 539.] 

Teeasuey Department, 
Washington, May 13, 1935. 
To Holders of Fourth Liherty Loan Wi Percent Bonds of 1933-38, am,d Others 
Concerned: 

T. NOTICE OF FOUETH AND FINAL CALL FOE REDEMPTION BEFOEE MATURITY OF FOURTH 
LIBEETY LOAN 4J PERCENT BONDS OF 1933-38 (FOURTH 4j'S) 

On April 13, 1935, the following public notice of call for redemption was 
given : 

[Notice of call omitted here, see above.] 

II. TRANSACTIONS IN FOUETH-OALLED BONDS 

1. The bonds included in the fourth and final call for redemption on October 
35, 1935, are hereby designated fourth-called Fourth 4i^'s.* 

2. Denominational exchanges of coupon bonds within the class fourth-called 
Fourth 414's will terminate at the close of business on October 14, 1935. Trans- 
fers and exchanges involving registered bonds within the same class will be 
permitted up to the close of business on September 30, 1935, but not after that 
date. 



1 Fourth 414'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 K (omit- 
ting I) being used, which letters, in order, rotate with and correspond to the final digits 
from 1 to 0, respectively. . _ .^„, ^ ^ ^ ^- 1 

First-called Fourth 414's (called for redemption on Apr. 15, 1934 — Department Circular 
No. 501, dated Oct. 12. 1933) 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) : 
seconrl-called Fourth 4i/4's (called for redemption on Oct. 15, 1934— Department Circular 
No. 509, dated Apr. 13, 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) ; 
third-called Fourth 414's (called for re<lemption on Apr. 15, 1935 — Department Circular 
No. 525, dated Oct. 12, 1934) bear serial numbers ending in 5. 6, or 7 (in the case of 
permanent coupon bonds preceded by the distinguishing letter E, F, or G. respectively) ; 
and fourth-called Fourth 4i/4's (called for redemption on Oct. 15, 1935) bear serial 
numbers ending in 3 or 4 (in the case of permanent coupon bonds preceded by the dis- 
tinguishing letter C or D, respectively). 



216 REPORT OF THE SECRETARY OF THE TREASURY 

III. PAYMENT OB EXCHANGE 

1. Payment of fourth-called hands on October 15, 1935. — Holders of fourth- 
called Fourth 414 's will be entitled to have such bonds redeemed and paid at 
par on October 15, 1935, with interest in full to that date. After October 15, 
1935, interest will not accrue on any such bonds included in the fourth and final 
call for redemption. 

2. Optional exchange offering. — Holders of fourth-called Fourth 4i^'s may. in 
advance of October 15, 1935, be offered the privilege of exchanging all or any 
part of their fourth-called bonds for other interest-bearing obligations of the 
United States, in which event due public notice will be given. Holders who de- 
sire to avail themselves of any exchange privilege, if and when offered, should 
watch for an announcement thereof, and should request their bank or trust com- 
pany to notify them when information regarding any exchange offering is 
received. 

3. In case of an exchange offering, instructions then given in the public 
announcement and the official circular should be followed in presenting fourth- 
called bonds for exchange; otherwise the instructions hereinafter set forth in 
this circular should be followed for the presentation of such fourth-called bonds 
for redemption on October 15, 1985. 

IV. REDEMPTION OF FOUBTH-CAIXED FOURTH 4i'S 

1. Presentation and surrender of coiipon tonds. — Fourth-called Fourtli 4i4'& 
in coupon form should be presented and surrendered to any Federal Reserve 
bank or branch, or to the Treasurer of the United States, Washington, D. C, 
for redemption on October 15, 1935. The bonds must be delivered at the expense 
and risk of holders (see par. 7 of this section) and should be accompanied by 
.-ippropriate written advice (see form P. D. 1445 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, 1935, which become payable on that date, should 
be detached from any fourth-called Fourth 414's before such bonds are pre- 
sented for redemption on October 15, 1935, and such coupons should be collected 
in regular course when due. All coupons pertaining to such bonds bearing dates 
subsequent to October 15, 1935, must be attached to such bonds when presented 
lor redemption, provided, Jioivever, 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 pay- 
ment to be made on account of such redemption, 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 subsequently be presented.'' 

3. Presentation and surrender of registered bonds. — Fourth-called Fourth 
414's in registered form 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, 1935. The bonds must be delivered at the expense and risk of 
holders (see par. 7 of this section) and should be accompanied by appropriate 
written advice (see form P. D. 1446 attached hereto). In all cases checks in 
payment of principal and final interest will be mailed to the address given in 
the form of advice accompanying the bonds surrendered. 

4. If the registered payee, or an assignee holding under proper assignment 
from the registered payee, desires that payment of the principal and final install- 
ment of interest be made to him, the bonds should be assigned by such payee or 
assignee, or by a duly constituted representative, to " the Secretai-y of the 
Treasury for i-edemptiou." If it is desired, for any reason, that payment be 
made to some other person, without intermediate assignment, the bonds should 
be assigned to " the Secretary of the Treasury for redemption for the account of 
", inserting the name and address of the person to 



''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 fourth call for 
redemption on October 15, 19.35, will receive all past due interest from October 15. 1920,^ 
when the bonds are redeemed pursuant to such call. All coupons now attached to any 
such temporary bonds should be detached and collected in regular course. 



EEPORT OP THE SECRETARY OF THE TREASURY 217 

whom payment is to be made. A representative or fiduciary should not assign 
for payment to himself individually, unless expressly authorized to do so by 
court order or by the instrument under which he is acting; he may, however, 
assign for payment to himself in his representative or fiduciary capacity. 

5. 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 bond becomes 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. 

6. Final interest due on October 15, 1935, on any fourth-called Fourth 4:\i's 
in registered form, will be paid with the principal in accordance with the assign- 
ments on the bonds surrendered. 

7. 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 
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 
nut agents of the United States under this circular. 

v. TIME OF PRESENTATION OF FOUKTH-CALLED FOURTH 4j'S FOR REDEMPTION 

1. In order to facilitate the redemption of fourth-called Fourth 4^/4 's on 
October 15, 1935, any such bonds should be presented and surrendered in the 
manner herein prescribed in advance of that date but not before September 15, 
1935. Such early presentation by holders will assure prompt payment of prin- 
cipal 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 the bonds included in the fourth call for 
redemption are presented to Federal Reserve banks or branches, and not direct 
to the Treasury Department. 

VI. GENERAL PROVISIONS 

1. Any further information which may be desired regarding the redemption 
of fourth-called Fourth 4i/4's under this circular may be obtained from any 
Federal Reserve bank or branch, or from the Treasury Department, Washing- 
ton, D. C, where copies of the Treasury Department's regulations governing 
assignments may also be obtained. 

2. As fiscal agents of the United States, Federal Reserve banks are author- 
ized and requested to perform any necessary acts under this circular. The 
Secretary of the Treasury may at any time, or from time to time, prescribe 
supplemental or amendatory rules and regulations governing the matters cov- 
ered by this circular, which will be communicated promptly to Federal Reserve 
banks. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 



Exhibit 13 



Offering of 2% percent Treasury bonds of 1955-60 (additional) and 1% per- 
cent Treasury notes of series A-19.'f0 (additional) 

On April 22, 1935, Secretary of the Treasury Morgenthau announced the 
offering of additional issues of 2ys percent Treasury bonds of 1955-60 and of 
1% percent Treasury notes of series A-1940, both in exchange for_ First Liberty 
Loan bonds, of any series, called for redemption on June 15, 1935. 



218 REPOKT OF THE SECRETARY OF THE TREASURY 

[Treasury bonds of 1955-60. Department Circular No. 536] 

Teeasxjuy Department, 

Washington, April 22, 1935. 

I. EXCHANGE OFFERING OF BONDS 

1. The Secretary of the Treasury, pursuant to the authority of the Second 
Liberty Bond Act, approved September 24, 1917, as amended, for refunding 
purposes, invites subscriptions from the people of the United States for 2% 
percent bonds of the United States, designated Treasury bonds of 1955-60, in 
payment of which only First Liberty Loan bonds, of any series, called for 
redemption on June 15, 1935, may be tendered. The amount of the additional 
issue of 2% percent Treasury bonds of 1955-60 under this circular will be 
limited to the amount of First Liberty Loan bonds tendered and accepted. 

2. First Liberty Loan bonds will be reecived on exchange at par, and 2% 
percent Treasury bonds of 1955-60 will be issued at par, with the right 
reserved by the Secretary of the Treasury to increase the issue price by publie 
announcement effective as to subscriptions tendered after the time, not eiirlier 
than April 29, 1935, fixed in the announcement. On all exchanges, interest ad- 
justments will be made as of June 15. 1935. 

3. The outstanding bonds of the First Liberty Loan called for redemption 
on June 15, 1935, and which, under the terms of this circvilar, may be ex- 
changed for 2% percent Treasury l)onds of 1955-GO, follows : 

3% percent bonds of 1932-47 (First SVa's) dated June 15. 1917 
Converted 4 percent bonds of 1932-47 (First 4's) dated November 15, 1917 
Converted 4^/4 percent bonds of 1932-47 (First 4i4's) dated May 9, 1918 
Second converted 4^4 percent bonds of 1932-47 (First-second 4i/4's) dated 
October 24, 1918 

4. In addition to the exchange offering under this circular, holders of First 
Liberty Loan bonds are offered the privilege of exchanging all or any part 
of such called bonds for 5-year 1% percent Treasury notes of series A-1940, 
which offering is set forth in Department Circular No. 537, issued simultane- 
ously with this circular. 

II. DESCRIPTION OF BONDS 

1. The bonds now offered will be an addition to and will I'orm a part of the 
series of 2% percent Treasury bonds of 1955-GO issued pursuant to Depart- 
ment Circular No. 531, dated March 4, 1935, are identical in all respects there- 
with, will be freely interchangeable, and are described in the following quota- 
tion from said Circular No. 531 : 

(Description omitted here, see p. 201.) 

III. SUBSCRIPTION AND ALLOTMENT 

1. Subscriptions 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. The Secre- 
tary of the Treasury reserves the right to close the books as to any or all 
subscriptions or classes of subscriptions at any time without notice. 

2. The Secretary of the Treasury reserves the right to reject any subscrip- 
tion, in whole or in part, to allot less than the amount of bonds applied for, to 
make allotments in full upon subscriptions for smaller amounts and to make 
reduced allotments upon, or to reject, subscriptions 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 allotments 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. Subject to these reserva- 
tions, all subscriptions will be allotted in full. Allotment notices will be sent 
out promptly upon allotment. 

IV. TERMS OF PAYMENT AND ISSUE 

1. Treasury bonds offered under this circular will be issued at par, or at such 
increased issue price as may be fixed by public announcement in the case of 
bonds issued upou subscriptions tendered to a Federal Reserve bank or branch 



EEPOBT OF THE SECRETAKY OF THE TEEASURY 219 

or to the Treasury Department after the time stated in the announcement. The 
effective time for any increase which may be made in the issue price will be 
after the date of the announcement and in no event earlier than April 29, 1935. 
Any such announcement fixing an increase in the issue price and the time when 
such increase becomes effective will be communicated promptly to the Federal 
Reserve banks. Payment for any bonds allotted under this circular may be 
made only in First Liberty Loan bonds of any series, which will be accepted 
at par, provided that payment of the premium by reason of any increase in the 
issue price shall be made as provided in the next following paragraph. The 
bonds tendered in payment should accompany the subscription. 

2. Interest adjustment as of June 15, 1935. — Subscribers will be credited with 
interest in full to June 15, 1935, on First Liberty Loan bonds tendered in 
exchange, and will be charged witli accrued interest from March 15 to June 
15, 1935 ($7.1875 per $1,000), on 2ys percent Treasury bonds of 195.5-60 issued 
on exchange. The net interest adjustment per $1,000 principal amount on 
account of the various issues of First Liberty Loan bonds follows : First 3y>'s — 
$10.3125; First 4's— $12.8125 ; First 414's and First-second 4 i/i's— $14.0625. This 
net interest adjustment (less any premium by reason of an increase in the 
issue price) will be paid to subscribers following acceptance of First Liberty 
Loan bonds under tliis circular. 

V. SXJRRENDEK OF FIRST LIBERTY LOAN BONDS ON EXCHANGE 

1. Coupon bonds. — First Liberty Loan bonds in coupon form tendered in 
exchange for Treasury bonds offered hereunder, should be presented and sur- 
rendered with the subscription to a Federal Reserve banls or to the Treasurer 
of the United States. Coupons dated Jtme 15, 1935, and all coupons bearing 
dates subsequent to June 15, 1935, should be attached to such coupon bonds when 
surrendered, and if any such coupons are missing, the subscription must be 
accompanied by cash payment equal to the face amount of the missing coupons.* 
The bonds must be delivered at the expense and rislj of the holder. 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. 

2. Registered bonds. — First Liberty Loan bonds in registered form tendered in 
exchange for Treasury bonds offered hereunder should be assigned by the 
registered payee or the assignee thereof, in accordance with the general regula- 
tions of the Treasury Department goveiTiing assignments for transfer or 
exchange, in one of the forms hereafter set forth, and thereafter should be 
presented and surrendered with the subscription to a Federal Reserve bank or 
to tlie Treasury Department, Division of Loans and Currency, Washington, D. C. 
The bonds must be delivered at the expense and risk of the holder. If Treasury 
bonds are desired registered in the same name as the First Liberty Loan bonds 
surrendered, the assignment should be to " The Secretary of the Treasury for 
exchange for Treasury bonds of 1955-60 " ; if Treasury bonds are desired regis- 
tered in another name, the assignment should be to " The Secretary of the 

Treasury for exchange for Treasury bonds of 1955-60 in the name of 

" ; if Treasury bonds in coupon form ai"e desired, the assignment 

should be to " The Secretary of tlie Treasury for exchange for Treasury bonds 
of 1955-60 in coupon form to be delivered to " 

VI. GENERAL PROVISIONS 

1. As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to receive subscriptions^ * * * 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 

' The final coupons attached to temporary coupon bonds of the First Liberty Loan 
became due as follows: First 4"s. Dec. 1.5, 1919; First 4%'s, .June 15, 1920; First- 
second 4iA's, Dec. 15. 1920. The holders of any such temporary bonds will receive the 
past due interest to June 15, 1935, if such bonds are tendered for exchange under this 
circular. 

= Omitted portion similar to corresponding section of Department Circular No. 524, 
p. 184. 



220 EEPOET OF THE SECRETARY OF THE TREASURY 

[Treasury notes, series A-1940. Department Circular No. 537] 

Treasury Department, 

Washington, April 22, 1935. 

I. EXCHANGE OFFERING OF NOTES 

1. The Secretary of the Treasury, pursuant to the authority of the Second 
Liberty Bond Act, approved September 24, 1917, as amended, invites subscrip- 
tions from the people of the United States for 1% percent Treasury notes of the 
United States, designated Treasury notes of series A-1940, in payment of which 
only First Liberty Loan bonds, of any series, called for redemption on June 15, 
1935, may be tendered. The amount of the additional issue of 1% percent 
Treasury notes of sei'ies A-1940 under this circular will be limited to the amount 
of First Liberty Loan bonds tendered and accepted. 

2. First Liberty Loan bonds will be received on exchange at par, and 1% 
percent Treasury notes of series A-1940 will be issued at par, with the right 
reserved by the Secretary of the Treasury to increase the issue price by public 
announcement effective as to subscriptions tendered after the time, not earlier 
than April 29, 1935, fixed in the announcement. On all exchanges, interest 
adjustments will be made as of June 15, 1035. 

3. The outstanding bonds of the First Liberty Loan called for redemption on 
June 15, 1935, and which, under the terms of this circular, may be exchanged 
for 1% percent Treasury notes of series A-1940, follow : 

3l^ percent bonds of 1932^7 (First 314's) dated June 15, 1917 
Converted 4 percent bonds of 1932-47 (First 4's) dated November 15, 1917 
Converted 414 percent bonds of 1932-47 (First 4i/4's) dated May 9, 1918 
Second converted 4% percent bonds of 1932-47 (First-second 4i/4"s) dated 
October 24, 1918 

4. In addition to the exchange offering under this circular, holders of First 
Liberty Loan bonds are offered the privilege of exchanging all or any part of 
such called bonds for 2% percent Treasury bonds of 1955-60, which offering is 
set forth in Department Circular No. 536, issued simultaneously with this 
circular. 

II. DESCRIPTION OF NOTES 

1. The notes now offered will be an addition to and will form a part of the 
series of 1% percent Treasury notes of series A-3940, issued pursuant to De- 
partment Circular No. 532, dated March 4, 1935, are identical in all respects 
therewith (except that the additional denomination of $50 will be made avail- 
able), will be freely interchangeable, and are described in the following 
quotation from said Circular No. 532: 

(Description omitted here, see p. 203.) 

2. Bearer notes with interest coupons attached will be issued in denomina- 
tions of $50, $100, $500, $1,000, $5,000, $10,000, and $100,000. The notes will 
not be issued in registered form. 

III. SUBSCRIPTION AND ALLOTMENT 

1. Subscriptions 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. The 
Secretary of the Treasury reserves the right to close the books as to any or all 
subscriptions or classes of subscriptions at any time without notice. 

2. 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 
allotments in full upon subscriptions for smaller amounts and to make reduced 
allotments upon, or to reject, subscriptions 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 
allotments 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. Subject to these reserva- 
tions, all subscriptions will be allotted in full. Allotment notices will be sent 
out promptly upon allotment. 



REPORT OF THE SECRETARY OF THE TREASURY 221 

IV. TEEMS OF PAYMENT AND ISSUE 

1. Treasury notes offered under this circular will be issued at par, or at such 
increased issue price as may be fixed by public announcement in the case of 
notes issued upon subscriptions tendered to a Federal Reserve bank or branch 
-or to the Treasury Department after the time stated in the announcement. The 
effective time for any increase which may be made in the issue price will be 
after the date of the announcement and in no event earlier than April 29, 1935. 
Any such announcement fixing an increase in the issue price and the time when 
such increase becomes effective will be communicated promptly to the Federal 
Reserve banks. Payment for any notes allotted under this circular may be 
made only in First Liberty Loan bonds of any series, which will be accepted at 
par, provided that payment of the premium by reason of any increase in the 
issue price shall be made as provided in the next following paragraph. The 
bonds tendered in payment should accompany the subscription. 

2. Interest adjustment as of June 15, 19S5. — Subscribers will be credited with 
interest in full to June 15, 1935, on First Liberty Loan bonds tendered in 
exchange, and will be charged with accrued interest from March 15 to June 15, 
1935 ($4.0625 per $1,000), on 1% percent Treasury notes of series A-1940 
issued on exchange. The net interest adjustment per $1,000 principal amount 
on account of the various issues of First Liberty Loan bonds follows : First 
3y2's, $13.4375; First 4's, $15.9375; First 4i4"s and First-second 414's, $17.1875. 
This net interest adjustment (less any premium by reason of an increase in the 
issue price) will be paid to subscribers following acceptance of First Liberty 
Loan bonds under this circular. 

V. SUREENDEK OF FIRST LIBERTY LOAN BONDS ON EXCHANGE 

1. Coupon bonds. — First Liberty Loan bonds in coupon form tendered in 
■exchange for Treasury notes offered hereunder, should be presented and sur- 
rendered with the subscription to a Federal Reserve bank or to the Treasurer 
of the United States. Coupons dated June 15, 1935, and all coupons bearing 
dates subfequent to June 15, 1935, should be attached to such coupon bonds 
when surrendered, and if any such coupons are missing, the subscription must 
be accompanied by cash payment equal to the face amount of the missing 
coupons.^ The bonds must be delivered at the expense and risk of the holder. 
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. 

2. Registered bonds. — First Liberty Loan bonds in registered form tendered 
in exchange for Treasury notes offered hereunder should be assigned by the 
registered payee or the assignee thereof, in accordance with the general regu- 
lations of the Treasury Department governing assignments for transfer or 
exchange, to " The Secretary of the Treasury for exchange for Treasury notes 
of series A-1940 ", and thereafter should be presented and surrendered 
Avith the subscription to a Federal Reserve bank or to the Treasury De- 
partment, Division of Loans and Currency, Washington, D. C. If the Treas- 
ury notes are to be delivered for the account of other than the registered 
r.ayee or the assignee thereof, the assignment should be to " The Secretary 
of the Treasury for exchange for Treasury notes of series A-1940 to be de- 
livered to " The bonds must be delivered at the expense 

and risk of the holder. 

VI. GENERAL PROVISIONS 

1. As fiscal agents of the United States. Federal Reserve banks are author- 
ized and requested to receive subscriptions < * * *. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 

"The final coupons attnehed to tpmporary coupon bonds of the First Libertv Loan 
became due as follows: First 4's. Dec. 1.5. 1019: First 4i''s. .Tune 15. 1920: First-sec- 
ond 414's, Dec. 15. 1020. Titlohoklers of any such temporary bonds will receive the 
past due interest to June 15, 1935, if such bonds are tendered for exchange under this 
■circular. 

^ Omitted portion similar to corresponding section of Department Circular No. 522, 
p. 181. 



222 



REPORT OF THE SECRETARY OF THE TREASURY 



On May 3, 1935, the following announcement was made of an increase in the 
issue price of the Treasury bonds of 1955-60, effective as to subscriptions ten- 
dered after May 7, 1935. 

To Holders of First Liberty Loan Bonds, and Others Concerned: 

Public announcement is hereby made that, pursuant to the right reserved by 
the Secretary of the Treasury under Department Circular No. 536, dated April 
22, 1935, inviting subscriptions for 2% percent bonds of the United States, 
designated Treasury bonds of 1955-60, in exchange for First Liberty Loan bonds 
of any series, the issue price of such 2% percent Treasury bonds of 1955-60 is 
increased to lOOi/^, effective as to subscriptions tendered after May 7, 1935. The 
increased issue price shall not be effective as against subscriptions duly ten- 
dered on or before May 7, 1935, including subscriptions received by mail at the 
Federal Reserve banks and the Treasury Department, Washington, D. C, 
enclosed in envelops postmarked prior to midnight May 7, 1935. 

This public announcement shall be communicated promptly to the Federal 
Reserve banks. 

Henry Morgehstthau, Jr., 
Secretary of the Treasury. 
Treasury Department, 

Washington, May 3, 1935. 



Exhibit 14 



Allotments on exchange subscriptions. Treasury bonds of 1955-60 and Treasury 
notes of series A-WJ/O (press releases, Apr. 29 and 30, May 4, 6, 13, 15, and 
21, and Aug. 6, 1935) 

The subscription books for the offering of Treasury notes of series A-1940 
in exchange for First Liberty Loan bonds, called for redemption on June 15, 1935, 
closed at the close of business May 2, 1935. The subscription books for the 
offering of Treasury bonds of 1955-60, also open to holders of First Liberty 
Loan bonds, remained open until the close of business May 23, 1935. 

First Liberty Loan bonds were exchanged for Treasury bonds of 1955-60 to 
the amount of' $746,406,550, and for the Treasury notes of series A-1940 to the 
amount of $864,480,000, making total exchanges $1,610,886,550, or more than 83 
percent of the total amount of First Liberty Loan bonds outstanding at the 
time the refunding was announced. All of the subscriptions were allotted in 
full. The subscriptions were divided among the several Federal Reserve 
districts and the Treasury as follows : 



Federal Reserve district 



Bonds allotted 



Notes allotted 



Total allotted 



Boston 

New York 

Philadelphia. 

Cleveland 

Richmond 

Atlanta 

Chicago 

St. Louis 

Minneapolis.. 
Kansas City.. 

Dallas 

San Francisco 
Treasury 

Total... 



$69, 655. 500 
274, 134, 900 
50, 215, 850 
74, 224, 950 
32, 521, 350 
9, 629, 950 
91, 959, 200 
28, 099, 700 
10, 031, 050 
21, 799, 400 
23,710.650 
38,711,700 
21, 712, 350 



746, 406, 550 



$66, 661, 450 

515, 001, 850 

23,311,900 

63, 206, 150 

29, 967, 750 

3, 077, 500 

98, 077, 400 

12, 661, 050 

5, 223, 800 

7, 194, 200 

6, 405, 900 

25, 108, 450 

8, 582, 600 



864, 480, 000 



$136, 316, 950 

789, 136, 750 

73, 527, 750 

137,431,100 

62, 489, lOO 

12, 707, 450 

190, 036, 600 

40, 760, 750 

15, 254, 850 

28, 993, 600 

30,116,550 

63, 820, 150 

30, 294, 950 



1, 610, 886, 550 



KEPORT OF THE SECRETARY OF THE TREASURY 



223 



Exhibit 15 

Refunding of the First Liherty loan, March 15 to June 30, 1935 
[On basis of daily Treasury statements (unrevised), see p. 293] 





First ZYi 's 


First 4 's 


First 4H 's 


First-sec- 
ond 4>4 's 


Total 


Outstanding Mar. 14, 1935 


$1, 392, 226, 250 


$5, 002, 450 


$532, 489, 100 


$3, 492, 150 


$1, 933, 209, 950 


Exchanges for \% percent Treasury 
notes, series A-1940 


754, 219, 100 
464, 945, 100 


650, 800 
2, 190, 150 


108, 033, 550 
277,864,950 


1, 576, 550 
1, 406, 350 


864, 480, 000 
746, 406, 550 


Exchanges for 2J^ percent Treasury 
bonds of 1955-60 






Total exchanges 


1, 219, 164, 200 


2,840,950 


385, 898, 500 


2, 982, 900 


1, 610, 886, 550 




Balance for cash redemption 

Eedeemed to June 30, 1935 


173, 062, 050 
98, 428, 500 


2, 161, 500 
998, 400 


146, 590, 600 
77,843,250 


509, 250 
251, 600 


322, 323, 400 
177,521,750 


Outstanding June 30, 1935 — - 


74, 633, 550 


1, 163, 100 


68, 747, 350 


257, 650 


144,801,650 





Exhibit 16 

Inviting tenders for 3 percent Treasury bonds of 1946-4S {additional) 

On May 27, 1935, Secretary of the Treasury Morgentliau invited tenders for 
an additional issue of 3 percent Treasui*y bonds of 1946-48 as described in the 
following circular: 

[Department Circular No. 541] 

Treiasury Department, 
Washington, May 21, 1935. 
The Secretary of the Treasury, pursuant to the authority of the Second 
Liberty Bond Act, approved September 24, 1917, as amended, offers to the 
people of the United States $100,000,000, or thereabouts, 3 percent Treasury 
bonds of 1946^8, and invites tenders therefor at not less than par and accrued 
interest from December 15, 1934, to June 3, 1935. 

DESCEIPTION OF BONDS 

The bonds now offered will be an addition to and will form a part of the 
series of 3 percent Treasury bonds of 1946-48 issued pursuant to Department 
Circular No. 512, dated June 4, 1934 ; are identical in all respects therewith 
(except that interest on the bonds issued under this circular will accrue from 
Dec. 15, 1934) ; will be freely interchangeable; and are described (except as to 
interest payable Dec. 15, 1934) in the following quotation from said circular 
no. 512: 

" 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 re- 
deemed 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 re- 
deemed will be determined by such method as may be prescribed by the 
Secretary of the Treasury. From the date of redemption designated in any 
such notice, interest on the bonds called for redemption shall cease. 

" The bonds shall be exempt, both as to principal and interest, from all 
taxation now or hereafter imposed by the United States, any State, or any 
of the possessions of the United States, or by any local taxing authority, except 
(a) estate or inheritance taxes, and (b) graduated additional income taxes, 
commonly known as surtaxes, and excess-profits and war-profits taxes, 
now or hereafter imposed by the United States, upon the income or profits of 
individuals, partnerships, associations, or corporations. The interest on an 



16816—36- 



-16 



224 EEPORT OF THE SECRETARY OF THE TREASURY 

amount of bonds autliorized by the Second Liberty Bond Act, approved Septem- 
ber 24, 1917, as amended, the principal of which does not exceed $5.(X)l), 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 tlie extent provided in the act approved 
July 22, 1932, as amended. They will not be entitled to any privilege of 
conversion. 

"Bearer bonds with interest coupons attached, and bonds registered as to 
principal and interest, will be issued in denominations of $50, $100, $500. $1,000, 
S5.000. $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 Secretary of the Treasury. 

" The bonds will be subject to the general regulations of the Treasury De- 
partment, now or hereafter prescribed, governing United States bonds." 

As interest on the bonds issued under this circular will accrue from December 
15, 1934, coupon bonds will be delivered hereunder with coupon no. 1, dated 
December 15, 1934, detached. 

TENnEBS AND ALLOTMENTS 

Tenders will be received at the Federal Reserve banks and tlie branches 
thereof up to 3 p. m., eastern standard time, Wednesday, May 29, 1935, and 
imless received by that time will be disregarded. Tenders will not bo received 
at the Treasury Department. Washington. Each tender must state the face 
amount of bonds bid for. which must be $1,000 or any even multiple thereof, 
and the price offered. The price offered nnist be stated exclusive of accrued 
interest from December 15, 1934, to June 3, 1935 ; and must be expressed on 
the basis of 100, with fractions expressed as 32ds of 1 percent, in accordance 
with usual practice; e. g., 103-29/32. Tenders at less than par will not be 
considered. 

Tenders will be received without deposit from incorporated banks and trust 
companies and from responsible and recognized dealers in investment securi- 
ties. Tenders from others must be accompanied in every case by a deposit 
of 5 percent of the face amount of bonds bid for, except where the tender 
is accompanied by an express guaranty of payment by an incorporated bank 
or trust company. If the tender is accepted, in whole or in part, the deposit 
will be applied toward payment for the bonds, the balance to be paid as 
hereinafter provided. If the tender is rejected, the deposit will be returned 
to the bidder. 

Tenders must be enclosed in envelops, securely sealed, addressed to the 
Federal Reserve bank, or branch, of the district, and plainly marked " Tender 
for 3 percent Treasury Bonds of 1946— iS." The Federal Reserve banks 'will 
supply printed forms and special envelops for submitting tenders. Incorporated 
banks and trust companies not located in a city where a Federal Reserve bank 
or branch is located may, in their discretion, submit tenders by telegram, but 
such telegrams must be received at the Federal Reserve bank or branch before 
the time fixed for closing. 

Immediately after the closing hour fbr the receipt of tenders on May 29, 
1935, all tenders received in writing or by telegraph at the Federal Reserve 
banks or branches thereof up to the closing hour (3 p. m., eastern standard 
time) will be opened. The Secretary of the Treasury will determine the ac- 
ceptable prices offered and will make public announcement thereof as soon 
as possible after the opening of tenders. 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 as hereinafter provided. 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, tenders for smaller amounts may be accorded preference 
and tenders for larger amounts prorated to the extent necessary in accord- 
ance with the respective amounts bid for. The Secretary of the Treasury 
expressly reserves the right, however, to reject any or all tenders or parts 
of tenders, and to award less than the amount bid for, and any action he may 
take in any such respect or respects shall be final. 



EEPORT OF THE SECRETARY OF THE TREASURY 225 



Payment for any bonds allotted on accepted tenders must be made or com- 
pleted on or before June 3, 1935, in cash or other immediately available funds, 
and must include the face amount and the premium, if any, which the bidder 
has agreed to pay, together with accrued interest on the face amount from 
December 15, 1934, to June 3, 1935/ In every case where payment is not so 
completed, the 5 percent deposit with application shall, upon declaration made 
by the Secretary of the Treasury in his discretion, be forfeited to the United 
States. 

GENERAL PROVISIONS 

Federal Reserve banks, as fiscal agents of the United States, are authorized 
and requested to receive tenders, to make allotments as indicated by the 
Secretary of the Treasury to the Fetleral Reserve banks of the respective dis- 
tricts, to issue allotment notices, to receive payment for bonds allotted, to make 
delivery of bonds on full-paid allotments, and to perform such other acts as 
may be necessary to carry out the provisions of this circular. Pending delivery 
of the definitive bonds. Federal Reserve banks may issue interim receipts. 

The Secretary of the Treasury may at any time, or from time to time, 
proscribe supplemental or amendatory rules and regulations governing the 
receipt of tenders and the sale of bonds under this circular, which will be 
communicated promptly to the Federal Reserve banks. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 



Exhibit 17 



Acceptance of tenders for Treasury ionds of 1946-^8 (from press release, May 

31, 1935 ') 

On May 31, 1935, Secretary of the Treasury Morgenthau announced the 
result of the offering by the Treasury of .$100,000,000, or thereabouts, of 3 
percent Treasury bonds of 1946— i8, tenders for which were received at the 
Federal Reserve banks up to 3 p. m. on May 29. 

Tenders for $270,077,000 face amount of bonds were received, of which $98,- 
708,000 was accepted at prices ranging from 103f| down to 103s^, and accrued 
interest from December 15. 1934, to June 3, 1935. Tenders were received for 
more than $22,000,000 at 103, and it was deemed inadvisable to allot a small 
percentage. The average price of the bonds to be issued was about lOS-j^ 
and a total premium of $3,082,864 would be received. Based on the average 
price at which the bonds were to be issued on June 3, 1935, the yield was about 
2.67 percent to the earliest call date, June 15, 1946, and about 2.71 percent to 
maturity, June 15. 1948. 



Exhibit 18 

Offering of I'^/r, percent Treasury notes of series B-W.'iO 

On June 10, 1935, Secretary of the Ti-easury Morgenthau offered for subscrip- 
tion 1% percent Treasury notes of series B-1940 in exchange for 3 percent 
Treasury notes of series A-1935 and for 1% percent Treasury notes of series 
B-1935. In the related press release it was stated that about $416,600,000 of 
the notes of series A-1935 would mature on June 15, 1935, and about $353,800,000 
of notes of series B-1935 would mature on August 1. 1935. 

[Department Circular No. 542] 

Treasury Department, 

Washington, June 10, 1935. 
The Secretary of the Treasury, pursuant to the authority of the Second 
laberty Bond Act, approved September 24, 1917, as amended, invites subscriptions, 

1 Accrued interest from Dec. 15, 1934, to June 3, 1935, on $1,000 face amount is 
$14.010989. 

2 Revised June 3, 1935. 



226 EEPORT OF THE SECRETARY OF THE TREASURY 

at par and accrued interest, from the people of the United States, for 11/2 
percent notes of the United States, designated Treasury notes of series B-1540, 
in payment of which only Treasury notes of series A-1935, maturing June 
15, 1935, or Treasury notes of series B-1935, maturing August 1, 1935, may be 
tendered. The amount of the offering under this circular will be limited to the 
amount of Treasury notes of series A-1935 and of series B-1935 tendered 
and accepted. 

DESCRIPTION OF NOTES 

The notes will be dated .Tune 15, 1935. and will bear interest from that date at 
the rate of lyo percent per annum, payable semiannually, on December 15, 1935, 
and thereafter on June 15 and December 15 in each year. They will mature 
June 15, 1940, and will not be subject to call for redemption prior to matui'ity. 

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.^ * * * 

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 s^ibscribers, but only the Federal Reserve banks 
and the Treasury Department are authorized to act as ofiicial agencies. The 
Secretary of the Treasury reserves the right to close the books as to any or 
all subscriptions 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 
allotments in full upon applications for smaller amounts and to make reduced 
allotments upon, or to reject, applications for larger amounts, to make classi- 
fied 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 allotments as S'hall be deemed by him to be in the public interest ; and his 
action in any or all of these respects shall be final. Subject to these reserva- 
tions, all subscriptions will be allotted in full. Allotment notices will be sent 
out promptly upon allotment. 

PAYMElNT 

Payment at par and accrued interest, if any, for notes allotted hereunder 
must be made on or before June 15. 1935, or on later allotment, and may be 
made only in 3 percent Treasury notes' of series A-1935, maturing June 15, 
1935, or in 1% percent Treasury notes of series B-1935, maturing August 1, 
1935, which will be accepted at par, and should accompany the subscription. 
In the case of Treasury notes of series B-1935 tendered in payment, coupons 
dated August 1, 1935, must be attached to the notes when soirrendered, and 
accrued interest to June 15, 1935,^ will be paid following acceptance of the 
notes for exchange. 

GENEIUVL PROVISIONS 

As fiscal agents of the United States, Federal Reserve banks are authorized 
and requested to receive subscriptions * * * 

HbNET MOBGfiNTHAU, Jr., 

Secretarij of the Treasunj. 
Exhibit 19 

Allotments on exchange sutscriptions, Treasxiry notes of series B-I94O {from 
2)rcss releases, June 12 and IS, 1935*) 

The subscription books for the offering of 1% percent Treasury notes of series 
B-1940 closed at the close of business June 13, 1935. Subscriptions for these 



^ Similarly, the exemption does not apply to the gift tax, see Treasury Decision 
4550, p. 252. 

- Omitted portions similar to corresponding sections of Department Circular No. 522, 
p. ISl. 

3 Accrued interest at 1% percent from Feb. 1, 1935, to June 15, 1935, on .$1,000 is 
$6.015193. 

■» Revised Aug. 6, 1935. 



REPORT OF THE SECRETARY OP THE TREASURY 



227 



notes, which were open only to holders of Treasury notes maturing June 15 
and August 1, 1935, amounted to $738,428,400, of which $402,741,800 was ex- 
changed for the notes of series A-1935, maturing June 15; and $335,686,600 
was exchanged for the notes of series B-1935, maturing August 15. The sub- 
scriptions, which were allotted in full, were divided among the several Federal 
Reserve districts and the Treasury as follows : 



Federal Reserve district 



Subscriptions 

received (June 

notes) 



Subscriptions 
received (Au- 
gust notes) 



Total subscrip- 
tions received 
and allotted 



Boston 

New Yorlc 

Pliiladelphia- 

Cleveland 

Richmond 

Atlanta 

Chicago 

St. Louis 

Minneapolis-. 
Kansas City_. 

Dallas 

San Francisco 
Treasury 

Total... 



469, 600 
051, 200 
152, 200 
518, 900 
609, 900 
198, 000 
304, 700 
895, 700 
938, 700 
837, 200 
387, 700 
434, 500 
943, 500 



402,741,800 



$6, 181, 300 

268, 243, 700 

3, 500, 300 

2, 102, 100 

3, 726, 100 

8, 340, 000 

32, 657, 100 

5, 068, 400 

647, 000 

3, 628, 700 

359, 800 

487, 100 

745, 000 



335, 686, 600 



$13, 650, 900 
657, 294, 900 
13, 652, 500 
11, 621, 000 
25, 336, 000 
8, 538, 000 
66, 961, 800 
12, 964, 100 
3, 585, 700 
8, 465, 900 
2, 747, 500 
10, 921, 600 
2, 688, 500 



738, 428, 400 



Exhibit 20 

Lnvitinff tenders for 3 percent Treasury ionds of lOJfO-'iS (additional) 

On June 24, 1935, Secretary of the Treasury Morgenthau invited tenders for 
an iidditional issue of 3 percent Treasury bonds of 194(>-48, as described in the 
following circular : 

[Department Circular No. 544] 

Treasury Department, 

Washington, June 24, 1935. 
The Secretary of the Treasury, pursuant to the authority of the Second 
Liberty Bond Act, approved September 24, 1917, as amended, offers to the 
people of the United States $100',0OO.0iG0', or thereabouts. 3 percent Treasury 
bonds of 1946-48, and invites tenders therefor at not less than par and accrued 
interest from June 15, 1935, to July 1, 1935. 

DESCBIPTIO'N OF BONDS 

The bonds now offered will be an addition to and will form a part of the 
series of 3 percent Treasury bonds of 1946-48 issued pursuant to Department 
Circulars No. 512, dated June 4, 1934, and No. 541, dated May 27, 1935 ; will 
be freely interchangeable therewith; and (with the exception that interest on 
the bonds issued under this circular will accrue from June 15, 1935) are 
identical in all respects therewith and are described in the following quotation 
from Department Circular No. 512: [Description omitted here, seep. 223.] 

As interest on the bonds issued under this circular will accrue from June 15, 
1935, coupon bonds will be delivered hereunder with coupons nos. 1 and 2, dated 
December 15, 1034, and June 15, 1935, respectively, detached. 

TENDERS AND ALLOTMENTS 

Tenders will be received at the Federal Reserve banks and branches thereof 
up to 12 o'clock noon, eastern standard time, Wednesday, June 26, 1935, and 
unless received by that time will be disregarded. Tenders will not be received 
at the Treasury Department, Washington. Bach tender must state the face 
amount of bonds bid for, which must be $1,000 or any even multiple thereof, and 
the price offered. The price offered must be stated exclusive of accrued interest 
from June 15, 1935, to July 1, 1935 ; and must be expressed on the basis of lOO, 
with fractions expressed as 32ds of 1 percent, in accordance with usual practice, 
e. g., 103-16/32. Tenders at less than par will not be considered.^ * * * 



1 Omitted portions similar to corresponding sections of Department Circular No. 
541, p. 22.3. 



228 EEPOET OF THE SECKETARY OF THE TREASURY 

Immediately after the closing hour for the receipt of tenders ou June 26, 1935, 
all tenders received in writing or by telegraph at the Federal Reserve banks or 
branches thereof up to the closing hour (12 o'clock noon, eastern standard time) 
will be opened. * * * 

PAYMENT 

Payment for any bonds allotted on accepted tenders must be made or com- 
pleted ou or befoi-e July 1, 1935, in cash or other immediately available funds, 
and must include the face amount, and the premium which the bidder has agreed 
to pay, together with accrued interest on the face amount from June 15, 1935, 
to July 1, 1935.^ In every case where payment is not so completed, the 5 percent 
deposit with application shall, upon declaration made by the Secretary of the 
Treasury in his discretion, be forfeited to the United States. 

6ENEBAL PROVISIONS 

Federal Reserve banks, as fiscal agents of the United States, are authorized 
and requested to receive tenders * * * 

Hbnky Morgenthau. Jr., 
Secretary of the Treasury. 



Exhibit 21 



Acceptance of tenders for Treasury bonds of 1946-^8 (from press release, June 

27, 1935) 

On June 27, 1935, Secretary of the Treasury Morgenthau announced the 
result of the offering by the Treasury on June 24 of $100,000,000. or there- 
abouts, of 3 percent Treasury bonds of 1946-48, tenders for which were received 
at the Federal Reserve banks up to 12 o'clock noon on Wednesday, June 26. 

Tenders for $461,341,000 face amount of bonds were received, of which 
$112,669,000 was accepted at prices ranging from 103-24/32 down to 103-17/32 
and accrued interest from June 15 to July 1, 1935. The average price of the 
bonds to be issued was about 103-18/32, and a total premium of $4,005,378 
was to be received. Based on the average price at which the bonds were to 
be issued on July 1, 1935, the yield was about 2.62 percent to the earliest 
call date, June 15, 1946, and about 2.67 percent to maturity, June 15, 1948. 



Issues of Treasury bills 
Exhibit 22 

Inviting tenders for Treasury bills dated July 3, 1934, and maturing January 2, 

1985 

Treasury Department, 
Washington, June 27, 1934. 

The Secretary of the Treasury gives notice that tenders are invited for 
Treasury bills to the amount of $75,000,000, or thereabouts. They will be 
183-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 Friday, June 29, 1934. Tenders will 
not be received at the Treasury Department. Washington. 

The Treasury bills will be dated July 3, 1934, and will mature on January 2, 
1935, and on the maturity date the face amount will be payable without 
interest. They w 11 be issued in bearer form only, and in amount or denomi- 
nations 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. 



2 Accrued interest from June 15, 1935, to July 1, 1935, on $1,000 face amount is 
$1.311475. 



REPORT OF THE SECRETARY OF THE TREASURY 229 

No teuder for an amount less than $1,000 will be considered. Each tender 
must be in multiples of $1,000. The price offered must be expressed on the 
basis of 100, with not more than three decimal places, e. g., 99.125. Fractions 
must not be used. 

Tenders will be accepted without cash deposit from incorporated banks 
and trust companies and from responsible and recognized dealers in investment 
securities. Tenders from others must be accompanied by a deposit of 10 
percent of the face amount of Treasury bills applied for, unless the tenders 
are accompanied by an express guaranty of payment by an incorporated bank 
or trust company. 

Immediately after the closing hour for receipt of tenders on June 29, 1934, 
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 re.serves the right to re- 
ject 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 submit- 
ting 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 July 3, 1934. 

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 23 



Acceptance of tenders for Treasury bills dated July 3, J934, and maturbig 
January 2, 1935 (press release, June 30, 1934) 

Secretary of the Treasury Morgenthau announced on June 29, 1934, that 
the tenders for $75,000,000, or thereabouts, of 183-day Treasury bills, dated 
July 3, 1934, and maturing January 2, 1935, which were offered on June 27, 
were opened at the Federal Reserve banks on June 29, 1934. 

The total amount applied for was $205,138,000, of which $75,167,000 was 
accepted. The accepted bids ranged in price from 99.980, equivalent to a rate 
of about 0.04 percent per annum, to 99.960, equivalent to a rate of about 0.08 
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 99.964 and the average rate is about 0.07 percent per annum on a bank 
discount basis. 



Exhibit 24 



Press releases pertaining to Treasury bill issues during the fiscal year 1935 
were similar in form to the foregoing and are, therefore, not here reproduced. 
The essential details regarding each issue are summarized in the following 
table. 



230 



EEPORT OF THE SECRETARY OF THE TREASURY 



Summary of information contained in press releases issued in connection with 
Treasury Mils offered during the fiscal year 1935 



Date of issue 



1934 

Julys 

July 11 

July 18 

July 25 

Aug. 1 

Aug. 8 

Aug. IS 

Aug. 22 

Aug. 29 

Sept. 5 

Sept. 12 

Sept. 19 

Sept. 26 

Oct. 3. 

Oct. 10 

Oct. 17 

Oct. 24. 

Oct. 31 

Nov. 7 

Nov. 14 

Nov. 21 

Nov. 28 

Dec. 5.. 

Dec. 12 

Dec. 19 

Dec. 26 

1935 

Jan. 2.. 

Jan. 9 

Jan. 16 

Jan. 23 

Jan. 30 

Feb. 6.- 

Feb. 13 

Feb. 20 

Feb. 27 

Mar. 6. 

Mar. 13 

Mar. 20 

Mar. 27 

Apr. 3 

Apr. 10 

Apr. 17 

Apr. 24 

May 1 

Mays 

May 15 

May 22. 

May 29 

June 5 

June 12. 

June 19 

June 26 



Date of maturity 



1935 

Jan. 2.. 

Jan. 9 

Jan. 16-. 

Jan. 23 

Jan. 30 

Feb. 6 

Feb. 13... 

Feb. 20 

Feb. 27 

Mar. 6 

Mar. 13 

Mar. 20 

Mar. 27 

Apr. 3 

Apr. 10 

Apr. 17 

Apr. 24 

May 1... 

Mays 

May 15 

May 22 

May 29 

June 5 

June 12 

June 19._ 

June 26 

Julv3_-.. 

July 10 

July 17 

Julv24.. 

July 31 

Aug. 7. 

Aug. 14 

Aug. 21 

/Aug. 28 

INov. 27 

/Sept. 4 

iDec. 4 

/Sept. 11 

IDec. 11 

/Sept. 18 

IDec. IS 

/Sept. 25 

\Dec. 24 

Dec. 31.. 

1935 and 1936 

Jan. 8, 1936 

Jan. 15, 1936.... 

Jan. 22, 1936 

Jan. 29, 1936.... 

Feb. 5, 19.36 

Feb. 11, 1936... 

/Oct. 2, 19.35 

\Feb. 19, 1936... 

/Oct. 9, 1935 

I Feb. 26, 19.36... 

/Oct. 16, 1935.... 

\Mar. 4, 1936.... 

/Oct. 23, 1935.... 

IMar. 11, 1936... 

/Oct. 30, 1935... . 

\Mar. 18, 1936... 

/Nov. 6, 1935.... 

\Mar. 25, 1936... 



Days 
to ma- 
turity 



1S3 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 
182 

182 
182 
182 
182 
182 
182 
182 
182 
182 
273 
182 
273 
182 
273 
182 
273 
182 
272 
272 



273 
273 
273 
273 
273 
272 
133 
273 
133 
273 
133 
273 
133 
273 
1.33 
273 
133 
273 



Total 
amount 
applied 
for (in 
thou- 
sands) 



$205, 138 
208, 743 
207, 015 
157, 856 
115,497 
IDS, 633 
201, 491 
254, 800 
299, 185 
342, 426 
244, 980 
150, 849 
194, 266 
243, 169 
232, 204 
237, 719 
205, 632 

198, 826 
168. 030 

199, 237 
208, 855 
314,910 
236, 905 
302, 273 

333. 129 
229, 299 

214. 130 
141,685 
142, 359 
232, 573 
203, 618 
262. 9S5 
196, 853 
156, 544 
120.712 
165, 180 
152,020 
157,560 
129,722 
120,615 
104, 570 

67, 406 
108, 329 
117,186 
119,428 



109, 147 
124,413 
115,059 
213,212 
165,006 
160, 256 
109, 289 
114,552 
70, 001 
118,922 
67, 548 
71, 630 
153,319 
106, 569 
139, 654 

134, 793 
137, 543 

135, 365 



Bids accepted 



Highest 



Price 
(per hun- 
dred) 



$99. 980 
99. 980 
99. 970 
99. 975 
99. 975 
99. 965 
99. 949 
99. 906 
99. 900 
99. 914 
99. 925 
99. 907 

2 99. 879 
99. 879 
99. 905 
99. 909 
99.910 
99. 914 
99. 909 
99. 914 

3 99. 909 
99. 904 
99. 900 
99. 909 

< 99. 939 
99. 950 

99. 951 
99. 970 
99. 960 
99. 950 
99. 960 
99. 950 
99, 965 
6 99. 956 
99. 961 
99.911 
99. 955 
99. 909 
99. 975 
99. 925 
99. 965 
6 99. 901 
« 99. 960 
99. 895 
99. 900 



99. 898 
99. 884 
99. 885 

^ 99, 887 
99. 975 
99. 902 
99. 970 
99. 900 
99. 974 

6 99. 898 
99. 964 
99. 896 
99. 970 
99. 895 
99. 980 
99. 910 
99. 978 
99.911 



Equiva- 
lent rate ' 
(percent) 



0.039 
.040 
.059 
.049 
.049 
.069 
.101 
.186 
.198 
.170 
.148 
.184 
.239 
.239 
.188 
.180 
.178 
.170 
.180 
.170 
.180 
.190 
.198 
.180 
.120 
.099 

.097 
.059 
.079 
.099 
.079 
.099 
.069 
.870 
.077 
.117 
.089 
.120 
.049 
.099 
.069 
.131 
.079 
.139 
.132 



.135 
.153 
.152 
.149 
.033 
.130 
.081 
.132 
.070 
.135 
.097 
.137 
.081 
.138 
.054 
.119 
.060 
.117 



Lowest 



Price 
(per hun- 
dred) 



$99. 960 
99. 962 
99. 963 
99. 963 
99. 949 
99. 930 
99. 848 
99. 875 
99. 886 
99. 907 
99. 874 
99. 840 
99. 843 
99. 844 
99. 871 
99. 889 
99. 894 
99. 899 
99. 884 
99. 881 
99. 890 
99. 880 
99. 885 
99. 896 
99. 915 
99. 937 

99. 942 
99. 936 
99.914 
99. 921 
99. 928 
99. 937 
99. 941 
99. 935 
99. 942 
99. 872 
99. 946 
99. 886 
99. 949 
99. 887 
99. 948 
99. 883 
99. 936 
99. 853 
99. 867 



99. 857 
99. 860 
99. 865 
99. 884 
99. 881 
99. 889 
99. 965 
99. 885 
99. 962 
99. 887 
99. 958 
99. 877 
99. 963 
99. 883 
99. 967 
99. 892 
99. 972 
99. 903 



I Bank discount basis. 
= Except for 1 bid of $55,000 at 99.935. 
3 Except for 4 bids aggregating $17,000. 
< Except for 1 bid of $20,000. 



« Except for 2 bids totalling $24,000. 
8 Except for 1 bid of $10,000. 
' Except for 1 bid of $30,000. 



EEPORT OP THE SECRETARY OF THE TREASURY 



231 



Summary of information contained in press releases issued in connection with 
Treasury bills offered during the fiscal year 1935 — Continued 



Date of issue 



July 3... 
July 11.. 
July 18.. 
July 25-. 
Aug. 1.. 
Aug. 8.. 
Aug. 15. 
Aug. 22. 
Aug. 29. 
Sept. 5- 
Sept. 12. 
Sept. 19. 
Sept. 26. 
Oct. 3..., 
Oct. 10.. 
Oct. 17... 
Oct. 24... 
Oct. 31... 
Nov. 7... 
Nov. 14.. 
Nov. 21.. 
Nov. 28.. 
Dec. 5... 
Dec. 12.. 
Dec. 19.. 
Dec. 26.. 



Jan. 2. 



Jan. 9... 
Jan. 16.. 
Jan. 23.. 
Jan. 30-. 
Feb. 6.. 
Feb. 13- 
Feb. 20- 

Feb. 27. 
Mar. 6.. 



Mar. 13. 
Mar. 20- 

Mar. 27. 

Apr. 3.. 
Apr. 10.. 
Apr. 17.. 
Apr. 24., 
May 1... 
Mays... 
May 15., 

May 22-, 
May 29.. 
June 5... 



June 12. 
June 19- 
June 26. 



1934 



1935 



Bids accepted 



Amount 
(in thou- 
sands) 



$75, 167 
75, 235 
75, 144 
75, 200 
75, 025 
75, 327 
75, 320 
75. 090 
75, 065 
75, 290 
75, 365 
75, 041 
75, 023 
75, 038 
75, 360 
75, 248 
75, 102 
75, 015 
75, 075 
75, 045 
75, 168 
75. 287 
75, 139 
75, 079 
75, 020 
75, 300 



75, 150 



75, 185 
75, 079 
75, 129 
75, 106 
75, 185 
75, 112 
75, 024 
50, 054 
50, 185 
50, 114 
50, 072 
50, 052 
50, 149 
50, 125 
50, 006 

50. 079 
50, 071 
50, 018 

50. 062 
50, 020 
50, 155 
50, 085 
50, 091 
50, 255 

50. 063 

50. 020 

50. 021 
50, 037 
50. 013 
50, 010 

50. 009 

50. 080 
50, 013 
50, 059 
50, 000 

50. 010 



Price 
(per 
hun- 
dred) 



$99. 964 
99. 966 
99. 965 
99. 966 
99. 957 
99. 942 
99. 875 



99. 908 
99. 886 
99. 857 
99. 855 
99. 857 
99. 881 
99. 894 
99. 900 
99. 905 
99. 893 
99. 889 
99. 895 
99. 886 
99. 889 
99. 900 
99. 921 
99. 942 



99. 949 



99. 942 
99. 926 
99. 927 
99. 931 
99. 939 
99. 944 
99. 941 
99. 946 
99. 874 
99. 949 
99. 889 
99. 953 
99. 893 
99. 953 
99. 889 
99. 945 
99. 864 
99. 882 
99. 867 
99. 866 
99. 872 
99. 884 
99. 885 
99. 892 
99. 967 
99. 889 
99. 965 
99. 896 
99.961 
99. 887 
99. 965 



99.898 
99. 974 
99. 907 



Equiva- 
lent 
rate ' 
(percent) 



0.070 
.068 
.069 
.067 
.085 
.115 
.248 
.227 
.219 
.181 
.226 
.282 
.286 
.284 
.236 
.209 
.198 
.189 
.212 
.220 
.208 
.226 
.219 
.198 
.155 
.116 



.116 
.145 
.145 
.136 
.120 
.110 
.117 
.108 
.166 
.100 
.147 
.094 
.141 
.094 
.147 
.109 
.180 
.157 
.176 
.176 
.169 
.153 
.152 
.143 
.088 
.146 
.095 
.137 
.105 
.149 
.096 
.148 
.083 
.134 
.070 
.123 



Date of press releases 



1934 



June 27 and 30 

July 6 and 10 

July 13 and 17 

July 20 and 24 

July 27 and 31 

Aug. 3 and 7 

Aug. 10 and 14 

Aug. 17 and 21 

Aug. 24 and 28 

Aug. 29 and Sept. 1. 

Sept. 7 and 11 

Sept. Hand 18 

Sept. 21 and 25 

Sept. 28 and Oct. 2.. 

Oct. 5 and 9 

Oct. 12 and 16 

Oct. 19 and 23 

Oct. 26 and 30. 

Nov. 1 and 3... 

Nov. 7 and 10 

Nov. 16 and 20 

Nov. 23 and 27 

Nov. 30 and Dec. 4.. 

Dec. 7 and 11... 

Dec. 14 and 18 

Dec. 19 and 22 



Dec. 26 and 29.... 
1935 



Jan. 
Jan. 
Jan. 
Jan. 
Feb. 
Feb. 
Feb. 

^Feb. 



4 and 8.-.. 
11 and 15.. 
18 and 22.. 
25 and 29.. 
1 and 5---, 
6 and 9-., 
15 and 19. 

22 and 26. 



^Mar. 1 and 5... 
Sand 12-- 
15 and 19. 
22 and 26. 



►Mar. 
>Mar. 



[Mar. 

Mar. 
Apr. 
Apr. 
Apr. 
Apr. 
May 
May 

•May 
•May 

■May 



29 and Apr. 2. 

5 and 9 

12 and 16 

19 and 23 

26 and 30 

3 and 7 

10 and 14 

17 and 21 

24 and 28 

29 and June 1-. 

7 and 11 

14 and 18 

21 and 25 



Date of 
closing 



1934 

June 29. 
July 9. 
July 16. 
July 23. 
July 30. 
Aug. 0. 
Aug. 13. 
Aug. 20. 
Aug. 27. 
Aug. 31. 
Sept. 10. 
Sept. 17. 
Sept. 24. 
Oct. 1. 
Oct. 8. 
Oct. 15. 
Oct. 22. 
Oct. 29. 
Nov. 2. 
Nov. 9. 
Nov. 19. 
Nov. 26. 
Dec. 3. 
Dec. 10. 
Dec. 17. 
Dec. 21. 



Dec. 28. 
1935 



Jan. 
Jan. 
Jan. 
Jan. 
Feb. 
Feb. 
Feb. 



Feb. 25. 



Mar. 
Mar. 
Mar. 

Mar. 

Apr. 
Apr. 
Apr. 
Apr. 
Apr. 
May 
May 

May 
May 
May 
June 
June 
June 



11. 
18. 

25. 

1. 

8. 

15. 

22. 

29. 

6. 

13. 

20. 
27. 
31. 
10. 
17. 
24. 



> Bank discount basis. 



232 REPORT OP THE SECRETARY OP THE TREASURY 

Issues and redemptions of bonds of Government agencies guaranteed as to 
interest and principal by the United States 

Exhibit 25 

Inviting tenders for Federal Farm Mortgage Corporation 3 percent bonds of 

19 J, 4-^9 

Ou July 23, 1934, the Secretary of the Treasury, on behalf of the Federal 
Farm Mortgage Corporation, invited tenders for bonds of the Corporation, as 
described in the following circular : 

[Department Circular No. 515] 

Treasury Depaetment, 

Washington, July 23, 1934. 

The Secretary of the Treasury, on behalf of the Federal Farm Mortgage 
Corporation, offers to the public $100,000,000, or thereabouts, 3 percent bonds of 
1944-49 of the Federal Farm Mortgage Corporation, and invites tenders there- 
for, through the Federal Reserve banks, at not less than par and accrued in- 
terest from May 15 to August 1, 1934. 

DESCRIPTION OF BONDS 

The bonds of this issue are dated May 15, 1934, and bear interest at the rate 
of 3 percent per annum, payable semiannually, on May 15 and November 15 
of each year, until the principal amount becomes payable. These bonds will 
mature May 15, 1049. All or any part of this issue of bonds may be redeemed 
at par and accrued interest on May 15, 1944, or on any subsequent interest- 
payment date. In the event of any such redemption, notice thereof will be 
given in such manner as the Board of Directors of the Corporation may pre- 
scribe. Interest ceases to accrue on any bond after the redemption date of 
which notice is so given, whether the bond is then surrendered or not. 

Bearer bonds, with interest coupons attached and bonds registered as to 
principal and interest are issued in denominations of $100, $500, $1,000, $5,000, 
and $10,000. Exchanges of denominations and of registered for coupon or 
coupon for registered bonds may he made through any Federal Reserve bank 
or at the Division of Loans and Currency of the United States Treasury, Wash- 
ington. D. C, and through any other agency designated for the purpose by the 
Fedei'al Farm Mortgage Corporation. 

These bonds are issued under the authority of the Federal Farm Mortgage 
Corporation Act, approved January 31, 1934, as amended, which provides that 
these bonds and the iacome derived therefrom shall be exempt from Federal, 
State, municipal, and local taxation (except surtaxes, estate, inheritance, and 
gift taxes). 

Section lG(a) of that act contains the following provisions: "The first sen- 
tence of the eighth paragraph of section 13 of the Federal Reserve Act, as 
amended, is further amended by inserting before the semicolon after the words 
'Section 13 (a) of this act' a comma and the following: 'or by the deposit or 
pledge of Federal Farm Mortgage Corporation bonds issued under the Federal 
Farm Mortgage Corporation Act '." Thus, the bonds are legally acceptable to 
secure 15-day borrowings from the Federal Reserve banks. However, they do 
not have the circulation privilege. 

Section 4 of the Federal Farm Mortgage Corporation Act, as amended, also 
provides as follows : " * * * Such bonds shall be fully and unconditionally 
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 con- 
trol 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. * * * " 



EEPOET OF THE SECRETAEY OF THE TEEASURY 233 

TENDERS AND ALLOTMENTS 

Tenders will be received at the Federal Reserve banks and the branches 
thereof up to 2 p. m., eastern standard time, Wednesday, July 25, 1934, and 
unless received by that time will be disregarded. Tenders will not be received 
at the Treasury Department, Washington. Each tender must be in multiples of 
SlOO, must state the face amount of bonds applied for, and the price offered. 
The price offered (not less than par) must be expressed on the basis of 100 
with not more than three decimal places, e. g., 101.125. The price offered must 
be stated exclusive of accrued interest from May 15 to August 1, 1934. Tenders 
at less than par will not be considei-ed. 

Tenders will be accepted without deposit from incorporated banks and trust 
companies and from responsible and recognized dealers in investment securities. 
Tenders from others must be accompanied in every case by a deposit of 5 percent 
of the face amount of bonds bid for, except where the tender is accompanied by 
an express guaranty of payment by an incorporated bank or trust company. If 
the tender is accepted, any deposit will be applied toward ]iayment for the bonds, 
the balance to be paid as hereinafter provided. If the tender is rejected, any 
deposit will be returned to the bidder. 

Tenders must be enclosed in envelops, securely sealed, addressed to the Fed- 
eral Resei've bank or branch of the district, and plainly marked " Tender for 
3 percent bonds of Federal Farm Mortgage Corporation. The Federal Reserve 
banks will supply printed forms and special envelops for submitting tenders. 

Immediately after the closing hour for the receipt of tenders on July 25, 1934, 
all tenders received at the Federal Reserve banks or branches thereof up to the 
closing hour will be opened. The Secretary of the Treasury w'ill determine the 
acceptable prices offered and will make public announcement thereof as soon 
as possible after the opening of tenders. Those submitting tenders will be ad- 
vised by the Federal Reserve banks of the acceptance or rejection thereof, and 
payment on accepted tenders must be made as hereinafter provided. In consid- 
ering 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 bid for. However, the Secretary of the Treasury ex- 
pressly reserves the right to reject any or all tenders or parts of tenders, and 
to award less than the amount bid for, and any action he may take in any such 
respect or respects shall be final. 



Payment for any bonds allotted on accepted tenders must be made or com- 
pleted on or before August 1, 1934, in cash or other immediately available funds, 
and must include the face amount and the premium, if any, which the bidder 
has agreed to pay, together with accrued interest on the face amount from May 
15 to August 1, 1934.^ In every case where payment is not so completed, the 
5 percent payment with application shall, upon declaration by the Secretary of 
the Treasury in his discretion, be forfeited to the United States. 

GENEBAL PROVISIONS 

Federal Reserve banks, as fiscal agents of the United States, are authorized 
and requested to receive tenders, to make allotments as indicated by the Secre- 
tary 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 allotments, and to perform such other acts as may be 
necessary to carry out the provisions of this circular. Pending delivery of the 
definitive bonds. Federal Reserve banks may issue interim receipts. 

The Secretary of the Treasury may at any time, or from time to time, pre- 
scribe supplemental or amendatory rules and regulations governing the receipt 
of tenders and the sale of bonds under this circular, which will be promptly 
communicated to the Federal Reserve banks. 

T. J. COOLIDGE, 

Acting Secretary of the Treasury. 



^ Accrued interest from May 15 to Aug. 1, 1934, on $1,000 face amount is' $6.358695. 



234 REPORT OP THE SECRETARY OF THE TREASURY 

Exhibit 26 

Acceptance of tenders for Federal Farm Mortgage Corporation "bonds of 1944-4^ 
{from press release, July 26, 1934, revised^) 

Acting Secretary of the Treasury Coolidge announced the result of the offer- 
ing by the Treasury of $100,000,000 of 10-15 year, 3 percent bonds of the Fed- 
eral Farm Mortgage Corporation, tenders for which were received at the Fed- 
eral Reserve banks up to 2 p. m., July 25. 

Tenders for $194,856,600 face amount of bonds were received, of which $100,- 
045.300 was accepted at prices ranging from 102.250 down to 100.438, and ac- 
crued interest from May 15 to August 1, 1934. Only 10 percent of the amount 
tendered at the latter price was accepted. The average price of the bonds to be 
issued was 100.559, and a total premium of $558,291 was to be received. Based 
on the average prices at which the bonds were to be issued on August 1, 1934, 
the yield was about 2.92 percent to the earliest call date. May 15, 1944, and 
about 2.95 percent to maturity, May 15, 1949. 



Exhibit 27 



Inviting tenders for Home Owners' Loan Corporation bonds, series C, 1936 
{iy2 percent), series D, 1937 (1% percent), and series E, 1938 {2 percent) 

On August 6, 1934, Secretary of the Treasury Morgenthau, on behalf of the 
Home Owners' Loan Corporation, invited tenders for three issues of bonds of 
the Corporation, as described in the following circular : 

[Department Circular No. 516] 

Tkeasuky Department, 

Washington, August 6, 1934. 
The Secretary of the Treasury, on behalf of the Home Owners' Loan Cor- 
poration, offers to the public not to exceed $150,000,000 of bonds of the Home 
Owners' Loan Corporation, in three series of not to exceed $50,000,000 each, 
and invites tenders therefor, through the Federal Reserve banks. 

DESCRIPTION OF BONDS 

Series C, 1936, for not to exceed $50,000,000.— The bonds of this series will 
be dated August 15, 1934, and will bear interest from that date at the rate of 
1% percent per annum. They will mature August 15, 1936, and will not be 
subject to call for redemption prior to maturity. 

Series D, 1937, for not to exceed $50,000.000.— The bonds of this series will 
be dated August 15, 1934, and will bear interest from that date at the rate of 
1% percent per annum. They will mature August 15, 1937, and will not be 
subject to call for redemption prior to maturity. 

Series E, 1938, for not to exceed $50,000,000.— The bonds of this series will 
be dated August 15, 1934, and will bear interest from that date at the rate of 
2 percent per annum. They will mature August 15, 1938, and will not be 
subject to call for redemption prior to maturity. 

Bearer bonds with interest coupons attached will be issued in denomina- 
tions of $100, $500, $1,000, $5,000, $10,000, and $100,000.' The bonds will not 
be issued in registered form. Provision will be made for the interchange of 
bonds of different denominations of the same series, without charge by the 
Corporation, under rules and regulations prescribed by the Corporation. 

These bonds are issued under the authority of the Home Owners' Loan Act 
of 1933, as amended, which provides that these bonds shall be exempt, both 
as to principal and interest, from all taxation (except surtaxes, estate, inherit- 
ance, and gift taxes) now or hereafter imposed by the United States or any 
district, Territory, dependency, or possession thereof, or by any State, county, 
municipality, or local taxing authority. 



1 Revised July 31, 1934. 

2 The denominations of SlOO, ?500, $1,000, and .$5,000 will be initially available, and 
those of $10,000 and $100,000 will be available after Sept. 1, 1934. 



REPORT OF THE SECRETARY OF THE TREASURY 235 

The bonds are acceptable at face value in paj-ment of indebtedness due the 
Home Owners' Loan Corporation. The.y are also acceptable to secure 15-day 
borrowings from the Federal Reserve banks, but do not bear the circulation 
privilege. 

Section 4 (c) of the Home Owners' Loan Act of 1933, as amended, provides 
as follows : " * * * Such bonds shall be fully and unconditionally guaran- 
teed 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 invest- 
ments, 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. * * * " 

TENDERS AND ALLOTMENTS 

Tenders will be received at the Federal Reserve banks and the branches 
thereof up to 2 p. m., eastern standard time, Wednesday, August 8, 1934, and 
unless received by that time will be disregarded. Tenders will not be received 
at the Treasury Department, Washington. Bidders will be required to specify 
the particular series for which each tender is made. Each tender must be in 
multiples of $100, must state the face amount of bonds applied for, and the 
price offered. The price offered must be expressed on the basis of 100 with 
not more than three decimal places, e. g., 100.125. 

Tenders will be received without deposit from incorporated banks and trust 
companies and from responsible and recognized dealers in investment securities. 
Tenders from others must be accompanied in every case by a deposit of 5 
percent of the face amount of bonds bid for, except where the tender is accom- 
panied by an express guaranty of payment by an incorporated bank or trust 
company. If the tender is accepted, in whole or in part, the deposit will be 
applied toward payment for the bonds, the balance to be paid as hereinafter 
provided. If the tender is rejected, the deposit w^ill be returned to the bidder. 

Tenders must be enclosed in envelops, securely sealed, addressed to a Federal 
Reserve baulj, or branch, and plainly marked " Tender for bonds of the Home 
Owners' Loan Coi'poration." The Federal Reserve banks will supply printed 
forms and special envelops for submitting tenders. 

Immediately after the closing hour for the receipt of tenders on August 8, 
1934, all tenders received at the Federal Reserve banks or bi'anches thereof up 
to the closing hour will be opened. The Secretary of the Treasury will deter- 
mine the acceptable prices offered and will make public announcement thereof 
as soon as possible after the opening of tenders. 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 as hereinafter pro- 
vided. 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 bid for. However, the Secretary of 
the Treasury expressly reserves the right to reject any or all tenders or parts 
of tenders, and to award less than the amount bid for, and any action he may 
take in any such respect or respects shall be final. 

PAYMENT 

Payment for any bonds allotted on accepted tenders must be made or com- 
pleted on or before August 15, 1934, in cash or other immediately available 
funds. In every case where payment is not so completed, the 5 percent pay- 
ment with application shall, upon declaration by the Secretary of the Treasury 
in his discretion, be forfeited to the Home Owners' Loan Corporation. 

GENEEAL PKOVISIONS 

Federal Reserve banks, as fiscal agents of the United States, are authorized 
and requested to receive tenders, to make allotments as directed by the Secre- 



236 



REPORT OF THE SECRETARY OF THE TREASURY 



tary of the Treasury, to issue allotment notices, to receive payment for bonds 
allotted, to make delivery of bonds on full-paid allotments, and to perform 
such other acts as may be necessary to carry out the provisions of this circular. 
Pending delivery of the definitive bonds. Federal Reserve banks may issue 
interim receipts. 

The Secretary of the Treasury may at any time, or from time to time, 
prescribe supplemental or amendatory rules and regulations governing the 
I'eceipt of tenders and the sale of bonds under this circular, which will be 
promptly communicated to the Federal Reserve banks. 

Henky Morgenthatj, Jr., 
Secretary of the Treasury. 



Exhibit 28 



Acceptance of tender.s for Home Oimiers' Loan Corporation ionds, series G, 
1936, series D, 1937, and series E, 193S {from press release, Aug. 9, 193^, 
revised *) 

On August 9, 1934, Secretary of the Treasury Morgenthau announced the 
result of the offering by the Treasury of not to exceed $150,000,000 of bonds 
of the Home Owners' Loan Corporation in three series of not more than 
$50,000,000 each, tenders for which were received at the Federal Reserve banks 
up to 2 p. m., August 8. 

Tenders aggregating $233,126,600 were received for the three series, of which 
tenders amounting to $127,111,100 were accepted. In accordance with the right 
reserved to reject any tenders, all those below 99 for the 3- and 4-year bonds 
were rejected as being unsatisfactory in price, with the result that allotments 
for these two series were below the amounts offered. In addition to accepted 
bids the Treasury purchased for the benelit of its investment funds $8,000,000 
of the 3-.year and $14,000,000 of the 4-year bonds. 

The details of each series follow: 



Issue 



Total amount 
applied for 



Bids accepted 



Amount 



Highest 



Lowest 



Average 



Price 



Equiva- 
lent 
rate' 



Series C, 1936 
Series D, 1937 
Series E, 1938. 



$124, 462, 500 
48, 177, 000 
60, 487, 100 



$49, 736, 000 
41,843,000 
35, 532, 100 



101.590 
101.130 
101.035 



100.411 
99.000 
99. 000 



100. 077 
99.931 
99.962 



1.15 
1.77 
2.01 



1 Bank discount basis. 



Exhibit 29 



Offering of Home Oimiers' Loan Corporation 1% percent bonds of series F-1939 
(tcith circular of Home Owners' Loan Corporation governing redemption^ of 
its Jf percent bonds of 1938-51) 



On May 20, 1935, Secretary of the Treasury Morgenthau, on behalf of the 
Home Owners' Loan Corporation, offered 1% percent bonds of the Corporation 
in payment of which only 4 percent bonds of the Corporation, series of 1933-51^ 
called for redemption on July 1, 1935', might be tendered. 



I Revised Aug. 15 and 21, 1934. 



REPORT OF THE SECRETARY OF THE TREASURY 237 

[Department Circular No. 540] 

Treasury Department, 
Washington, May 20, 1935. 

The Secretary of the Treasury, on behalf of the Home Owners' Loan Corpora- 
tion, invites subscriptions, from the people of the United States, for IV2 per- 
cent bonds of the Home Owners' Loan Corporation, designated bonds of series 
F-1939, in payment of which only Home Owners' Loan Corporation 4 percent 
bonds of series of 1933-51, called for redemption on July 1, 1935, of an equal 
principal amount, may be tendered. The amount of the offering under this 
circular will be limited to the principal amount of Home Owners' Loan Cor- 
poration 4 percent bonds of series of 1933-51 tendered and accepted. It is the 
intention to offer for cash subscription, upon such terms and conditions as 
may be prescribed by the Home Owners' Loan Corporation with the approval 
of the Secretary of the Treasury, an additional amount of bonds of series 
F-1939, approximately equal to the amount of Home Owners' Loan Corpora- 
tion 4 percent bonds of series of 1933-51 not tendered and accepted hereunder. 

The terms and conditions of the bonds offered under this circular, the man- 
ner in which such bonds shall be issued, and the prices at which they shall 
be sold are prescribed by the Home Owners' Loan Corporation, with the ap- 
proval of the Secretary of the Treasury, as follows : 

DESCRIPTION OF BONDS 

The bonds will be dated June 1, 1935, and will bear interest from that date 
at the rate of IV2 percent per annum, payable semiannually, on December 1, 
1935, and thereafter on June 1 and December 1 in each year. They will 
mature June 1, 1939, and will not be subject to call for redemption prior to 
maturity. 

These bonds are issued under the authority of the Home Owners' Loan 
Act of 1933, as amended, which provides that these bonds 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, municipality, or local taxing authority. 

The bonds will be acceptable at face value in payment of indebtedness due 
the Home Owners' Loan Corporation. They will be acceptable to secure 
deposits of public moneys, and will also be acceptable in lieu of surety under 
the provisions of section 1126 of the Revenue Act of 1926, as amended. They 
will be acceptable to secure 15-day borrowings from the Federal Reserve banks. 

The bonds herein offered come within the following provisions of section 4(c) 
of the Home Owners' Loan Act of 1933, as amended : " * * * Such bonds 
shall be fully and unconditionally 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. * * * " 

Bearer bonds with interest coupons attached will be issued in denominations 
of $25, $50, $100, $500, $1,000, $5,000, $10,000, $100,000. The bonds will not be 
issued in registered form. Provision will be made for the interchange of bonds 
of different denominations, witliout charge by the Corporation, under rules 
and regulations prescribed by the Corporation. 

SUBSCRIPTION AND ALLOTMENT 

Subscriptions will be received at the Federal Reserve banks and branches 
and the Treasury Department, Washington, D. C. The Secretary of the 
Treasury reserves the right to close the books as to any or all subscriptions 
at any time without notice. 



238 KEPOE.T OF THE SECRETARY OF THE TREASURY 

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 classi- 
fication of allotments 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. Subject to these 
reservations, all subscriptions will be allotted in full. Allotment notices will 
be sent out promptly upon allotment. 

TERMS OF PATMENT 

Payment for bonds allotted hereunder may be made only in Home Owners' 
Loan Corporation 4 percent bonds of series of 1933-51, called for redemption 
on July 1, 1935, of an equal principal amount, which should accompany the sub- 
scription. Cash payments will not be accepted. If any subscription is rejected, 
in whole or in part, the Home Owners' Loan Corporation 4 percent bonds of 
series of 1933-51 tendered therewith and not accepted will be returned to the 
subscriber. Interest on Home Owners' Loan Corporation 4 percent bonds of 
series of 1933-51 tendered and accepted will be paid in full to July 1, 1935. 

SURRENDER OF HOME OWNERS' LOAN CORPORATION 4 PERCENT BONDS OF SERIES OF 

1933-51 

Coupon honds. — Home Owners' Loan Corporation 4 percent bonds of series 
of 1933-51 in coupon form tendered in payment for Home Owners' Loan Cor- 
poration bonds offered hereunder, should be presented and surrendered with 
the subscription to a Federal Reserve bank or the Treasurer of the United 
States, Washington, D. C. Coupons dated January 1, 1936, and all coupons 
bearing subsequent dates should be attached to such coupon bonds when sur- 
rendered, and if any such coupons are missing, the subscription must be 
accompanied by cash payment equal to the face amount of the missing coupons. 
Coupons dated July 1, 1935, should be detached and collected in regular course 
when due. The bonds must be delivered at the expense and risk of the holder. 
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. 

Registered bonds. — Home Owners' Loan Corporation 4 percent bonds of series 
of 1933-51 in registered form tendered in payment for Home Owners' Loan 
Corporation 1% percent bonds offered hereunder, should be assigned by the 
registered payee or the assignee thereof to " Home Owners' Loan Corporation 
in payment for Home Owners' Loan Corporation li/^ percent bonds of series 
F-1939 ", and thereafter should be presented and surrendered with the sub- 
scription to a Federal Reserve bank or to the Treasury Department, Division 
of Loans and Currency, Washington, D. C. If the 1% percent bonds are to be 
delivered for the account of other than the registered payee or the assignee 
of the 4 percent bonds surrendered, the assignment should be to " Home Owners' 
Loan Corporation in payment for Home Owners' Loan Corporation li^ percent 

bonds of series F-1939 to be delivered to " The bonds must 

be delivered at the expense and risk of the holder. Final interest due will 
be paid on July 1. 1935, by checks issued in favor of registered payees and 
for this purpose the persons entitled by assignment to receive the bonds of 
series F-1939 will be considered the registered payees. 

GENERAL PROVISIONS 

Federal Resei-ve banks, as fiscal agents of the United States, are authorized 
and requested to receive subscriptions, to make allotments as directed by the 
Secretary of the Treasury, to issue allotment notices, to receive payment for 
bonds allotted, to make delivery of bonds on full-paid subscriptions allotted, to 
issue interim receipts if required, and to perform such other acts as may be 
necessary to carry out the provisions of this circular. 



EEPORT OF THE SECRETARY OF THE TREASURY 239 

The Secretary of the Treasury may at any time, or from time to time, pre- 
scribe supplemental or amendatory rules and regulations governing the offer- 
ing which will be promptly communicated to the Federal Reserve banks. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 



The circular of the Home Owners' Loan Corporation governing the redemption 
of its 4 percent bonds, series of 1933-51, as follows : 

[Home Owners' Loan Corporation Circular No. 11] 

Home Owners' Loan Corporation, 

Office of the Chairman, 

Washington, May 20, 1935. 

To Holders of Home Oivners' Loan Corporation // Percent Bonds of Series of 
1933-51, and Others Concerned: 

I. notice of call for redemption before maturity 

On May 20, 1935, the following public notice of call for redemption was given : 
Public notice is hereby given that all outstanding Home Ownei-s' Loan Cor- 
poration 4 percent bonds of series of 1933-51, dated July 1, 1933, each and 
every number of all denominations, are hereby called for redemption on July 
1, 1935, and will cease to bear interest on that date. 

Full information regarding the presentation and surrender of such Home 
Owners' Loan Corporation 4 percent bonds of series of 1933-51 for redemption 
on July 1, 1935, is given in Circular No. 11, dated May 20, 1935, of the Home 
Owners' Loan Corporation. 

II. OPTIONAL EXCHANGE OFFERING 

Holders of Home Owners' Loan Corporation 4 percent bonds of series of 
1933-51, now called for redemption on July 1, 1935, are offered the privilege, 
for a limited period, of acquiring with all or any part of their called bonds 
an equal principal amount of 4-year 11/2 percent bonds of the Home Owners' 
Loan Corporation, dated and bearing interest from June 1, 1935, and fully 
and unconditionally guaranteed both as to interest and principal by the United 
States. Full information concerning the offering is set forth in Treasury 
Department Circular No. 540, dated May 20, 1935. 

III. RUt^S AND RBGXn^TIONS GOVERNING REDEMPTION OF HOME OWNERS' LOAN COR- 
PORATION 4 percent bonds 

Pursuant to the call for redemption, as set forth in section 1 of this circular, 
the following rules and regulations are hereby prescribed to govern the pres- 
entation and surrender of Home Owners' Loan Corporation 4 percent bonds for 
redemption on July 1, 1935 : 

1. The United States Treasury Department is the agency of the Home 
Owners' Loan Corporation for the redemption of Home Owners' Loan Corpora- 
tion 4 percent bonds, and the Home Owners' Loan Corporation has adopted 
the regulations of the Treasury Department governing the assignment and 
redemption of United States bonds in connection with the redemption of Home 
Owners' Loan Corporation bonds. Therefore, Treasury Department regulations 
will be followed in connection with the assignment and redemption of Home 
Owners' Loan Corpgration 4 percent bonds, except as otherwise provided 
herein. 

2. Payment of called bonds on July 1, 1935. — Holders of any outstanding 
Home Owners' Loan Corporation 4 percent bonds will be entitled to have such 
bonds redeemed and paid at par on July 1, 1935, with interest in full to that 
date. After July 1, 1935, interest will not accrue on any Home Owners' Loan 
Corporation 4 percent bonds. 

3. Presentation and surrender of coupon bonds. — Home Owners' Loan Corpo- 
ration 4 percent bonds in coupon form should be presented and suiTendered 
to any Federal Reserve bank or branch, or to the Treasurer of the United 
States, Washington, D. C., for redemption on July 1, 1935. The bonds must be 
delivered at the expense and risk of holders (see par. 9 of this section), and 
should be accompanied by appropriate written advice (see form FA12 attached 

16816—36 17 



240 EEPOBT OF THE SECEETARY OF THE TREASURY 

liereto). Checks in payment of principal will be mailed to the address given 
in the form of advice accompanying the bonds surrendered. 

4. Coupons dated July 1, iy35, which become payable on that date, should be 
detaclied from any Home Owners' Loan Corporation 4 percent bonds before 
such bonds are presented for redemption on July 1, 1935, and such coupons 
should be collected in regular course when due. All coupons pertaining to such 
bonds bearing dates subsequent to July 1, 15135, 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 bf redeemed, but the full face amount of any such missing coupons will 
be deducted from the payment to be made on account of such redemption, and 
any amounts so deducted will be held in the Treasury to provide for adjust- 
ments or refunds on account of such missing coupons as may subsequently 
be presented. 

5. Presentation and surrender of registered bonds. — Home Owners' Loan 
Corporation 4 percent bonds in registered form must be assigned by the regis- 
tered payees or assigns thereof, or by their duly constituted representatives, in 
accordance with the general regulations of the United States Treasury Depart- 
ment governing assignments of United States bonds in the form indicated in the 
next paragraph hereof, and thereafter should 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 July 1, 1935. The 
bonds must be delivered at the expense anil risk of holders (see par. 9 of this 
section) and should be accompanied by appropriate written advice (see form 
rA13 attached hereto). Final interest due July 1, 1U35, on registered bonds 
will be paid with the principal amount thereof and check will be issued in 
regular course to the owner of the bond surrendered. 

6. If the registered payee, or an assignee holding under proper assignment 
from the registered payee, desires that payment of the principal and final instal- 
ment of interest be made to him, the bonds should be assigned by such payee 
or assignee, or by a duly constituted i-epresentative, to the " Home Owners' 
Loan Corporation for redemption." If it is desired, for any reason, that pay- 
ment be made to some other person, without intermediate assignment the bonds 
sliould be assigned to the " Home Owners" Loan Corporation for redemption for 
the account of ", inserting the name and address of the per- 
son to whom payment is to be made. A representative or fiduciary should not 
assign for payment to himself individually, unless expressly authorized to do so 
by court order or the instrument under which he is acting ; he may, however, 
assign for payment to himself in his representative or fiduciary capacity. 

7. 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 bond becomes in 
effect payable to bearer. Assignments in blank or assignments having similar 
effect should be avoidetl, if possible, in order not to lose the protection afforded 
by registration. 

8. Final interest due on July 1, 1935, on registered Home Owners' Loan Corpo- 
ration 4 percent bonds will be paid with the principal in accordance with the 
assignments on the bonds surrendered. The transfer books for registered 
bonds will remain open until June 15, 1935. 

9. Transportation of bonds. — Bonds presented for redemption under this circu- 
lar 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 
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 Ijearing unrestricted assignjnents should be for- 
warded 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 incorpo- 
rated banks and trust companies as their agents. Incorporated banks and 
trust companies are not agents of the Home Owners' Loan Corporation under 
this circular. 

IV. TIME] OF PRESENTATION OF ClALLED BONDS FOR REDEMPTION 

1. In order to facilitate the redemption of Home Owners' Loan Corporation 
4 percent bonds on July 1, ]J)3r). any such bonds should be presented and sur- 
rendered in the manner herein prescribed well in advance of that date but not 



REPORT OF THE SECRETARY OF THE TREASURY 



241 



before June 1, 1935. Such early presentation by holders will a.ssure prompt 
payment of principal when clue. This i.s particularly important with respect 
to registered bonds, for payment cannot be made until registration shall have 
been discharged at the United States Treasury Department. 

2. It will expedite redemption if the bonds are presented to Federal Reserve 
banks, or branches, and not direct to the Treasury Department. 

3. As hereinbefore provided : (Ij Coupons due July 1, 1935, should be detached 
from any coupon bonds when such bonds are presented for redemption on 
that date, such coupons to be collected when due; and (2) final interest due 
on any registered bonds will be paid with the principal amount. 

4. If Home Owners" Loan Ccjrpoiation 4 percent bonds called for redemption 
on July 1, 1935, are to be presented in payment for Home Owners' Loan Corpo- 
ration 1% percent bonds of series F-1939, instructions given in Treasury De- 
partment Circular No. 540 should be followed ; if to be presented for redemp- 
tion on July 1, 1935, instructions given in this circular should be followed. 

v. GENEatAL PEO^nSIONS 

1. Any further information which may be desired regarding the redemption 
of Home Owners' Loan Corporation 4 percent bonds 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 also may be obtained. 

2. As fiscal agents of the Home Owners' Loan Corporation, Federal Reserve 
banks are authorized and requested to perform any necessary acts under this 
circular. The chairman of the board of directors of the Home Owners' Loan 
Corporation may at any time, or from time to time, prescribe supplemental 
or amendatory rules and regulations governing the matters covered by this 
circular, which will be communicated promptly to Federal Reserve banks. 

JoHX H. Fahey, 
Chairman of the Board of Directors. 



FOR COUPON BONDS 

[Form FA 12. For registered bonds use form FA 13] 

Form of Advice to Accompany Home Owners' Loan Corporation 4 Pekcent 
Bonds in Coupon Form Presented for Redemption on July 1, 1935 

To the Fedeeal Reserve Bank of , 

or 
Trizasurer of the United States, Washington, D. C. : 
Pursuant to the provisions of Home Owners' Loan Corporation Circular No. 
11. dated May 20, 1935, the undersigned presents and surrenders herewith for 

redemption on July 1, 1935, .$ , face amount of Home Owners' Loan 

Corporation 4 percent bonds in coupon form, witli coupon due January 1, 1936, 
and all subsequent coupons attached, as follows : 



Number of bonds 


Denomina- 
tion 


Serial numbers of bonds 


Face 
amount 




$25 

50 

100 

500 

1.000 

5,000 

10, 000 

100, 000 




$ 


















































Total 













and requests that remittance covering payment therefor be forwarded to the 

undersignecl at the address indicated below. 

Signature 

Name (please print ) 

Address in full 

Date 



242 



REPOET OF THE SECRETARY OF THE TREASURY 



Date- 



FOR REGISTERED BONDS 

[Form FA 13. For coupon bonds use form FA 12] 



Form of Advice to Accompany Home Owneirs' Loan Corporation 4 I'ebcent 
Bonds in Rexjisteireid Form PRESENTEa> for Redemption on July 1, 1935 

To the Fedeiral Reserve Bank op , 

or 
Treasury Department, Division of Loans and Currency, Washington, 
D. C: 
Pursuant to tlie provisions of Home Owners' Loan Corporation Circular No. 
11, dated May 20, 1935, the undersigned presents and surrenders herewith for 

redemption on July 1, 1935, $ , face amount of Home Owners' Loan 

Corporation 4 percent bonds in registered form, inscribed in the name of 
and duly assigned to the " Home Owners' Loan Corpora- 
tion for redemption ", as follows : 



Number of bonds 


Denomina- 
tion 


Serial numbers of bonds 


Face 
amount 




$1, 000 

5,000 

10, 000 

100, 000 




$ 


























Total 






1 





and requests that remittance covering payment of principal and final interest 
be forwarded to the undersigned at the address indicated below. 

Signature 

Name (please print) 

Address in full 

Date 



Exhibit 30 



Allotments on exchange subscriptions, Home Owners' Loan Corporation bands of 
series F-1939 {press release, June 3, 1935^) 

The subscription books for the offering of 1% percent bonds of the Home 
Owners' Loan Corporation of series F-1939 were closed on May 29, 1935. The 
subscriptions, which were limited to holders of corporation bonds, series of 
1933-51, 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 and 
allotments 



$6, 323, 725 
152, 428, 975 
9, 854, 650 
9, 199, 0.50 
5, 825, 625 
6, 994, 800 
18, 347, 525 
7, 874, 250 



Federal Reserve district 



Minneapolis. - 
Kansas City.. 

Dallas 

San Francisco 
Treasury 

Total... 



Total sub- 
scriptions and 
allotments 



$10, 641, 275 

4, 476, 625 

499, 075 

6, 715, 850 

6, 073, 325 



245, 254, 750 



1 Revised Aug. 6, 1935. 



EEPORT OP THE SECRETARY OF THE TREASURY 243 

Miscellaneous 

Exhibit 31 

An act to amend the Second Liberty Bond Act, as amended, and for other 

purposes 

[Public No. 3, 74th Cong., H. R. 4304] 

Be it enacted by the Senate and House of Representatives of the United 
States of America in Congress asacnibled, That the Second Liberty Bond Act, 
as amended, is further amended as follows: 

The first paragraph of section 1 is amended to read as follows : 

" The Secretary of the Treasury, with tlie approval of the President, is 
hereby authorized to borrow, from time to time, on the credit of the United 
States for the pui'poses of this act, to provide for tlie purchase, redemption, 
or refunding, at or before maturity, of any outstanding bonds, notes, certificates 
of indebtedness, or Treasury bills of the United States, and to meet expendi- 
tures authorized for the national security and defense and other public pur- 
poses authorizeil by law, such sum or sums as in his judgment may be neces- 
sary, and to issue therefor bonds of the United States : Provided, That the 
face amount of bonds issued under this section and section 22 of this act shall 
not exceed in the aggregate $25,000,000,001) outstanding at any one time." 

Sec. 2. The first sentence of subsection (a) of section 5 is amended to read 
as follows : " In addition to the bonds and notes authorized by sections 1, 18, 
and 22 of this act, as amended, the Secretary of the Treasury is authorized, 
subject to the limitation imposed by section 21 of this act. to borrow from 
time to time, on the credit of the United States, for the purposes of this act, 
to provide for the purchase, redemption, or refunding, at or before maturity, 
of any outstanding bonds, notes, certificates of indebtedness or Treasury bills 
of the United States, 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 
(except as provided in section 20 of this act, as amended) 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." 

Sec. 3. Section 5 is further amended by striking out the final sentence! of sub- 
section (a) thereof, reading as follows: "The sum of the par value of such 
certificates and Treasury bills outstanding hereunder and under section 6 
of the First Liberty Bond Act shall not at any one time exceed in the aggre- 
gate $10,000,000,000." 

Sec. 4. Subsection (a) of section 18 is amended to read as follows: 

" In addition to the bonds and certificates of indebtedness and war-savings 
certificates authorized by this act and amendments thereto, the Secretary of 
the Treasury, with the approval of the President, is authorized, subject to the 
limitation imposed by section 21 of this act, to borrow from time to time 
on the credit of the United States for the purposes of this act, to pr.wide 
for the purchase, redemption, or refunding, at or before maturity, of any out- 
standing bonds, notes, certificates of indebtedness, or Treasury bills of the 
United States, and to meet public expenditures authorized by law, such sum or 
sums as in his judgment may be necessary and to issue therefor notes of the 
United States at not less than par (except as provided in sec. 20 of this 
act, as amended) in such form or forms and denomination or denominations, 
containing such terms and conditions, and at such rate or rates of interest, 
as the Secretary of the Treasury may prescribe, and each series of notes so 
issued shall be payable at such time not less than 1 year nor more than 5 years 
from the date of its issue as he may prescribe, and may be redeemable 
before maturity (at the option of the United States) in whole or in part, upon 
not more than 1 year's nor less than 4 months' notice, and under such 
rules and regulations and during such period as he may prescribe." 

Sec. 5. The Second Liberty P>ond Act, as amended, is further amended, by 
adding a new section, as follows: 

" Sec. 21. The face amount of certificates of indebtedness and Treasury bills 
authorized by section 5 of this act, certificates of indebtedness authorized by 
section 6 of the First Liberty Bond Act, and notes authorized by section 18 



244 EEPOET OF THE SECEETAEY OF THE TEEASUEY 

of this act shall not exceed in the aggregate $20,000,000,000 outstanding at an,, 
one time." 

Seo. 6. The Second Liberty Bond Act. as amended, is further amended, by 
adding a new section, as follows : 

" Sec. 22. (a) The Secretary of the Treasury, with the approval of the Presi- 
dent, is authorized to issue, from time to time, through the postal service or 
otherwise, bonds of the United States to be known as ' United States Savings 
Bonds.' The proceeds of the Savings Bonds shall be available to meet any public 
expenditures authorized by law and to retire any outstanding obligations of 
the United States bearing interest or issued on a discount basis. The various 
issues and series of the Savings Bonds shall be in shch forms, shall be offered 
in such amounts within the limits of section 1 of this act, as amended, and 
shall be issued in such manner and subject to such terms and conditions 
consistent with subsections (b) and (c) hereof, and including any restriction 
on their transfer, as the Secretary of the Treasury may from time to time 
prescribe. 

"(b) Each Savings Bond shall be issued on a discount basis to mature 
not less than 10 nor more than 20 years from the date as of which the bond 
is issued, and provision may be made for redemption before maturity upon 
such terms and conditions as the Secretary of the Treasury may prescribe: 
Provided, That the issue price of Savings Bonds and the terms upon which they 
may be redeemed prior to maturity shall be such as to afford an investment 
yield not in excess of 3 per centum per annum, compoun(Jed semiannually. 
The denominations of Savings Bonds shall be in terms of their maturity value 
and shall not be less than $25. It shall not be lawful for any one person at any 
one time to hold Savings Bonds issued during any one calendar year in an 
aggregate amount exceeding .$10,000 (maturity value). 

" (c) The provisions of section 7 of this act, as amended (relating to the 
exemptions from taxation both as to principal and as to interest of bonds 
issued under authority of sec. 1 of this act, as amended), shall apply as 
well to the Savings Bonds; and, for the purposes of determining taxes and 
tax exemptions, the increment in value represented by the difference between 
the price paid and the redemption value received (whether at or before ma- 
turity) shall be considered as interest. The Savings Bonds shall not bear the 
circulation privilege. 

" (d) The appropriation for expenses provided by section 10 of this act and 
extended by the act of June 16, 1921 (U. S. C, title 31, sees. TOO and 761), 
shall be avaihible for all necessary expenses under this section; and the Secre- 
tary of the Treasury is authorized to advance, from time to time, to the Post- 
master General from such appropriation such sums as are shown to be re- 
quired for the expenses of the Post Office Department, in connection with the 
handling of the bonds issued under this section. 

" (e) The board of trustees of the I'ostal Savings System is authorized to 
I)ermit, subject to such regulations as it may from time to time prescribe, the 
withdrawal of deposits on less than 60 days' notice for the purpose of ac- 
quiring Savings Bonds which may be offered by the Secretary of the Treasury ; 
and in such cases to make payment of interest to the date of withdrawal 
whether or not a regular interest payment date. No further original issue of 
bonds authorized by section 10 of the act approved June 25, 1910 (U. S. C, title 
39, sec. 760), .shall be made after July 1, 1935. 

"(f) At the re(|uest of the Secretary of the Treasury the Postmaster Gen- 
eral, under sut li regulations as he may prescribe, shall require the employees of 
the Post Oflice Department and of the Postal Service to perform, without extra 
compeni-ation, such fis^cal agency services as may be desirable and practicable 
in connection with the issue, delivery, safe-keeping, redemption, and payment 
of the Savings Bonds." 

Seo. 7. Section 1126 of the Revenue Act of 1926 is amended by adding at 
the end thereof the following : " In order to avoid the frequent substitution 
of securities such rules and regulations may limit the effect of this section, in 
appropriate classes of cases, to bonds and ncites of the United States maturing 
more than a year after the date of deposit of such bonds as security. The 
phrase ' bonds or notes of the United States ' shall be deemed, for the pur- 
poses of this section to mean any public debt obligations of the United States 
and any bonds, notes, or other oliligations^ which are unconditionally guaran- 
teed as to both interest and principal by the United States." 

Approved, February 4, 1935. 



KEPORT OF THE SECRETARY OF THE TREASURY 245 

Exhibit 32 

Statement for the press, Jamianj 21, 1935, giving an explanation of the bill to 
amend the Second Liberty Bond Act 

Representative Robert L. Doughton. chairman of tlie Ways and Means Com- 
mittee, submitted tlae following explanation of the bill which he introdneed 
today to amend the Second Liberty Bond Act : 

The present authority of the Government to issue l)onds is limited to 
$2,549,512,885. The Second Liberty Bond Act in its i)resent form carries 
authorization for the issuance of $28,000,000,000 of bonds, but since $25,450,- 
487,115 have already been issued, the right to issue new long-term securities 
is very much restricted. Of the more than $25,000,000,000 which have been is- 
sued, there are now outstanding $13,474,947,650. But the nearly $12,000,000,000 
which have been retired may not be reiss'ued without specific authority, since 
the authorization in the Second Liberty Bond Act was not in the nature of a 
revolving fund. 

It is now proposed to substitute a $25,000,000,000 revolving authorization for 
the previous $28,000,000,000 fixed authority. This will give to the Treasury 
authority to issue between 11 and 12 billions in bonds, which is approximately 
equivalent to the amount of those which have been retired out of those issued 
under the $28,000,000,000 authorization. 

The bill also proposes to consolidate the two existing revolving funds relating 
to short-term obligations. At present notes may be issued to the amount of 
$10,000,000,000 outstanding at any one time, and certificates of indebtedness and 
Treasury bills may be outstanding in like amount. It is proposed to substi- 
tute one $20,000,000,000 limitation applicable to the aggregate outstanding 
notes, certificates, and bills, thus affording greater flexibility in financing the 
requirements of the Treasury. There were on December 31, $9,586,000,000 
of notes outstanding, while certificates and bills aggregated $2,112,000,000. 
The amendment proposed in this regard would not increase the total author- 
ization for the issuance of short-term obligations. 

The bill would likewise authorize the issuance, at a discount, of United States 
Savings Bonds maturing in from 10 to 20 years, with the holder having the 
right in the interval to receive payment from the Treasury on an ascending 
scale of value. It would also permit the use of Government guaranteed bonds 
as security in lieu of surety bonds. 

Statement showing present authority to issue bonds, notes, certificates of 
indebtedness and Treasury bills under the Second Liberty Bond Act, as 
amended, and under proposed amendments 

[December 31, 1934] 
Bonds : 

Under present authority: 

Total issuable $28. 000. 000. 000 

Total issued : 

Liberty bonds $14,948,096,150 

Treasury bonds 10, 502, 390, 965 

25, 450, 487, 115 



Balance now issuable 2, 549, 512, 885 



Total authorized $28, OOO, 000, 000 

Total issued 25.450.487,115 

Total retired 11. 975. 539, 465 

Total outstanding 13,474,947,650 

Under proposed amendment : 

Total which may be oiitstanding at any one time 25, 000, 000, 000 

Now outstanding 

Liberty bonds $3, 194, 086, 650 

Treasury l)onds 10.280,861,000 

13, 474, 947, 650 



Balance issuable 11, 525,052, 350 



246 HEPORT OF THE SECRETARY OF THE TREASURY 

Notes, certificates of iudebteclness, and Treasury bills : 
Under present authority : 
Notes : 

Total which may be outstanding at any one time__ $10, 000', OOO, 000 
Now outstanding— Treasury notes 9,586,377,400 

Balance issuable 413,022,600 



Certificates of indebtedness and Treasury bills: 

Total which may be outstanding at any one time__ 10, 000, 000, 000 
Now outstanding: 

Certificates of indebtedness— $158, 300, 000 

Treasury bills 1,954,168,000 

2, 112, 468, 000 



Balance issuable 7, 887, 532, 000 



Under proposed amendments : 

Notes, certificates of indebtedness, and Treasury bills : 

Total which may be outstanding at any one time_- 20, 000, 000, 000 
Now outstanding: 

Notes $9. 586, 377, 400 

Certificates of indebtedness—, $158, 300, 000 

Treasury bills 1.954.168,000 

11, 698, 845, 400 

Balance issuable 8, 301, 154, 600 



Exhibit 33 

Regulations govern hig United States Savings Bonds 
[Department Circular No. 530] 

Treasury Department, 

Wash in (/Ion, Fehruary 25, 1035. 
To Ovniers of United States Savings Bonds, and Others Concerned: 

The following regulations governing United States Savings Bonds are pub- 
lished for the information and guidance of all concerned : 

I. RBGISTBATION 

1. T'nited States Savings Bonds will pe issued only in registered form. Except 
as otherwise specifically provided in these regulations, the Treasury Department 
reserves the right to treat as conclusive the ownership and interest in the bond 
as stated in the registration. 

2. The following forms of registration are authorized: 
(a) In the name of any individual, including minors. 

(ft) In the names of two (but not more than two) natural persons in the al- 
ternative, as, for example, " John Jones or Mary Jones." The addresses of both 
persons should be inscribed on the Savings Bonds. No other form of registration 
in two names is authorized except, as provided in subparagraphs (e) and id) 
hereof. 

(c) In the name of one individual and a single designated beneficiary in case 
of death, as for example. " John Smith, payable on death to Mary Smith ", in 
which case the address of the registered owner and the address of the beneficiary 
should be inscribed on the face of the Savings Bond. 

{d) In the name of one or more guardians, executors, administrators, trustees, 
or other fiduciaries, whose names shall be given, followed by a description as com- 
plete as possible of the capacity in which and the persons for whom they hold 
the Savings Bonds. Begistration in a form indicating that the persons whose 
names appear on the bonds do not hold full legal title to the Savings Bonds, as, 
for example, " John Jones, under article 10, of the will of Henry Smith ", will 
not be permitted. 



KEPORT OF THE SECRETARY OF THE TREASURY 247 

(e) lu the name of any corporation, unincorporated association, partnership, or 
joint stock company. The name of tlie owner should be followed by the word 
or words " corporation ", " unincorporated association ", " partnership ", or " joint 
stock company ", as the case may be. No designation may be made in the 
registration of an officer or agent to receive payment in behalf of the corpora- 
tion, unincorporated association, partnership, or joint stock company. 

II. BONDS NOT TRANSFERABLE 

United States Savings Bonds are not transferable : and are payable only to 
the owner named thereon, except in case of the death or disability of the ownei 
or as a result of judicial proceedings, and then only to the extent specificallj 
provided in sections XIII, VIII, and XIV hereof. 

III. LIMITATION ON HOLDINGS 

Under the provisions of section 22 of the Second Liberty Bond Act, approved 
September 24, 1917, as amended, it shall not be lawful for any one person at 
any one time to hold Savings Bonds issued during any one calendar year in an 
aggregate amount exceeding $10,000 (maturity value). In determining whether 
the $10,000 limitation on the holdings of any one person has been exceeded, the 
full maturity value of Savings Bonds issued in any one calendar j^ear held for 
the benefit of such person in the name of a fiduciary or fiduciaries, or held by 
such person with any other person (but not of bonds of which such person 
is merely the designated beneficiary in case of the death of the owner), shall 
be added to the full maturity value of such bonds held by such person in his 
or her own name, and the sum must not exceed $10,000 (maturity value). If 
any person who owns Savings Bonds should become the owner of additional 
Savings Bonds as the result of the death of any other person, and the total 
amount then owned by him is in excess of the lawful limit, he should immedi- 
ately surrender the excess for payment at the redemption value for the period 
in which the excess was acquired. 

IV. LOST, STOLEN, OR DESTROYED BONDS 

1. Under the provisions of the Revised Statutes, duplicates may be issued or 
payment made upon proof of the loss, theft, or destruction of Savings Bonds. 
Application for relief in such cases will be governed by the regulations found 
in Department Circular No. 300. Full information as to the requirements, as 
well as appropriate forms, may be secured from the Treasury Department, Divi- 
sion of Loans and Currency, Washington, D. C. 

2. It is important that immediate notice of such loss, theft, or destruction be 
given to the Treasury Department. 

V. SAFE-KEEPING FACILITIES 

1. Any Savings Bond will be held in safe-keeping by the Secretary of the 
Treasury if the purchaser so desires, and in this connection the Secretary will 
utilize the facilities of the Federal Reserve banks as fiscal agents of the United 
States. The purchaser may arrange for such safe-keeping at the time he pur- 
chases his bond or subsequently. If the owner desires his bond held in safe- 
keeping, he can obtain from the postmaster an appropriate envelop, and an 
application blank which lie should fill out, address to the appropriate Federa? 
Reserve bank, sign and enclose with the bond in the envelop, which should be 
addressed to the appropriate Federal Reserve bank. The postmaster will then 
register the envelop, at the owner's expense, and the registry receipt will 
serve as the ovnier's temporary receipt. 

2. When received at the Federal Reserve hank, the bond will be placed in 
safe-keeping and a receipt from the bank will be mailed to the owner at the 
address given in the application. The owner can subsequently regain posses- 
sion of his bonds upon application to the Federal Reserve bank, and upon 
such identification as is required by such bank. 

3. Postmasters generally will assist owners in arranging for safe-keeping, 
but will not act as a safe-keeping agent. 



248 REPORT OF THE SECRETARY OF THE TREASURY 

VI. GENEEAL PAYMENT PROVISIONS 

1. Savings Bonds will be payable at or after maturity at their full value, or at 
the option of the owner, prior to maturity (but not within 60 days after the 
Issue date) at the appropriate redemption value as shown on the face of each 
bond. Payment, in each case, will be made following presentation and sur- 
render of the bond, at the Treasury Department, Division of Loans and Cur- 
rency, Washington, D. C, or at any Federal Reserve bank, with the request 
for payment appearing on the bacli thereof properly executed in accordance 
with the succeeding paragraphs. Such presentation will be at the expense 
and risk of the owner and, for his protection, the bond, or bonds, should be 
presented in person or forwarded by registered mail. 

2. The request for payment must be signed in ink or indelible pencil by the 
person in whose name the bond is inscribed, or by the person entitled to receive 
payment under the provisions hereof. The request must be signed in the 
presence of, and be certified by, one of the following officers : 

(c) Any United States postmaster, acting postmaster, or official in charge 
of a post office authorized to sell Savings Bonds: Provided that in post offices 
of first class the assistant postmaster, the postal cashier, the superintendent of 
money orders, or the superintendent or clerk in charge of a classified station 
or branch may certify to the request for payment ; and provided further that 
at any post office of the second class, the assistant postmaster, or the clerk 
in charge if there is no assistant postmaster, may certify to the request for 
payment. If an official other than a postmaster, acting postmaster, or an 
official in charge of an office certifies to a request for payment, he should 
certify in the name of the postmaster, acting postmaster, or official in charge, 
followed by his own signature and official title, e. g., "John Doe, postmaster, 
by Richard Roe, Superintendent of Money Orders." The certification of any 
post-office official must be authenticated by a legible imprint of the dating stamp 
of his post office ; 

(6) Any executive officer of an incorporated bank or trust company, whose 
signature must be authenticated by the impression of the corporate seal of the 
bank or trust company : 

(c) Any officer authorized generally to witness assignments of United States 
registered bonds (see pars. 33-35 Department Circular 300). 

3. No person authorized to certify requests for payment may certify a re- 
quest signed by himself, either in his own right or in any representative 
capacity. 

4. Certifying officers should require positive identification of the person execut- 
ing the request for payment as the person whose name appears on the face of 
the bond, or the person entitled to request payment under the px'ovisions of 
these regulations, and will be held fully responsible therefor. 

VII. MINORS 

1. If a Savings Bond is registered in the name of a minor and the Treasury 
Department has notice that a guardian of the estate of such minor has been 
appointed by a court of competent jurisdiction, payment will be made only to 
such guardian. The request for payment appearing on the back of the bond 
should be signed : "A. B., minor, by C. D., guardian " and must be supported 
by a certificate from the proper court, or by a certified copy of the order 
appointing the guardian, showing his appointment and qualification. The cer- 
tificate, or certified copy, must be under the seal of the court and should be 
dated not more than 1 year prior to the presentation of the bend. 

2. If the Treasury Department has no notice of the appointment of a 
guardian of the estate of a minor owner of a Savings Bond, payment will be 
made direct to such minor owner, provided such minor is, at the time payment 
is requested, of sufficient competency and undei'standiug to sign his name to the 
request and to comprehend the nature thereof. In general, the fact that the 
request for payment has been signed by the minor and duly certified in accord- 
ance with section VI hereof will be accepted as sufficient proof of such compe- 
tency and understanding. If the Treasury is properly advised in the request 
for payment that such minor owner is not of sufficient competency and under- 
standing to execute the request for payment, payment will be made to either 
parent of the minor with whom be resides, or in the event that such minor 
resides with neither parent, then to the person with whom he does reside. In 



EEPORT OP THE SECRETARY OF THE TREASURY 249 

executing the request for payment the parent or other person shall sign the 
minor's name as well as his own name, and state his relationship to the minor, 
and there shall be inserted above the space for signature m the request for 
payment a statement to the effect that the owner is a minor, that he is not of 
sufficient competency and understanding to execute the request fur payment, 
and that the person signing the request is the person witli whom the minor 
resides. An appropriate form is as follows : 

" I am the (state relationship) of A. B. and the person with whom he 

resides. He is not of sufficient competency and understanding to sign this 
request. 

C. D 

On behalf of A. B. 

VIII. DISABILITY OF OWNERS 

1. If the owner of a Savings Bond has been legally declared to be incompetent 
to manage his affairs and the Treasury Department has noticed that a conservator 
or other legally constituted representative of his estate has been appointed by a 
court of competent jurisdiction, payment will be made only to such conservator or 
other legal representative. The request for payment should be signed : "A. B. 
incompetent, by C. D., conservator (guardian or committee as the case may be), 
and must be supported by a certificate from the proper court or a certified copy 
of the order of the court appointing such conservator or other legal representative 
showing his appointment and qualification. The certificate, or certified copy, 
should be under the seal of the court and dated not more than 1 year prior to 
the date of the presentation of the Savings Bond for payment. 

2. In cases where the owner of a Savings Bond has been judicially declared 
incompetent or insane and no guardian or other legal representative of his 
estate has been appointed, and the entire gross value of his personal estate, botli 
real and personal, does not exceed $500, payment will be made to a member of 
his family standing in the position of voluntary guardian upon presentation of 
proof satisfactory to the Secretary of the Treasury that the proceeds of the bonds 
are required, and are to be used, for the purchase of necessaries for the incompe- 
tent or for his wife or minor children or other persons dependent upon him for 
support. 

IX. CO-OWNEIRS 

A Savings Bond registered in the namesi of two i>ersons in the alternative, as 
for example, " John Jones or Mary Jones ", will be payable to either person named 
thereon without requiring the signature of the other person, but not to the 
representative of a deceased co-owner except as hereinafter provided, and upon 
payment to either person the other shall cease to have any interest in the bond. 
Should one of the owners die and then the survivor himself die before payment 
of the Savings Bond, the provisions of section XIII hereof, governing payment 
or reissue of Savings Bonds held by a deceased owner, shall govern the payment 
or reissue of the bond as though the survivor had been the sole owner. 

X. BENEIFICIAKIES 

1. A Savings Bond i-eglstered in the form "A. B. payable on death to C. D." 
will be payable, until the Treasury Department has received notice of the dL-ath 
of the registered owner, as if the beneficiary were not named on the bond. Upon 
proof of death of the registered owner, the bond will be payable to, or reissued in 
the name of, the beneficiary named on the bond, at his option (but only if such 
beneficiary did not predecease the original owner), as if he had been the 
registered owner. 

2. If the beneficiary should predecease the registered owner, the Savings Bond 
will be payable to the registered owner as though such beneficial registration had 
not been made. Registration naming beneficiaries at the death of the registered 
owner cannot be changed so as to add, eliminate, or substitute beneficianes. 

3. Should the beneficiary die after the death of the registered owner, but before 
payment or issue of the Savings Bond, the provisions tif section XIII hereof 
governing payment or reissue of Savings Bonds held by a decea.sed owner, shall 
govern the payment or reissue of the Savings Bond as though the beneficiary had 
been the registered owner. 



250 REPORT OF THE SECRETARY OF THE TREASURY 

XI. FIDUCIARIES 

1. A Savings Bond registered in the name of a fiduciary will be paid to such 
fiduciary without proof of his authority upon presentation of the bond with the 
request for payment duly signed by him and certified in accordance with section 
VI hereof. The request for payment should be signed by the fiduciary in 
exactly the same manner as his name and designation as fiduciary appear on the 
face of the Savings Bond. 

2. In the event of the death or disqualification of a fiduciary in whose name a 
Savings Bond is registered, such Savings Bond will be paid to, or, if desiretl, 
reissued in the name of, his successor upon satisfactory proof of the appoint- 
ment and qualification of such successor. If there is no successor, the Savings 
Bond may be paid to, or, if desired, reissued in the name of tlie person or persons 
beneficially entitled thereto upon satisfactory proof of their beneficial ownership. 

XII. CORPORATIONS, ASSOCIATIONS, PARTNEKSHIPS, ETC. 

1. A Savings Bond registered in the name of a corporation, unincorporated 
association, or joint stock company will be paid upon a request for payment 
signed by a duly authorized officer of such organization. The signature to the 

request should be in the form, " The Company, by John Jones, President." 

The fact that the request for payment is signed and duly certified in accordance 
with section Y hereof may be accepted as suflicient proof of the officer's 
authority. 

2. A Savings Bond registei*ed in the name of a partnership will be paid upon 
a request for payment signed by any general partner. The signature to the 
request should be in the form, " Smith and Jones, a partnership, by John Jones, 
a general partner." The fact that the request for payment is signed and duly 
certified in accordance with section VI hereof may be accepted as sufficient proof 
that the person signing the request is a general partner. 

XIII. DECE-'\.SET> OWNEKS 

1. With administration. — If the owner of a Savings Bond dies leaving a will 
which is duly admitted to probate and on which letters testamentary are issued, 
or dies intestate and the estate is administered in a court of competent juris- 
diction, payment will be made to the duly appointed representative of the estate. 
The request for payment should be signed in the form, "A. B., executor (admin- 
istrator) of the estate of C. D., deceased", and must be supported by a cer- 
tificate under the seal of the court appointing such representative, dated not 
more than 6 months prior to the presentation of the Savings Bond for pay- 
ment, showing the appointment and qualification of such representative and 
stating that the appointment is still in force ; or, in the absence of such a 
certificate, by a duly certified copy of the representative's letter of appointment, 
the certification of which must be dated not more than 6 months prior to the 
presentation of the bond for payment, and must state that the appointment is 
still in force. A Savings Bond will be reissued in the name of an heir or legatee 
of the deceased owner upon the request of the representative accompanied by his 
certificate to the effect that the person in whose name reissue is requested is 
entitled to the Savings Bond as such legatee or heir. If the representative is 
himself the heir or legatee entitled to the Savings Bond and desires reissue in his 
own name, a special order of the court authorizing such reissue must be 
submitted. 

2. WitJwut administration. — If the owner of a Savings Bond dies and no legal 
representative of bis estate is to be appointed and it is established to the satis- 
faction of the Secretary of the Treasury, either that the gross value of the 
personal estate does not exceed $500, or that administration of the estate is not 
required in the State of the decedent's domicile, the Savings Bond will be paid 
to, or reissued in the name of. one (but not more than one) of the persons 
entitled to the bonds under the laws of the State of the decedent's domicile 
without administration. The request for payment should be signed in the 
form, "A. B., C. D., E. F., heirs and pex'sons entitled to the estate of X. X., 
deceased ", and should be accompanied by an agreement signed by all persons 
entitled, specifying the person to whom payment is to be made or in whose 
name the bond is to be reissued. Proof will be required that the debts of the 
decedent and of his estate have been paid or provicled for, and that the person 
to whom payment is requested or in whose name reissue is requested, is en- 
titled to the bonds ; such proof will include affidavits of all persons entitled 



EEPOET OF THE SECEETAiiY OF THE TREASURY 251 

to auy share in the estate setting forth the facts in detail and agreeing to the 
payment or reissue in question, supported by aflidavits of two disinterested 
pei'sons having personal linowledge of the decedent and his family, and by a 
death certificate or other proof of the death of the owner. (Use Form L. & C. 
285, copies of which may be procured from the Treasury Department or any 
Federal Reserve bank.) If the gross value of the personal estate exceeds 
$500 the Secretary of the Treasury may further require an affidavit or a certifi- 
cate from a practicing attorney or judicial ofiicer of the State of the decedent's 
flomicile showing that administration of the estate is not required in such 
State and referring specifically to the statutes or the decisions of the courts 
of such State under which exemption from administration is claimed, or show- 
ing that it is a general and well-recognized practice in that State to settle such 
estates without administration. 

3. No payment or reissue without administration will be permitted in a case 
where any of the persons entitled are minors or under disability, except to 
them or in their names or upon compliance with the provisions of sections 
VII and VIII hereof governing the payment of Savings Bonds in the names 
of such persons. 

XIV. creditors' rights 

Payment of a Savings Bond will be made in accordance with a judgment or 
decree of a court of competent jurisdiction, or proceedings pursuant to such 
judgment or decree, except in cases where the action is instituted for the pur- 
pose of giving effect to an attempted transfer by the owner contrary to section 
II hereof. In appropriate cases the Treasury Department will require proof 
that the court acting had jurisdiction over the parties and subject matter, 
and proceeded in due course of its jurisdiction, and that the judgment or decree 
is final and conclusive, that it has fully and effectually transferred the title 
of the owner, and that it is not open to attack in any jurisdiction whatever. 
For this purpose duly authenticated copies of the complaint, order of service, 
return of service, answer, or other pleading, and the final judgment or order of 
the court must be furnished, together with a certificate, under seal, from the 
clerk of the court showing that the time for appeal has elapsed without an 
appeal having been taken, or that an appeal has been taken and determined 
by the court of last resort (in which case certified copy of the rescript or 
mandate of such court must be furnished) and that no further appeal is 
possible. 

XV. denominational exchange or reissue 

No denominational exchanges of Savings Bonds will be permitted, and except 
as expressly provided by this circular no reissue of Savings Bonds will be made, 
whether in the same name or in another name. 

XVI. FURTHER PROVISIONS 

These regulations are prescribed by the Secretary of the Treasury as govern- 
ing United States Savings Bonds issued under the authority of the Second 
Liberty Bond Act, approved September 24, 1917, as amended, and the provisions 
of Treasury Department Circular No. 300 have no application to such Savings 
Bonds except as hereinbefore specifically provided. 

The Secretary of the Treasury may at any time, or from time to time,' 
prescribe supplemental or amendatory rules and regulations governing United 
States Savings Bonds. 

Henry Morgenthau, Jr., 
Secretary of the Treasiinj. 



Exhibit 34 



Amendment to Department Circular No. Jtl8, as amended May 3, 193Ji, govern- 
ing the sale and issue of Treasury bills 

Treasury Department, 

Washington, May 21, 1935. 
Department Circular No. 418, as amended May 3, 1934, is hereby further 
amended : 

(1) By adding the following sentence to footnote 2 on page 1: "With respect 
to all Treasury bills, attention is invited to Treasury Decision 4550, annexed to 
this circular." 



252 REPORT OF THE SECRETARY OF THE TREASURY 

(2) By adding an additional exliibit at tlie end of the circular, as follows: 

"(T. D. 4550) 

" Gift tax on transfers of bonds, notes, hills and certificates of indeb edness of 
the United States or its agencies 

" Treasury Department, 
" Office of Commissioner of Internal Revenue, 

'• Washington, D. C. 
" To CoUcriors of Internal Revenue, and Others concerned: 

"Article 2 of retaliations 79, relating to tlie gift tax, is amended by inserting 
the following innnediately after the second sentence: 

" ' Various statutory provisions, which exempt bonds, notes, bills, and certifi- 
cates of indebtedness of the Federal Government or its agencies and the 
interest thereon from taxation, are not applicable to the gift tax since this 
tax is an excise tax on the transfer, and is not a tax on the subject of the 
gift. A gift of a bond, note, or certificate of indebtedness issued by the 
Federal Government, if made by a nonresident alien, not engaged in business 
in tlie United States, is not subject to the tax.' 

" Guy T. Hexvering, 
" Commissioner of Internal Revenue. 
"A])proved: May 21, 1935. 

'• T. J. COOLIDGE, 

''Acting Secretary of the Treasurg." 

T. J. COOLIDGE, 

Acting Secretary of the Treasury. 



Exhibit 35 



Supplement, dated June 25, 1935. to Department Circular No. 300, July 31, 1923, 

prescriHng regulations governing United States bonds and transactions mith 

the Treasury Department 

Tbeiasury Department, 

Washington, June 25, 1935. 

1. Treasury Department Circular No. 300, dated July 31, 1923, prescribing 
regulations governing United States bonds and transactions with the Ti-easury 
Department therein, is hereby amended by strilving out paragraph 33 and insert- 
ing in lieu thei-eof the following : 

"33. OflScers authorized to witness assignments: 

"(a) In general: The following oflScers are authorized to witness assign- 
ments of United States registered bonds: 

" Judges and clerks of United States courts. United States district attorneys. 
United States collectors of customs. United States collectors of internal revenue ; 

" Executive officers of Federal Reserve banks located in Boston, New York, 
Philadelphia, Cleveland, Richmond, Atlanta. Chicago, St. Louis, Minneapolis, 
Kansas City, Dallas, and San Francisco, and managers and assistant managers 
of the branches thereof; 

"Executive officers of Federal land banks: 

" Executive officers of banks and trust companies incorporated in the United 
States, or its organized territories, and managers of the branches thereof, 
domestic and foreign : 

" Executive oflicers of incorporated banks and trust companies in the insular 
possessions of the United States doing business under Federal charter or organ- 
ized under Federal law; 

" Commanding officers of the Army, Navy, and Marine Corps of the United 
States (only for members of the Military and Naval Establishments of the 
United States) ; 

" Diplomatic and consular representatives of the United States on duty 
abroad, and those officers of the Navy and Marine Corps of the ITnited States 
who have certain consular powers under the act approved April 25, 1935; 

" Certain officers of the United States Treasury at Washington. 

"(&) Assignments for redemption: Assignments by registered payees or as- 
signees of such payees for redemption for their account (where checks in re- 
demption are to be issued to the payee or assignee, as the ca.se may be) may 



KEPORT OF THE SECRETARY OF THE TREASURY 253 

also be witnessed in tlie United States by notaries public, postmasters, or acting 
postmasters, or by assistant postmasters at first-class post offices, provided that 
the signatures of notaries public shall be authenticated by their official seals 
and the dates of expiration of their commissions shall be given and that the 
signatures of postal oflScials shall be authenticated by theii- office stamps. 

"(c) Postal savings bonds: In addition to the officers listed in (a) hereof, 
assignments of postal savings bonds may be witnessed by a postmaster desig- 
nated to receive postal savings deposits and, in the case of bonds assigned to 
the board of trustees of the Postal Savings System, by assistant postmasters, 
postal cashiers, and money-order cashiers at offices designated to receive postal 
savings deposits. In all cases where the assignment is witnessed by a postal 
official other than the postmaster, the form of signature to the certificate of 
acknowledgment should be the following: 'John Doe, postmaster, by Robert 
Roe, postal cashier '." 

2. The Secretary of the Treasury may withdraw or amend at any time, or 
from time to time, all or any of the provisions of this supplemental circular. 

H. MORGENTHAU, Jr., 

Secretary of the Treasury. 



Exhibit 36 



Statutes relating to lost, stolen, destroned, mutilated, and defaced bonds and 

notes 

[Extract from regulations of the Treasury Department with respect to United States bonds 
and notes (Treasury Department Circular No. 300, dated July :^1, 1923, as amended) ] 

Tiie following statutes of the United States relate to lost, stolen, destroyed, 
mutilated, and defaced United States bonds and notes, and claims for relief 
arising in connection therewith : 

COUPON BONDS AND NOTES * 

Whenever it ai>i:)ears to the Secretary of the Treasury, by clear and unequiv- 
ocal proof, that any interest-bearing bond of the United States has, without 
bad faith upon the part of the owner, been destroyed, wholly or in part, or so 
defaced as to impair its value to the owner, and such bond is identified by 
number and description, the Secretary of the Treasury shall, under such regu- 
lations and with such restrictions as to time and retention for security or 
otherwise as he may prescribe, issue a duplicate thereof, having the same time 
to run, bearing like interest as the bond so proved to have been destroyed or 
defaced, and so marked as to show the original number of the bond destroyed 
and the date tliereof. But when such destroyed or defaced bonds appear to have 
been of such a class or series as has been or may, before such application, be 
called in for redemption, instead of issuing duplicates thereof, they shall be 
paid, with such interest only as would have been paid if they had been pre- 
sented in accordance with such call. 

(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 jud.gment 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 1)e presented by a bona fide holder for value, the Secre- 
tary of the Treasury is authorized to make payment of the amount which would 
have been due on such bond had it been pi-esented 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 in- 
demnity required by section 3703 of the Revised Statutes shall be in a penal 



^ Section 3702 and 3703 apply also to Treasury certificates of indebtedness in bearer 
form. 



254 EEPOET OF THE SECEETAEY OF THE TEEASUEY 

sum of double the amount to be paid aud shall be execvited 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. ( Sec. 3702, Revised Statutes ; U. S. Code, 
title 31, sec. 735, as amended Apr. 9, 1934.) 

The owner of such destroyed or defaced bond shall surrender the same, or 
so much thereof as may remain, and shall file in the Treasury a bond in a 
penal sum of double the amount of the destroyed or defaced bond, and the 
interest which would accrue thereon until the principal becomes due and pay- 
able, with two good and sufficient sureties, residents of the United States, to 
be approved by the Secretary of the Treasury, with condition to indemnify and 
save harmless the United States from any claim upon such destroyed or defacetl 
bond. (Sec. 3703, Revised Statutes; U. S. Code, title 31, sec. 736.) 

EEGISTERED BONDS 

Whenever it is proved to the Secretaiy of the Treasury by clear and satis- 
factory evidence, that any duly registered bond of the United States, bearing 
interest, issued for valuable consideration in pursuance of law, has been lost 
or destroyed, so that the same is not held by any person as his own property, 
the Secretary shall issue a duplicate of such registered bond, of like amount, 
aud bearing like interest and marked in the like manner as the bond so proved 
to be lost or destroyed. (Sec. 3704, Revised Statutes; U. S. Code, title 31, sec. 
737.) 

The owner of such missing bond shall first file in the Treasury a bond in a 
penal sum equal to the amount of such missing bond and the interest which 
would accrue thereon, until the principal thereof becomes due and payable, 
with two good and sufficient sureties, residents of the United States, to be 
approved by the Secretary of the Treasury, with condition to indemnify and 
save harmless the United States from any claim because of the lost or destroyed 
bond. (Sec. 3705, Revised Statutes; U. S. Code, title 31, sec. 738.) 

" NOTES " INCLUDED IN CERTAIN PROVISIONS OF STATUTES 

The word "bond" or "bonds" where it appears in sections 8, 9, 10, 14, and 
15 of this act as amended, and sections 3702, 3703, 3704, and 3705 of the Revised 
Statutes, and section .5200 of the Revised Statutes as amended, but in such 
sections only, shall be deemed to include notes Issued under this section. (Sec. 
IS [d], Second Liberty Bond Act, as amended ; U. S. Code, title 31, sec. 753 [d].) 

CORPORATE SURETY 

Whenever any recognizance, stipulaiion, bond, or undertaking conditioned 
for the faithful performance of any duty, or for doing or refraining from doing 
anything in such recognizance, stipulation, bond, or undertaking specified, is by 
the laws of the United States required or permitted to be given with one surety 
or with two or more sureties, the execution of the same or the guaranteeing 
of the performance of the condition thereof shall be sufficient when executed 
or guaranteed solely by a corporation incorporated under the laws of the United 
States, or of any State having power to guarantee the fidelity of persons hold- 
ing positions of public or private trust, and to execute and guarantee bonds 
and undertakings in judicial proceedings : Provided, That such recognizance, 
stipulation, bond, or undertaking be approved by the head of department, court, 
judge, officer, board, or body executive, legislative, or judicial required to 
approve or accept the same. But no officer or person having the approval of 
any bond shall exact that it shall be furnished by a guaranty company or by 
any particular guaranty company. (Act Aug. 13, 1894, sec. 1 ; 28 Stat. 279 ; 
U.' S. Code, title 6, sec. 6.) See also sections 2-S of the same statute, as 
amended by the act approved March 23. 1910; United States Code, title 6, 
sections 7-13. 



EEPORT OF THE SECRETAEY OF THE TREASURY 255 

PROVISIONS OF PENAL CODE WITH KESPECT TO FALSE CL.\IMS, ETC. 

Making or presenting false claims (sec. 35, as amended) : Whoever sliall make 
or cause to be made or present or cause to be presented, for payment or ap- 
proval, to or by any person or officer in tlie civil, military, or naval service of 
the United States, or any department thereof, or any corporation in which the 
United States of America is a stockholder, any claim upon or against the Gov- 
ernment of the United States, or any department or officer thereof, or any cor- 
poration in which the United States of America is a stockholder, knowing such 
claim to be false, fictitious, or fraudulent ; or wlioever, for the purioose of ob- 
taining or aiding to obtain tlie payment or approval of such claim, or for the 
purpose and with the intent of cheating and swindling or defrauding the Gov- 
ernment of the United States, or any department thereof, or any corporation 
in which the United States of America is a stockholder, shall knowingly and 
willfully falsify or conceal or cover up by any trick, scheme, or device a ma- 
terial fact, or make or cause to be made any false or fraudulent statements or 
representations, or make or use or cause to be made or used any false bill, 
receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, know- 
ing the same to contain any fraudulent or fictitious statement or entry, shall 
be fined not more than $10,000 or imprisoned not more than 10 years, or both. 
(Sec. 5438, Rev. Stats., as amended; U. S. Code, title IS, se". SO.) 

Conspiracy to commit offense against the United States (sec. 37) : If two or 
more persons conspire either to commit any offense against the United States, 
or to defraud the United States in any manner or for any purpose, and one or 
more of such parties do any act to effect the object of the conspiracy, each of 
the parties to such conspiracy shall be fined not more than $10,000, or im- 
prisoned not more than 2 years, or both. (Sec. 5440, Rev. Stats.^ as amended r 
U. S. Code, title 18, sec. 88.) 



Exhibit 37 



Press release, Sept. 25, 1934, respecting the guarantee of honds of the Federal 
Farm Mortgage Corporation and the Home Owners' Loan Corporation 

Treasury Department, 
Washington, Scpteniher 25, lOSJf. 

The phrase " fully and unconditionally guaranteed " as applied to the bonds 
of both the Federal Farm Mortgage Corporation and Home Owners' Loan Cor- 
poration, in the opinion of the Secretary of the Treasury, concurred in by the 
Attorney General, means that this is a guaranty of payment — not merely of 
collection — with the effect that, should either corporation default, the United 
States is obligated to make payment of either principal or interest immediately 
when due without requiring the holders first to proceed against the corporation. 

Bonds of the Federal Farm Mortgage Corporation issued under the act ap- 
proved January 31, 1934, and bonds of the Home Owners' Loan Corporation 
issued under the amendment of April 27, 1934, to the Home Owners' Loan Act 
of 1933, are guaranteed fully and unconditionally both as to interest and prin- 
cipal by the United States. 

Secretary Morgenthau today made public the text of a letter, addressed to 
John H. Fahey, chairman. Federal Home Loan Bank Board, with the announce- 
ment that a letter to the same effect had been sent to W. I. Myers, Governor 
of the Farm Credit Administration. The letter follows : 

" September 10, 1934. 

" My Dear Mr. Fahey : Reference is made to your inquiry respecting the 
Government guaranty of the bonds of the Home Owners' Loan Corporation, 
issued under the amendment of April 27, 1934, to the Home Owners' Loan Act 
of 1933. , ^ 

"Section 4 (c) of the act, as so amended, provides: 'Such bonds shall be 
fully and unconditionally guaranteed both as to interest and principal by the 
United States, and such guaranty shall be expressed on the face thereof 
* * *.' The bonds issued pursuant thereto recite upon their face, over the 
signature of the Secretary of the Treas^ury, that ' This bond is fully sind uncon- 
ditionally guaranteed both as to interest and principal by the United States/ 

" The Treasury takes the view that this guaranty is a guaranty of payment — 
not merely of collection— with the effect that should yonr corporation fail to 

16816—36 18 



256 EEPOET OP THE SECRETARY OF THE TREASURY 

pav upon demaiul, when clue, the principal of. or interest on, these l)on(ls, the 
United States would be obligated to make such payments immediately without 
requiring the respective holders first to proceed against your corporation. 

" The Attorney General, in an opinion to the Secretary of the Treasury, 
dated September 14. 1934, has confirmed the correctness of this view. The 
opinion reads in part as follows : 

" ' The guaranty being stated by the statute as full and unconditional, there 
is no occasion to "consider whether a condition should be implied. The separate 
provision that the Secretary of the Treasury shall pay if the corporation is 
unable to pay upon demand is no part of the guaranty, but merely a provision 
for carrying" it out in the only reasonably conceivable contingency that would 
require such action. 

" ' CoFiSidering the foregoing, it is my opinion that if * * * t^e cor- 
poration should fail, upon demand by a bona fide and accredited holder, to 
pay either principal or interest when due, the United States would thereupon 
become obligated to make such payment and its obligation would not be condi- 
tioned upon the institution of any prticeeding by the bondholder against the 
corporation.' 

" Very truly yours, 

" H. MORGENTHAU, Jr., 

" Secretary of the Treasury. 

" John H. Fahey. 

" Chairman, Federal Home Loan Bank Board, Washington, D. C" 



MONEY ' 

Exhibit 38 

Proclamations and orders relating to silver 

PROCLAMATION, AUGUST 9, 1934, AUTHORIZING THE MINTS TO RECEIVE ALI. SIL\-ER 
SITUATE© IN THE CONTINENTAL UNITED' STATES ON THAT DATE 

Whereas, by paragraph (2) of section 43, title III, of the act of Congress, 
approved May 12, 1933 (Public No. 10), as amended by the Gold Reserve Act 
of 1934, 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 " 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 " ; and " 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 certifi- 
cates " ; and 

Whereas, the Silver Purchase Act of 1984, approved June 19, 1934, provides 
in sections 2, 5, and 7, in part, as follows : 

" Seo. 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. 



^ Regulations promulgated during the year with respect to silver and foreign exchange 
are available separately and are not reproduced here. 



EEPOKT OF THE SECKETARY OF THE TEEASURY 257 

" Seo. 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. 7. Whenever in the judgment of the President such action is neces- 
sary 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 dol- 
lars or otherwise added to the monetary stocks of the United States as the 
President may determine ; and there shall be returned therefor in standard 
silver dollars, or any other coin or currency of the United States, the monetary 
valtie of the silver so delivered less sitch detluctions 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. * * * » 

Now, therefore, finding it necessary, in my judgment, to effectuate the policy 
of the Silver Purchase Act of 1934, to assist in increasing and stabilizing do- 
mestic prices, to protect our foreign commerce against the adverse effect of 
depreciated foreign currencies, and to promote the objectives of the proclama- 
tion of the 21st day of December, nineteen hundred and thirty-three, relating 
to the coinage of silver ; by virtue of the power in me vested by the Acts of 
Congress above cited, and other legislation designated for national I'ecovery, 
and by virtue of all other authority in me vested ; 

I, Franklin D. Roosevelt, President of the United States of America, do 
proclaim and direct that each United States mint shall receive for coinage or 
for addition to the monetary stocks of the United States, as hereinafter deter- 
mined, any silver which such mint, subject to regulations prescribed hereunder 
by the Secretary of the Treasury, is satisfied was situated on the effective 
date hereof in the continental United States, including the Territoo^ of 
Alaska. 

The silver so delivered shall be added to the monetary stocks of the United 
States and shall be coined from time to time into standard silver dollars in 
such amounts as are reqtiired to carry out the provisions of this proclamation 
and to provide for the redemption of silver certificates ; and there shall be 
returned therefor in standard silver dollars, silver certificates, or any other 
coin or currency of the United States, the monetary value of the silver so de- 
livered (that is, $1.2929+ a fine troy ounce), less a deduction of 61^^o percent 
thereof for seigniorage, brassage, coinage, and other mint charges, such deduc- 
tion having been determined by the Secretary of the Treasury with my 
approval. 

The provisions hereof are supplemental to the provisions of the proclama- 
tion of the 21st day of December, nineteen hundred and thirty-three, and the 
United States coinage mints shall continue to receive for coinage in accord- 
ance with the provisions of such proclamation silver which such mint, subject 
to regulations prescribed thereunder by the Secretary of the Treasury, is sat- 
isfied has been mined subsequently to the date of such, proclamation, from 
natural deposits in the United States or any place subject to the jurisdiction 
thereof : Provided, however. That the Director of the Mint shall, at the option 
of the tenderer of such silver, deliver silver certificates in lieu of the stand- 
ard silver dollars to which the tenderer of such silver for coinage would be 
entitled and in an amount in dollars equal to the coined standard silver dol- 
lars that the tenderer of such silver for coinage would receive in standard 
silver dollars. 

The Secretary of the Treasury is authoinzed to prescribe regulations to carry 
out the purposes of this proclamation. 



258 REPORT OF THE SECRETARY OF THE TREASURY 

Notice is liereby given tliat I reserve tlie right by virtue of tlie authority 
vested in nie to revoke or modify this proclamation as the interest of the 
United States may seem to require. 

This prochimation shall bear the date of, and becomes effective on, tlie day 
on which the Secretary or Acting Secretary of State countersigns the same, 
affixes thereto the Seal of the United States, and deposits this proclamation 
so countersigned and sealed in the Ofhce of the Secretary of State, as a part 
of the archives of the Nation. 

In witness whereof I have hereunto set my hand. 

Franklin D. Roosevelt. 

By the President; and countersigned and sealed witli the Seal of the United 
States, by direction of the President, this 9th day of August, in the year of our 
Lord nineteen hundred and thirty-four, and of the Independence of the United 
States of America the one hundred and fifty-ninth. 

CORDELL HtJLL, 

Secretary of State. 



EXECUTIVE OKDER, AUGUST 9, 1934, KEQUIKING THE DELIVERY OF SILVER TO THE 

UNITED STATES MINTS 

By virtue of the authority vested in me by the Silver Purchase Act of 1934: 
and' of all other authority vested in me, I, Franklin D. Roosevelt, President 
of the United States of America, do hereby require the delivery of all silver 
situated in the continental United States on the effective date liereof, by any 
and all persons owning, possessing, or controlling any siich silver, and do hereby 
require any and all persons owning, possessing, or controlling any such silver 
to ileliver the same in the manner, upon the conditions and subject to the ex- 
ceptions herein contained, such action being in my judgment necessary to 
effectuate the policy of the Silver Purchase Act of 1934. 

Sec. 2. Silver required to be delivered. — There shall be delivered in accordance 
with the terms of this order all silver situated in the continental United 
States on the effective date hereof, except silver falling within any of the 
following categories so long as it continues to fall thereunder : 

a. Silver coins, whether foreign or domestic ; 

h. Silver of a fineness of 0.8 or less, which has not entered into industrial, 
conunercial, professional, artistic, or monetary use; 

c. Silver mined, after December 21, 1938, from natural deposits in the United 
States or any place subject to the jurisdiction thereof; provided, however, that 
so mucli of such silver so mined in the continental United States on or before 
the effective date of this order which shall not have been deposited with a 
United States mint under the proclamation of December 21, 1933, shall, if 
processed to a fineness greater than 0.8 within seventy-five days from the 
effective date of this order, be delivered in accordance with this order, not 
later than ninety days from the effective date hereof, or if processed to a fine- 
ness greater than 0.8 after seventy-five days from the effective date of this 
order, be delivei-ed within 15 days thereafter in accordance with this order ; 

d. Silver held for industrial, professional, or artistic use and unnielted scrap 
silver and silver sweepings in an amount not exceeding in the aggregate five 
hundred fine troy ounces belonging to any one person ; 

V. Silver owned on the effective date hereof by a recognized foreign govern- 
ment, foreign! central bank, or the Bank for International Settlements ; 

f. Silver contained in articles fabricated and held in good faith for a specific 
and customary use and not for their value as silver bullion ; or 

r/. Silver held under a license issued in accordance with section 6 hereof. 

Sec. 3. Time and place of deliver y. — The silver required to be delivered here- 
under shall bo delivered not later than ninety days from the effective date 
hereof to the United States mint nearest to the place where the silver is 
situated immediately prior to delivery ; provided that such silver temporarily 
falling within the exempt categories enumerated in section 2, shall be delivered 
:it the end of ninety days from the effective date hereof, or 15 days after the 
time when it ceases to fall within such categories, whichever date is later. 
Any person acquiring ownership, possession, or control of silver required to be 
delivered under this order after seventy-five days from the effective date hereof, 
shall deliver sucli silver within 15 days of such acquisition. 



REPORT OF THE SECRETARY OF THE TREASURY 259 

Sec. 4. Amount returnable for silver. — The silver herein required to be deliv- 
«^red shall be coined into standard silver dollars, or otherwise added to the 
njonetary stoclis of the United States in accordance with the pi'oclamatiou, 
bearing the Sf.me date as this order, relating to the coinage of silver, and there 
shall be returned therefor in standard silver dollars, silver certificates, or any 
other coin or currency of the United States, the monetary value of the silver 
so delivered (that is, 81.2929+ a fine troy ounce), less a deduction of 6IV2S 
percent thereof for seigniorage, brassage, coinage, and other mint charges, as 
provided in such proclamation ; that is, the amount returnable for the silver 
delivered in accordance herewith shall be an amount eciual to 50+ cents a fine 
troy ounce, which amount is not less than the fair value, at the time of this 
(jrder. of the silver required to be delivered hereunder as determined by the 
market price over a reasonable period terminating at the time of this order. 

Sec. 5. Reimbursement of costs. — The Secretary of the Treasury shall pay all 
necessary costs, actually incurred, of the transportation of such silver and 
standard .silver dollars, silver certificates, and other coin or currency of the 
United States, including the cost of .insurance, protection, and such other 
incidental costs as may be reasonably necessary. Persons desiring reimburse- 
ment of such costs shall submit their accounts on voucher forms which may be 
obtained by writing to the Treasurer of the United States, Washington, D. C. 

Sec. 6. 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, shall issue licenses authorizing the withholding of silver which 
the Secretary of the Treasury, or such agency as he may designate, is satisfied : 

(a) Is required for legitimate and customary use in industry, profession, or 
art, by a person regularly engaged in such industi'y, profession, or art or in 
the business of processing silver or furnishing silver therefor ; 

(ft) Has been imported for reexport; or 

(c) Is required to lulfiU an obligation to deliver silver in such amount to a 
third person, incurred or assumed by the applicant on or before the effective 
date of this order; provided that, at the date of the application, the applicant 
owns such silver or holds the obligation of another to deliver to him such silver. 

The Secretary of the Treasury may, with the approval of the President, 
issue licenses authorizing the withholding of silver for purposes deemed to be 
in the public interest and not inconsistent with the purposes of the Silver 
Purchase Act of 1934 and of this order. 

Sec. 7. Deliveries in fnlfillmnit of ohlifjation-'i or to licensees. — No person 
required to deliver silver owned by him or in his possession or control shall 
be deemed to have failed to comply with the provisions of this order, if such 
silver is delivered in fulfillment of an obligation Incurred or assumed by such 
person on or before the effective date of this order or is delivered to a person 
licensed to acquire and withhold silver In such an amount under section 6. 

Sec. S. Definitions. — As used In this order the term " person " means an 
Individual, partnership, association, or corporation ; 

The term " continental United States " means the States of the United States, 
the District of Columbia, and the Territory of Alaska. 

The term " United States Mints " means the following mints and assay 
offices : 

United States Mint. Philadelphia. Pa. 

United States Assay Office, New York, N. Y. 

United States Mint, Denver, Colo. 

United States Mint, San Francisco, CaUf. 

United States Assay Office, Seattle, Wash. 

United States Mint, New Orleans, La. 

Sec. 9. Penalties and forfeitures. — All persons are hereby Informed of the 
following provisions of section 7 of the Silver Purchase Act of 1934 with re- 
spect to penalties and forfeitures : 

" * * * Any silver withheld in violation of any Executive order Issued 
under this section or of any regulations issued pursuant thereto shall be for- 
feited to the United States, and may be seized and condemned by like pro- 
ceedings as those provided by law for the forfeiture, seizure, and condemna- 
tion of property Imported into the United States contrary to law ; and. in 
addition, any person failing to comply with the provisions of any such Exec- 
utive order or regulation shall be subject to a penalty equal to twice the 
monetary value of the silver in respect of which such failure occurred." 



260 EEPOET OF THE SECRETARY OF THE TREASURY 

This order shall bear the date of, and become effective on, the day on which 
the Secretary or Acting: Secretary of State countersigns and deiiosits this order 
so countersigned in the office of the Secretary of State, as a part of the 
archives of the Nation. 

This order may be modified or revoked at any time. 

Franklin D. Roosevelt. 
Countersigned, by direction of the President, this 9th day of August 1934. 

CoRDEix Hull, 

Secretary of State. 



EXECUTIVE 0'RI>EII, NOVEMBER 2, 10."4, AMENDING EXECUTIVE ORDER OF AUGUST 9, 1934 

Executive Order No. 6814 of August 9, 1S34, requiring the delivery of silver 
to the United States mints, is hereby amended by adding a new section after 
section 2 thereof, reading as follows : 

" Sec. 2A. Silver not required to be delivered. — Silver which at the close of 
business on November 7, 1934, falls within category (a), (b), (d), (e), or 
(f) of section 2 shall be permanently exempt from the requirement tliat such 
silver be delivered under this order. Silver which after November 7, 1934, but 
prior to the time 'that it is first required to be delivered by any person, is 
manufactured in good faith into articles described in subdivision (f ) of section 
2 shall be permanently exempt from the requirement that it be delivered under 
this order." 

The order, as so amended, may be niodified or revoked at any time. 

Franklin D. Roosevelt'. 

The White House, 

November 2, 1934. 



proclamation, APRIL, 10, 19.35, REDUCING TO 45 PERCENT THE SEIGNIORAGE, ETC., 
on SILVKB mined on or AFTEB APRIL 10, 1935, AND RECEIVED tTNDEK THE PROCLA- 
MATION OF DECEMBER 21, 1933 

Whereas, by proclamation of the twenty-first day of December 1933, as modi- 
fied by proclamation of the ninth day of August 1934, the United States coinage 
mints are directed to receive for coinage and addition to the monetary stocks 
of the United States silver mined subsequent to December 21, 1933, from natural 
deposits in the United States or any place subject to the jurisdiction thereof: 
and 

Whereas, such proclamation as so modified is subject to revocation or further 
modification as the interest of the United States may seem to require. 

Now, therefore, finding that the interests of the United States require further 
modification of said proclamation of the twenty-first da.v of December 1933 : 
by virtue of the power in me vested by the act of Congress cited in said 
proclamation, and other legislation designated for national recovery, and by 
virtue of all other authority in me vested ; 

I. Franklin D. Roosevelt, President nf the United States of America, do 
proclaim and direct that, with respect to all silver received by a United States 
coinage mint under the provisions of the proclamation of the twenty-first day 
of December 1933, which such mint, subject to regulations prescribed here- 
under by the Secretary of the Treasury, is satisfied has been mined on or 
after April 10, 1935, from natural deposits in the United States or any place 
subject to the jurisdiction thereof, the de<luction for seigniorage and services 
performed by the Government shall be 45 percent and there shall be returned 
therefor in standard silver dollars, silver certificates, or any other coin or 
currency of the United States, the monetary value of the silver so received 
(that is, $1.2929+ a fine ounce), less such deduction of 45 iJercent. 

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 aflixed. 



REPORT OF THE SECRETARY OF THE TREASURY 261 

Done at the city of Washington this 10th day of April, in the year of our 
Lord nineteen hundred and thirty-five, and of the Independence of the United 
States of America the one hundred and fifty-ninth. 

[seal] Feankun D. Roosevelt. 

By the President : 
CoRDEtL Hull, 

Secretary of State. 



PROCLAMATION, APRIL 24, 1935, REDUCING TO 40 PERCENT THE SEIGNIORAGE, ETC., ON 
SILVER MINED ON OR AFTER APRIL 24, 1935, AND RECEIVED UNDER THE PROCLAMA- 
TION OF DECEMBER 21, 1933 

Whereas, by proclamation of the twenty-first day of December 1933, as modi- 
fied by proclamations of the ninth day of August 1934, and the tenth day of 
April 1935, the United States coinage mints are directed to receive for coinage 
and addition to the monetary stocks of the United States silver mined subse- 
quent to December 21, 1933, from natural deposits in the United States or any 
place subject to the jurisdiction thereof; and 

Whereas, such proclamation as so modified is subject to revocation or further 
modification as the interest of the United States may seem to require. 

Now, therefore, finding that the interests of the United States require further 
modification of said proclamation of the twenty-first day of December 1933 ; by 
virtue of the power in me vested by the act of Congress cited in said proclama- 
tion, and 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, with respect to all silver received by a United States 
coinage mint under the provisions of the proclamation of the twenty-first day of 
December 1933, which such mint, subject to regulations prescribed hereunder by 
the Secretary of the Treasury, is satisfied has been mined on or after April 24, 
1935, fi-om natural deposits in the United States or any place subject to the 
jurisdiction thereof, the deduction for seigniorage and services performed by 
the Government shall be 40 percent and there shall be returned therefor in 
standard silver dollars, silver certificates, or any other coin or currency of the 
United States, the monetary value of the silver so received (that is, $1.2929+ a 
fine ounce), less such deduction of 40 percent. 

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 aflixed. 

Done at the city of Washington this 24th day of April, in the year of our 
Lord nineteen hundred and thirty-five, and of the Independence of the United 
States of America the one hundred and fifty-ninth. 

[seal] Franklin D. Roosevelt. 

By the President: 
CoRDELL Hull, 

Secretary of State. 



ORDER or THE SECRETARY OF THE TREASURY OF MAY 20, 103 5, AMENDING THE ORDER 
OF JUNE 2S, 1934, RELATING TO SILVER 

The order of the Secretary of the Treasury of June 28, 1934, relating to 
silver, issued in order to effectuate the policy of the Silver Purchase Act of 
1934, and under authority of said act is amended, effective from the time of 
approval by the President of this amendatory order, by adding after sec- 
tion 11 thereof the following additional sections which, in the judgment of the 
Secretary of the Treasury, are necessary further to effectuate the policy of 
said act: 

Sec. 12. Invportation or transportation into the United States. — Except as 
otherwise specifically provided in section 14, no person shall import or transport 



262 REPORT OF THE SECRETARY OF THE TREASURY 

into the continental United States any foreign silver coin, or any other conven- 
tional pieces or forms of silver commonly used in any foreign country as money 
or coin, except under license issued pursuant to section 13 of this order. 

Sec. 13. Import 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 importation 
or transportation into the continental United States of such silver coin or other 
conventional pieces or forms of silver which he, or the designated agency, is 
satisfied : 

a. Are required to fulfill an obligation to deliver such silver in the continental 
United States, incurred or assumed by the applicant on or before the effective 
date of this order; 

b. Are shipped to the continental United States by, or on behalf or with the 
consent of, a recognized foreign government, foreign central bank, or the Bank 
for International Settlements ; 

c. With the approval of the President, for other purposes not inconsistent 
with the purposes of the Silver Purchase Act of 1934, or the Silver Agreement 
executed at London on July 22, 1933. 

Sec. 14. Exempt silver coin. — Silver coins of a monetary value equal at the 
time of entry to 110 percent or more of the market value of their silver content 
and United States silver coins may be imported or transported into the conti- 
nental United States without the necessity of obtaining a license under this 
order. 

Henry Morgenthau, Jr., 
Secretary of the Treasury. 
Approved : 

Franklin D. Roosevelt. 

The White House, 

May 20, 1935. 



Exhibit 39 

Statements and official orders relating to the issue of silver certificates 

statement by the treasury department, august 10, 1904 

The Gold Reserve Act of 1934 authorizes the President to issue silver 
certificates against any silver bullion, silver, or standard silver dollars in the 
Treasury which, at the time of such issue, is not held for redemption of any 
outstanding silver certificates. 

In accordance with an order of the President issued pursuant to this au- 
thority, the Secretary of the Treasury is now issuing silver cei'tificates against 
all the free silver which was in the Treasury prior to the approval of the 
Silver Purchase Act. This amounted to approximately 62,000,000 ounces, 
the cost of which was about $46,900,000. These silver certificates are being 
issued on a basis of $1.29 an ounce, because that is required liy law for all 
silver certificates. The total amount to be issued, under the President's 
order, against these 62,000.000 ounces will be of a face amount of approximately 
$80,000,000. The difference between the cost of the silver involved and this 
face amount constitutes seigniorage under the law and, as these certificates 
are issued, that difference will be shown on the daily statement as such, 

While " sei.gniorage " now appears in the daily statement for the first time 
as a separate item, it has always appeared in the Treasury receipt account. 
Since the beginning of the Government, the Treasury has received a total of 
$387,000,000 in seigniorage, which hitherto had been included on the daily 
statement under the item "Other miscellaneous." 

The silver now being acquired under the Silver Purchase Act will, in 
regular course, also form the basis of the issuance of silver certificates. The 
silver certificates to be issued against this silver will also, of course, be issued 
on the basis of $1.29 per ounce, as required by law. For the present the 
Treasury will issue against this silver an aggregate face amount of certificates 
equal to its cost. The difference between the cost of the silver which will have 
to be held to secure these certificates when they are issued and the monetary 
value ($1.29 an ounce) of the silver so held will be carried as seigniorage as 
indicated above. 



REPORT OF THE SECRETARY OP THE TREASURY 263 

official orders, august 13, and september 10, 1934 

August 13, 1934. 
My Dear Mr. Secretary : Pursuant to tlie authority vested in me by section 
12 of the Gold Reserve Act of 1934, I hereby authorize and direct the issuance 
of silver certificates against silver in the Treasury not then lield for the 
redemption of any outstanding: silver certificates and in a face amount equal 
to the amount returned for silver received at the United States mints and 
assay offices on and after June 15, 1934, whether under the proclamation of 
December 21, 1933, or under the proclamation of August 9, 1934. 

Pursuant to the authority vested in me by section 7 of the Silver Purchase 
Act of 1934, I hereby direct that such portion of tlie foregoing silver as is 
not held for the redemption of silver certificates shall be added to the monetary 
stocks of the United States and held as bullion in the General Fund of the 
Treasury, but shall be carried on the books of the Treasury at cost. 
Sincerely yours, 

Franklin D. Rooseivelt, 

President. 
The Honorable the Secretary of the Treasury. 

August 13, 1934. 
The Treasurer of the United States. 

Sir : Pursuant to the authority vested in me by section 5 of the Silver Pur- 
chase Act of 1934, I hereby authorize and direct the issuance of silver certificates 
in denominations of $1, $5, $10, $20, and $100 against silver in the Treasury not 
then held for redemption of any outstanding silver certificates, and in a face 
amount equal to the cost of the silver heretofore or hereafter purchased under 
the authority of section 3 of such act, whether purchased from the stabilization 
fund constituted by section 10 of the Gold Reserve Act of 1934 or from other 
sources. 

The portion of the foregoing silver not held for redemption of the silver 
certificates referred to shall be added to the monetary stocks of the United 
States and held as bullion in the General Fund of the Treasury, but shall be 
carried on the books of the Treasuiy at cost. 
Respectfully, 

H. Morge;nthau, Jr., 
Secretary of the Treasury. 
Approved : 

Franklin D. Roosevelt. 
The White House, 

August 13, 1934. 

September 10, 1934. 
My Dear Mr. President : Reference is made to your orders dated March 12, 
June 14, and August 13, and to my order to the Treasurer of the United States, 
approved by you on August 13, 1934, all with respect to the issuance of silver 
certificates. 

Innsmuch asi the order (if June 14 in part supersedes the order of March 12, 
and in turn is closely related to the orders of August 13, I submit for your 
approval the following statement combining and, in minor respects, revising 
the provisions of such orders : 

1. The Secretary of the Treasury is authorized and directed to issue silver 
certificates in denominations of $1, $5, $10. $20, and $100 (or in one or more of 
such denominations), against any silver in the Treasury not at the time held 
for redemption of any outstanding, silver certificates and in a face amount equal 
to the total of the following items : 

(a) $80,000,000, being an amount approximately equal to the monetary value 
of all of the silver bullion in the Treasury on June 14, 1934, not then held for 
redemption of any outstanding silver certificates. This amount does not include 
silver held in the stabilization fund on June 14, 1934. 

(b) $1,560,000, being the amount of series of 1933 silver certificates out- 
standing on March 12. 1934 (including those held in the Treasurer's cash). 
Silver certificates issued in this amount shall be of the series of 1984 and shall 
be issued in lieu of the series of 1933 silver certificates as they are redeemed 
or otherwi^ie received into the Trensury and retired. 

(c) A sum equal to the amount heretofore or hereafter returned to the 
depositors for silver received at the United States mints and assay offices 
on and after June 15, 1934, whether under the proclamation of December 21, 
1933, or under the proclamation of August 9, 1934. 



264 EEPORT OP THE SECRETARY OF THE TREASURY 

2. In addition to the foregoing, the Secretary of the Treasury will issue, 
as authorized and directed in section 5 of the Silver Purchase Act of 1934, 
silver certificates, in denominations of $1, $5, $10, $20, and $100 (or in one 
or more of such denominations), against any silver in the Treasury not at 
the time held for the redemption of any outstanding silver certificates, in a 
face amount equal to the cost of all silver heretofore or hereafter purchased 
under the authority of section 3 of such act, whether purchased from the- 
stabilization fund constituted by section 10 of the Gold Reserve Act of 1934, 
or from other sources. 

3. The silver bullion held as security for silver certificates shall be carried 
at the monetary value of the bullion as defined in the Silver Purchase Act of 
1934 (i. e., $1.2929+ a fine troy ounce), and there will be held at all times, 
pursuant to law, an amount in silver dollars and silver bullion of monetary 
value, equal to the face amount of all silver certificates at the time outstanding. 

4. Such of the silver as is now in, or shall hereafter come into, the Treasury 
as bullion and as is not held as security for outstanding silver certificates, 
shall be held as bullion in the General Fund of the Treasury, initil coined into 
standard silver dollars or subsidiary silver coin ; and, until pledged as security 
for silver certificates or until so coined, shall be carried on the books of the 
Treasury at cost, except that such an amount of such silver as represents (a) 
melted down subsidiary silver coins shall be carried on the books of the 
Treasury, as heretofore, at the value of the subsidiary siher coins which can 
be minted therefrom, and (b) silver previously held for the redemption of silver 
certificates, at the monetary value of such silver (as defined in the Silver 
Purchase Act of 1934). 

If the foregoing restatement of the provisions of your orders of ]\Iarch 12, 
June 14, and August 13, 1934, and my order to the Treasurer of August 13, 
1934, meets with your approval, I should appreciate it if you would indicate 
your approval by signing the notation at the foot hereof. 
Faithfully yours, 

H. MORGENTHAU. Jr., 

Secretary of the Treasury. 
The President, 

The White House. 

Approved : 

Franklin D. Rooseveilt. 
September 12, 1934. 



STATE*IENT by the TREA.SURY department, OCTOBER 18, 1934. RELATING TO THE 
ACCOUNTING PROCEDURE WITH REGARD TO SEIGNIORAGE ON SILVER. 

Secretary of the Treasury Morgentliau announced today that seigniorage 
resulting from the issuance of silver certificates against silver bullion acquired 
under the terms of the Silver Purchase Act of 1934, whether by purchase in the 
market or by nationalization, will l)e covered into tlie Treasury as a special 
receipt in the same manner as the increment resulting from reduction in the 
weight of the gold dollar. Seigniorage of this character will appear on the 
daily Treasury statement, not under ordinary receipts of general and special 
funds, but as a separate item under the same classiflcatic n as trust funds and 
increment on gold. 

The General Fund balance on the daily statement will be segregated to show 
the amount of seigTiiorage from this source, and also the amount of the gold 
increment in the fund. 

Beginning with the daily statement as of the close of business October 16, 
the General Fund l)alance will be shown as follows : 

Balance of increment resulting from reduction in weight of 

the gold dollar $ 

Seigniorage 

Working balance 

Total net balance $ 

All seigniorage on silver other than that received through the issuance of 
silver certificates against silver acquired under the provisions of the Silver 
Purchase Act of 1934 will be covered into the Treasury as an ordinary receipt 
and will so appear in the daily Treasury statement. 



EEPORT OF THE SECRETARY OF THE TREASURY 265 

Exhibit 40 

Statement bij the Secretary of the Treasury, Fehruary 11, 1935. relating to 

the stabilization fund 

Tkeasury Department. 

February 11, 1935. 

1. Since January 14, banks and dealers in foreign exchange and gold, have 
practically stopped buying and selling gold, within gold import and export 
points — which means that the international gold standard as between foreign 
countries and the United States has ceased its automatic operation. 

2. Thanks to the foresight of the Seventy-third Congress, we now have a 
stabilization fund. 

3. When we saw that the external value of the dollar was rapidly going 
out of control, we put the stabilization fund to work on n moment's notice, 
with the result that for the past four weeks we have successfully managed 
the value of the dollar in terms of foreign currencies. 

The country can go about its business with assurance that we are prepared 
to manage the external value of the dollar as long as it may be necessary. 



Exhibit 41 



Proclamation. Fehruary IJf, 1935, extending for two years the period ivithin 
which the Federal Reserve Board may authorize the Federal Reserve banks 
to offer, and the Federal Reserve agents to accept, direct obligations of the 
United States as collateral security for Federal Reserve notes 

Whereas, tb.e second paragraph of section 16 of the Federal I{esei'\'e Act 
(38 Stat. 265), as amended by the act of March 6, 1934 (48 Stat. 398), provides: 

"Any Federal Reserve bank may make application to the local Federal 
Reserve agent for such amount of the Federal Reserve notes hereinbefore 
provided for as it may require. Such application shall be accompanied with a 
tender to the local Federal Reserve agent of collateral in amount equal to the 
sum of the Federal Reserve notes thus applied for and issued pursuant to such 
application. 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 indorsed l)y a member bank of any Federal Reserve 
district and purchased under the provisions of section 14 of this act, or 
bankers' acceptances purchased mider the provisions of said section 14, or gold 
certificates: Promdcd, however. That until March 3, 1935, or until the expira- 
tion of such additional period not exceeding two years as the President may 
prescribe, the Federal Reserve Board may, should it deem it in the public 
interest, iipon the affirmative vote of not less than a majority of its mem- 
bers, authorize the Federal Reserve banks to offer, and the Federal Reserve 
agents to accept, as such collateral security, direct obligations of the United 
States * * *." 

And whereas it is deemed advisable that the authority of the Federal Reserve 
Board to authorize the Federal Reserve banks to offer, and the Federal Reserve 
agents to accept, direct obligations of the United States as collateral security 
for Federal Reserve notes issued to the Federal Reserve banks be continued 
for an additional period after March 3, 1935: 

Now, therefore. I, Franklin D. Roosevelt, President of the United States of 
America, acting under and by virtue of the authority conferred upon me by 
the aforesaid section 16 of the Federal Reserve Act, as amended, do hereby 
proclaim, declare, and prescribe an additional period of two years from and 
after March 3, 1935, during which the Federal Reserve Board may, should it 
deem it in the public interest, upon the affirmative vote of not less than a 
majority of its members, authorize the Federal Reserve banks to offer, and 
the Federal Reserve agents to accept, direct obligations of the United States 
as collateral security for Federal Reserve notes issued to the Fe<^leral Reserve 
banks under the provisions of the aforesaid section. 

In witness whereof, I have hereunto set my hand and caused the seal of the 
United States to be aflSxed. 



266 KEPORT OF THE SECRETARY OF THE TREASURY 

Done 'at the City of Washington this 14th clay of February, in the year of 
our Lord nineteen huntlred and thirty-five, and of the Independence of the 
United States of America the one hundred and fifty-ninth. 

[SEiAL.] FRuANKLIN D. IvOOSEIVEXT. 

By the President : 
CoKDEi/L Hull, 

Secretary of State. 



TAXATION ' 
Exhibit 42 



A7i act to amend certain provisions relating to jmblicity of certain statements 
of income, approved April 19, 1935 

[Public No. 40, 74th Cong., H. R. 6359] 

Be it enacted by the Senate and House of Representatives of the United 
States of America in Congress assembled, That section 55 (b) of the Revenue 
Act of 1934 relating to tiling and making public certain income statements is 
amended to read as follovps : 

"(b) (1) All income returns filed under this title for any taxable year be- 
ginning after December 31, 1934 (or copies thereof, if so prescribed by regula- 
tions made under this subsection), shall be open to inspection by any oflicial, 
body, or commission, lawfully charged with the administration of any State 
tax law, if the inspection is for the purpose of such administration or for the 
purpose of obtaining information to be furnished to local taxing authorities as 
provided in paragraph (2). The inspection shall be permitted only upon written 
request of the Governor of such State, designating the representative of such 
official, body, or commission to make the inspection on behalf of such olhcial, 
body, or commission. The inspection shall be made in such manner, and at 
such times and places, as shall be prescribed by regulations made by the 
Commissioner with the approval of the Secretary, 

"(2) Any information thus secured by any official, body, or commission of 
any State may be used only for the administi-ation of the tax laws of such 
State, except that upon written request of the Governor of such State any such 
information may be furnished to any oflBcial, body, or commission of any 
political subdivision of such State, lawfully charged with the administration 
of the tax laws of such political subdivision, but may be furnished only for 
the purpose of, and may be used only for, the administration of such tax laws. 
Any officer, employee, or agent of any State or political subdivision, who di- 
vulges (except as authorized in this subsection, or when called upon to testify 
in any judicial or administrative proceeding to which the State or political 
subdivision, or such State or local official, body, or commission, as such, is a 
party) any information acquired by him through an inspection permitted him 
or another imder this subsection shall be guilty of a misdemeanor and shall 
upon conviction be punished by a fine of not more than $1,000, or by imprison- 
ment for not more than one year, or both." 

Approved, April 19, 1935. 



Exhibit 43 



Joint resolution to provide revenue, and for other purposes, approved June 28, 

1935 

[Public Res. No. 36, 74th Cong., H. J. Res. 324] 

Resolved by the Senate and House of Representatives of the United States of 
America in Congress assembled. That title IV, as amended, and parts I, II, III, 
and IV of title V, as amended, of the Revenue Act of 1932, are further amended 
by striking out " 1935 " wherever appearing therein, and inserting in lieu thereof 
"1937". Section 1001 (a), as amended, of the Revenue Act of 1932, and sec- 
tion 2, as amended, of the act entitled "An act to extend the gasoline tax for 
one year, to modify postage rates on mail matter, and for other purposes ", ap- 



1 These exhibits do uot include Public No. 20. Mar. 18. 1935. which amends the Agri- 
cultural Adjustment Act of May 12, 1933, with respect to the taxation of rice. 



REPORT OF THE SECRETARY OF THE TREASURY 



267 



proved June 16, 1933, are further amended by striking out " 1935 " wherever 
appearing therein, and inserting in lieu thereof " 1937." 
Approved, June 28, 1935. 



Exhibit 44 



Processing tax rates under the Agricultural Adjustment Act, and rates of tax on 
cotton ginning and tobacco sales, to June 30, 1935, with effective dates 



Source of tax 



Processing 

Wheat 

Cotton 

Tobacco 2 



Effective date 



July 9, 1933 
Aug. 1, 1933 
Oct. 1, 1933 



Aug. 1, 1934 



Oct. 1, 1934 



Rate 



30 cents per bushel of 60 pounds. 

4.2 cents per pound. 

Cigar leaf^3.0, 3.75, and 5.0 cents 

per pound. 
Maryland— 1.7, 1.8, and 2.4 cents per 

pound. 
Burley- — ^2.0, 2.3, and 3.1 cents per 

pound. 
Flue-cured — 4.2, 4.7, and 6.1 cents per 

pound. 
Fire-cured— 2.9, 3.2, and 4.1 cents per 

pound. 
Dark air-cured — ^3.3, 3.8, and 5.1 cents 

per pound. 
Cigar leaf — 3.0, 3.75, and 5.0 cents per 

pound. 
Maryland — 1.7, 1.8, and 2.4 cents per 

pound. 
Burley — 2.0, 2.3, and 3.1 cents per 

pound. 
Flue-cured: 

Used in plug chewing tobacco and 

twist — 3.3, 3.7, and 4.8 cents 

per pound. 

Other- — 4.2, 4.7, and 6.1 cents per 

pound. 

Fire-cured — 2.9, 3.2, and 4.1 cents per 

pound. 
Dark air-cured — 3.3, 3.8, and 5.1 cents 

per pound. 
Cigar leaf — 3.0, 3.75, and 5.0 cents per 

pound. 
Maryland^ — -0 cents per pound. 
Burley: 

Used in plug chewing tobacco and 
twist — ^4.1, 4.7, and 6.4 cents 
per pound. 
Other — 6.1, 7.0, and 9.5 cents per 
pound. 
Flue-cured: 

Used in plug chewing tobacco and 

twist — 3.3, 3.7, and 4.8 cents 

per pound. 

Other^ — ^4.2, 4.7, and 6.1 cents per 

pound. 

Fire-cured — 2.9, 3.2, and 4.1 cents per 

pound. 
Dark air-cured — 3.3, 3.8, and 5.1 
cents per pound. 



For footnotes, see p. 26 



268 



EEPOET OF THE SECEETAEY OF THE TEEASUEY 



Procesing tax rates under the Agricultural Adjustment Act, and rates of tax on cotton 
ginning and tobacco sales, to June SO, 1935, with effective dates — Continued 



Source of tax 



Processing ^ — Contd. 
Tobacco - — Continued. 



Effective date 



Feb. 1, 1935 



Field corn. 
Hogs 



Sugar beets and sugar- 
cane. 



Peanuts 

Rice 

Paper.. 



Nov. 5, 1933 
do 



Dec. 1, 1933 

Feb. 1, 1934 

Mar. 1, 1934 

June 8, 1934 



Oct. 1, 1934 

Apr. 1, 1935 
Dec. 1, 1933 



Rate 



Cigar leaf (including all types of to- 
bacco used in manufacture of cigars 
and scrap chewing and smoking to- 
bacco) : 

Used in cigars: 

Fire-cured tobacco — 3.0, 3.25, 

and 4.3 cents per pound. 
Other— 3.0, 3.75, and 5.0 
cents per pound. 
Used in scrap chewing and smok- 
ing tobacco — 2.0, 2.5, and 3.3^ 
cents per pound. 
Maryland — cent per pound. 
Burley: 

Used in chewing tobacco — 2.5, 2.9, 

and 3.9 cents per pound. 
Other — ^6.1, 7.0, and 9.5 cents per 
pound. 
Flue-cured: 

Used in chewing tobacco — 2.0, 2.3, 

and 2.9 cents per pound. 
Other — 4.2, 4.7, and 6.1 cents per 
pound. 
Fire-cured: 

Used in chewing tobacco — 2.0, 

2.2, and 2.9 cents per pound. 
Other— 2.9, 3.2, and 4.1 cents per 

pound. 
Dark air-cured: 

Used in chewing tobacco — 2.0, 

2.3, and 3.1 cents per pound. 
Other — 3.3, 3.8, and 5.1 cents per 

pound. 
5 cents per bushel of 56 pounds. 
50 cents per hundred pounds. 
$1.00 per hundred pounds. 
$1.50 per hundred pounds. 
$2.25 per hundred pounds. 
Direct-consumption sugar — 0.5 cent 

])er pound of sugar, raw value. 
Sirup of cane juice and edible molasses 
from sugarcane- — 0.125 cent per 
pound of sugar content, raw value. 
Other than those used in the manufac- 
ture of peanut oils- — -1 cent per pound. 
1 cent per pound. 
Used in — 

Multi-wall bags- — -2.04 cents per 

pound of paper. 
Coated bags- — -3.36 cents per pound 

of coated paper. 
Open-mesh paper bags- — -2.14 cents 
per pound of open-mesh fabric. 
Paper towels- — ^0.715 cent per 

pound of paper. 
Gummed paper tai)e- — 4.06 cents, 
per pound of paper. 



For footnotes, see p. 269. 



REPORT OF THE SECRETARY OF THE TREASURY 



269 



Processing tax rates under the Agricultural Adjustment Act, and rates of tax on cotton 
ginniug and tobacco sales, to June 30 1935, with effective dates — Continued 



Source of tax 



Efieetive date 



Rate 



Processing ' — Contd. 
Paper — Continued 



June 12, 1934 



Jute. 



Other agricultural 
adjustment 

Cotton ginning 



Tobacco sales. 



Dec. 1, 1933 
June 12, 1934 



June 1,1934' 
June 18, 1935 
June 29, 1934 



Used in — 

Bags, as defined, other than open 
mesh: 

4.5- to 5.4-pound size— $1.24 

per thousand bags. 
5.5- to 7.9-pound size— $1.47 

per thousand bags. 
8- to 10.9-pound size — $2.02 

per thousand bags. 
11- to 12.9-pound size— $2.25 

per thousand bags. 
13- to 16.9-pound size— $3.11 

per tliousand bags. 
17- to 29.9-pound siz(^-$3.96 

per thousand bags. 

30- to 74.9-pound size— $7.91 

per thousand bags. 

Open-mesli paper bags — 2.14 cents 

per pound of open-mesh fabric. 

Paper towels- — 0.346 cent per 

pound of paper. 
Gummed paper tape— 4.06 cents 
per pound of paper. 
Fabric into bags- — 2.9 cents per pound 

of fabric. 
Yarn into twine- — -2.9 cents per pound 

of yarn. 
Fabric into small bags- — ^2.1 cents per 

pound of fabric. 
Yarn into twine — 2.9 cents per pound 
of yarn. 



5.67 cents per pound of lint cotton pro- 
duced from ginning.^ 

6.0 cents per pound of lint cotton pro- 
duced from ginning.^ 

25 percent of the price received from 
first bona fide sale. 



1 Tax applies to the first domestic processing and is measured by the quantity of the commodity put 
in process, unless otherwise specified. 

- The 3 rates given apply respectively to farm sales weight, tobacco from which the stem 
has not been removed, and tobacco from which the stem has been removed. 

3 Tax applies to the ginning of cotton harvested after May 31, 1934, and to sales of tobacco harvested after 
June 28, 1934. 

< 50 percent of average central market price as determined and proclaimed by the Secretary of Agriculture 
in accordance with provisions of the act. 



OBLIGATIONS OF FOREIGN GOVERNMENTS 

Exhibit 45 

Statements by the Treasury Department concerning the indebtedness of certain 
foreign governments to the United States 

AUSTRIA 

Announcing the postponement of the payment due from Austria on January 1, 
1925 (press release, Dec. 21, 193 i) 

The Treasury has been notified by the Department of State that a note 
dated November 30, 1934, has been received from the Austrian Minister stating 
that the Austrian Government received on November 26, 1934. a coninainication 
from the trustees of the Austrian Government guaranteed loan of 1923-43. in 



270 REPORT OF THE SECRETARY OF THE TREASURY 

which objections were raised against the payment to the creditor governments 
signatoi-y to the agreements reltitive to the settlement of relief debts of the 
amounts due to them in 1935, and that in view of these objections no remittance 
can be made to cover the installments due within the next year. 

The lien upon the assets and revenues of Austria pledged for the payment 
of Austrian relief bonds has been subordinated to the lien upon such assets and 
revenues pledged for the payment of the Austrian guaranteed 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 agreements between 
Austria and the United States dated May 8, 1930. and September 14, 1932. 

In accordance with the provisions of the agreement of May 8, 1930, bond no. 
7 in the face amount of $460,093, due January 1, 1935, wall be postponed and 
said amount together with interest at the rate of 5 percent per annum com- 
pounded annually to December 31, 1943, is repayable together with further 
interest at 5 percent per annum in 25 equal annuities en January 1 of each 
of the years 1944 to 1968, inclusive. The 1935 annuity under the September 14 
agreement is postponed and repayable in a similar manner. 

The Treasury has heretofore listed Austria as one of the countries that 
failed to make certain payments as required by agreements to which the United 
States was a party for the reascm that the Treasury took the view that the 
objections raised by the trustees in November 1933, did not apply to the annuity 
of .$34,767.23 due January 1, 1934, under the agreement dated September 14, 
1932. The Treasury has recently received through the State Department a 
copy of a letter dated Septeml)^r 6. 1934, from the trustees to the Austrian 
Minister of Finance in which the trustees state that they confirm that their 
letter of November 21, 1933, nni-t be considered as covering all payments due 
by Austria under the relief credit agreements, including those postponed under 
the Hoovf'r moratorium which fell due on Januai'y 1, 1934. Information fur- 
nished to the Government of the United States indicates that Austria has not 
nuide any payment due creditors inconsistent with tlie trustees' letter of Sep- 
tember 6, 1934, and also that no creditor, among those who have replied, has 
opposed tlie position taken in that letter. 

The Treasury is of the opinion that it would be appropriate to take the view 
that the notice of the trustees of November 21. 1933, as more recently clarified, 
liostj)oned, in accordance with the provisions of the agreement dated September 
14, 1932. the annuity amounting to $34,767.23, otherwise payable on January 
1, 1934. A note to this effect has been made upon the records of the Treasury. 



Announcing the receipt of payments due from Finland (press releases, Dec. 
lo, J93Jf, and June 15, 1935) 

Decbmbeu 15, 1934. 

The Treasury received today the sum of $228,538 from the Government of 
Finland, representing a payment of principal in the amount of $62,000, and the 
semiannual payment of interest in the amount of $147,507.50 tmder the funding 
agreement of May 1, 1923, and $19,030.50 as the third semiannual annuity 
due under the moratorium agreement of May 23, 1932. This payment repre- 
sents the entire amount due from the Government of Finland and was paid in 
cash through the Federal Reserve Bank of New York. 

June 15, 1935. 

The Treasury received today the sum of $165,453 from the Government of 
Finland, representing the semiannual payment of interest in the amount of 
$146,422.50 under the funding agreement of May 1, 1923, and $19,030.50 as the 
fourth semiannual annuity due under the moratorium agi'eement of May 23, 
1932. This payment represents the entire amount due from the Government 
of Finland and was paid in cash through the Federal Reserve Bank of New 
York. 

GREECE 

Announcing the receipt of interest payments due from Greece (press release, 

July 6, lOSJf) 

Acting Secretary of the Treasury Coolidge today announced that the Greek 
Government had transferred to the United States Treasury the sum of $196,128, 



KEPORT OF THE SECRETABY OP THE TREASURY 271 

representing 27% percent of the interest amounting to $435,840 due during the 
calendar year 1933, and 35 percent of the semiannual interest amounting to 
$217,920 due May 10, 1934, on the 4 percent loan of 1929. 

By the transfer of this sum the Greek Government has accorded to the 
United States treatment equal to that accorded to the bondholders of the 
Greek stabilization and refugee loan of 1928. Such equal treatment is pro- 
videtl for by the terms of the American-Greek debt funding agreement of 
May 10, 1929. 



Exhibit 46 



Coi^'espondence exchanged beUoeen the Ooveffnment of the United States and 
various foreign governments concerning foreign debts oiving to the United 
States {Department of State press releases) 

BELGIUM 

To the Secretary of State from the Belgian Charge d' Affaires, December 13, 1934 

[Translation] 
Me. Secretary of State: 

In your note of November 22, 1934, Your Excellency informed me of the 
total of the amounts due to the Government of the United States by the 
Belgian Government on December 15, 1934, in accordance with the terms of the 
understanding of August 18, 1925, and of the moratorium agreement of June 
10, 1932. In the same note Your Excellency vs^as good enough to assure me 
that the Government of the United States was entirely prepared to discuss 
through diplomatic channels any proposal of the Belgian Government regarding 
a settlement of this debt. 

I have the honor to inform Your Excellency that the Government of the 
King has noted this communication. It regrets that the reasons which pre- 
vented it from resuming on December 15, 1932, the payments interrupted by 
the Hoover moratorium, and which were called to the attention of the Ameri- 
can Government in the note of December 14, 1933, continue to exist in their 
entirety. 

In view of this the Belgian Government finds itself unable to make the 
payments in question on December 15 next. 

I take this occasion [etc.]. 

Prince Eugene De Ligne. 

To the Secretary of State from the Belgian Ambassador, June 14, 1935 

[Translation] 
Mr. Secretary of State : 

By your note of June 1, 1935, Your Excellency informed me of the amounts 
due to the Government of the United States by the Belgian Government on 
June 15, 1935, in execution of the agreement of August 18, 1925, and of the 
moratorium agreement of June 10, 1932. 

The Belgian Government has had occasion, notably in its notes of December 6, 
1932, and of December 14, 1933, to set forth to the Government of the United 
States the reasons why the Belgian Government found it impossible to resume 
the payments interrupted by the Hoover moratorium. It will be sufficient 
to recall that the failure of Germany to make payments, by depriving Belgium 
of receipts which solemn engagements permitted it to count on, overthrew the 
financial plan worked out for the liquidation of the situation created by the war. 

To this fundamental difiiculty there had been added all the difficulties which 
result from the depression. Belgium, an export country, has been particularly 
affected by the paralysis of international commerce. Unemployment became 
even more serious in 1934, thus considerably increasing the burden of charges 
upon the treasury. The financial capacity of Belgium is closely dependent on 
business recovery. The Belgian Government is convinced that an essential 
condition for such recovery is the lowering of the barriers which impede inter- 
national trade. The agreement recently concluded with the United States 
constitutes a first step in this direction. 

It is necessary to continue to pursue this policy; its success appears as the 
essential condition on which depends the comprehensive solution of the eco- 

16816—36 19 



272 REPORT OF THE SECRETARY OF THE TREASURY 

nomic and financial problems raised by the Great War. The Belgian Govern- 
ment hopes for this general settlement. 

While recognizing its obligations toward the Government of the United 
States, it finds itself, to its great regret, not in a position to alter, under the 
present conditions, the attitude which circumstances have obliged it to adopt 
since December 15, 1932. 

I avail myself [etc.]. 

R. V. Straten. 



CZECHOSLOVAKIA 

To the Acting Secretary of State from the Miwister of Czechoslovakia, 

December U, 1934 
Excellency : 

In acknowledging the receipt of Your Excellency's note of November 22, I 
have the honor to convey to Your Excellency the following observations of 
the Czechoslovak Government. 

The Czechoslovak Government having taken a careful estimate of present 
circumstances as compared to the situation which prevailed at the occasion of 
the presentation of the last note, arrived at the conclusion that no substantial 
change so far has taken place in the conditions predominating at that time. 
The arguments then set forth unfortunately have lost nothing in their perti- 
nency and validity, and, in the opinion of the Czechoslovak Government, present 
circumstances would hardly warrant encouraging prospects for the immediate 
resumption of the negotiations. 

Notwithstanding these facts the Czechoslovak Government, noting with great 
satisfaction the willingness on the part of the Government of the United States 
to receive any further suggestion, proposes to follow assiduously any future 
developments in existing conditions. The Czechoslovak Government, in accord- 
ance with the conclusion of the note of June 11, reiterates its sincere assur- 
ances that in the event of any changes arising which might justify substantial 
hope of a successful conclusion of the final settlement, the Czechoslovak Gov- 
ernment will not fail to avail itself of the opportunity of concurring with the 
intimation conveyed in Your Excellency's note relative to proposals for pay- 
ment of this indebtedness and the eventual submission of it to the American 
Congress. 

Accept [etc.]. 

Dr. Ferdinand Veveeka, 
Envoy Extraordinary and Minister Plenipotentiary of Czechoslovakia. 

To the Secretary of State from the Minister of Czechoslovakia, June 10, 1935 

ExCEILLEiNOY t 

In acknowledging the receipt of Your Excellency's note of June 1, 1935, I 
have the honor to refer to my note of December 14, 1934, number 804, in which 
I was instructed by my Government to stress the fact that the Czechoslovak 
Government is taking a careful estimate of current circumstances and prevailing 
economic and financial conditions underlying the problem of international 
indebtedness and causing the temporary suspension of due installments. 

The Czechoslovak Government continued to do so in the intervening period 
and profoundly regrets that this assiduous study led to the same conclusion that 
no essential change has taken place to warrant substantial prospects for the 
resumption of negotiations in this matter at this moment. 

Nevertheless, the Czechoslovak Government received with much gratification 
the reiteration of the assurance that the Government of the United States is 
fully disposed to discuss through diplomatic channels any proposals in regard 
to the payment of the Czechoslovak indebtedness, and will not fail to avail itself 
of the first opportunity of presenting any such proposal whenever general condi- 
tions substantiate a genuine hope of arriving at a satisfactory conclusion of such 
negotiations. 

Dr. FtEDINAND Veverka, 
Envoy Extraordinary and Minister Plenipotentiary of Czechoslovakia. 



REPORT OF THE SECRETARY OF THE TREASURY 273 

ESTONIA 

To the Secretarjf of State from tJie Estonian Minister of Foreign Affairs, 

December 4, 1934 

EXCELLBNOY : 

I have the honor to invite your attention to my note of the 31st May, 1934, 
no. 2^-R, regarding the debt funding agreement of 1925 between Estonia and tlie 
United States, and to state the following : 

As the economic and financial conditions of Estonia, in spite of the vigorous 
steps taken by the Government, have not improved to any appreciable extent 
during the last six months, the Estonian Government feel bound to bring to the 
knowledge of the United States Government that to their deep regret they are 
unable, under the terms of the agreement of 1925, to effect the payment of the 
instalment falling due on December 15, 1934. 

I avail myself [etc.]. 

Juuus Seljamaa, 
Minister of Foreign Affairs. 

To the Secretary of State from the Acting Estonian Minister of Foreign Affairs, 

Mau 28, 1935 
EXCEIXENOY : 

I have the honor to inform you that the Estonian Government, for reasons 
stated in their previous notes, regret to be unable to effect, under the terms of 
the debt funding agreement of 1925, between Estonia and the United States of 
America, the payment of the instalments falling due during the present financial- 
year, i. e., on June 15th, 1935, and December 15th, 1935. 
I avail myself [etc.]. 

H. Laketei, 
Acting Minister of Foreign Affairs^ 



FRANCE 

To the Secretary of State from the French Ambassador, December 13, 1934 

[Translation] 

I have the honor to acknowledge the receipt of Your Excellency's note of 
November 22, containing a statement of the amounts due by France to the 
United States on December 15, next, under the terms of the agreements of 
April 29, 1926, and of July 6, 1931. 

In that note you were good enough to assure me that the American Gov- 
ernment is prepared to discuss, through diplomatic channels, any proposals 
which my Government may desire to present concerning payment of this debt, 
and to give consideration to such proposals with a view to presenting them 
to the American Congress. 

The French Government highly appreciates these assurances and thanks the 
American Government for them. 

It desires to reaffirm that it does not contest the validity of the debt and 
that it remains prepared to seek a settlement with the American Government 
on such basis as may appear acceptable to the two countries. Although it 
finds it at present impossible to formulate proposals, it can only hope that 
the situation will develop sufficiently to justify, in the near future, undertak- 
ing negotiations with a view to assuring the early attainment of the under- 
standing desired equally by the two Governments. 

Kindly accept [etc.] 

Andee de Laboxilaye. 

To the Secretary of State from the French Ambassador, June 12, 1935 

[Translation] 

I have the honor to acknowledge the receipt of Your Excellency's note of 
June 1, transmitting a statement of the amounts due by France to the United 
States, June 15, 1935, under the terms of the agreements signed by the French 
Government. 



274 REPORT OF THE SECRETARY OP THE TREASURY 

In presenting this statement, you took occasion to reiterate that the Ameri- 
can Government is fully disposed to discuss through diplomatic channels any 
proposals which the Government of the Republic may desire to put forward 
in regard to the payment of this indebtedness, and to give them careful con- 
sideration with a view to their eventual submission to the American Congress. 

The French Government thanks the American Government for having been 
so kind as to renew these assurances. It desires in turn, referring to its 
previous communications, to repeat that it is prepared to seek, as soon as cir- 
cumstances permit, a settlement of its debt upon bases acceptable to both 
■countries. 

Still finding itself, however, unable to put forward proposals at the present 
time, it can only hope that the situation will develop sufficiently to justify, 
in the near future, undertakmg negotiations with a view to assuring the early 
attainment of the understanding desired equally by the two Governments. 

Please accept [etc.]. 

AnDEE DE LABOrrLAYB. 



GREAT BRITAIN 

To the Secretary of State from the British Ambassador, December 10, 19S4 

Sir: 

In accordance with instructions from His Majesty's Principal Secretary of 
State for Foreign Affairs I have the honour to acknowledge the receipt of 
your note of November 22nd enclosing a statement of the amounts due from 
His Majesty's Government in the United Kingdom under the provisions of 
the debt agreement of June 19th, 1923, and of the moratorium agreement of 
June 4th, 1932. 

His Majesty's Government welcome the assurance that the United States 
Govei-nment are fully disposed to discuss any proposals that may be put for- 
ward in regard to the payment of this indebtedness and that such proposals 
would receive careful consideration with a view to their eventual submission 
to Congress. 

In June last His Majesty's Government explained the circumstances which 
had forced them to decide to suspend payments under the funding and mora- 
torium agreements pending the final revision of the war debt settlement. In 
that note it was stated that recent events had shown that discussions with a 
view to a final revision of the settlement could not at that time usefully be 
renewed. 

His Majesty's Government have again most carefully reviewed the position, 
but they regret that they have reached the conclusion that the considerations 
which governed their decision six months ago apply with equal force today. 
Accordingly they feel that it would be useless and therefore unwise to ini- 
tiate negotiations at present, but they will continue to watch for any eifective 
opportunity of taking steps in that direction. 

I have the honour [etc.] 

R. C. Lindsay. 

To the Secretary of State from the British Ambassador, June 7, 1935 

Snt: 

In accordance with instructions from His Majesty's Principal Secretary of 
State for Foreign Affairs, I have the honour to acknowledge the receipt of 
your note of June 1st enclosing a statement of the amounts due from His 
Majesty's Government in the United Kingdom under the provisions of the 
debt agreement of June 19th, 1923, and of the moratorium agreement of June 
4th, 1932. 

In their note of June 4th, 1934, His Majesty's Government explained in full 
the reasons for which they were reluctantly compelled to suspend payments 
under the above-mentioned agreements pending the negotiation of a final 
revised settlement. 

His Majesty's Government have constantly given most careful consideration 
to the matter, but they regret that it does not appear to them that the essen- 
tials of the situation have changed since that note was written. They observe 
with appreciation the readiness of the United States Government to discuss 
nny proposals for dealing with the present situation and wish to state that 



REPORT OF THE SECRETARY OP THE TREASURY 275 

they will be fully prepared to resume discussions whenever circumstances 
would appear to warrant the hope that a result satisfactory to both Govern- 
ments might be expected. 
I have the honour [etc.] 

R. C. Lindsay. 



HUNGARY 

To the Secretary of State from the Hungarian Minister, December 12, 1934 

Sib: 

I have the honor to inform you that I have been instructed by my Govern- 
ment to advise the Government of the United States that owing to continued 
unfavorable economic conditions, the Hungarian Government regrets exceed- 
ingly its inability to pay the amount of $49,771.93, representing the principal 
and semiannual interest due on December 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 2 per centum i)er 
annum. 

Accept [etc.]. 

John PELfiNyi. 

To the Secretary of State from the Hungarian Minister, June 14, 1935 

Sib: 

I have the honor to inform you that I have been instructed by my Govern- 
ment to advise the Government of the United States that owing to continued 
unfavorable economic conditions, the Hungarian Government regrets exceed- 
ingly its inability to pay the amount due on June 15, 1935, 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 2 per 
centum per annum. 

Accept [etc.] 

John Pel^nti. 



To the Secretary of State from the Italian Ambassador, December 14, 1934 

Sib: 

I have the honor to acknowledge the receipt of your note of November 22, 
enclosing a statement of the amounts due from the Italian Government up to 
the 15th of December 1934, under the provisions of the debt agreement of No- 
vember 14, 1925, and the moratorium agreement of June 3, 1932. 

My Government has taken note of the assurance that the United States Gov- 
ernment is fully disposed to discuss, through diplomatic channels, any proposals 
the Italian Government may desire to put forward in regard to the payment 
of this indebtedness, and has directed me to thank you for this communication. 

The Italian Government, while regretting to be now unable to submit any 
proposals, will not fail to closely follow the situation. Under the present cir- 
cumstances, it can only refer to the considerations contained in my note of 
June 14, 1934, dealing with the situation existing on that date, which has 
remained unchanged. 

Accept [etc.] 

Rosso. 

To the Secretary of State from the Italian Ambassador, June 10, 1935 

Sir: 

I have the honor to acknowledge the receipt of your note of June 1st, 
1935, enclosing a statement of the accounts due from the Italian Government 



276 KEPORT OP THE SECRETARY OF THE TREASURY 

up to the loth of June 1935, under the provisions of the debt agreement of 
November 14, 1925, and the moratorium agreement of June 3rd, 1932. 

My Government has taken note with appreciation of tlie renewed assurance 
that the United States Government is fully disposed to discuss, through diplo- 
matic channels any proposals which the Italian Government may desire to 
put forward in regard to the payment of its indebtedness and that such pro- 
posals would receive careful consideration with a view to eventual submission 
to the American Congress. 

While thanking you for this communication, my Government regrets to be 
unable at present to submit any proposals and wishes to refer to the considera- 
tions contained in my note of June 14, 1934, dealing with the situation existing 
on that date, which does not appear -to have changed. 

Accept [etc.] 

Rosso. 



Note from the President of the Comicil and Minister for Foreign Affairs to the 
American Charge d' Affaires, Riga, December 13, 193 Jf 

Monsieur le ChargiS d'affaires : 

I have the honor to refer to the correspondence exchanged between the Min- 
istry for Foreign Affairs and the American Legation regarding the indebted- 
ness of Latvia to the United States and to refer, in particular, to the note of 
the State Department of November 22 last, addressed to Mr. A. B. Lule, Lat- 
vian Consul General in New York in charge of Legation, in which a statement 
was made concerning the amounts due from Latvia and Mr. Lule was assured 
that the United States Government are " fully disposed to discuss, through 
diplomatic channels, any proposals your Government may desire to put for- 
ward in regard to the payment of this indebtedness," and that " such proposals 
would receive careful consideration with a view to eventual submission to 
the American Congress." 

The attitude of the Latvian Government regarding the settlement of their 
indebtedness to the United States has, as you will remember, already been 
defined in my former communications on the subject, in the Aide-Memoire pre- 
sented to His Excellency Monsieur Skinner on December 3rd, 1932, and, re- 
cently, in my note no. R. 763, 00/32 of June 12th last. In this note the Latvian 
Government declared themselves obliged to suspend all payments pending the 
final revision of the debt-funding agreement of September 24th, 1925. At the 
same time they took the opportunity to emphasize once more their willingness 
to enter upon a further discussion of the subject at any time when such a 
discussion would be agreeable to the Government of the United States. 

No reply to this note has up to now been received, and I may therefore 
assume that the note of the State Department, dated November 22nd last, may 
be regarded as a reply to the statements of the Latvian Government, Mr. Lule 
now being assured that the American Government are willing at present to 
discuss the proposals the Latvian Government may desire to put forward. As 
pointed out to you at the time, such a further discussion of the subject of their 
indebtedness is also the desire of my Government. 

In view of the fact that the next term of payment falls due on December 
15th, it stands to reason that no definite settlement can be reached at such 
short notice. The Latvian Government therefore regret that, for reasons stated 
in their previous notes on the subject and owing to the present adverse economic 
and financial situation, they will be unable to pay the instalment of their debt 
to the United States which falls due on December 15th. It is, however, the 
earnest hope of my Government, that it will be found possible to begin the 
discussion of the whole subject at the earliest possible date, so that an under- 
standing might be effective which would prove acceptable to both the Govern- 
ments concerned. 

I avail myself [etc.] 

K. Ulmanis. 
Press release, June 14, 1935 

The Department of State was informed by a telegram received from Mr. 
Felix Cole, American Charge d' Affaires at Riga, Latvia, that the Latvian 
Government in a note delivered to the American Legation at Riga on June 14, 
1935, has expressed regret owing to inability to pay the current installment 
due on its debt to this Government. 



REPORT OF THE SECRETARY OF THE TREASURY 277 

LITHUANIA 

To the Secretary of State from the Lithuanian Charge d'Affaires ad interim, 

December 14, 1934 
Sir: 

With reference to your note of November 22, 1934, transmitting a state- 
ment of the amounts clue from my GoA^ernment June 15, 1933, December 15, 1933, 
June 15, 1934, and December 15, 1934, under the provisions of the debt agree- 
ment of September 22, 1924, and of the moratorium agreement of June 9, 1932, 
I have the honor to state that I have been instructed by my Government to 
inform you as follows : 

The adverse economic and financial conditions which existed in Lithuania, 
as set forth in my note of June 14, 1934, have shown no improvement, but, 
on the contrary, the difficulties which confronted Lithuania at that time have 
since further increased. 

Reaffirming the acknowledgment of its indebtedness to the United States, the 
Lithuanian Government regrets very much that it is again forced to arrive at 
the conclusion that it is unable to effect payments due the United States 
Government on December 15, 1934. 

The Lithuanian Government is deeply grateful for the assurance that the 
United States Government is disposed to discuss, through diplomatic channels, 
any proposals the Lithuanian Government may desire to put forward in regard 
to the payment of its indebtedness, and that such proposals would receive 
careful consideration with a view to eventual submission to the Congress of 
the United States of America. 

The Lithuanian Government will be glad to submit proposals relative to its 
indebtedness to the United States Government as soon as it will be found that 
discussions regarding this matter would be likely to produce mutually agreeable 
and practicable results. 

M. Bagdonas, 
Charge d'Affaires ad interim. 

To the Secretary of State from the Lithuanian Charge ^Affaires ad interim, 

June U, 1935 
Sie: 

I have the honor to acknowledge the receipt of your note of June 1, 1935, 
enclosing a statement of the amounts due and payable June 15, 1933, December 
15, 1933, June 15, 1934, December 15, 1934, and June 15, 1935, from my Govern- 
ment pursuant to the terms of the debt agreement of September 22, 1924, and 
the moratorium agreement of June 9, 1932. 

In accordance with instructions from my Government, I have the honor to 
inform you that no favorable changes have taken place in the economic and 
financial conditions which prevailed in Lithuania at the time of the presenta- 
tion of my notes of June 14, 1934, and December 14, 1934. 

In view of the above, the Lithuanian Government regrets exceedingly that it 
is unable to meet the payments due the United States Government on June 15, 
1935. 

The Lithuanian Government, reaffirming the acknowledgment of its indebted- 
ness to the United States, reiterates its assurance, as set forth in my note of 
December 14, 19S4, that it will be glad to submit proposals relative to its 
indebtedness as soon as it will be found that discussions regarding this matter 
would be likely to produce mutually agreeable and practicable results. 

Accept [etc.]. 

MiKAs Bagdonas, 
Charge d'Affaires ad interim. 



POLAND 

To the Department of State from the Polish Ambassador, December 14, 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, 1982, and confirmed by later declarations, they are 
obliged to request similarly a deferment of payment of the instalment payable 
on December 15th, 1934. Tlie Polish Government are still not in a position to 
resume the service of the debt toward the United States. 



278 REPORT OP THE SECRETARY OP THE TREASURY 

To the Secretary of State from the Polish Ambassador, June 12, 1935 

[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 instalment payable 
on June 15, 1935. The Polish Government are still not in a position to resume, 
toward the United States, the service of the debt. 



BUMANIA 

To the Secretary of State from the Rumanian Minister, December 20, 1934 

Sib: 

In accordance vpith instructions from my Government, I have the honor to 
acknowledge the receipt of your note of November 22nd, enclosing a statement 
of the amounts due from my Government June 15, 1933, January 2, 1934, June 
15, 1934, and December 15, 1934, under the provisions of the debt agreement of 
December 4, 1925, and of the moratorium agreement of June 11, 1932. 

In the note of June 12, 1934, my Government explained the reasons why it 
was obliged to suspend the payments on the above-mentioned agreements, and 
referred to the note of June 15, 1933, in which it stated the unprecedented 
financial diflBculties it was facing. 

The Rumanian Government, after having carefully reexamined the prevailing 
conditions, feels that the reasons which determined its decision last June are 
Btill valid, as no changes have occurred in the general situation which would 
permit to expect a favorable result by initiating negotiations at the present time. 

Please accept [etc.]. 

Davila, 
Minister of Rumania. 

To the Secretary of State from the Rumanian Minister, June 12, 1935 
Sir: 

I have the honor to acknowledge receipt of your note of June 1, 1935, enclosing 
a statement of the amounts due from my Government June 15, 1933, January 2, 
1934, June 15, 1934, December 15, 1934, and June 15, 1935, under the provisions 
of the debt agreement of December 4, 1925, and of the moratorium agreement 
of June 11, 1932. 

In the note of December 20, 1934, I have referred to the reasons why my 
Government was obliged to suspend payments under the above-mentioned agree- 
ments. The Rumanian Government feels that those reasons are still valid, 
as no changes have occurred in the general situation which would permit to 
expect a favorable result by initiating negotiations at the present time. 

Please accept [etc.]. 

Davila, 
Mvnister. 



GOVERNMENT DEPOSITS 

Exhibit 47 

Instructions for collecting agents regarding the receipt of postal money orders 
draivn on points outside the district in which received 

[Accounts and Deposits, Division of Deposits, Circular J^o. 1] 

Teeasuby Department, 

July 21, 1934. 
To the Heads of Departments and Establishments Concerned: 

Under the authority contained in the Act of June 16, 1934 (Public No. 366 — 
73d Cong.) the Postmaster General has prescribed regulations exacting a fee 
of the same amount as that charged for the issue of a money order when such 
money order is paid at an office other than that on which drawn. The Post- 
master General has ruled that money orders drawn in favor of governmental 
establishments and agencies are not excepted from the operation of the law. 



REPORT OF THE SECRETARY OF THE TREASURY 279 

Paragraph 4, of Treasury Circular No. 176 provides, in part, that payments 
made by express or postal money order shall be handled subject to collection in 
the same manner as cash. Authority is granted, under the terms of the circular, 
to deposit cash with general depositaries of public moneys where available. 
Paragraph 26, of Treasury Circular No. 176, however, provides that general 
depositaries are not authorized to maintain any collection account for deposits of 
public moneys, but are required to give immediate credit in the Treasurer's 
account and to issue certificates of deposit for the full amount of all public 
moneys deposited with them for credit in the Treasurer's account in accordance 
with the circular. 

It is requested that all departments, independent establishments, bureaus, and 
offices instruct their collecting agents in the field that if postal money orders drawn 
on outside points are received, all such money orders should be forwarded to the 
Federal Reserve bank or branch of the district for collection and credit in accord- 
ance with the procedure set up by Treasury Circular No. 176 in the case of 
checks. Depositors located in the District of Columbia may continue to deposit 
all postal money orders, including those drawn on outside points, direct with the 
Treasurer of the United States. 

Stephen B. Gibbons, 
Acting Secretary of the Treasury. 



Exhibit 48 



Supplement to regulations governing deposit of puUio moneys and payment of 
Oovernment checks and warrants 

[Eighth supplement to Department Circular No. 176] 

Teeasury Department, 

April 23, 1935. 
To the Treasurer of the United States, Federal Reserve Banks and Branches 
and Others Concei'ned: 

Treasury Department Circular No. 176, dated September 2, 1930, as amended, 
is hereby amended so that the last paragraph of section 34 on page 15 will read 
as follows : 

"After the expiration of 1 year following the close of the fiscal year (ending 
June 30) in which they are drawn, checks drawn on the Treasurer of the 
United States are not payable by him but should be transmitted to the Secre- 
tary of the Treasury, Division of Bookkeeping and Warrants, for payment from 
the " Outstanding liabilities " appropriation, accompanied by an application for 
payment over the signature and address of the owner of such checks : Pro- 
vided, however, That the 1-year restriction does not apply to checks issued on 
account of public debt obligations and checks issued on account of transac- 
tions regarding the administration of banking and currency laws." 

Treasury Department Circular No. 57, dated September 11, 1916, with regard 
to " Treasury warrants and ofiicial checks of public disbursing officers pertain- 
ing to ' Outstanding liabilities ' ", is hereby rescinded. 

H. MOEGENTHAtr, Jr., 

Secretary of the Treasury. 



ORGANIZATION CHANGES 
Exhibit 49 

Orders changing organization and procedure in the Treasury Department 

TBELASUKY DEPARTMENT ORDER NO. 8, SEPTEMBER 17, 1934 

The Section of Financial and Economic Research in the Office of the Secretary 
(Commissioner of Accounts and Deposits) is hereby abolished, and there is 
hereby created and established in the Office of the Secretary a Division of 
Research and Statistics. There is also hereby created the position of Director 
of Research and Statistics. 



280 REPORT OF THE SECRETARY OF THE TREASURY 

The Division of Research and Statistics will function under the immediate 
supervision of the Director. The Division will absorb the duties heretofore as- 
signed to the Section of Financial and Economic Research, and will maintain 
statistical and other series, and conduct economic studies. The Director of 
the Division will also exercise direct authority over and responsibility for the 
production, analysis, and publication of statistics, and the conduct of economic 
research and over the purchase and maintenance of equipment utilized in con- 
nection therewith in all branches of the Department, including the Bureau of 
Internal Revenue, the Bureau of the Mint, the Customs Bureau, and the Oflace 
of the Comptroller of the Currency ; and with the approval of the Secretary 
will exercise control over the hiring, classification, and salaries of all em- 
ployees in the Treasury who are primarily engaged in statistical compilation 
or analysis or in economic research. 

This order shall be effective September 17th, 1934, and department orders 
of December 6tb, 1921, and June 3rd, 1927, establishing the Section of Statistics 
and the Section of Financial and Economic Research of the Treasury Depart- 
ment, are hereby modified accordingly. 

H. MORGENTHAU, Jr., 

Secretary of the Treasury. 



TREASURY DEPARTMENT ORDER NO 9, SEPTEMBE:R 26, 1934 

All medical relief activities in the Treasury Department in the District of 
Columbia, not now a part of or under the supervision of the United States 
Public Health Service, are hereby transferred to that Service and placed 
under the general supervision of the Surgeon General. These activities in ad- 
dition to those already a part of the Public Health Service embrace emergency 
relief units at the following locations : 

1. Main Treasury Building. 

2. Treasury Annex No. 1, Madison Place and Pennsylvania Avenue, NW. 
8. Internal Revenue Building, 12th Street and Constitution Avenue NW. 

4. Old Southern Railway Building, 1300 E Street, NW. (so long as under 
the supervision of the Treasury Department). 

5. Office of the Register of the Treasury, Fourteenth and B Streets, SW. 

6. Branch Treasurer's Office, 119 D Street, NE. 

7. Federal Warehouse, Ninth and D Streets, SW. 

8. Division of Loans and Currency, Fourteenth and D Streets, SW. 

9. Bureau of Engraving and Printing, Fourteenth and C Streets, SW. 

10. Washington Building, Fifteenth Street and New York Avenue, NW. (in 
process of organization). 

All personnel, records, books, furniture, equipment, and supplies connected 
with the medical activities concerned are hereby placed under the jurisdiction 
and control of the Surgeon General of the Public Health Service, the costs of 
the personnel and other expenses involved to be paid from the appropriations 
heretofore chargeable with such costs. 

The Surgeon General will detail a commissioned medical officer of the Public 
Health Service to direct the operation of all emergency relief stations in the 
Treasury Department. 

Emergency medical measures are to be available at the relief stations under 
the control of the Public Health Service and such stations are not to be operated 
as dispensaries where repeated and long-continued treatment may be obtained. 

This order shall be effective October 1, 1934. 

H. MORGENTHAU, Jr. 

Secretary of the Treasury. 



TREASURY DEIPARTMENT ORDER NO. 10, APRIL 23, 1935 

The Division of Supply of the Treasury Department shall be known hereafter 
as the " Division of Printing." The Division of Printing shall perform the 
same functions as were formerly exercised by the Division of Supply with 
the exception that the purchasing functions and the storage and distribution 
of stationery supplies, together with such equipment and personnel, including 
salaries, as are not required by the Division of Printing are hereby trans- 
ferred to the Procurement Division, established under the provisions of Ex- 
ecutive Order No. 6166 of June 10, 1933, and order of the Secretary of the 



REPORT OP THE SECRETARY OP THE TREASURY 281 

Treasury, approved by the President on October 9, 1933, and placed under 
the immediate jurisdiction of the Assistant Director, Branch of Supply. 

Requisitions for printing, binding, and stationery supplies shall be forwarded 
to the Division of Printing for administrative approval. 

Requisitions for all other supplies shall be forwarded direct to the Division 
of Procux'ement on the forms prescribed by the Director of Procurement. Pay- 
ments for all issues will be made by transfer and counter warrants prepared 
by the Procurement Division. 

The stationery stock now in the custody of the Division of Supply shall be 
inventoried, priced, and transferred to the Division of Procurement. Credit 
shall be given to the Division of Printing in an amount equal to the current 
value of stock transferred. 

All allotments of appropriations made to the Division of Supply by the 
several bureaus and divisions of the Department will be canceled on an effec- 
tive date to be later determined by the Administrative Assistant to the Seci'e- 
tary. Thereafter bureaus and divisions will maintain such appropriation 
accounts as may be necessary. 

H. MOBGENTHAU, Jr., 

Secretary of the Treasury. 



Exhibit 50 

Supervision of Bureaus, Offices, and Divisions of the Treasury Department 

[Department Circular No. 244 ^ (Revised)] 

Tbeasury DE3»ARTMENT, 
Washington, December 7, 1934- 
1. The following assignments of bureaus, offices, and divisions of the Treasury 
Department are hereby ordered, effective December 7, 1934: 
The Secretary of the Treasury : 

1. Office of the General Counsel. 

2. Bureau of Internal Revenue. 

3. Procurement Division. 

4. Secret Service Division. 

The Under Secretary of the Treasury : 

1. The Finances. 

2. Commissioner of Accounts and Deposits : 

(a) Division of Bookkeeping and Warrants. 

(b) Division of Disbursement. 

(c) Division of Deposits. 

{d) Section of Surety Bonds. 

3. Commissioner of tlie Public Debt : 

(a) Division of Loans and Currency. 

(&) Office of the Register of the Treasury. 

(c) Division of Public Debt Accounts and Audit. 

(d) Division of Paper Custody. 

4. Office of the Comptroller of the Currency. 

5. Office of the Treasurer of the United States. 

6. Division of Research and Statistics. 

Assistant Secretary in Charge of Engraving and Printing, and Mint: 

1. Bureau of Engraving and Printing. 

2. Bureau of the Mint. 

Assistant Secretary in Charge of Customs, Coast Guard, and Narcotics : 

1. Bureau of Customs. 

2. United States Coast Guard. 

3. Bureau of Narcotics. 

Assistant Secretary in Charge of Public Health : 

1. Bureau of the Public Health Service. 
Administrative Assistant to the Secretary : 

1. Chief Clerk of the Department. 

2. Division of Appointments. 

3. Division of Supply. 

4. Secretary's Correspondence Division. 



^This circular supersedes Department Circular No. 244, dated Sept. 19, 1930. 



282 REPORT OF THE SECRETARY OF THE TREASURY 

2. The Administrative Assistant to the Secretary will act as Budget Officer 
of the Treasurj^ and is authorized to act, for and by direction of the Secretary 
of the Treasury, in any branch of the Department. 

3. In the absence or sickness of the Secretary, the Under Secretary will act 
as Secretary of the Treasury. In the absence or sickness of the Secretary and 
the Under Secretary, the senior Assistant Secretary on duty will act as 
Secretary. 

4. The Bureau of the Budget of the Treasury operates under the immediate 
direction of the President. 

5. This circular supersedes Treasury Department Circular No. 244, dated 
September 19, 1930. 

H. MOKGENTHAU, Jr., 

Secretary of the Treasury. 



MISCELLANEOUS ' 

Exhibit 51 

Executive Order No. 6S69, October 10, 1934, requiring certain financial state- 
ments to be furnished the Secretary of the Treasury 

By virtue of and pursuant to the authority vested in me as President of the 
United States, and in furtherance of the provisions of Executive Order No. 6226, 
of July 27, 1933, I hereby prescribe the following regulations : 

1. Every executive department and every independent establishment of the 
Government shall furnish the Secretary of the Treasury, not later than the 15th 
day of each month, a statement of all bonds, notes, debentures, shares of stock, 
and other such evidences of indebtedness or interest, held by it for account of 
the United States, but exclusive of trust funds, and of all liabilities of the 
United States incurred through it represented by bonds, notes, debentures, or 
other such evidences of indebtedness. The statements herein required to be 
furnished shall be made as of the close of business on the last business day of 
the preceding month. 

2. Every corporation in which the Government of the United States has a 
proprietary interest shall furnish the Secretary of the Treasury, not later than 
the 15th day of each month, a statement of its assets, liabilities, capital, and 
surplus as of the close of business on the last business day of the preceding 
month. Corporations in which the United States has no proprietary interest 
other than that evidenced by preferred stock and/or capital notes acquired 
through the Reconstruction Finance Corporation, shall not be considered corpo- 
rations in which the Government of the United States has a proprietary 
Interest within the meaning of such phrase as used in this order. 

3. The Secretary of the Treasury shall cause to be published monthly on the 
daily statement of the United States Treasury a combined statement of the 
assets, liabilities, capital, and surplus, reported pursuant to the provisions of 
this order at such times and in such manner as he shall prescribe. 

4. The Secretary of the Treasury is authorized to prescribe a form or forms 
on which the required reports shall be made and to issue such regulations 
or instructions as he may consider necessary for the purpose of carrying out 
the provisions of this order. 

Franklin D. Roosevelt. 
The White House, 

October 10, 1934. 



* The following are available separately and are not reproduced here : Department 
Circular No. 230, revised Oct. 1, 1934 — Regulations governing the recognition of attorneys 
and agents representing claimants and others before the Treasury Department; Depart- 
ment Circular No. 230, revised Oct. 1, 19.34 — Supplementary rules of procedure in sus- 
pension and disbarment proceedings: Department Circular No. 154 (revised), amended 
Feb. 6, 1935 — Regulations relating to the acceptance of bonds, notes, or other obliga- 
tions issued or guaranteed by the United States as security in lieu of surety or sureties 
on penal bonds ; and Department Circular No. 538, Mar. 28. 1935 — Regulations govern- 
ing payment of losses sustained by otHcers and employees of the Treasury Department 
in foreign countries due to appreciation of foreign currencies in their relation to the 
American dollar. 



EEPORT OF THE SECRETARY OF THE TREASURY 283 

Exhibit 52 

Regulation no. 1 — Administrative procedure for the maintenance of the system, 
of accounts and disbursements under the Emergenci/ Relief Appropriation 
Act of 1935, established pursuant to section II (A) of Executive Order 
No. 7034 

[Department Circular No. 543] 

Teeastjby Department, 

Washington, June 18, 1935. 
Pursuant to the provisions of section IV, of Executive Order No. 7034, dated 
May 6, 1935, issued by virtue of and pursuant to the authority vested in the 
President of the United States under the Emergency Relief Appropriation Act 
of 1935, approved April 8, 1935 (Pub. Res. No. 11, 74th Cong.), the following 
regulations governing the maintenance of a system of accounts and disburse- 
ments under section II (A) of such order are hereby prescribed: 

GENEaiAL PtTBPOSES 

1. Section II (A) of Executive Order No. 7034 directs: 

" The Secretary of the Treasury, (1) through the disbursing and accounting 
facilities under the Commissioner of Accounts and Deposits of the Treasury 
Department, to make provision for all disbursements from the funds appro- 
priated by the ' Emergency Relief Appropination Act of 1935 ', subject only to 
such exceptions as the Secretary may authorize, and to maintain a system of 
accounts necessary to enable the President — 

"(«) to exercise Executive control over such funds, 

"(&) to provide current financial and accounting information for govern- 
mental agencies concerned, and 

"(c) to make a complete report to the Congress concerning expenditures 
made and obligations incurred, by classes and amounts * * *." 

DEFINITIONS 

2. As used herein : 

(o) The word "allocation" means the amount made available by the Presi- 
dent as carried in appropriation warrants for which separate appropriation 
accounts will be carried. An allocation may cover one or more projects. 
Such allocations are identified with an applicable appropriation limitation in 
the act. 

(&) The words "official project" mean an undertaking approved by the 
President for which a separate official project number has been assigned by 
the Bureau of the Budget. An official project may be either a single work 
project or a general work relief program consisting of a number of work 
projects. 

(c) The words "work project" mean a particular job or subdivision of an 
official project, as designated by an Administrator. This may be a single work 
relief job or a group of jobs in a particular locality under a project manager. 
A work project may be identical with an official project or it may be a sub- 
division or part of an official project for which separate limitations are to be 
observed through administrative accounts. 

(d) The words "project authorization" mean that part (or all) of an allo- 
cation which has been set up on the books of the central or other Treasury 
accounts office of the Commissioner of Accoimts and Deposits on account of 
a particular project or of a subdivision of an allocation designated by an 
administrator. 

(e) The word " administrator" means a board, commission, or the head of a 
department, bureau, or other agency authorized to administer an allocation. 

if) The words "State administrator" mean a person having general super- 
vision of work or relief in a State or other area who is under the supervision 
of an administrator. 

(g) The words "district director" mean a person having supervision over 
work or relief in a county or district within a State who is under the general 
supervision of an administrator or a State administrator. 

(h) The words "project manager" mean a person having supervision of 
a work project who is authorized to incur obligations under an allotment. 



284 EEPOET OF THE SECEETARY OF THE TREASURY 

This term may include administrators, State administrators, or district 
directors wtio act in the capacity of project managers. 

(i) The words "certifying officer" mean a person duly authorized to attest 
to the correctness and legality of the services rendered or articles furnished 
as set forth on pay rolls or vouchers to be submitted to a disbursing officer 
for payment. 

ij) The vpord " allotment " means the amount of an authorization on a pre- 
scribed form issued by an administrator or other authorized person to a project 
manager, authorizing the latter to enter into contracts, to make purchases or 
pay-roll commitments or to incur other obligations, for a work project. 

(fc) The words "Treasury accounts office" mean the United States Treasury- 
State accounts office located in the State in which detailed accounts will be 
kept with respect to allotments and expenditures for particular projects, and 
to which all accounting documents relating to such projects must be sent. 

ORGANIZATION 

3. The Ck)mmissioner of Accounts and Deposits, Treasury Department, is 
authorized and directed to establish and maintain a Treasury Central Accounts 
Office in the District of Columbia and such United States Treasury-State 
accounts offices and United States Treasury-State disbursing offices there and 
elsewhere as in his judgment may be necessary to effectuate the purposes of 
section II (A) of Executive Order No. 7034, and the Commissioner, with the 
approval of the Secretary, is authorized to employ personnel for such purposes. 
The Commissioner is further authorized to prescribe such administrative 
procedures and take such other action as may be necessary. Treasury accounts 
offices shall maintain such detail records for projects undertaken within their 
respective districts as may be necessary for accounting purposes. 

FISCAL PROCEDUBB 

4. Appropriation. — The amount made available by the Emergency Relief 
Appropriation Act of 1935 shall be set up in administrative appropriation con- 
trol accounts to be maintained in the United States Treasury Central Accounts 
Office, in accordance with the limitations contained in said act and such other 
limitations as the President may fix. 

5. Resolutions. — In order that the Treasury Department may be kept cur- 
rently informed, the executive secretary of the Advisory Committee on Allot- 
ments shall transmit to the Treasury Central Accounts Office not later than 
the day following the date of each meeting of such Committee, a certified 
copy of each resolution agreed to concerning the earmarkings, allocations, 
reallocations, releases, reductions, cancelations, allotments, transfers, or other 
disposition of funds. 

6. Reserves. — Certified copies of all orders issued by the President earmark- 
ing or reserving funds shall be furnished to the Treasury Central Accounts 
Office by the Bureau of the Budget for the maintenance of controlling accounts. 

7. Allotments or authorizations. — The Advisory Committee on Allotments 
shall furnish the Treasury Central Accounts Office with a certified copy of 
each resolution passed by it, accompanied by copies of applications upon which 
each resolution is based. The Advisory Committee on Allotments shall also 
furnish the Treasury Central Accounts Office a schedule of applications sub- 
mitted by the Committee to the President which are rejected or are increased 
or decreased above or below the amounts previously reported under section 5. 

8. Allocations. — (a) The Bureau of the Budget shall transmit currently to 
the Treasury Central Accounts Office and to the General Accounting Office 
copies of all orders issued by the President making allocations or any other 
disposition of funds, including any limitations which the President has im- 
posed in connection with such allocations or allotments or any amendment of 
a prior allocation or allotment. 

(&) Allocations shall be numbered by the Bureau of the Budget in the order 
of their approval by the President. 

(c) Upon receipt in the Treasury Department of an order or letter of the 
President making an allocation, the Division of Bookkeeping and Wai-rants, 
Treasury Department, shall issue an appropriation warrant against the proper 
limitation contained in the Emergency Relief Appropriation Act of 1935, and 
a copy of such order or letter, supported by such detail as may be required 
by the Comptroller General of the United States, shall be furnished to the 



EEPORT OF THE SECRETARY OF THE TREASURY 285 

General Accounting Office. After the appropriation warrant has been counter- 
signed by the Comptroller General of the United States, a certified copy thereof 
shall be forwarded by tlie Division of Bookkeeping and Warrants to the Treas- 
ury Central Accounts Office. On the basis of such certified copies of appro- 
priation warrants, the Treasury Central Accounts Office shall charge the proper 
limitations and establish the necessary controlling accounts. 

9. Advice of aUocations. — (a) The Treasury Central Accounts Office shall 
notify the proper Administrator of any allocation through the issuance of an 
"Advice of Allocation." 

(h) Advices of Allocations shall be numbered by the Treasury Central Ac- 
counts Office in regular numerical sequence. 

10. Adnice of project authorisation. — (a) The Administrator shall issue an 
"Advice of Project Authorization " on a prescribed form for the purpose of 
advising State Administrators and other designated persons, through the 
Treasury Central Accovmts Office, of the amounts to be set up on the books 
of the appropriate Treasury Accounts Office for expenditure on a particular 
project or subdivision of an allocation. Advices of Project Authorization 
shall show tlie number and date of tlie Advice of Allocation under which such 
authorizations are made. 

( b ) Advices of Project Authorizations shall be made in quintuplicate, viz, for 
(1) the Treasury Central Accounts Office, (2) the appropriate Treasury 
Accounts Office, (3) the Administrator, (4) the State Administrator or other 
proper person, and (5) the General Accounting Office. 

(c) The Administrator shall number Advices of Project Authorization in 
regular nmnerical sequence, and shall designate, subject to the approval of 
the Treasury Central Accounts Office, the appropriate Treasury Accounts Office 
which shall maintain detail records of such authorization. A schedule show- 
ing the location of each Treasury Accounts Office will be furnished to admin- 
istrators by the Commissioner of Accounts and Deposits. 

(d) Advices of Project Authorization shall show the appropriation symbol 
and title, official project number, and such other references and information 
as may be required by the Commissioner of Accounts and Deposits. 

(e) The Administrator shall furnish the Treasury Central Accounts Office, 
on forms provided by the Treasury Department, with authenticated specimen 
signatures of persons autliorized to sign Advices of Project Authorization, to- 
gether with a statement of the limitations, if any, on their authority to issue 
such Advices. 

11. Advice of allotment. — (a) State administrators or persons designated in 
an Advice of Project Authorization shall issue, in accordance with such authori- 
zation, an "Advice of Allotment " to project managers for the purpose of 
authorizing them to procure services, to make purchases through authorized 
procurement procedure, to make pay-roll commitments, or to incur other obli- 
gations, for the objects indicated on the said advices of allotment. 

(6) Advices of Allotment shall be numbered in regular sequence by the State 
Administrator or other designated person, and this number shall be entered 
on all purchase requisitions, contracts, pay rolls, and vouchers relating to the 
allotment. 

(o) Advices of Allotment shall show the official project number, the appropri- 
ation symbol and title, the Treasury Accoimts Office on which issued, and such 
other information as the Commissioner of Accounts and Deposits may require 
in connection with the checking of vouchers and pay rolls submitted thereunder. 

(d) Immediately after issuance of each Advice of Allotment, a duplicate 
thereof shall be transmitted to the appropriate Treasury Accounts Office for 
entry in its accounts. The Treasury Accounts Office shall determine that 
vouchers subsequently received and chargeable thereto do not exceed the 
amount of the allotment and are for the objects or purposes specified thereon. 

(e) The Administrator shall furnish the appropriate Treasury Accounts 
Office with authenticated specimen signatures of State Administrators or other 
persons authorized to issue Advices of Allotment, together with a statement of 
the limitations, if any, on the authority of such persons to issue Advices of 
Allotment. 

12. Encumbrances for contracts, purchase orders, etc. — (a) The records of 
the Treasury Accounts Offices shall reflect as currently as practicable the ac- 
cruing liability of the Government on account of each project. To this end 
administrators and other designated officers shall furnish the appropriate 
Treasury Accounts Office such information as it may require. 



286 REPORT OF THE SECRETARY OF THE TREASURY 

(6) Copies of contracts and purchase requisitions or orders and copies of 
papers, advices, or documents covering encumbrances or obligations incurred, 
shall be sent, promptly after issuance, to the appropriate Treasury Accounts 
Office designated on the related Advices of Allotment. 

(c) Each purchase requisition, purchase order, contract, or other advice of 
obligation incurred shall show the official project number, the work project 
number (if any), the serial number of the Advice of Allotment under which 
such obligation was incurred, the appropriation symbol chargeable, and such 
other references as may be required by the Commissioner of Accounts and 
Deposits. ^ 

id) Original contracts shall be numbered and forwarded to the General 
Accounting Office in accordance with General Accounting Office General Regu- 
lations No. 51, and supplements thereto. 

13. Vouchers and pay rolls. — (a) All vouchers and pay rolls shall be certified 
by project managers or by such other persons as may be authorized to do so. 
(&) Except as otherwise specifically authorized by the Secretary of the 
Treasury, all vouchers and pay rolls chargeable against an allocation made 
under the Emergency Relief Appropriation Act of 1935 shall be forwarded 
to the appropriate Treasury Accounts Office designated on the Advice of 
Allotment, where they will be checked against the records of Project Authoriza- 
tions and Allotments and forwarded to the appropriate Treasury Disbursing 
Office as provided in section 16 hei'eof. 

(c) Vouchers and pay rolls shall be certified only by authorized project 
managers or other " certifying officers " who either have personal knowledge 
or documentary evidence of the facts upon which the vouchers or pay rolls 
are based, or who have immediate charge of the persons who have such 
knowledge. 

id) Adequate timekeeping records shall be maintained, showing for each 
employee time and earnings chargeable to the various project or cost ac- 
counts, deductions, and net earnings, and a procedure shall be established to 
verify the fact that each individual to whom payment is made is legally entitled 
thereto. 

(e) Certifying officers shall keep or be responsible for the keeping of time 
records and other records herein provided to avoid duplicate payments, and 
will be accountable for the legality of vouchers and pay rolls certified by them. 
Such officers shall be responsible for the correctness of the facts on which the 
vouchers and pay rolls are based and also for the mathematical computations. 
if) Authenticated specimen signatures of certifying officers shall be filed in 
the appropriate Treasury accounts offices and Treasury disbursing offices, to- 
gether with a statement of the limitations, if any, on the authority of such 
persons to certify vouchers and pay rolls. 

(g) All vouchers shall show the appropriation symbol and title, and official 
project number, against which such vouchers are chargeable, the number of 
the purchase order, contract, or other document obligating funds under the 
project, and such other material facts as may be necessary to enable the Gen- 
eral Accounting Office to settle and adjust the amounts for which credit is to 
be claimed by the disbursing officer. 

14. Voucher distribution form. — The certifying officer shall transmit to the 
appropriate Treasury accounts office attached to each voucher or pay roll, a 
prescribed form of Voucher Distribution Form showing the amounts included 
in the voucher or pay roll, classified according to different objects of expendi- 
ture, and such other data as may be required by the Commissioner of Accounts 
and Deposits. 

15. Examination of vouchers and pay rolls in Treasury accounts offices. — No 
Treasury accounts office shall transmit a pay roll or voucher to a disbursing 
office for payment unless such office shall find that sufficient money is available 
in the proper account to meet the payment ; that the voucher or pay roll is 
covered by a contract, purchase requisition, or otJiier proper obligating docu- 
ment ; that the mathematical computations in the voucher are correct ; and 
that the voucher or pay roll has been certified by an authorized certifying 
officer, whose authenticated specimen signature is on file in such Treasury 
accounts office. 

16. Scheduling of vouchers and pay rolls. — (a) Vouchers and pay rolls shall 
be scheduled on Standard Form 1064, in the offices where the vouchers are 
administratively approved, and transmitted, in quadruplicate, to the appro- 
priate Treasury accounts office. Schedules of vouchers and pay rolls shall be 
summarized on Standard Form 1064, by appropriation symbols and titles. 



EEPORT OF THE SECRETARY OF THE TREASURY 287 

(&) Checks for travel advances will be issued only upon approved applica- 
tions therefor (Standard Form 1038 or 1038a) when supported by authenti- 
cated copies of the travel orders issued to the employees and such approved 
applications shall be scheduled in the Treasury Accounts Office to the proper 
Treasury disbursing office. 

(c) Cash for disbursing purposes may be carried only when specifically 
authorized by the Secretary of the Treasury pursuant to Section 3620 of the 
Revised Statutes. In making requests for authority to carry cash, which will 
be at personal risk of disbursing officers, justification therefor must be fully 
set forth. Checks issued in exchange for cash will be scheduled in the Treas- 
ury Disbursing Office and a copy of each such schedule shall immediately 
be forwarded to the appropriate Treasury accounts office. 

(d) After examination pursuant to section 15 hereof, vouchers and pay rolls, 
accompanied by the original and two copies of the schedules, shall be trans- 
mitted by the Treasury Accounts Office to the Tr'easury Disbursing Office for 
payment, except as to items of transportation furnished on Government trans- 
portation requests and bills of lading forms and questionable claims which 
shall be scheduled to the General Accounting Office for preaudit and then re- 
turned to the appropriate Treasury accounts office for completion of records 
and forwarding to the appropriate Treasury Disbursing Office for payment. 
Bills of lading and transportation requests must show the office to be billed 
and other necessary information. 

17. Advance of funds to disbursing officers and rendition of accounts. — (a) 
In order to expedite the placing of funds to the credit of bonded disbursing 
officers and to facilitate the audit and settlement of their accounts, funds 
shall be advanced upon accountable warrants to the Chief Disbursing Officer, 
Division of Disbursement, under the several appropriation-allocations, based 
upon requisitions approved by the Commissioner or Assistant Commissioner 
of Accounts and Deposits, or sucli other officers as the Secretary of the Treasury 
may designate. The Chief Disbursing Officer shall transfer to the official 
credit of such of the various bonded Disbursing Officers with the Treasurer 
of the United States in Washington or in the Ti'easurer's account with the 
Federal Reserve banks as directed by the Commissioner or Assistant Com- 
missioner of Accounts and Deposits, or by such other officers as the Secretary 
of the Ti'easury may designate, the amounts necessary to make current 
disbursements. The Chief Disbursing Officer shall take credit in his accounts 
under the proper appropriation-allocations for the amounts so transferred to 
disbursing officers, and they, in turn, shall charge themselves with such 
transfers and render an accounting therefor in their own names to the General 
Accounting Office, through the Central Treasury Accounts Office. 

(&) All officers disbursing funds appropriated by the Emergency Relief 
Appropriation Act of 1935 shall render to the General Accounting Office as 
at the close of business on the 10th, 20th, and last day of each month a sepa- 
rate and complete accounting for all funds coming into their custody during 
the period covered by each account, by reason of their official positions, in 
accordance with General Accounting Office General Regulations No. 80, dated 
August 15, 1934. 

18. Administrative verification of check payments. — (a) Treasury disbursing 
officers shall transmit promptly to the appropriate Treasury accounts offices 
copies of all checks issued by them for verification against copies of schedules 
and pay rolls on file in the Treasury Accounts Office. 

(6) Stocks of blank checks shall be kept in the custody of Treasury dis- 
bursing officers. Treasury disbursing officers shall account to the appropriate 
Treasury accounts offices for all checks delivered to them under a procedure 
prescribed by the Commissioner of Accounts and Deposits, which shall provide 
for the transmission of notices of delivery directly to the appropriate Treasury 
accounts office by the Bureau of Engraving and Printing. Treasury accounts 
offices shall take inventories of stocks of unused checks not less than once in 
each quarter and without advance notice to the disbursing officer. 

(c) Spoiled checks shall be voided and the space provided thereon for 
signatures effectively mutilated. They shall then be forwarded to the Treasury 
Accounts Office for examination, and the check copies in such cases shall also 
be voided. After examination in the Treasury Accounts Office the voided 
checks shall be returned to the Treasury Office for disposition in accordance 
with the provisions of Treasury Department Circular No. 8, and General 
Accounting Office General Regulations Nos. 31 and 35. 
1681 6 — 36 20 



288 EEPOET OF THE SECRETARY OF THE TREASURY 

19. Disbursements not made through Division of Disbursement, Treasury 
Departtnent. — In cases where disbursements are not made through the Division 
of Disbursement, Treasury Department, copies of allotments, purchase requisi- 
tions, purchase orders, contracts, disbursement schedules, vouchers, pay rolls, 
check registers, etc., will be promptly forwarded to the Treasury accounts 
office specified by the Commissioner of Accounts and Deposits, and the general 
principles embodied in the system of accounting for project authorizations, 
allotments, etc., as outlined herein for payments made through the Division 
of Disbursement, Treasury Department, will be followed. 

20. Interdepartmental work. — In cases where one Government department or 
establishment has agreed to perform services or furnish materials for another 
department or establishment, the amounts involved being relatively small, the 
work shall be done from the requisitioned Department's own appropiration on 
a reimbursable basis. However, where, upon a proper showing to the Bureau 
of the Budget, the requisitioned Department or establishment is unable to 
perform the services or furnish the materials on a reimbursable basis, within 
the limits of its own appropriation, the transactions shall be handled through 
the issuance of an Advice of Allotment (approved by the Bureau of the Budget) 
on account of the oflScial project involved to the requisitioned department or 
establishment by the requisitioning department or establishment. 

21. Requisitions for forms. — Upon receipt of these regulations each adminis- 
trator concerned is requested to make requisition at once upon the Public 
Printer for a supply of the forms provided for herein which it is estimated will 
be required for his service for a period of 12 months from July 1, 1935. In so 
doing, it is understood and agreed by the said administrator that he thereby 
consents to the plan of combining all the requisitions submitted and printing 
the total amount thereof in one edition, to be delivered to him or placed in 
stock at the Government Printing Ofiice subject to his order, or partly delivered 
and partly placed in stock as the case may be, and that the administrator 
authorize the Public Printer to prorate the cost of printing and to render bill 
against him for his proportionate share on the basis of the number of forms 
ordered by him. 

22. Budgetary apportionments of funds. — ^The provisions of Executive Order 
No. 6226, dated July 27, 1933, and Treasury Department Circular No. 494, 
issued pursuant thereto relating to apportionments shall be applicable to allo- 
cations of funds under the Emergency Relief Appropriation Act of 1935. 

23. Duplication of records. — The heads of departments, establishments, 
boards, commissions, bureaus, and ofiices are requested to utilize to the fullest 
extent the accounting records provided herein and to avoid, as much as pos- 
sible, unnecessary duplications of accounting records. 

24. Special instructions. — When the Secretary of the Treasury finds that the 
public interest requires, he may issue special instructions to cover the pro- 
cedure for exceptional cases, which instructions shall conform as nearly as 
practicable to the principles embodied in the foregoing regulations. 

25. Compliance toith regulations. — Full compliance with the regulations here- 
in prescribed is essential to prompt payment of accounts and the compilation of 
current and accurate information required under the Emergency Relief Appro- 
priation Act of 1935, and Executive Order No. 7034. 

H. MORGENTHAU, Jr., 

Secretary of the Treasury. 
Approved : 

Franklin D. Roosevelt. 



Exhibit 53 



Executive Order No. 6981, March 2, 1935, removing, in certain cases, restrictions 
imposed by Public Resolution 53, of June 27, 193^, as to payments, transfers, 
and deliveries of property under the Trading with the Enemy Act and the 
Settlement of War Claims Act of 1928 

By virtue of and pursuant to the authority vested in me by Public Resolu- 
tion 53. approved June 27, 1934 (48 Stat. 1267), the Trading with the Enemy 
Act, approved October 6, 1917 (40 Stat. 411), as amended, and the Settlement 



EEPOET OF THE SECKETARY OF THE TREASURY 289 

of War Claims Act of 1928, approved March 10, 1928 (45 Stat. 254), I do hereby 
order as follows: 

Section 1. For the purposes of the said resolution, it is hereby determined 
that Germany has been and is now in arrears in payments of principal and 
interest under the debt-funding agreement between Germany and the United 
States dated June 23, 1930, with respect to the obligations of Germany on 
account of awards entered and to be entered by the Mixed Claims Commission, 
United States and Germany. The period in which Germany is in arrears shall 
be deemed to continue for the purposes of this order until it is determined 
by the President that such period has terminated. 

Section 2. The restrictions imposed by the said resolution are hereby re- 
moved except as to the following payments, conveyances, transfers, or de- 
liveries of money or property or of the income, issues, profits, or avails 
thereof : 

1. To any person who was on April 6, 1917, or who at any time since that 
date has been, a German national, unless such person is entitled to receive 
payment under section 9, subsection (b) (1), of the Trading with the Enemy 
Act, as amended, or unless such person is a national of the United States at 
the time of payment, conveyance, transfer, or delivery, and was on June 1, 
1934, the legal and beneficial owner of the claim to the money or property 
or the income, issues, profits, or avails thereof, and on or before June 1, 1934, 
the United States received written notice of such ownership. 

2. To any person domiciled or resident within the territory of Germany, 
except a natural person who is a national of the United States at the time of 
payment, conveyance, transfer, or delivery. 

3. To any corporation, association, or partnership, or other unincorporated 
body of individuals or a body politic which on or at any time since April 6, 
1917, was organized or existed under the laws of Germany or had its principal 
place of business in Germany. 

4. To any corporation, association, or partnership, or other unincorporated 
body of individuals, or a body politic in which a substantial legal or beneficial 
interest is owned directly or indirectly by any person to whom payment, con- 
veyance, transfer, or delivery continues to be postponed under subdivision 
1, 2, or 3 hereof, or to any person who is a trustee of such money or propeity for 
a person to whom payment, conveyance, transfer, or delivery continues to be 
postponed under subdivision 1, 2, or 3 hereof. 

5. To the heirs, devisees, legatees, executors, administrators, representatives, 
creditors, successors, or assigns of any person to whom payment, conveyance, 
tranfer, or delivery continues to be postponed under subdivision 1, 2, 3, or 
4 hereof, except to such heirs, devisees, or legatees as are natural persons 
and have been nationals of the United States from June 1, 1934, to the time 
of payment, conveyance, transfer, or delivery. 

Section 3. For the purposes of this Executive order, (a) the nationality, 
residence, domicile, or other qualification of claimants under the Trading 
with the Enemy Act, as amended, shall be that determined by the Attorney 
General; and (&) the nationality, residence, domicile, or other qualification 
of claimants to money or property or the income, issues, profits, or avails 
thereof, held in the German special deposit account, and in the Austrian and 
Hungarian special deposit accounts, shall be that determined by the Secretary 
of the Treasury. 

Feankun D. Roosevelt. 

The White House, 

March 2, 1935. 



Exhibit 54 



Letter of the Acting Postmaster General to the Secretary of the Treasury, dated 
November 26, 1935, certifying extraordinary expenditures contributing to the 
deficiency of postal revenues for the fiscal year 1935, in pursuance of Public 
Act No. 316, Seventy-first Congress, approved June 9, 1930 {^0 Stat. 523) 

Washington, D. C, November 26, 1935. 
The honorable the Secretary of the Treiasxjry: 

My Dear Mr. Secretary : 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 



290 



REPORT OF THE SECRETARY OF THE TREASURY 



June 30, 1935, are certified to you in order that they may be separately classified 
on the books of the TreasuiT Department in stating the expenditures made 
from the appropriation 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 Gov- 
ernment (other than those of the Post Office Department) under 
the penalty privilege, including registry fees : 

Postage: $28, 418, 484 

Registry fees, Including surcharges 2, 863, 116 

$31, 281, 600 

(6) The estimated amount which would have been collected at regular 
rates of postage on matter mailed during the year by : 

1. Iklembers of Congress under the franliing privilege $577, 162 

2. By others under the franking privilege 180 

577, 342 

(c) The estimated amount which would have been collected during the year 

at regular rates of postage on publications going free in the county 575, 597 

(d) The estimated amount which would have been collected at regular 

rates of postage on matter mailed free to the blind during the year 131, 700 

(e) The estimated difference between the postage revenue collected during 

the year on mailings of newspapers and periodicals published by and 
in the interests of religious, educational, scientific, philanthropic, agri- 
cultural, labor, and fraternal organizations, and that which would 
have been collected at zone rates of postage 203, 434 

(f) The estimated excess during the year of the cost of aircraft service 

over the postage revenues derived from air mail 8, 474, 738 

(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, 292, 841 

Total 69, 537, 252 

Very truly yours, 

W. W. Howes, 
Acting Postmaster Oeneral. 



TABLES 



291 



EXPLANATION OF BASES USED IN TABLES 

Figures in the following tables are shown on various bases, namely: (1) Daily- 
Treasury statements, unrevised (current cash) ; (2) daily Treasury statements, 
revised (actual); (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 the 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 has come into general use as reflecting 
the financial operations of the Government covering a given period, and gives 
an accurate idea of the actual condition of the Treasury as far as it is ascertainable 
from day to day. This is known as "current cash basis", according to daily 
Treasury statements (unrevised). Table 3 (p. 316) 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 anl 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, in 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 
daily Treasury 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 based on warrants issued. The table on 
page 173 shows receipts and expenditures on this basis. The current assets and 
liabilities of the Treasury 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 acknowledgement for money received into the Public 
Treasury shaU be valid. The issuance of warrants by the Secretary of the 
Treasury, as provided by law, represents the formal covering of receipts into 
the Treasury. 

Certificates of deposit covering actual deposits in Treasury offices and deposi- 
taries, upon which covering warrants are based, cannot reach the Treasury 
simultaneously, 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 year. 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. 296) show receipts on this basis. 

293 



294 KEPORT 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 324 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. 302) shows expenditures on this 
basis. 

Collections reported by collecting officers (receipts). — Statements showing 
receipts on a collection basis are compiled from reports received by the various 
administrative offices from collecting officers in the field, such as collectors of 
internal 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. 341 and 355) 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 
efi'ected 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 
combined 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 
applicable to public debt retirement), sale of surplus and condenaned property, 



REPORT OF THE SECRETARY OF THE TREASURY 295 

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; (6) 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; (6) 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. 



296 



REPORT OF THE SECRETARY OF THE TREASURY 



Table 1. 



RECEIPTS AND EXPENDITURES 

General tables 

-Details of receipts, by sources and accounts, for the fiscal year 1935 



[Details on basis of warrants issued with totals adjusted to basis of daily Treasury statements (unrevised), 
see p. 293. For explanation of accounts, see p. 294.] 



Source 


General and 
special accounts 


Trust and con- 
tributed accounts 


REVENUE 
Internal revenue: 


$1, 099, 230, 382. 70 

1, 658, 796, 527. 21 

517,796,894.01 




Miscellaneous internal revenue 












Total internal revenue, warrants-issued basis 


3, 275, 823, 803. 92 
1,866,223.90 




Adjustment between warrants issued and cash receipts 








Total internal revenue, cash receipts 


3,277,690,027.82 








Customs: 

Customs duties, warrants-issued basis 


344, 292, 569. 75 
939,636.19 














343, 353, 033. 56 








Miscellaneous: 

Miscellaneous taxes: 

Tax on circulation of national banks 


4, 365, 601. 32 

1, 433, 521. 86 

796, 967. 00 

71, 844. 72 




Tonnage tax.. 




Immigration head tax 














6,667,934.90 








Interest, exchange, and dividends: 

Interest on deferred collections or payments. 


51, 518. 85 

599, 681. 47 

23, 942, 120. 02 

3, 379. 00 

1, 616, 288. 94 

16, 104. 75 

2, 130. 76 

265, 189. 25 

44, 625. 97 
160, 437. 96 

2,915,931.18 

86, 240. 95 

59.51 

26, 678, 99 

1, 591, 472, 67 

350, 000. 00 
76, 808. 28 
100, 000. 00 

1 596, 182. 70 

1 17, 774. 36 

1 334, 387. 81 




Interest on bonds of foreign governments under funding 
agreements -. 




Interest on obligations of Reconstruction Finance Corpora- 




Interest on loans, Puerto Rican Hurricane Relief Commis- 
sion 




Interest on loans to States, municipalities, etc.. Public 
Works Administration 




Interest on loans, Housing Corporation, Department of 
Labor . . .. 




Interest on homestead loans, Virgin Islands 




Interest on farmers' seed loans.- 




Interest on Liberty bond issues fund, Naval Establishment. 




Interest on public deposits 




Interest on money loaned from construction loan funds 
(U. S. Shipping Board Bureau) 




Interest on miscellaneous obligations 




Discount on Treasury obligations redeemed and purchased . 




Gain by exchange 




Dividends on capital stock of Federal home loan banks 




Dividends on capital stock of the Panama R. R. owned by 
the United States 




Dividends on shares of Federal savings and loan associations. 




Earnings of War Finance Corporation 




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 








Total interest, exchange, and dividends . 


32, 797, 013. 42 








Fines and penalties: 


399,155.81 
21, 397. 77 

311,507.99 
48, 420. 79 
73, 929. 75 
34, 735. 39 

254, 660. 87 
(2) 

5, 500, 000. 00 
14, 406. 18 




Internal Revenue 




Customs Service. . . . . . 




Immigration Service 








Navigation ... 




Liquidated damages . . . . 








Recovery of value of oil in case of United States against Pan 
American Petroleum Co 




Other 










6, 658, 214. 55 









For footnotes, see p. 302. 



REPORT OF THE SECRETARY OF THE TREASURY 297 

Table 1. — Details of receipts, by sources and accounts, for the fiscal year 1935 — Con. 



Source 



General and 
special accounts 



Trust and con- 
tributed accounts 



REVENUE— continued 

Miscellaneous— C on t inued. 
Fees: 

Agricultural Commodities Act 

Alaska game laws 

Clerks, United States courts 

Board of Tax Appeals 

Commissions on telephone pay stations in Federal buildings 

and rented post offices 

Credit union 

Consular and passport 

Court of Customs and Patent Appeals 

Court of Claims.. 

Copying 1 

Copyright 

Immigration (registration) 

Indian lands and timber 

Land offices (including commissions) 

Marshals, United States courts 

Migratory-bird hunting stamps 

Naturalization... 

Naval stores grading 

Navigation 

Patent 

Purchase of discharges, Navy and Marine Corps 

Registration, Securities Act 

Testing.. 

Warehouse Act 

Water and power right 

Other 



Total fees. 



Forfeitores: 

Bonds of aliens, contractors, etc 

Bribes to United States officers 

Customs Service 

Judicial, miscellaneous. 

Under enforcement of National Prohibition Act (Judicial) . . 
Unclaimed moneys and wages remaining in registry of courts. 

Unclaimed merchandise.. 

Unclaimed funds 

Unexplained balances in cash accounts 

Other 



Total forfeitures. 



Assessments: 

Colorado River Dam fund, Boulder Canyon project 

Deposits for establishing wool standards 

Deposits, public survey work, Alaska 

Deposits, public survey work, general 

On Federal and joint stock land banks, and Federal inter- 
mediate credit banks for expenses of examinations, Farm 

Credit Administration 

On Federal home loan banks for salaries and expenses, Fed- 
eral Home Loan Bank Board 

On railroads for expenses of Federal Coordinator of Trans- 
portation... 

German Government's moiety, expenses. Mixed Claims 

f' Commission 

Furlough and compensation deductions and vacancy sav- 

► ings (special deposit accounts) 

Immigration Service overtime 

Naval hospital fund 



Total assessments. 



Reimbursements: 

Construction charges (Indian Service) 

Collections under Grain Standards Act 

Collections under Cotton Standards Act 

By District of Columbia for advances for acquisition of lands 

under sec. 4, act May 29, 1930, as amended 

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 



$68, 975. 16 

11, 554. 79 

1, 778, 283. 55 

38, 065. 85 



67, 

10, 

3, 408, 

6, 

6, 

37, 

259, 

91, 

87, 

198, 

171, 

466, 

1, 168, 

9, 

179, 

4, 077, 

3, 

105, 

59, 

19, 

11, 



756. 32 
245.00 
657.26 
382. 05 
613. 05 
928.04 
907. 90 
870. 00 
292.17 

481. 12 
151. 19 
879. 00 
507. 91 
932. 75 
173. 25 
883.08 

208. 13 
408. 21 
368.33 
780. 50 
318.24 
407. 18 



12, 354, 030. 03 



645, 369. 23 

1, 579. 04 

902, 544. 38 

33, 201. 31 

81, 717. 69 

183, 510. 89 

75, 631. 06 

2, 637. 40 

209.01 

20, 674. 63 



1, 947, 074. 64 



95, 518. 93 
25, 223. 00 
(2) 



465, 138. 07 

247, 929. 10 

526, 146. 30 

1, 048. 59 

3 3, 980. 65 
68, 710. 01 
(2) 



1, 433, 694. 65 



15, 762. 25 
51, 196. 32 
68, 286. 05 

531, 211. 94 

122, 079. 68 
11, 509. 70 
27, 256. 94 

155, 305. 99 



Forjootnotes, see p. 302. 



298 REPORT OP THE SECRETARY OF THE TREASURY 

Table 1. — Details of receipts, by sources and accounts, for the fiscal year 19S5 — Con. 



Source 


General and 
special accounts 


Trust and con- 
tributed accounts 


REVENUE— continued 

Miscellaneous— Continued. 

Eeimbnrsements— Continued. 

Expenses of redeeming national currency 


$463,902.38 

308, 738. 68 

603. 08 

527, 474. 38 

66, 199. 54 

94, 621. 60 
150, 000. 00 
31, 833. 73 

520, 016. 32 
167, 843. 77 
2, 195, 112. 87 
20, 793. 38 
5, 234. OS 
85, 527. 11 




Inspection of food and farm products .. 








Government property lost or damaged 




Hospitalization charges and expenses 




Expenses of international service of ice observations and 
patrol - . - 




Under Federal Hunting Stamp Act 




Costs from estates of deceased Indians.. 




Maintenance, operation, and irrigation charges, irrigation 




Of appropriations made for Indian tribes 




Reclamation fund, collections 




Auxiliary reclamation fund, Yuma project, Arizona... 




Settlement of claims against various depositors 




Other 








Total reimbursements 


5, 620, 509. 79 








Gifts and contributions: 

Donations to the United States 


4,439.28 
3, 552. 18 
3, 437. 50 
174. 97 
1, 698. 34 
100, 000. 00 




Moneys received from known and unknown persons 




Return of part of compensation of the President 








Return of salary from constitutional ofl3cers 




By New York Liberty Loan Association. 








Total gifts and contributions ... ... 


113, 302. 27 








Sales of Government property — products: 

Scrap and salvaged materials, condemned stores, waste 


1, 067, 223. 63 

44, 423. 26 

207, 637. 90 

43, 185. 19 

5, 743. 53 

62, 439. 79 

29, 186. 71 

135,206.39 

56,597.37 

54, 354. 26 

7, 424. 32 

447, 421. 91 

108, 447. 05 

60. 283. 03 

45, 907. 24 

27, 285. 12 




Agricultural products, including livestock and livestock 
products 




Card indexes. Library of Congress 




Dairy products .. . 




Electric current, power plant, CooUdge Dam, Ariz 




Electric current 




Gas from helium plants 




Heat, light, and power 




Ice 




Occupational therapy products.. 




Photo duplications 




Puiiilic documents, charts, maps, etc 




Seal and fox skins, and furs 




Subsistence (meals, rations, etc.) 




Water 




Other. 








Total sales of Government property — products 


2, 392, 766. 70 








Sales of services: 

Alaska Railroad fund receipts 


1, 500, 077. 71 

57, 546. 19 

25, 892. 51 

27, 032. 00 

924, 255. 53 

148. 30 

87, 369. 10 
(2) 

224, 716. 91 
39, 792. 13 
44, 225. 00 
164, 073. 81 
313, 549. 65 
24, 020, 108. 25 
21, 693. 81 
17, 407. 18 




Earnings by United States transports.. 




Earnings from business operations 




Fumigating and disinfecting . ... 




Laundry and dry-cleaning operations 




Livestock breeding service 




Overhead charges on sales of services or supplies (War and 
Navy) 




Profits from sale of ships' stores. Navy. .. ....... 




Quarantine charges (including fumigation, disinfection, in- 
spection, etc., of vessels) .. ...... 








Radio service . . . . . . 




Storage and other charges 




Telephone and telegraph 








Work done for individuals, corporations et al 




Other . . . . 








Total sales of services.. .. 


27, 467, 888. 08 









For footnotes, see p. 302. 



REPORT OF THE SECRETARY OF THE TREASURY 299 

Table 1. — Details of receipts, by sources and accounts, for the fiscal year 1935 — Con. 



Source 


General and 
special accounts 


Trust and con- 
tributed accounts 


REVENUE— continued 

M iscellaneous— C ontinued. 
Rents and royalties: 

Rent of public buildings, grounds, etc 


$231,829.00 

114, 500. 49 

3, 926, 372. 44 

639. 383. 32 

36, 385, 23 

83, 046. 28 

18, 493. 69 

75, 448. 45 

15, 000. 00 

17, 256. 06 

1, 916. 63 




Rent of land 




















Rent of telegraph and telephone facilities 








Pipe line rentals 








Other 








Total rents and royalties 


5, 159, 631. 59 








Permits, privileges, and licenses: 

Alaska fund 


257, 305. 69 

181, 548. 05 

3, 406. 09 

178, 122. 84 

570, 504. 66 

619, 697. 21 

15. 543. 00 

411. 00 








Game, bird, and wildlife refuges.. 




Immigration permits 




Licenses under Federal water power act 


(4) 










Other 








Total permits, privileges, and licenses 


1, 826, 538. 54 








Mint receipts: 

Profits on coinage, bullion deposits, etc 


4,139,327.18 
58, 153, 161. 00 












Total mint receipts 


62, 292, 478. 78 








Forest reserve fund 


3, 361, 028. 24 










263, 574. 01 








United States share of District of Columbia receipts 


78, 627. 46 
. 










170,434,307.65 








Total revenue receipts, warrants