ar treasury 1938

ANNUAL REPORT OF THE SECRETARY OF THE TREASURY ONJ STATE OF THE FINANCES FOR FISCAL YEARENDEDJUNE 30,1938

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

ERRATA

Annual Report of the Secretary of the Treasury for 193S

The following statement on the fund account of the adjusted service certificate fund should be substituted for that n6w appearing on page 93: '

Adjusted service certificate fund, June 30, 1938 FUND ACCOUNT

Appropriations: . To June 30, 1936 (including $2,230,157,956.40 appropriated in the Independent Offices

Appropriation Act, 1937, approved Mar. 19, 1936) . . $3,626,157,956.40 Interest on investments:

To June 30, 1937 i $128,176,582.31 Ju ly l , 1937, to June 30, 1938 j 1,469,928.77

_ 129,646,511.08

Total---- 3,755,804,467.48 Payments under Adjusted Compensation Payment Act, 1936, enacted

Jan 27, 1936: Adjusted service bonds - $1,822,090,350.00 Checks for amounts less than $50 _.. 82,815,997. 57 Adjusted service bonds (Government life insurance fund series) 500,157, 956. 40

Total . 2,405,064,303.97 Checks paid by Treasurer of the United States other than in final

settlement of certificates under the Adjusted Conipensation Payment Act, 1936, less credits on account of repayments of loans and interest thereon - -. - 1,323,896,986.78

3.728,961,290.75

Balance in fund June 30,193b 26,843,176.73


ANNUAL REPORT OF THE SECRETARY OF THE TREASURY

ON

THE STATE OF THE FINANCES

FOR THE FISCAL YEAR

ENDED JUNE 30

1938

UNITED STATES

GOVERNMENT PRINTING OFFICE

WASHINGTON : 1939

For sale by the Superintendent of Documents, Washington, D. C. - - - - - - - - - - Price 60 cents (Paper)


TREASURY DEPARTMENT

DOCUMENT N O . 3096

Secretary


^50

CONTENTS

Page

Budget results 1 Receipts 1

Sources -- 4 Expenditures 4 Deficit : . - 7

The public debt ^ 7 Treasury bonds and Treasury notes . 10 Treasury bills 12 United States savings bonds ^ 12 Special issues 15 Adjusted service bonds 15 Cumulative sinking fund 15 Amendment to the Second Liberty Bond Act 16

General Fund 16 Securities owned by the United States and proprietary interest in govern-

mental corporations and credit agencies 18 Securities owned 18 Proprietary interest in governmental corporations and credit agencies, 19

Securities guaranteed by the United States 20 - ^ Monetary developments ^ 21 ^1^ Emergency legislation 22

Revenue legislation._ 25 ^ Revenue Act of 1937 26

r ^ Domestic and foreign personal holding companies 26 ^ Nonresident aliens 27

Trusts 27 . Revenue Act of 1938 28

^ Corporation income tax 28 Capital gains and losses 29

^ Other changes 30 J Sugar Actof 1937 .32 _ Railroad Unemployment Insurance Act 32

"^ Other revenue legislation 33 ii Estimates of receipts 33 j Legislative enactments affecting revenue estimates 35

^ Fiscal year 1939 37 ^ Income taxes 37 V Miscellaneous internal revenue 38 ^ Payroll taxes 39

Customs 40 0 Miscellaneous revenues and receipts 41

Fiscal year 1940 . 41 3 Income taxes - 41

Miscellaneous internal revenue 41 Payroll taxes 42 Railroad Unemployment Insurance Act 43

^ Customs 43 Miscellaneous revenues and receipts 43

^ Estimates of expenditures l 44 > Bureau of Internal Revenue 49 c Income tax ^ 49 ^ Miscellaneous internal revenue 49 L^ Social security taxes 50 ^ Alcohol tax administration __ 50

' Technical Staff decentralization 51 crA Customs 52

oj/^lhci D

i n


IV OONTi|N-fS

Page Construction activities 53

Program under the Public Works Administration 53 Program under the emergency appropriation acts 53 Program for other departments 54 Buildings in the District of Columbia 54

Treasury activities under the provisions of the Social Security Act 54 Unemployment trust fund 55 Collection of taxes 55 Public health work 55 Old-age reserve account 55

Treasury activities under the Emergency Relief Appropriation Acts 60 Nonfiscal activities 62

Coast Guard 62 Public Health Service 63 Bureau of Narcotics 65

Changes in organization and procedure 65

ADMINISTRATIVE REPORTS OF BUREAUS AND DIVISIONS

Accounts and Deposits, Office of the Commissioner of 69 Daily statement of the United States Treasury 69 Combined statement of assets and liabilities of governmental corpora-

tions and credit agencies 70 Securities owned by the United States Government 70 Contingent liabilities of the United States 72 Accounting and disbursing of emergency relief funds 72 Federal savings and loan associations. 73 Federal home loan banks 74 Federal land banks 75

Capital stock 75 Payments on account of reduction in interest rates on mortgages

and subscriptions to paid-in surplus 76 Advances to Federal Reserve banks for industrial loans, etc 77 Appropriations and expenditures under the Social Security Act 78 Obligations of foreign governments 78

Austria 80 Hungary 80 Nicaragua - 81

Receipts from Germany 82 Army costs 82 Mixed claims, United States and Germany 82 Annuities under moratorium agreement 82

Treasury administration of alien and mixed claims 83 Mixed Claims Commission: Claims against Germany 83 War Claims Arbiter 86

Claims of German nationals 86 Claims of Hungarian nationals 86

German special deposit account 86 Tripartite Claims Commission 87

Claims against Austria 87 Claims against Hungary 87

Claims of American nationals against Turkey __ 88 Claims of American nationals against Mexico 89 Railroad obligations 90

Section 207, Transportation Act, 1920, as amended 90 Section 210, Transportation Act, 1920, as amended _ 91

Trust and special funds invested by the Treasury 92 Adjusted service certificate fund 92 Civil service retirement and disability fund 93 Canal Zone retirement and disability fund 94 Foreign service retirement and disability fund. _ : 94 Alaska Railroad retirement and disability fund 95 District of Columbia teachers' retirement fund 96 Longshoremen's and harbor workers' compensation fund 96 District of Columbia workers' compensation fund 97 District of Columbia water fund ^ 97


CONTENTS V

Accounts and Deposits, OflSce of the Commissioner ofContinued. T r u s t and special funds invested by the TreasuryContinued. Page

United States Government life insurance fund 97 Old-age reserve account 98 Unemployment t rus t fund 99 Railroad ret irement account 101 Library of Congress t rus t fund 102 National Ins t i tu te of Heal th gift fund _ 105 National park t rus t fund 105 Ainsworth library fund, Walter Reed General Hospital 106 Pershing Hall Memorial fund 107 Alien property t rus t fund 107

Special funds 108 Colorado River D a m fund 108 Advances to reclamation fund 109

Division of Deposits 109 Depositary functions 110 Federal savings and loan associations and Federal credit unions __ 110 Government Losses in Shipment Act 111

Section of Surety Bonds 112 Division of Bookkeeping and Warrants 113 Division of Disbursement 113

Appointments, Division of 114 Number of employees in the Treasury Depar tment 114 Retirement of employees 115

Budget and Improvement Committee 115 Coast Guard 116

Enforcement of customs and other laws 117 Protection to marine commerce and life and property 119 Aviation 120 Communications 120 Floating equipment 121 Ordnance activities 122 Stations, bases, repair depot, etc 122 Personnel and training 123 Awards of lifesaving medals and decorations 124 Legislation 124 Funds available, obligations, and balances 125

Comptroller of the Currency, Bureau of the 126 Changes in the condition of active national banks 126 Summary of changes in the national banking system 128 Administration of unlicensed national banks 129

Customs, Bureau of 130 Collections 130 Volume of business 131

Entries of merchandise 131 Vessel, airplane, and highway traffic 132 Drawback transactions 133 Appraisement of merchandise 134 Protests and appeals 134

Law enforcement activities 134 Seizures 134 Legal proceedings 137 Fines, penalties, etc 138 Coordination with other agencies 139

Smuggling 139 Customs procedure 142 Customs Agency Service 142

Undervaluation 143 Drawback investigations 143 Por t Examination Commission 144 Enforcement U n i t . __. 144 Foreign investigations 144

Miscellaneous 144 Customs School of Instruction 144 Appraisement Unit 144 Quota control 145


VI CONTENTS

Customs, Bureau ofContinued. MiscellaneousContinued. Pag

Division of Laboratories 145 Changes in ports and stations 146 Cost of administration 146

Engraving and Printing, Bureau of 146 Enrollment and Disbarment, Committee on 149 Federal Alcohol Administration ., 150

Permit Division ' 151 Label Examination Division 151 Statistics and Reports Division 152 Enforcement Division 152 Legal Division 153

Internal Revenue, Bureau of 154 General ^ 154

Internal revenue collections 154 Refunds, drawbacks, and s tamp redemptions 154 Additional assessments 155 Cost of administration 156

Income Tax Unit 156 Returns 156 Back taxes ._ 158 Claims and overassessments 159 Final notices of deficiency (90-day letters) ^ 159 Audit in Washington ^_- 160 Audit in the field 160 Changes in organization and procedure 161

Miscellaneous Tax Unit 162 Es ta te Tax Division. 162 Tobacco Division 164 Bituminous Coal and Silver Tax Division 164 Sales Tax Division __. 164 Capital Stock Tax Division _ _ _ 165 Processing Tax Division 166

Alcohol Tax Unit - ^ - . ^ .-_--_ 167 Enforcement Division _1 168 Field Inspection Division i . 168 Laboratory Division . . . . . 168 Audit Division _. 168 . Procedure Division 169 Alcohol Tax Section of the Office of the General Counsel 169

Accounts and Collections Unit 169 Taxes under title VI I I of the Social Security Act 170 Tax under title I X of the Social Security Act 171 Taxes under the Carriers Taxing Act of 1937 173

Technical Staff 173 Office of the Chief Counsel ^ 175

Appeals Division 175 Civil Division 176 Interpretat ive Division 178 Penal Division ^__ 178 Review Division 179 Legislation and Regulations Division 179

Intelligence Unit 180 Work relief projects - - - - - 180

Accounts and Collections Unit (miscellaneous tax) project 180-Alcohol Tax Unit (retail liquor stores) project 181

Legal Division 181 Mint, Bureau of the 183

Inst i tut ions of the Mint Service _-_ 183 Coinage 183 Bullion deposit transactions _. _ 184 Gold operations 184 Silver operations __^______ 184 Refineries - - - - - ____^_ _.___-.-_ 185 Commemorative coins _. 185 Stock of coin and monetary bullion in the United States_-. 185


CONTENTS VII

Mint , Bureau of theContinued. Page Production of gold and silver 185 Industrial consumption of gold and silver 186 Mint buildings 186 Appropriations, expenses, and income 186

Monetary Research, Division of J 187 Narcotics, Bureau of 187

Enforcement activities 187 Extent and trend of narcotic traffic 190

Printing, Division of 191 Printing and binding 191 Stationery supplies 193 Depar tment advertising 193 Engraving work ^ 193

Processing Tax Board of Review 193 Procurement Division 194

Public Buildings Branch 194 Office of the Supervising Architect 194 Office of the Supervising Engineer 195 Combined building program 195 Program under the Public Works Administration 196 Emergency construction program 196 Program for other departments 197 Repair and equipment of Federal buildings 198 Administration and cost of Federal buildings under the control of . the Treasury Depar tment 198

Expenditures 199 Section of Space Control 200 Section of Painting and Sculpture 201 Treasury relief a r t project . .' 202

Branch of Supply J 202 Public Debt Service 1 205

Division of Loans and Currency 205 Issue and ret irement of securities 206 United States savings bonds 206 Individual registered accounts 209 Cla ims . . _.-_ _ _ . . . 210 Safekeeping of securities 211 Muti lated paper and redeemed currency * 211

Register of the Treasury 211 Division of Public Debt Accounts and Audit 214 Division of Paper Custody 214 Destruction Committee 215

Public Heal th Service 216 Public health work under the Social Security Act 216

Section 601 216 Section 603 . 217

Division of Sanitary Reports and Statistics 218 Division of Domestic Quarantine 218

Public heal th engineering - : 218 Cooperation with other Federal agencies 219 Works Progress Administration projects 220

Division of Foreign and Insular Quarantine 220 National Ins t i tu te of Heal th . . - _.__ 221

Division of Biologies Control 221 Division of Chemistry 222 Division of Industrial Hygiene 222 Division of Infectious Diseases. 222 Division of Pathology . . 223 Division of Pharmacology . . 223 Division bf Public Heal th M e t h o d s . . : . . . _ _ 223 Division of Zoology _ _ ^ _ . . _ . ^ ^ _ _ _ _. 224 National Cancer I n s t i t u t e . . . . . . . . . L ' . . _ . ' 224

Division of Venereal Diseases 224 Division of Marine Hospitals and Relief . . . 225 Division of Mental Hygiene . 226


VIII CONTENTS

Public Health ServiceContinued. Page Division of Personnel and Accounts 228

Personnel 228 Financial statement 228

Research and Statistics, Division of___ J 230 Savings Bonds, Division of 231 Secret Service Division 231 Tax Research, Division of 233 Treasurer of the United States 233 War Finance Corporation 237

EXHIBITS

PUBLIC DEBT

Public issues of Treasury notes and Treasury bonds

Exhibit 1. Offering of 1}^ percent Treasury notes of series E-1938 and 2 percent Treasury notes of series B-1942 241

Exhibit 2. Allotments, Treasury notes of series E-1938 and series B-1942_ _ 242 Exhibit 3. Offering of 2}i percent Treasury bonds of 1945 and 1% percent

Treasury notes of series C-1942 243 Exhibit 4. Subscriptions and allotments, Treasury bonds of 1945 and

Treasury notes of series C-1942 246 Exhibit 5. Offering of 2}^ percent Treasury bonds of 1948 247 Exhibit 6. Allotments, Treasury bonds of 1948 247 > Exhibit 7. Offering of 2% percent Treasury bonds of 1958-63 and 1>

percent Treasury notes of series A-1943 248 Exhibit 8. Allotments, Treasury bonds of 1958-63 and Treasurv notes of

series A-1943 ,_ . 1 250

Issues of Treasury bills

Exhibit 9. Inviting tenders for Treasury bills dated July 7, 1937 250 Exhibit 10. Acceptance of tenders for Treasury bills dated July 7, 1937-. 251 Exhibit 11. Summary of information contained in press releases issued

in connection with Treasury bills offered during the fiscal year 1938 251

" United States savings bonds

Exhibit 12. Sale of United States savings bonds of series C continued after December 31, 1937 ^ 254

Miscellaneous

Exhibit 13. An act to amend the Second Liberty Bond Act, as amended. _ 254 Exhibit 14. First amendment, August 18, 1937, to Department Circular

No. 368, prescribing general regulations governing full-paid interim certificates 254

Exhibit 15. Second supplement, August 18, 1937, to Department Circular No. 300, prescribing regulations with respect to United States bonds and notes 255

Exhibit 16. Third supplement, June 27, 1938, to Department Circular No. 300, prescribing regulations with respect to United States bonds and notes 256

Exhibit 17. Order of the Acting Secretary of the Treasury, April 5, 1938, authorizing additional officers of the Treasury Department to witness and certify requests for payment of United States savings bonds and

. adjusted service bonds . 257 Exhibit 18. Order of the Acting Secretary of the Treasury, April 6, 1938,

revoking the authority, contained in the order of June 10, 1936, for certain officers of the Treasury Department to witness and certify requests for payment of adjusted service bonds 257

SECURITIES GUARANTEED BY THE UNITED STATES

Exhibit 19. Section 20 of the United States Housing Act of 1937 guaran-teeing principal and interest of obligations of the IJnited States Housing Authoritv 257


CONTENTS - IX

Page Exhibit 20, Portions of section 3 of the National Housing Act Amendments

of 1938, relative to the guarantee by the United States of debentures of the mutual mortgage insurance fund and the housing insurance fund. 258

Exhibit 21. Section 1105 (c) of the Merchant Marine Act, 1936, as amended June 23, 1938, guaranteeing principal and interest of debentures of the Federal ship mortgage insurance fund 259

Exhibit 22. An act to maintain unimpaired the capital of the Commodity Credit Corporation at $100,000,000, and for other purposes 260

Exhibit 23. Offering of J percent notes of series C of the Commodity Credit Corporation 261

Exhibit 24. Subscriptions and allotments, Commodity Credit Corporation notes of series C . 263

MONETARY DEVELOPMENTS

Exhibit 25. Announcement by the Secretary of the Treasury, February 14, ^1938, with respect to acquisitions of gold by the Treasury Department. 263 Exhibit 26. Announcement by the Secretary of the Treasury, April 19, ^ 1938, of the discontinuance of the inactive gold account 264 Exhibit 27. Memorandum of the Secretary of the Treasury, approved by

the President September 14, 1937, relative to newly mined domestic silver minedfprior to midnight of December 31, 1937 264

Exhibit 28. Proclamation, December 30, 1937, modifying the proclamation offDecember 21, 1933, as modified, relating to newly mined domestic silver 264

Exhibit 29. Proclamation, April 28, 1938, revoking, except as provided ^therein, the proclamation of August 9, 1934, relating to silver 265 Exhibit 30. Executive Order No. 7877, April 28, 1938, revoking Executive

orders of August 9, 1934, and November 2, 1934, relating to silver 266 Exhibit 31. Order of the Secretary of the Treasury, April 28, 1938, revoking

the orders of the Secretary of the Treasury of June 28, 1934, and May 20, 1935, relating to silver, and the Silver Regulations of August 17, 1934, as amended 266

Exhibit 32. Announcement by the Secretary of the Treasury, April 28, 1938, of the revocation of a proclamation and certain orders and regula-tions relating to silver . . 266

Exhibit 33. Statement by the Secretary of the Treasury and the Minister of Finance of China, July 9, 1937, announcing further progress in mone-tary cooperation between the two countries 267

Exhibit 34. Statement by the Secretary of the Treasury and the Minister of Finance of Brazil, July 16, 1937, relative to gold and dollar exchange. . 268

Exhibit 35. Announcement by the Secretary of the Treasury and the Minister of Finance of Mexico, December 31, 1937, relative to the peso-dollar exchange and silver 268

Exhibit 36. Statement by the Secretary of the Treasury, March 27, 1938, that the Treasury will defer continuation of the monthly silver purchase arrangements with Mexico 268

TAXATION o

Exhibit 37. An act to amend the stamp provisions of the Bottling in Bond Act 269

Exhibit 38. An act to amend section 3336 of the Revised Statutes, as amended, pertaining to brewers' bonds, and for other purposes 269

Exhibit 39. An act to amend certain provisions of law relative to the pro-duction of wines, brandy, and fruit spirits so as to remove therefrom certain unnecessary restrictions; to facilitate the collection of internal revenue taxes thereupon; and to provide abatement of certain taxes upon wines, brandy, and fruit spirits where lost or evaporated while in the custody and under the control of the Government without any fault of the owner 270

Exhibit 40. Joint resolution to provide for a floor stock tax on distilled spirits, except brandy 272

Exhibit 41. An act to amend the National Firearms Act 273 Exhibit 42. Portions of the Sugar Act of 1937 imposing excise taxes with

respect to sugar 273


X CONTENTS

Page Exhibit 43. An act to impose an occupational excise tax upon certain

dealers in marihuana, to impose a transfer tax upon certain dealings in marihuana, and to safeguard the revenue therefrom by registry and recording 275

Exhibit 44. Major tax rate changes made by the Revenue Acts of 1937 and 1938, and the rates which they superseded, with legal citations and effective dates 280

OBLIGATIONS OF FOREIGN GOVERNMENTS

Exhibit 45. Correspondence exchanged between the Government of the United States and various foreign governments and statements con-cerning foreign debts owing to the United States 285

Exhibit 46. Text of notes delivered to the German Foreign Minister by the American Ambassador at Berlin, relative to the indebtedness of Austria to the United States 292

Exhibit 47. Announcement concerning the proposal of the Hungarian Government to make payments on account of its indebtedness to the United States 294

Exhibit 48. Message from the President of the United States to the Con-gress, March 28, 1938, concerning the desire of the Hungarian Govern-ment to repay its relief loan to the United States without interest 297

Exhibit 49. Announcement concerning the treaty between the United States and Nicaragua for adjustment of pending financial questions 300

Exhibit 50. Agreement with Nicaragua providing adjustment of certain accounts and refund of income taxes, ratified by the Senate on June 13, 1938 - _-_ 301

GOVERNMENT LOSSES IN SHIPMENT

Exhibit 51. An act to dispense with the necessity for insurance by the Government against loss or damage to valuables in shipment, and for other purposes 302

Exhibit 52. Regulations, July 16, 1937, governing the shipment of valuables pursuant to the Government Losses in Shipment Act 306

Exhibit 53. Regulations, August 13, 1937, governing claims for replace-ment of valuables, or the value thereof, shipped pursuant to the Govern-ment Losses in Shipment Act 307

Exhibit 54. First supplement, August 20, 1937, to Department Circular No. 577, prescribing regulations governing claims for replacement of valuables, or the value thereof, shipped pursuant to the Government Losses in Shipment Act 311

Exhibit 55. Regulations and instructions governing the issue of duplicates of checks of the United States 311

ORGANIZATION AND PROCEDURE

Exhibit 56. Department Circular No. 187, Second Revision, March 24, 1938, prescribing time and leave regulations for the departmental service 315

Exhibit 57. Department Circular No. 202, Second Revision, March 25, 1938, prescribing time and leave regulations for the field forces 325

Exhibit 58. Amendments, May 11, 1938, to Department Circular No. 187, Second Revision, and Department Circular No. 202, Second Revision__ 328

Exhibit 59. Treasury Department Order No. 18, March 25, 1938, establish-ing in the Office of the Secretary a Division of Monetary Research and a Division of Tax Research : 329

MISCELLANEOUS

Exhibit 60. Section 3 of the act to provide aid to the States in wildlife-restoration projects, establishing in the Treasury the Federal aid to wildlife-restoration fund 1__ , 330


CONTENTS XI

Page Exhibit 61. An act to authorize the Secretary of the Treasury to cancel

obligations of the Reconstruction Finance Corporation incurred in sup-plying funds for relief at the authorization or direction of Congress, and for other purposes 331

Exhibit 62. Customs Administrative Act of 1938, amending certain administrative provisions of the Tariff Act of 1930, and for other purposes. 332

Exhibit 63. An act to regulate commerce in firearms 344 Exhibit 64. Joint resolution extending for two years the time within which

American claimants may make application for payment, under the Settlement of War Claims Act of 1928, of awards of the Mixed Claims Commission and the Tripartite Claims Commission, and extending until March 10, 1940, the time within which Hungarian claimants may make application for payment, under the Settlement of War Claims Act of 1928, of awards of the War Claims Arbiter . 346

Exhibit 65. Announcement of change in the daily Treasury stateixient beginning July 1, 1938, with respect to the financial transactions of the Reconstruction Finance Corporation, Commodity Credit Corporation, and Export-Import Bank of Washington 347

Exhibit 66. Letter of the Postmaster General to the Secretary of the Treasury, dated November 22, 1938, certifying extraordinary expendi-tures contributing to the deficiencies of postal revenues for the fiscal year 1938 348

TABLES

Explanation of bases used in tables ^ 351 Description of accounts through which Treasury operations are effected__ 352

RECEIPTS AND EXPENDITURES

General tables

Table 1. Details of receipts, by sources and accounts, for the fiscal year 1938 (warrant and daily statement bases) 354

Table 2. Details of expenditures, by organization units and accounts, for the fiscal year 1938 (checlis-issued and daily statement bases) 362

Table 3. Classified receipts and expenditures, monthly July 1937 to June 1938, and annually for the fiscal years 1937 and 1938, arranged to cor-respond with the classification shown in the daily Treasury statements beginning July 1, 1938 (daily statement basis) 379

Table 4. Public debt receipts and expenditures, by classes, fiscal year 1938 (revised daily statement bas is ) . . . . ^ 396

Table 5. Public debt receipts and expenditures, monthly July 1937 to June 1938, and annually for the fiscal years 1934 to 1938 (daily statement basis) ._ 397

Table 6. Classified receipts and expenditures for the fiscal years 1932 to 1938, arranged to correspond with the classification shown in the daily Treasury statements beginning July 1, 1938 (daily statement basis) 401

Table 7. Receipts and expenditures for the fiscal years 1789 to 1938 (warrant and daily statement bases) 410

Table 8. Expenditures by major functions for the fiscal years 1931 to 1938 (daily statement basis and classifications of the Bureau of the Budget) 418

Table 9. Expenditures for recovery and relief classified as to provisions for repayment, fiscal years 1932 to 1937 combined, fiscal year 1938, and total to June 30, 1938 419

Specific receipts and expenditures

Table 10. Expenditures of the several activities of the Treasury Depart-ment in each of, the States and Territories, fiscal year 1938, 421

Table 11. Comparison of detailed internal revenue collections for the fiscal years 1937 and 1938 (collection basis)._:. ^._. . 425

Table 12. Internal revenue receipts, by,tax sources, fiscal years 1916 to 1938 (collectionbasis)_.-._.-..^-___ ^.__^___ ..___ 427

Table 13. Internal revenue receipts, by States and Territories, fiscal year 1938 (collection basis) 430


XII CONTENTS

Page Table 14. Expenses of the Internal Revenue Service, fiscal year 1938

(checks-issued basis) 431 Table 15. Computed values of dutiable imports for consumption and com-

puted duties collected, by tariff schedules, fiscal years 1937 and 1938 436 Table 16. 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 1928 to 1937, and by months from January 1937 to June 1938 437

Table 17. Customs duties (estimated), value of dutiable imports, and rat io ' of estimated duties to value of dutiable imports, by tariff schedules,

for the calendar years 1928 to 1937 and by months from January 1937 to June 1938 438

Table 18. Customs statistics, by districts, fiscal year 1938 442 Table 19. Receipts and expenditures and s ta tement of accounts under the

Social Security Act and | R a i l r o a d i R e t i r e m e n t Act (daily s ta tement basis) 446

Table 20. Amounts appropriated and expended to June 30, 1938, under authorizations contained in the Social Security Act 454

Table 21. Panama Canal receiptsJand expenditures for the fiscal years 1903 to 1938 (warrant basis) 455

Miscellaneous

Table 22. Actual receipts for the fiscal year 1938, and estimated receipts for the fiscal years 1939 and 1940, by sources 456

Table 23. Funds appropriated and allocated for recovery and relief and expenditures therefrom, as of June 30, 1938 462

Table 24. Financial s ta tus of appropriations provided in the Emergency Relief Appropriation Acts of 1935, 1936, and 1937, as of June 30, 1938- . 465

PUBLIC DEBT

Public debt outstanding

Table 25. Public debt outstanding June 30, 1938, by issues (revised daily s ta tement basis) 472

Table 26. Description of the public debt issues outstanding June 30, 1938 (revised daily s ta tement basis) ^ 476

Table 27. Interest-bearing debt outstanding June 30, 1938, classified ac-cording to kind of security and callable period or payable date (revised daily s ta tement basis) 487

Table 28. Principal of the public debt outstanding a t the end of each fiscal year from 1853 to 1938 (revised daily s ta tement basis) 489

Table 29. Comparative s ta tement of the public debt outstanding June 30, 1932 to 1938 (daily s ta tement basis) 491

Table 30. Composition of the public debt a t the end of the fiscal years 1916 to 1937 and by months from July 1937 to June 1938 (revised daily s ta tement basis) 493

Public debt operations

Table 31. Public debt retirements chargeable against ordinary receipts during the fiscal year 1938, and cumulative totals from July 1, 1917, to June 30, 1937 and 1938, by sources and issues (revised daily s ta tement basis) 494

Table 32. Summary of transactions in interest-bearing and noninterest-bearing securities during the fiscal year 1938 (revised daily s ta tement basis) 496

Table 33. Summary of transactions in interest-bearing securities, by form of issue, during the fiscal year 1938 (revised daily s ta tement basis) 499

Table 34. Changes in interest-bearing debt, by issues, during the fiscal year 1938 (revised daily s ta tement basis) 500

Table 35. Transactions in noninterest-bearing securities, by issues, during the fiscal year 1938 (revised daily s ta tement basis) 505


CONTENTS XIII

Page Table 36. Issues, maturities, and redemptions of interest-bearing securi-

ties, exclusive of trust account and other special issues, July 1937 through June 1938 . 510

Table 37. Sources of public debt increase or decrease for the fiscal years 1915 to 1938 (daily statement basis) 514

Table 38. Transactions on account of the cumulative sinking fund during the fiscal year 1938 (revised daily statement basis) 516

Table 39. Transactions on account of the cumulative sinking fund for the fiscal years 1921 to 1938 (revised daily statement basis) 516

Table 40. Securities retired through the cumulative sinking fund, par amount and principal cost to June 30, 1938 (revised daily statement basis) 517

Interest on the public debt

Table 41. Interest on the public debt, payable, paid, and outstanding unpaid for the fiscal year 1938 (revised daily statement basis) 517

Table 42. Interest paid on the public debt, by issues, for the fiscal years 1936 to 1938 (warrant basis) 518

Table 43. Amount of interest-bearing debt outstanding, the computed annual interest charge, and the computed rate of interest, for the fiscal years 1916 to 1938 and by months from July 1937 to June 1938 (revised daily statement basis) 519

Miscellaneous

Table 44. Contingent liabilities of the United States, June 30, 1938 520 Table 45. Average yield on long-term United States Government bonds,

by months, January 1919 to June 1938 523

CONDITION OF THE TREASURY EXCLUSIVE OF PUBLIC DEBT LIABILITIES

Table 46. Current assets and liabilities of the Treasury at the close of the fiscal years 1937 and 1938 (revised daily statement basis) 524

Table 47. Balance in the General Fund of the Treasury at the end of each month, fiscal year 1938 (daily statement basis) 526

Table 48. Securities owned by the United States Government, June 30, 1938 527

ASSETS AND LIABILITIES OF GOVERNMENTAL CORPORATIONS AND AGENCIES

Table 49. Combined statement of assets and liabilities of governmental corporations and credit agencies of the United States, as of June 30, 1938_ 530

Table 50. Proprietary interest of the United States in governmental corporations and credit agencies, as of June 30, 1929 to 1938 536

STOCK AND CIRCULATION OF MONEY IN THE UNITED STATES

Table 51. Stock of money, money in the Treasury, in the Federal Reserve banks, and in circulation June 30, 1913 to 1938 538

Table 52. Stock of money, by kinds, at the end of each fiscal year from 1913 to 1938 540

Table 53. Money in circulation, by kinds, at the end of each fiscal year from 1913 to 1938 . . .__ 541

Table 54. Stock of money, money in the Treasury, in the Federal Reserve banks, and in circulation, by kinds, June 30, 1938 ' 542 ^

TAX-EXEMPT SECURITIES

Table 55. Estimated amount of securities outstanding, interest on which is wholly or partially exempt from the Federal income tax, June 30, 1938. 543

Table 56. Estimated amount of securities outstanding, interest on which is wholly or partially exempt from the Federal income tax, June 30, 1913 to 1938, by types of borrowers 544


XIV CONTENTS

MISCELLANEOUS Page

Table 57. 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, 1938 . . _ . . . 548

Table 58. Net expenditures for Federal aid to States, individuals, etc. (exclusive of funds allocated for recovery and relief), fiscal years 1920, 1937, and 1938, and amounts appropriated for 1939, by appropriations-. 549

Table 59. Expenditures made by the Government as direct payments to States, etc., under cooperative arrangements and expenditures within States which provided relief and other aid during the fiscal year 1938 553

PERSONNEL

Table 60. Number of employees in the departmental service of the Treas-ury in Washington, by months, from June 30, 1937, to June 30, 1938.-__ 560

Table 61. Number of employees in the departmental and field services of the Treasury on June 30, 1937, and June 30, 1938 561

Table 62. Number of persons retired, departmental and field services of the Treasury, August 20, 1920, to June 30, 1938, and number of persons eligible for retirement but retained, as of June 30, 1938 ^ 562

Index . 563


SECRETARIES, UNDER SECRETARIES, AND ASSISTANT SECRETARIES OF THE TREASURY DEPARTMENT FROM MARCH 4, 1933, TO NOVEM-BER 15, 1938,1 AND THE PRESIDENT UNDER WHOM THEY SERVED

Term of service

From

Mar. 4,1933 Jan. 1,1934

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

Jan. 29,1937 Nov. 1,1938

Apr. 18,1933 June 6,1933 June 12,1933 Dec. 1,1934 Feb. 19,1936 July 1,1938

T o -

Dec. 31,1933

Nov. 16,1933 Dee. 31,1933 Feb. 15,1936

Sept. 15,1938

Feb. 15,1936

Dec. 12,1933 Nov. 1,1937

Oct. 31,1938

Official

Secretaries of the Treasury

William H. Woodin, New York.. . . Henry Morgenthau, Jr., Nevsr York.

Under Secretaries

Dean.G. Acheson, Maryland Henry Morgenthau, Jr., New York. Thomas Jefferson Coolidge, Mas-

sachusetts. Roswell Magill, New York John W. Hanes, North Carolina...

Assistant Secretaries

Lawrence W. Robert, Jr., Georgia.. Stephen B. Gibbons, New York.i . Thomas Hewes, Connecticut : . . Josephine Roche, Colorado......_i_ Wayne C. Taylor, Illinois.'.^Jj..;.2. John W. Hanes, North Carolina. __

Secretary of the Treasury

Woodin . Woodin Morgenthau

Morgenthau Morgenthau. _ ..

. Woodin, Morgenthau... Woodin, Morgenthau... Woodin.. : . . Morgenthau __ .._ Morgenthau 1..^.. Morgenthau . .

President ,

Roosevelt.; Roosevelt: >'

Roosevelt.^ Roosevelt. Roosevelt.

Roosevelt. Roosevelt.

Roosevelt. Roosevelt. Roosevelt. Roosevelt. .

^Roosevelt..' Roosevelt.

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


PRINCIPAL ADMINISTRATIVE AND STAFF OFFICERS OF THE TREASURY DEPARTMENT AS OF NOVEMBER 15, 1938

OFFICE OF THE SECRETARY

Henry Morgenthau, Jr Secretary of the Treasury. John W. Hanes Under Secretary of the Treasury. Wayne C. Taylor Assistant Secretary of the Treasury. Stephen B. Gibbons Assistant Secretary of the Treasury. (Vacant) Assistant Secretary of the Treasury. Herbert E. Gaston. Assistant to the Secretary. Daniel W. Bell Assistant to the Secretary. LeRoy Barton Assistant to the Secretary. Harold N. Graves Assistant to the Secretary. Eugene S. Duffield Assistant to the Secretary. Henrietta S. Klotz.. Assistant to the Secretary. John Kieley Assistant to the Secretary. Archie Lochhead Technical Assistant to the Secretary. William H. McReynolds Administrative Assistant to the Secretary. W. N. Thompson Assistant Administrative Assistant to the Secretary, Charles R. Schoeneman _ Special Staff Assistant. Edwin R. Ballinger Technical Assistant. Herbert S. Wood. . . i Consulting Expert. Beriah M. Thompson Consulting Expert. Thomas Tarleau . Legislative Counsel. Eugene Sloan Chief, Division of Savings Bonds. James W. Bryan . . .Chief, Information Section, Division of Savings Bonds. Herbert J. Wollner Consulting Chemist. H. R. Sheppard Assistant to Assistant Secretary. Francis C. Rose Assistant to Assistant Secretary. Mary E. Switzer Assistant to Assistant Secretary. F..A. Birgfeld.. . . . . Chief Clerk. John D. Fox Superintendent of Treasury Buildings. Frank J. Wilson 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. Huntington Cairns Assistant General Counsel. Edward H. Foley, Jr Assistant General Counsel. Lawrence J. Bernard __ Assistant General Counsel. Bernard Bernstein Assistant General Counsel. Oscar S. Cox Assistant to the General Counsel. Thomas A. Manning, Jr Assistant to the General Counsel. Joseph J. O'Connell, Jr Special Assistant to the General Counsel. John P. Wenchel Chief Counsel, Bureau of Internal Revenue. W. R; Johnson Chief Counsel, Bureau of Customs.

DIVISION OF RESEARCH AND STATISTICS

George C. Haas Director of Research and Statistics. Al F. O'Donnell... Assistant Director. Russell R. Reagh Assistant Director (Government Actuary). Lawrence H. Seltzer Assistant Director. Anna M. Michener Assistant to the Director. Charles S. Bell Administrative Assistant to the Director.

DIVISION OF MONETARY RESEARCH

Harry D. White Director of Monetary Research.

Harold Glasser Assistant Director.

DIVISION OF TAX RESEARCH

Roy Blough Director of Tax Research.

Joseph S. Zucker Assistant 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. Edward G. Dolan. 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.

XVI


P R I N C I P A L A D M I N I S T R A T I V E A N D S T A F F G E E I C E R S XVII

BUREAU OF ENGRAVING AND PRINTING

Alvin W. Hall Director, 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. William T. Heflelflnger Assistant Commissioner of Accounts and-Deposits. Joseph Greenberg. :.. Executive Assistant to the Commissioner. Guy F. Allen Chief Disbursing Officer, Division of Disbursement. Robert W. Maxwell Chief Accountant and Acting Chief, [Division of Bookkeeping

and Warrants. Edward D. Batchelder Chief, Division of Deposits. Harry R. Schwalm Chief Examiner, Section of Surety Bonds.

BUREAU OF THE COMPTROLLER OF THE CURRENCY

Preston Delano . - . Comptroller of the Currency. Cyril B. Upham _ Deputy Comptroller. Eugene H. Gough. . . . Deputy Comptroller. (Vacant) Deputy Comptroller. W. P. Folger Chief National Bank Examiner. 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. M. E. Slindee Administrative Assistant. Louis P. Allen Chief Clerk.

BUREAU OF NARCOTICS

Harry J. Anslinger Commissioner of Narcotics. Will S. Wood Deputy Commissioner of Narcotics. Malachi L. Harney. Assistant to the Cominissioner.

OFFICE OF THE COMMISSIONER OF INTERNAL REVENUE

Guy T. Helvering Commissioner of Internal Revenue. Milton E. Carter Assistant to the Commissioner. John R. Kirk Deputy Commissioner. George J. Schoeneman _ Deputy,Commissioner. D. Spencer Bliss :. Deputy Commissioner. Stewart Berkshire Deputy Commissioner. Eldon P. King.. Special Deputy Commissioner. A. R. Marrs Head, Technical Stafl. Elmer L. Irey Chief, Intelligence Unit. Bertha Wetherton.. Special Assistant to the Commissioner.

FEDERAL ALCOHOL ADMINISTRATION

Wilford S. Alexander Federal Alcohol Administrator. John L. Huntington Deputy Administrator. H. C. Flanery Deputy Administrator. Philip E. Buck General Counsel. John E. O'Neill Assistant General Counsel. A.J . Barrett Administrative Assistant.

BUREAU OF CUSTOMS

James H. Moyle Commissioner of Customs. Frank Dow... _ Assistant Commissioner of Customs. Thomas J. Gorman Deputy Commissioner. Harvey A. Benner Deputy Commissioner.

BUREAU OF THE MINT

Nellie Tayloe Ross Director of the Mint.

(Vacant) Assistant Director.

PUBLIC HEALTH SERVICE

Thomas Parran, Jr Surgeon General. Lawrence Kolb Assistant Surgeon General. Robert Olesen Assistant Surgeon General. L. R. Thompson Assistant Surgeon General. Paul M. Stewart _ Assistant Surgeon General. C. E. Waller Assistant Surgeon General. S. L. Christian Assistant Surgeon General. C. L. Williams. Assistant Surgeon General. R. A. Vonderlehr _.. Assistant Surgeon General. W. F. Draper Executive Officer. D. S. Masterson Chief Clerk and Administrative Officer.

10482539 2


XVII I P R I N C I P A L A D M I N I S T R A T I V E A N D S T A F F O F F I C E R S

UNITED STATES COAST GUARD

Rear Admiral Russell R. Waesche Commandant. Capt. Leon C. Covell Assistant Commandant and Chief of Operations. Capt. Philip W. Lauriat ..' Inspector in Chief. Capt. Roger C. Weightman... Chief Personnel Officer. Capt. Lloyd T. Chalker... Chief Aviation Officer. Capt. (E) Harvey F. Johnson Engineer in Chief. Comdr. P. F. Roach Chairman of Permanent Board. Comdr. William J. Keester Chief Supply Officer. Comdr. James F. Farley . Chief Communications Officer. Comdr. G. U. Stewart... ^ Chief Ordnance Officer. Comdr. Frank J. Gorman. j . . . . . . . Chief Finance Officer. Lt. Frank E. Pollio Acting Chief Intelligence Officer.

PROCUREMENT DIVISION

Rear Admiral C. J. Peoples Director of Procurement. W. E. Reynolds Assistant Director, Public Buildings Branch. Harry E. Collins Assistant Director, Supply Branch. E. R. Witman Executive Officer, Public Buildings Branch. N. Max Dunning . . . . Assistant to Assistant Director, Public Buildings Branch. Robert LeFevre __ . 1 . . . Assistant to Assistant Director, Supply Branch. W. N. Rehlaender Administrative Assistant, Supply Branch. Louis A. Simon Supervising Architect. Neal A. Melick... Supervising Engineer. Edward Bruce... Chief, Section of Fine Arts.

ADVISORY COMMITTEE ON ARCHITECTURAL DESIGN

(Vacant), Chairman. Philip B. Maher. Aymar Embury II. Henry R. Shepley.

Louis A. Simon.. '. - -

BOARD OF AWARDS, PUBLIC BUILDINGS BRANCH

F. P. Trott, Assistant Executive Officer, Chairman. James D. Head, Acting Chief Counsel, Legal Section. Neal A. Mehck, Supervising Engineer. - . . . John H. Schaefer, Office Manager. W. C. Noll, Superintendent, Architectural Section. John Weber> Secretary. Nelson S. Thompson, Chief, Mechanical Engineer-

ing Section. . . BOARD OF AWARDS, SUPPLY BRANCH

Robert LeFevre, Assistant to Assistant iDirector, R.Ji ; Queenin, Chief, Finance Division. Chairman. ; ..=.W. N. Rehlaender, Administrative Assistant.

STANDING DEPARTMENTAL COMMITTEES

BUDGET A N D . m P R O V E M E N T COMMITTEE

C. R. Schoeneman, Chairman. John H. Schaefer. F. A. Birgfeld, Vice Chairman. . . , . Arthur E. Wilson. W. N. Thompson. M. E. Slindee. George O. Barnes. Mary. E. Switzer. Charles S. Bell. Fred P. Trott. R. L. Harlow. E. C. Nussear, Secretary.

COMMITTEE ON ENROLLMENT AND DISBARMENT

Guy C. Hanna, Chairman. George D. Carrington.

W. W. Cook. E. B. Van Veen, Attorney for the Government.

COMMITTEE ON PERSONNEL

F. A. Birgfeld, Chairman. - (Vacant.) James E. Harper.

COMMITTEE ON CIVIL SERVICE R E T I R E M E N T F. A. Birgfeld, Chairman. W. N. Thompson. James E. Harper. Frank Dow.

BOARD OF l iEVIEW (Refunds of Processing Taxes)

L. S. Cannon, Chairman. Percy S. Crewe. (Vacant), Vice Chairman. Annabel Matthews. John W: Edwards. William Schwartz. H. Stewart McDonald, Jr. Temple W. Seay.


DEPARTMENT OF THE TREASURY November 15. 1938

SECRETARY OF THE TREASURV

UNMR SECBCTARV

AOMINISTBATIVE

FEDERAL ALCOHOL

DIVISION OF AND STATISTICS

GOVERNMENT ACTUARY

NARCOTICS

SECHET SERVICE

SPECIAL

SCCRETARy

BUREAU OF THE COMPTROLLER OF THE CURRENCY

DIVISION OF

COMMISSIONER

PUBLIC DCBT ACCOUNTS AND AUO

,U OF ENGRAVING

OFFICE OF THE

SAVINGS BONOS

COMMISSIONER OF ACCOUNTS

AND DEPOSITS

LEGAL DIVISION

DISBURSEMENT

CpAi^T 1^


ANNUAL REPORT ON THE FINANCES

TREASURY DEPARTMENT,

Washington^ D. (7., January 5, 1939. SIR: I have the honor to make the following report for the fiscal

year ended June 30, 1938:

BUDGET RESULTS

Receipts

Receipts in general and special accounts amounted to $6,241,700,000

REPORT OF THE SECRETARY OF THE TREASURY

The trend in receipts by major sources for the fiscal years 1929 to. 1938, inclusive, is shown in the chart on page 1. A comparison of re -ceipts for 1937 and 1938 is presented in the table following. A more detailed comparison of internal revenue receipts appears in table 11 on page 425 of this report.

Receipts by major sources for the fiscal years 1937 and 1938

[In millions of dollars]

Source

Internal revenue: Income taxes:

Cur ren t corporation 2 _ _ Curren t individual Back taxes _ . . . . Excess-profits tax

Tota l income taxes (collection basis) Adjus tment to daily T reasu ry s t a t emen t (unrevised)

Tota l income taxes (cash basis)

Miscellaneous internal revenue taxes: Capi ta l stock Es t a t e -_-Gif t . . Disti l led spiri ts and wines (including special taxes) 2 Fe rmen ted ma l t l iquors (including special taxes) * . Tobacco 2 S t a m p . . _ . . .

Manufac ture rs ' excise taxes: Gasoline Automobiles , t rucks , tires, tubes , a n d par t s or accessories Electrical energy Lubr ica t ing oils All o the r . .

To ta l manufacturers ' excise t a x e s .

Telegraph, telephone, cable, and radio facilities, etc Transpor ta t ion of oil b y pipe line Admissions ._ Coconut , etc., oils processed 2 Bi tuminous Coal Act of 1937 Sugar Act of 1937 All other miscellaneous

To ta l miscellaneous in ternal revenue taxes (collection basis) Ad jus tmen t to daily Treasu ry s t a t emen t (unrevised) _

Tota l miscellaneous internal revenue taxes (cash basis)

Other internal revenue taxes: Carriers and their emplovees Social Securi ty . _ Unjus t enr ichment

Tota l other in ternal revenue taxes (collection basis) Ad jus tmen t to dai ly T rea su ry s t a t emen t (unrevised)

To ta l o ther in ternal revenue tax^es (cash basis)

Tota l in ternal revenue taxes (collection basis) . Ad jus tmen t to dai ly Treasu ry s t a t emen t (unrevised)

To ta l internal revenue taxes (cash basis) Cus toms ' ' . . .

To ta l in terna l revenue taxes and cus toms (cash b a s i s ) . - . .

1937

894.3 996.0 258.3

25.1

2,173. 7 - 1 6 . 2

2,157. 5

137.5 281. 6

23.9 312.2 281.6 551.9 69.9

196.5 125.2 36.0 31.5

3 60.7

449.9

24.6 11.2 19.7 11.6

3 13.0

2,188. 7 - 7 . 6

2,181. 2

. 3 265.6

6.1

271.8 - 1 3 . 4

258.4

4, 634. 3 - 3 7 . 2

4, 597.1 486.4

5,083. 5

1938

1,145. 6 1,189. 0

251.6 36.6

2, 622.8 11.8

2, 634. 6

139.3 382.2

34.7 294. 5 273.2 567.8 46.2

203.6 89.6 38.5 31.6 53.5

416.8

24.0 12.5 20.8 13.3 3.2

30.6 13.2

2, 272. 2 7.3

2,279. 5

149.5 593.2

6.2

748.9 11.3

760.2

5, 643. 8 30.5

5,674. 3 359.2

6,033.5

Increase or de-

crease (>

251.3 193.0 6.7

11.5-

449.1 28.0'

477.1.

l . fr 100. &

10.8-17. 7

8.4' 15.9^

23.7'

7.1 - 3 6 . 6

2.5-. 1

- 7 . 2

- 3 3 . 1

- . 6 L 3 1.1 1.7 3.2:

30.6 . 2

83.6^ 14.8-

98.3

149.2 327.7'

. 1

477.1 24.7

501.8 -

1,009.5-67. r

1,077. 2' - 1 2 7 . 2

950.0= '

Footnotes at end of table.



Receipts by major sources for the fiscal years 1937 and 1938 ^Continued

[In millions of dollars]

Source

Miscellaneous receipts; Proceeds of Government owned securities;

Foreign obligations All other. _

Seigniorage .- _._ . . . - . All other miscellaneous receipts .

Total miscellaneous receipts (cash basis)

Total receipts, general and special accounts (cash basis) . .

1937

.6 68.2

. 48.9 92.6

210. 3

5, 293. 8

1938

.6 65.0 35.6

107.0

208.2

6, 241. 7

Increase or de-

crease ( - )

-3 .2 -13.3

14.4

- 2 . 1

947.9

' The detail of income taxes, miscellaneous internal revenue taxes, and other internal revenue taxes is on the basis of internal revenue collections with totals adjusted to basis of daily Treasury statement (unre-vised). Customs and miscellaneous receipts are shown on the basis of the daily Treasury statement (unre-vised) . General and special accounts are combined. For description of accounts and bases, see p. 351.

2 Collections for credit to trust funds are not included. For details of the collections see note on p. 426. 3 Receipts from jewelry tax, repealed effective June 23, 1936, included in "all other miscellaneous."

NOTE.Figures are rounded to nearest tenth of a million and will not necessarily add to totals.

A large share of the increase of $947,900,000 in receipts during the year was accounted for by an increase of $444,300,000 in current cor-poration and individual income taxes. Receipts from these sources rose not only because of the high levels of incomes in 1936 and 1937 but also because of the effect of the legislative changes incorporated in the Revenue Acts of 1936 and 1937. The provisions of the Revenue Act of 1936 included the undistributed profits tax, the subjection of dividends to normal taxes, and an increase in surtax rates on individual incomes; and the Revenue Act of 1937 contained provisions which concerned mainly the prevention of tax avoidance. The increase of $476,900,000 in taxes which first became effective during the fiscal year 1937, viz, social security taxes and taxes upon carriers and their employees, imposed by the Carriers Taxing Act of 1937, accounted for more than half of the total increase in receipts. A detailed classification of receipts from social security taxes appears in table 19 on page 446o Other significant changes in receipts were the increases of $100,600,000 in the collections from estate taxes and $15,900,000 from tobacco taxes. The $30,600,000 collections from taxes imposed by the Sugar Act of 1937 and the $3,200,000 collections from taxes imposed by the Bituminous Coal Act of 1937 constituted new sources of revenue during the fiscal year 1938.

The largest decrease occurred in customs receipts as a result of a substantial contraction of imports during the last 6 months of the fiscal year 1938 compared with the corresponding period during the previous year. Other sizable decreases occurred in the collections from excise taxes on automobiles, etc., stamp^taxes, and taxes on distilled spirits and wines.


4 REPORT OF THE SECRETARY OF THE TREASURY

Sources.-r-As is regularly the case, the bulk of ordinary receipts in 1938 was derived from relatively few sources. As shown by data in the table on page 2, 86 percent of ordinary receipts came from customs and the following eleven tax sources, arranged in order of magnitude: Current individual income; current corporation income; social security; tobacco; estate; distilled spirits and wines; fermented malt liquors; gasoline; carriers and their employees; capital stock; and automobiles, trucks, tires, tubes, and parts or accessories. Among primary sources of revenue, the individual and corporation income taxes, both on current and back account, and the estate and capital stock taxes yielded approximately $3,107,700,000 or almost one-half the total receipts.

The proportion of receipts derived from income and related taxes on individuals and corporations has increased greatly since 1934, while the proportion derived from commodity levies in the aggregate, includ-ing the customs, has decreased. The commodity levies were, of course, increased by collections from the processing taxes in 1934 and 1935 but have declined in relative importance even since 1936. These shifts resulted partly from changes in the general business situation, which affect income tax receipts more sharply than receipts from relatively stable consumption sources; and partly from revenue law changes involving, among other things, heavier direct taxation on individual incomes and estates.

Individual and corporate income taxes, which constituted from one-half to three-fifths of total receipts in 1932 and prior years, constituted 41 percent of total receipts in 1938. Social security taxes, which were first collected during the fiscal year 1937, constituted almost 10 percent of total receipts in 1938. The estate tax, which constituted 6 percent of total receipts in 1938, contributed a larger absolute amount than in any prior year. Miscellaneous receipts, not in the main of tax origin, which had large significance in the decade or more when the Government was realizing upon its war investments and loans, have been comparatively small in the past few years.

Expenditures

Total expenditures of the Federal Government under general and special accounts amounted to $7,691,000,000 in the fiscal year 1938, a decrease of $855,000,000 from the previous year.

The table that follows shows in summary form the major changes in expenditures between the fiscal years 1937 and 1938. The trend in total expenditures and in the principal classes of expenditures for recent years is shown in the chart on page 6, and in greater detail in table 8, page 418. Classifications are on a functional basis and are directly comparable from year to year.



Expenditures by major functions, fiscal years 1937 and 1938 ^ [On basis of daily Treasury statements as reclassified on July 1, 1938, and of classifications of the Bureau

of the Budget. In millions of dollars]

Class

Ordinary: Legislative, judicial, and civil establishments. National defense. . . . Veterans' pensions and benefits Interest on the public debt -Refunds of receipts Agricultural adjustment program Social security Railroad retirement Government employees' retirement funds Other (settlement of war claims. Commodity Credit Corporation

losses, etc.)

Total

Public works: Public highways Tennessee Valley Authority _ __ Reclamation.. Rivers and harbors, improvement . Flood control Public buildings Grants to public bodies, including administration . . . . Other

Total

Unemployment relief: Direct relief . . _ . . . . . . Work relief Civilian Conservation Corps . ,-

Total -

Loans and subscriptions to stock, etc. (net) Debt retirement.

Total expenditures

1937

689 895

1,128 866 56

527 448

6 47

1

4,663

351 42 52

148 45 76

273 115

1,102

184 1,957

386

2,527

150 104

8,546

1938

712 980 572 926 100 362 678 145 73

98

4,646

237 42 65 98 61 77

190 110

880

154 1,516

326

1,996

104 65

7,691

Increase or decrease

(-)

23 85

-556 60 44

165 230 139 26

97

-17

-114

13 -50

16 1

-83 - 5

-222

-30 -441 -60

-531

-46 -39

-855

1 Classification includes both general and emergency funds.

Table 3, page 379, presents a comparison of expenditures on the basis of the daUy Treasury statement as reclassified on July 1, 1938. Recovery and relief expenditures are classified as to provisions for repayment in table 9, page 419.

The decrease of $17,000,000 in the ordinary expenditures of the Government included a net decrease of $556,000,000 in. the expendi-tures for veterans^ pensions and benefits, which was due principally to the completion in 1937 of the transfers to the adjusted service certificate fund for the veterans' adjusted compensation payment. Expenditures for national defense increased by $85,000,000, including expenditures for the construction of naval vessels, aircraft, and sub-sidiary works to meet provisions of the naval treaties of 1922 and 1930. The increase in expenditures for refunds of receipts was accounted for largely by the return, authorized by the act approved August 24^ 1937, of $41,000,000 of taxes collected under title IX of the Social Security Act to the thirteen States which enacted in 1937 an approved unemployment compensation law.



The increase in social security expenditures of $230,000,000 included an increase of $122,000,000 in transfers to the old-age reserve account. Expenditures for railroad retirement, which increased $139,000,000, consisted mainly of transfers to the railroad retirement account, which were begun in July 1937 and made monthly thereafter. The table on page 446 shows the expenditures and also the receipts under the Social Security and Railroad Retirement Acts for the fiscal years 1936 to 1938 and monthly durmg 1938.

EXPENDITURES, FISCAL YEARS 1929 TO 1938, BY PRINCIPAL CLASSES

DOLLARS" Billions

D ^ b i Ro-tiro-mant

] Loans a n d Subscriptions to Stock, ate. y / i Un9.mpl0ymQ.nt Rz.li

REPORT OF THE SECRETARY OF THE TREASURY 7

Loans and subscriptions to stock, etc. (net), decreased $46,000,000 ^over the previous year. Details with respect to revolving fund pay-fments and collections are shown in the table on page 464.

Public debt retirements amounted to $65,000,000 in the fiscal year 1938. A detailed discussion of public debt operations and expendi-tures is presented below.

Deficit

The deficit for the fiscal year 1938, in general and special accounts, amounted to $1,449,600,000. If pubhc debt retirements are deducted, the net deficit for the year amounted to $1,384,200,000. This flGompares with a net deficit of $3,148,600,000 for the previous year.

THE PUBLIC DEBT

The gross public debt outstanding at the close of the fiscal year 1938 ^amounted to $37,164,700,000, an increase of $740,100,000 since June 30, 1937. This is the smallest annual increase in the gross debt :since .the fiscal year 1931, and is accounted for as follows:

'Excess'of-expenditures-_ ._ $1,524,713,050.28 Less:

Public debt retirements included in expenditures $65,464,950.00 Excess of receipts over expenditures in trust and other special accounts,

excluding retirements of national bank notes 381,665,532.81 JEleduction in General Fund balance 337,555,984.31

784,586,467.12

increase in gross public debt ._ 740,126,583.16

Although the gross public debt increased during the year, the .amount of interest-bearing public issues decreased $341,800,000. ^Special issues to Government agencies and trust funds increased ;:$1,117,700,000 during the year.

The net changes during the year in the various classes of securities which constitute the outstanding debt are shown in the two tables 'Which follow, classified as to public and special issues. The first stable presents a comparison of the amounts outstanding at the be-;giiming and at the end of the year, and the second shows, in summary :form, the issues and maturities or redemptions of the interest-bearing debt. The various classes of securities which made up the outstand-mg debt during the years 1932 to 1938 are shown in the table on ]page 491 of this report.



Comparison of public debt outstanding June 30, 1937 and 1938, by classes

[On basis of daily Treasury statements (unrevised), see p. 351]

Interest-bearing: Public issues:

Bonds: Pre-war and postal savings bonds.. Treasury bonds United States savings bonds.. Adjusted service bonds of 1945

Total bonds Treasury notes Treasury bills

Total public issues...

Special issues: Adjusted service bonds, Government

life insurance fund series Treasury notes - - - . - . . . Certificates of indebtedness. _

Total special issues

Total interest-bearing debt Matured debt on which interest has ceased Debt bearing no interest

Total gross debt Balance in General Fund . .

Gross debt less balance in General Fund_

June 30, 1937

$197,780,860.00 19,935, 749,800.00

1 799, 648,901. 77 388, 574,650.00

21,321, 754, 211. 77 10, 617, 241, 250. 00 2,303,094,000.00

34,242,089,461. 77

500,157,956.40 707,967,000.00 349,895,000.00

1,558,019,956. 40

35,800,109,418.17 118,529,815. 26 505,974,498.86

36,424,613,732.29 2, 553,473,897.31

33,871,139,834. 98

June 30, 1938

$196,759,920. 00 21,846,029,950. 00 1 1, 237,672,854. 05

318,701, 250.00

23, 599,163,974.05 9,146,922,950.00 1,154,164,000.00

33, 900,250,924. 05

500,157,956.40 1, 277,717,000.00

897,800,000.00

2, 675, 674, 956. 40

36, 575,925, 880.45 141, 362,460. 26 447,451, 974. 74

37,164,740,315. 45 2,215,917,913.00

34, 948,822,402.45

Increase or de-crease ( - )

-$1,020,940.00' 1, 910,280,150.00

438,023,952. 28 -69,873,400.00-

2,277,409, 762.28 -1,470,318,300.00--1,148,930,000.00'

-341,838,637.72'

569, 750,000.00' 547,905,000. Oa

1,117, 655,000.00^

775,816,462. 28 22,832,645. Oa

-58, 522, 624.12

740,126, 583.1& -337, 555,984.31

1, 077, 682, 567.47

' Proceeds of sales plus earned accruals less redemptions. For full account of sales, see p. 14.

Issues and maturities and redemptions of interest-bearing debt, fiscal year 1938


Interest-bearing debt

Public issues: Pre-war and postal savings bonds Treasury bonds United States savings bonds... Adjusted service bonds of 1946

Total bonds Treasury notes Treasury bills 1. . .

Total public issues

Special issues: Treasury notes. . . Certificates of indebtedness

Total special issues

Grand total

Issues

$1, 910, 602, 550.00 1 604, 653, 947. 53

12, 760,800.00

2, 428,007,297. 53 1. 275, 755,000.00 3, 757, 949,000. 00

7,461, 711, 297. 53

702, 616.000. 00 1,465, 870,000. 00

2,158, 485,000.00

9, 620,196, 297. 53

Maturities and redemptions

$1,020,940.00-322,400.00-

66, 629,996. 26 82,624,200.00'

150, 597, 536. 25-2, 746,073, 300. OO' 4, 906,879,000. Oa

7,803, 549,836.25

132,865,000.00-907, 966,000.00"

1,040, 830,000. 00-

8,844,379,835.25-

Proceeds of sales plus earned accruals.

The composition of the interest-bearing debt outstanding, by types of obligations, monthly, January 1931 to June 1938, in amounts and in percent of the total, is shown in chart 4 on page 9. The various maturities, by calendar years, of the interest-bearing debt outstanding on June 30, for the years 1933, 1935, 1937, and 1938 are shown in chart 5 on page 11.



COMPOSITION OF THE INTEREST-BEARING PUBLIC DEBT OUTSTANDING, BY TYPES OF OBLIGATIONS, MONTHLY, JANUARY 1931 TO JUNE 1938

1931 DOLLARS

B i l l i ons

936 1937 1938 DOLLARS

B i l l i ons

1931 1932 1933 1934 1935 1936 1937 1938

PERCENTAGE COMPOSITION OF THE INTEREST-BEARING PUBLIC DEBT OUTSTANDING, MONTHLY, JANUARY 1931 TO JUNE 1938

1931 1932 1933 1934 1935 1936 1937 1938

193 1 1932 1933 1934 1935 1936

CHART 4,

19 38

" NOTE.United States savings bonds and adjusted service bonds included with Treasury bonds. Securi-ties issued to Government agencies and trust funds include all such special obligations, whether in the form of bonds, notes, or certificates of indebtedness.



The computed annual interest charge, on the basis (unrevised) of the interest-bearing debt outstanding at the beginning and at the end of the year, increased from $924,275,241 to $947,084,058, and the com-puted average rate of interest increased from 2.582 to 2.589 percent. Actual expenditures for interest during 1938 amounted to $926,280,714.

The interest due and payable on the various classes of securities during 1938 and the amounts paid and outstanding unpaid are shown in the table on page 517. The interest paid on the public debt, by issues, for the years 1936 to 1938 are shown in the table on page 518-

The course of the interest-bearing debt outstanding and of the com-puted rate of interest thereon is shown from January 1921 throughi June 1938 in chart 6 on page 13, and from June 1916 through June 1938 in table 43 on page 519.

The open market operations during the year included: (1) The-offering of three series of Treasury bonds and four series of .Treasuiy notes, (2) weekly offerings and redemptions of Treasury bills, and. (3) the sale of United States savings bonds.

Treasury bonds and Treasury notes

The major public debt operations involving Treasury bonds and Treasury notes were carried out on the four regular tax-payment dates. All offerings were for refunding purposes except the Decem-ber offerings of bonds and notes which were for both cash and exchange-Four series of Treasury notes maturing during the year and the series maturing on September 15, 1938, were refunded. These operations-are summarized in the following table:

Quarterly financing during the fiscal year 1938 Quarter ly

da t e Issue A m o u n t

Sept . 16,1937

Dec. 16,1937

1}4 percent Treasury notes, series E-1938, d u e Dec. 16, 1938: I n exchange for Z}4 percent Treasury notes of series A-1937, ma tu r ing Sept . 15,1937

2 percent Treasury notes, series B-1942, due Sept . 15, 1942: I n exchange for d}4 percent Treasury notes of series A-1937, ma tu r ing Sept. 16,1937

2H percent Treasury bonds of 1946, d u e Dec. 15, 1945: I n exchange for 2% percent Treasury notes of series A-1938,

ma tu r ing F e b . 1, 1938 - -For cash _ _

$247, 330, 300 293, 513,250

1 ^ percent Treasury notes, series C-1942, due Dec, 15,1942: I n exchange for 2% percent Treasury notes of series A-1938,

ma tu r ing F e b . 1,1938 _ For cash _

13,339, 500 219,035, 700

M a r . 15,1938

J u n e 15,1938

2}4 percent Treasu ry bonds of 1948, due Sept . 15, 1948: I n exchange for 3ipercent Treasury notes of series C-1938, ma tu r ing M a r . 15, 1938. . - _.

2% percent Treasury bonds of 1958-63, d u e J u n e 16, 1968-63: I n exchange for 2J4 percent Treasury notes of series B-1938,

ma tu r ing J u n e 15,1938 __ I n exchange for 2H percent Treasury notes of series D-1938,

ma tu r ing Sept . 16,1938

$433,460, 900-

342,143, 30O'

540,843, 550'

232,375, 200'

450. 978,401>

I H percent Treasury notes, series A-1943, due J u n e 16, 1943: I n exchange for 2J4 percent Treasury notes of series B-1938,

ma tu r ing J u n e 15, 1938 I n exchange for 2H percent Treasu ry notes of series D-1938,

ma tu r ing Sept. 15, 1938

571, 736,200

347,044,400

36,142, 600

231, 633,000

918, 780, 60&

207, 775, 60O

3, 186, 357, 660 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

EEPORT OF THE SECRETABY OF THE TREASURY 11 MATURITY, BY CALENDAR YEARS, OF THE INTEREST-BEARING PUBLIC DEBT

OUTSTANDING

DOLLARS" Bi l l ions As of June 30

1933

"DOLLARS Bi l l ions

I i i I III 1933 35 37 "39 41 43 45 47 49 51 '53 '55 57 ' 59 '61 '63

1933 35 37 39 43 45 47 49 '5! '53 55 57 59 bl 63

As of June. 30 10-3-7

n0

\ \

i l

kilitiiltl Il 1 1933 '35 37 '39 '41 '43 '45 '47 '49 '5! '53 '55 '57 '59 '61 '63

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


1 2 REPORT OF THE SECRETARY OF THE TREASURY

Quarterly financing during the fiscal year 1938Continued

BECAPITULATION

Issued

For cash _ . In exchange.. _ _

Total

Treasury bonds

$293, 513,250 1, 617,089, 300

1,910,602,650

Treasury notes

$219,035, 700 1,056, 719, 300

1, 276, 765,000

Total

$512,648,950 2, 673,808, 600

3,186, 357, 650

All official circulars and statements relating to these transactions are included in the exhibits beginning on page 241.

Treasury bills

OfiFerings of Treasury bills were made each week during the year, some to replace maturing issues and some in anticipation of income tax receipts due on the regular quarterly tax-payment dates.

At the beginning of the year 46 series of Treasury bills aggre-gating $2,303,094,000 were outstanding. During the year 66 series aggregating $3,757,949,000 were issued, and 96 series aggregating $4,906,879,000 matured. At the end of the year 16 series aggregating $1,154,164,000 were outstanding. Except for those Treasury bills issued to mature during quarterly tax-payment date periods. Treasury bills issued during the early part of the year were for a term of 273 days, and those issued after October 20, 1937, were for a term of 91 days. The highest average rate, computed on a bank discount basis, for 273-day bills was 0.711 percent for those dated September 8, 1937, the lowest average rate for 273-day bills was 0.362 percent for those dated October 20, 1937. The liighest average rate for 91-day bills was 0.146 percent for those dated April 13, 1938, the lowest average rate was 0.011 percent for those dated June 29, 1938. The average rate on all bills issued during the year was 0.201 percent, and the average rate on all matured bills was 0.327 percent.

Further information concerning Treasury bills will be found in exhibits 9 to 11, beginning on page 250, and in table 36 on page 510.

United States savings bonds

The sale of United States savings bonds continued during the year without any change in terms or conditions of issue. These bonds, primarily intended for the service of small investors, are sold on a discount basis, with a 10-year maturity, but are redeemable before maturity, at the option of owners, at fixed redemption values. They are sold over-the-counter at post offices, and by mail on application to the Treasurer of the United States or to any Federal Reserve bank. They are issued in denominations of $25, $50, $100, $500, and $1,000, maturity value, at an issue price at the rate of $75 for each $100 maturity value.



During the fiscal year 1938, sayings bonds with a maturity value of $650,700,000 were sold, for which cash receipts aggregating $488,-000,000 were received by the Treasury. Bonds with a maturity value of $87,700,000 were redeemed, at the request of owners, at their current redemption value of $66,900,000.

INTEREST-BEARING DEBT OUTSTANDING i AND COMPUTED RATE OF INTEREST THEREON, BY MONTHS, JANUARY 1921 TO JUNE 1938

OLLAF i l l i o n

35

30

2 5

20

IS

PER CENT

4 . 5

4 . 0

3 . 5

3 . 0

2 . 5

2 . 0

3

-"

1921

- . . .

1923

^

1925

^ -N

==

"""'\

1927

^ ^

...-...

Co

==

I n t c

r e s t - B e a n

y

%.,

m p u t

1929

C H A

'<

z d if

B T 6

n g D

/

w-'\

z b t '

J

J

1 ^ i t e r a s t R a t z ^

1 1

193! 1933

F J

n

\ \

1935

V / -

.

if-

-'..,.

1937

D E

/^

DLLARS J i l l ibns

3 5

30.

:25

20 ' , .

15

PER CENT

4 . 5 .

4 . 0

3 . 5 '

3 . 0

2 . 5

2 . 0

Between March 1, 1935, when the issue was inaugurated, and June 30, 1938, bonds aggregating $1,773,100,000 maturity value were sold, for which cash aggregating $1,329,900,000 was received by the Treas-ury. Increase in the redemption value of the outstanding bonds over their issue price aggregated $25,600,000 to June 30, 1938. During the same period bonds with a maturity value of $151,500,000 were redeemed at their current redemption value of $115,000)000, and there

On basis of daily Treasury statements (unrevised).

10482539 3



remained outstanding on June 30, 1938, bonds with a maturity value of $1,621,700,000 and a current redemption value of $1,240,400,000.

The following statement, on the basis of daily Treasury statements, revised, summarizes the issues and redemptions of savings bonds by fiscal years from March 1, 1935, when the sale was inaugurated, to June 30, 1938:

Fiscal year

1936 (Mar. 1 to June 30) 1936 1937 1938 -Accruals to June 30,1938

Total

Issued

Maturity value

$83,422, 726 352, 277,425 686,739,175 650, 707,500

1, 773,146,825

Cash receipts

$62, 567,043. 76 264, 208, 068. 76 516,054,398.80 488,030,611.85 25,562,309.25

1,356,412,432.40

Redeemed

Maturity value

$707,850 14,971,200 48,040,125 87,732,250

151,451,425

Redemption value

$530,887.6&= 11. 252 714 76-36,327,912 26> 66,868,862.76'

114,980,377 25'

Sales of savings bonds by months and denominations dming the year are shown in the following table:

Sales of United States savings bonds, by months and denominations, July 1937 to June 1938

Month

1937July August September... October November... December-_.

1938January February March April May June -

Total

Total.

$25 $50 $100 $500 $1,000 Total

Maturity value

$1,223,375.00 1,170,475.00 1, 092,325. 00 1,174,975. 00 1,179,950.00 1,523,450. 00 1,721,700.00 1,546,775.00 1, 688,425.00 1,394,750.00 1,285,926.00 1,179,700. 00

16,081,826.00

$1,975,050.00 1, 778,200.00 1,635, 950.00 1,763,050.00 1,765,850.00 2,136,450.00 2, 681, 500.00 2, 242, 700.00 2,390,800.00 2,039,850.00 1,888, 500.00 1,782,150.00

23,980,050.00

$6,489,800 5, 756,100 5, 294,000 5, 529, 700 6,479, 700 6, 796, 500 8, 732, 700 7,043, 200 7,262,000 6,442, 200 5,685, 600 5,498,900

76,010,400

$9,433,000 7, 081,000 6, 480, 500 6,810,500 6,886,000 9, 312,000

13, 685, 500 9, 309,000 9,487,500 7,976,000 6, 592, 000 6, 690, 500

99, 743,500

$31,434,000 24, 697, 000 20,825,000 21, 868. 000 21,907,000 42,411,000

104,036,000 39,398,000 39,162,000 31, 956, 000 28,027,000 28,164,000

433, 875,000

$50, 555,225. 00-40,482,775.0^ 35,327, 775.00^ 37,146,225.00 37, 218, 500.00^ 62,179. 400. 00-

130, 757,400.00^ 69, 539, 675.00-59,890, 726.00' 49, 808,800.00' 43,479,025.0a 43,305,250.00^

649,690, 776.0^

Cash receipts

12, 061,368.75 17, 985,037.60 67, 007,800 74,807,626 325,406,250 487,268,081.26

The preceding table is compiled on the basis of the Treasury audit of original registration stubs representing sales by the Postall Service, the Federal Reserve banks, and the Treasury Department during the fiscal year 1938. These figures are not in agreement with those pre-sented elsewhere in this report, as certain proceeds of sales of bonds with issue dates in one fiscal year are not cleared imtil after the close of that fiscal year.

For other data concerning savings bonds, reference is made to the administrative report of the Division of Savings Bonds, on page 231, and to that of the Division of Loans and Currency, on page 206.



Special issues

Special issues of interest-bearing securities, made for the investment of trust or other fimds deposited in the Treasury or pursuant to appropriations for specific purposes, increased $1,117,700,000 during the year. Total issues aggregated $2,158,500,000 and redemptions amounted to $1,040,800,000. The increase in the amount of these issues is due for the most part to investments for the old-age reserve account and the unemployment trust fund, established by the Social Security Act.

The transactions in the special issues during the_year are summa-rized in the following table:

Issues and redemptions of special issues, fiscal year 1938


Special issues

Treasury notes: Old-age reserve account Railroad retirement account.-Civil service retirement fund. Foreign service retirement fund _. Canal Zone retirement fund - . _ _ . _ . . . . . . _ . _ Alaska Railroad retirement fund Postal Savings System series . . . . Federal Deposit Insurance Corporation OovftrnmeTit life insurance fund^. . ._ . _ .

Total

Certificates of indebtedness: Adjusted service certificate fund Unemployment trust fund

Total

Grand total _. _ . . . . .

Issues

$395,200,000 81,200,000

161,600,000 731,000 609,000 275, 000

25,000,000 25,000,000 23,000,000

702,616, 000

32,000,000 1,423,870,000

1,465,870,000

2,158,485,000

Redemptions

$16,000,000^ 72,100,000.'

614,000 251,000

10,000,00 36,000,00

132,865, OOO

43,800, OOO 864,165, OOO

907,965, OOO

1,040,830, OOO

The amount of each class of special issues outstanding on June 30, 1938, is shown in the statement on the public debt, appearing on page 472.

Adjusted service bonds

Adjusted service bonds amounting to $12,800,000 were issued during the year, making a total of $1,822,100,000 of such bonds issued since June 15, 1936. Redemptions of $82,600,000 of these bonds during the year brought the total redemptions since June 15, 1936, to $1,503,400,000, leaving $318,700,000 outstanding on June 30, 1938,

Cumulative sinking fund

Credits accruing to the cumulative sinking fund during the fiscal year 1938 amounted to $577,609,381, which with the unexpended balance of $618,916,809 brought forward from the previous year made $1,196,526,190 available for the year. Only $65,232,400 of



this amount was applied to the redemption of the public debt$83,000 for the retirement of Treasury bonds at par and $65,149,400 for the redemption of Treasury notes maturing during the year and presented for cash redemption. To have exhausted all available credits would have required a corresponding increase in cash offerings without any net change in the public debt. The unexpended balance of $1,131,-293,790 was carried forward to the fiscal year 1939.

Tables presenting the transactions pn account of the fund for 1938 and since its inception on July 1, 1920, will be found on pages 516 and 517 of this report.

Amendment to the Second Liberty Bond Act

The public debt operations are carried on under the authority of the Second Liberty Bond Act, approved September 24, 1917, as amended. Under that act the total amount of bonds that could be outstanding at uny one time was limited to $25,000,000,000 and the amount of Treasury notes, certificates of indebtedness, and Treasury bills was limited to $20,000,000,000, an aggregate of $45,000,000,000 for all obligations. The act approved May 26, 1938 (se6 exhibit 13, p. 254), combined under one limitation of $45,000,000,000 the amount of bonds, notes, certificates of indebtedness, and Treasury bills which may be outstanding at any one time, and at the same time provided that the amount of bonds outstanding should not exceed $30,000,000,000.

GENERAL FUND

The General Fund includes all moneys of the Government deposited with and held by the Treasurer of the United States including the moneys covered into the Treasury which can be withdrawn only in pursuance of an appropriation by Congress. Every receipt of the Treasury, from whatever source, and every expenditure, of whatever nature, affect either the assets or liabilities, or both, of the General Fund shown in the daily statement of the Treasury. The total amount of the assets over and above the total amount of the liabilities repre-sents the balance in the General Fund available to meet Government expenditures.

The assets in the General Fund consist of gold, silver, currency, coin, unclassified collection items, etc., and deposits to the credit of the Treasurer of the United States and other Government officers, in Federal Reserve banks, special depositaries account of sales of Govern-ment securities, national and other bank depositaries, foreign deposi-taries, and the treasury of the Philippine Islands.

The liabilities of the General Fund consist of outstanding Treasurer's checks, deposits of certain Government officers composed of balances

-to the credit of the Post Office Department, the Board of Trustees,



Postal Savings System, and postmasters, clerks of courts, disbursing officers, etc., and uncollected items, exchanges, etc.

The balance in the General Fund is classified according to increment on gold, seigniorage, and working balance.

The net change in the balance of the General Fund from the beginning to the close of the fiscal year is accounted for as follows:

Analysis of the change in the General Fund balance between June SO, 1937, and June SO, 1938

[On basis of daily Treasury statements (unrevised), see p. 351. For a description of accounts through which Treasury transactions are effected, see p. 352]

Balance, June 30, 1937 $2,553,473,897.31 Add:

Ordinary receipts: General and special funds _ 6,241,661,226.99 Trust funds, increment on gold, etc 1,727,031,693.30

Net increase in gross pubhc debt _ 740,126, 583.16

Total funds available 11,262,293,400.76 Deduct:

Expenditures chargeable against ordinary receipts:

General and special accounts $7, 766,374, 277.27 Less public debt retirements 65,464,950.00

$7, 700,909,327. 27 Trust funds, increment on gold, etc 1,396,944,899. \ Less national bank note retirements 61,478,739. 60

1,345,466,160.49

Total expenditure