EXHIBIT 10.-First Supplement, December 31, 1959, to Department Circular No. 888, Revised, governing the special endorsement of savings bonds, the cash payment of Series A-E, and the payment of Series E, F, and J bonds on redemption-exchange for Series H bonds Paragraph (a) of sec. 330.8 of Department Circular No. 888, Revised, dated April 8, 1953 (31 CFR 1951 Supp. 330), is hereby amended to read as follows: "Sec. 330.8. Payment or exchange of bonds.-"(a) Payment of Series A-F and J bonds by paying agents.— "(1) Payment of Series A-E bonds inclusive for cash. Bonds of Series A to E, inclusive, bearing the special endorsement (see sec. 330.3 and sec. 330.6) may be paid by a paying agent pursuant to the authority and subject, in all other respects, to the provisions and conditions of Department Circular No. 750, Revised, and the instructions issued pursuant thereto. Series A to E bonds, inclusive, which bear the special endorsement and which are thereafter paid by the paying agent under Department Circular No. 750, Revised, will be combined with other Series A to E bonds paid under that circular and forwarded to the Federal Reserve Bank of the district. "(2) Payment of Series E, F, and J bonds on redemption-exchange for Series H bonds. All outstanding Series E and J bonds and all Series F bonds with issue dates on and after January 1, 1948, provided that such Series F bonds are received not later than six months from the month of maturity, presented for redemption-exchange under the provisions of Department Circular No. 1036, which bear the special endorsement (see sec. 330.3 and sec. 330.6), may be paid by a paying agent pursuant to the authority and subject, in all other respects, to the provisions and conditions of Department Circular No. 750, Revised, and the instructions issued pursuant thereto." ROBERT B. ANDERSON, Legislation EXHIBIT 11. An act to permit the issuance of Series E and H U.S. savings bonds at interest rates above the existing maximum, to permit the Secretary of the Treasury to designate certain exchanges of Government securities to be made without recognition of gain or loss, and for other purposes [Public Law 86-346, 86th Congress, H.R. 9035, September 22, 1959] Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, TITLE I-IN GENERAL SEC. 101. (a) The Second Liberty Bond Act, as amended, is amended by adding at the end thereof the following new section: "SEC. 25. In the case of any offering of United States savings bonds issued or to be issued under section 22 of this Act, the maximum limits on the interest rate or the investment yield or both may be exceeded upon a finding by the President with respect to such offering that the national interest requires that such maximum limits be exceeded: Provided, however, That in no event may the interest rate or the investment yield exceed 44 per centum per annum." U.S. savings bonds. Interest rates increase. 40 Stat. 288. 31 USC 774(2). (b) Paragraph (2) of section 22(b) of the Second Liberty 65 Stat. 26. Bond Act, as amended (31 U.S.C., sec. 757c(b)(2)), is amended to read as follows: "(2) The Secretary of the Treasury, with the approval of the President, is authorized to provide by regulations: "(A) That owners of series E and H savings bonds may, at their option, retain the bonds after maturity, or after any period beyond maturity during which such bonds have earned interest, and continue to earn interest upon them at rates which (subject to section 25) are consistent with the provisions of paragraph (1). "(B) That series E and H savings bonds on which the rates of interest have been fixed prior to such regulations will earn interest at higher rates which (subject to section 25) are consistent with the provisions of paragraph (1).” (c) The authority granted by the amendments made by subsections (a) and (b) may be exercised with respect to United States savings bonds bearing issue dates of June 1, 1959, or thereafter. Such authority may also be exercised with respect to United States savings bonds issued before June 1, 1959, but in no case shall the interest rate, or investment yield, on any bond be changed pursuant to such authority for any period which begins before June 1, 1959. Retention of matured bonds. SEC. 102. The heading and first sentence of section 454 (c) of 68A Stat. 156. the Internal Revenue Code of 1954 (relating to matured United States savings bonds) are amended to read as follows: "(c) MATURED UNITED STATES SAVINGS BONDS.-In the case of a taxpayer who (1) holds a series E United States savings bond at the date of maturity, and (2) pursuant to regulations prescribed under the Second 31 USC 774(2). Liberty Bond Act. (A) retains his investment in such series E bond in an obligation of the United States, other than a current income obligation, or (B) exchanges such series E bond for another nontransferable obligation of the United States in an exchange upon which gain or loss is not recognized because of section 1037 (or so much of section 1031 as relates to section 1037), Post, p. 623. the increase in redemption value (to the extent not previously 68A Stat. 302. SEC. 103. Subsection (i) of section 22 of the Second Liberty Paying agents. Relief from Bond Act, as amended (31 U.S.C., sec. 757c(i)), is amended by liability. inserting after the third sentence thereof the following: "Relief 57 Stat. 63. from liability shall be granted in all cases where the Secretary of the Treasury shall determine, under regulations prescribed by him, that written notice of liability or potential liability has not been given by the United States, within ten years from the date of the erroneous payment, to any of the foregoing agents or agencies whose liability is to be determined: Provided, That no relief shall be granted in any case in which a qualified paying agent has assumed unconditional liability to the United States.' SEC. 104. The following provisions of law are amended by striking out the words "on original issue at par" and inserting in lieu thereof the words "on original issue at the issue price": (1) Section 6(g) (5) of the Act of March 24, 1934, as 53 Stat. 1226. amended (22 U.S.C., sec. 1393(g) (5)), relating to the trust account for the payment of pre-1934 bonds of the Government of the Philippines. (2) Section 201(d) of the Social Security Act (42 U.S.C., sec. 401(d)), relating to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund. (3) Section 904(b) of the Social Security Act (42 U.S.C., sec. 1104(b)), relating to the Unemployment Trust Fund. (4) Section 15(b) of the Railroad Retirement Act of 1937 (45 U.S.C., sec. 2280(b)), relating to the Railroad Retirement Account. (5) Section 209(e) (2) of the Highway Revenue Act of 1956 (23 U.S.C., sec. 173(e) (2)), relating to the Highway Trust Fund. 70 Stat. 397. SEC. 105. (a) Section 3701 of the Revised Statutes (31 U.S.C., Tax exemption. sec. 742) is amended by adding at the end thereof the following: "This exemption extends to every form of taxation that would require that either the obligations or the interest thereon, or both, be considered, directly or indirectly, in the computation of the tax, except nondiscriminatory franchise or other nonproperty taxes in lieu thereof imposed on corporations and except estate taxes or inheritance taxes." (b) The following provisions of the Second Liberty Bond Repeals. Act, as amended, relating to the tax-exempt status of obligations of the United States, are repealed, without changing the status of any outstanding obligation: (1) Subsections (b) and (d) of section 5 (31 U.S.C., sec. 754 (b) and (d)); (2) The second and third sentences of section 7 (31 U.S.C., sec. 747); (3) Subsection (b) of section 18 (31 U.S.C., sec. 753(b)); (4) The first sentence of subsection (d) of section 22 (31 U.S.C., sec. 757c(d)). 46 Stat. 19, 775. 40 Stat. 291, 1309. 55 Stat. 7. TITLE II-INCOME TAX TREATMENT OF CERTAIN EXCHANGES OF UNITED STATES OBLIGATIONS SEC. 201. (a) Part III of subchapter O of chapter 1 of the 68A Stat. 302. Internal Revenue Code of 1954 (relating to common nontaxable 26 USC 1031-1036. exchanges) is amended by adding at the end thereof the following new section: 73 Stat. 622. 73 Stat. 623. "SEC. 1037. CERTAIN EXCHANGES OF UNITED STATES OBLIGATIONS. "(1) EXCHANGES INVOLVING OBLIGATIONS ISSUED AT A "(A) the aggregate amount considered, with respect "(B) the issue price of the obligation received in the "(c) CROSS REFERE CES. **(1) For rules relating to the recognition of gain or loss in a case where "(2) For rules relating to the basis of obligations of the United States (b) The table of sections for part III of subchapter O of chapter 1 of the Internal Revenue Code of 1954 is amended by adding at the end thereof the following: 31 USC 774(2). "Sec. 1037. Certain exchanges of United States obligations." 73 Stat. 623. 73 Stat. 624. (c) Section 1031(b) of such Code (relating to gain from exchanges of property not solely in kind) is amended by striking 68A Stat. 302. out "the provisions of subsection (a), of section 1035(a), or of section 1036(a)," and inserting in lieu thereof "the provisions of subsection (a), of section 1035(a), of section 1036(a), or of section 1037(a),". (d) Section 1031 (c) of such Code (relating to loss from ex- 68A Stat. 302. changes of property not solely in kind) is amended by striking out "the provisions of subsection (a), of section 1035(a), or of section 1036(a)," and inserting in lieu thereof "the provisions of subsection (a), of section 1035(a), of section 1036(a), or of section 1037(a),". (e) Section 1031(d) of such Code (relating to basis in the case of exchanges of property held for productive use or investment) is amended by striking out "this section, section 1035(a), or section 1036(a)," each place it appears in the first and second sentences thereof and inserting in lieu thereof "this section, section 1035(a), section 1036(a), or section 1037(a),". 72 Stat. 1641. SEC. 202. Section 4(a) of the Public Debt Act of 1941, as 61 Stat. 180. amended (31 U.S.C., sec. 742a), is amended by striking out "under the Internal Revenue Code, or laws amendatory or supplementary thereto" and inserting in lieu thereof "except as provided under the Internal Revenue Code of 1954". SEC. 203. The amendments made by this title shall be effective Effective date. for taxable years ending after the date of enactment of this Act. Approved September 22, 1959. EXHIBIT 12. Portion of the act to increase for a one-year period the public debt limit set forth in section 21 of the Second Liberty Bond Act, and for other purposes [Public Law 86-564, 86th Congress, H.R. 12381, June 30, 1960] Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Public Debt and Tax Rate Extension Act of 1960". TITLE I-PUBLIC DEBT LIMIT UNDER SECOND SEC. 101. TEMPORARY INCREASE. Public Debt and During the period beginning on July 1, 1960, and ending on June 30, 1961, the public debt limit set forth in the first sentence 73 Stat. 156, of section 21 of the Second Liberty Bond Act, as amended, shall 31 USC 757b. be temporarily increased by $8,000,000,000. Address on Federal Financial Policies EXHIBIT 13. Remarks by Secretary of the Treasury Anderson, December 29, 1959, on financial policies for sustainable growth at a meeting of the American Finance Association and the American Economic Association, Washington, D.C. I welcome this opportunity to speak before an audience of professional economists. During my few years in Washington, I have become more and more impressed with the need for better communication between Government officials and economists outside of Government, particularly those in universities and research organizations. We need to encourage a greater interchange of ideas. Some of the most perplexing and crucial problems of public policy cluster around the economie problem. Thus the professional economist, more than ever before, has a significant and unique contribution to make to public policy. |