AUTHORIZING ACTS:

(a) September 24, 1917, as amended, with the exception of the Panama Cana ILoan of 1961 which was authorized by the acts of Aug. 5, 1909, Feb. 4, 1910, and Mar. 2, 1911. (b) Various.

(e) June 25, 1910.

(d) Apr. 24, 1917.

TAX STATUS:

(e) Any income derived from Treasury bills, whether interest or gain from their sale
or other disposition does not have any exemption, as such, and loss from the sale or
other disposition of any such bills does not have any special treatment, as such, under
the Internal Revenue Code or laws amendatory or supplementary thereto. The bills
are subject to estate, inheritance, gift, or other excise taxes, whether Federal or State,
but are exempt from all taxation now or hereafter imposed on the principal or interest
thereof by any State, or any of the possessions of the United States, or by any local
taxing authority. For purposes of taxation the amount of discount at which the bills
are originally sold by the United States is to be considered to be interest.

(5) Income derived from these securities is subject to all taxes now or hereafter im-
posed under the Internal Revenue Code or laws amendatory or supplementary thereto.
The securities are subject to estate, inheritance, gift, or other excise taxes, whether
Federal or State, but are exempt from all taxation now or hereafter imposed on the
principal or interest thereof by any State, or any of the possessions of the United States;
or by any local taxing authority. The following is applicable to savings bonds only:
For the purposes of taxation any 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. For exception, see Treasury bonds,
2 3/4% of 1960-65, and note h.

Attention is invited to Treasury Decision 4550 ruling that bonds, notes, bills, and
certificates of indebtedness of the Federal Government or its agencies, and the interest
thereon, are not exempt from the gift tax.

(8) Any gain or loss derived from the exchange of 25% Treasury bonds of 1961 for
334% Treasury notes of Series D-1964 or 37%% Treasury bonds of 1968 will be taken
into account for Federal income tax purposes upon the disposition or redemption of the
new obligations.

(b) Exempt, both as to principal and interest, from all taxation now or hereafter im-
posed by the United States, or any of the possessions of the United States, or by any
local taxing authority, except (a) estate or inheritance taxes, and (b) graduated addi-
tional income taxes, commonly known as surtaxes, and excess profits and war profits
taxes, now or hereafter imposed by the United States, upon the income or profits of
individuals, partnerships, associations, or corporations. The interest on an amount of
bonds authorized by the act approved Sept. 24, 1917, as amended, the principal of which
does not exceed in the aggregate $5,000 owned by any individual, partnership, associa-
tion, or corporation shall be exempt from the taxes provided for in clause (b) above.
(1) Exempt from the payment of all taxes or duties of the United States, as well as
from all taxation in any form by or under State, municipal, or local authority. (The
Supreme Court has held that this exemption does not extend to estate or inheritance
taxes, imposed by Federal or State authority.)

(1) These issues, being investments of various Government funds and payable only
for the account of such funds, have no present tax liability.

In hands of foreign holders-Applicable only to securities issued prior to Mar. 1,
1941: Bonds, notes, certificates of indebtedness of the United States, shall while bene-
ficially owned by a nonresident alien individual, or a foreign corporation, partnership,
or association not engaged in business in the United States, be exempt both as to princi-
pal and interest from any and 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.

MEMORANDUM RELATING TO OTHER OBLIGATIONS:
Obligations of the United States payable on presentation:
U.S. registered interest checks payable..
U.S. interest coupons due and outstanding.
Interest payable with and accrued discount added to principal
of United States securities.

Total.

$320, 367, 630. 44 121,042, 035, 89

7, 194, 425. 46

448, 604, 091. 79

TABLE 28.-Description of guaranteed obligations held outside the Treasury, June 30, 1960

[On basis of daily Treasury statements, see "Bases of Tables"]

Security

Rate of interest

Amount

UNMATURED OBLIGATIONS !

District of Columbia Armory Board stadium bonds issued under the act of
September 7, 1957, as amended (2 D.C. Code 1722, 1727): 2

Percent

Bonds..

Bond...

434

$380,000.00

Subtotal..

476,000.00

Federal Housing Administration debentures issued under the act of June 27, 1934, as amended (12 U.S.C. 1701-1750g): 3

TABLE 28.-Description of guaranteed obligations held outside the Treasury, June 30, 1960—-Continued

[On basis of daily Treasury statements, see "Bases of Tables"]

1 Issued and payable on various dates. Interest is payable semiannually. All unmatured debentures issued by the Federal Housing Administration are redeemable on any interest day or days, on 3 months' notice, except the Series A debentures which are not redeemable until maturity. The stadium bonds issued by the District of Columbia Armory Board are redeemable at any time.

The securities and the income derived therefrom, and gain from the sale or other disposition thereof or transfer as by inheritance or gift, are subject to taxation by the United States, but are exempt both as to principal and interest from all taxation, except estate and inheritance taxes, imposed by the District of Columbia.

Under the Public Debt Act of 1941 (31 U.S.C. 742a), income or gain derived from these securities except mutual mortgage insurance fund debentures, Series A, is subject to all Federal taxes now or hereafter imposed. The securities are subject to surtaxes, estate, inheritance, gift, or other excise taxes, whether Federal or State, but are exempt from all taxation now or hereafter imposed on the principal or interest thereof by any State, municipality, or local taxing authority. Debentures issued on contracts entered into before Mar. 1, 1941, are exempt from all taxation except surtaxes, estate, inheritance, and gift taxes.

4 Series A debentures are subject only to such Federal, State, and local taxes as the mortgages in exchange for which they are issued would be subject to in the hands of the holders of the debentures.

Includes Series A debentures amounting to $1,460,050, maturing on July 1, 1960; and debentures called for redemption on July 1, 1960, at par plus accrued interest, as follows: Series AA, $2,891,850; Series BB, $257,400; Series EE, $148,950; Series R, $67,050; Series T, $59,500; and Series H, $3,240,900.

Funds are on deposit with the Treasurer of the United States for payment of principal of $536,775 and interest of $114,423.33.

NOTE. For obligations held by the Treasury, see table 115.

TABLE 29.-Postal Savings Systems' deposits and Federal Reserve notes outstanding, June 30, 1946-60

[Face amount in thousands of dollars. On basis of reports received by the Treasury]

1 The faith of the United States is solemnly pledged to the payment of deposits (plus accrued interest at the rate of 2 percent) made in postal savings depositary offices. Interest is payable quarterly from the first day of the month next following date of deposit, and on deposits made after Mar. 1, 1941 (under the Public Debt Act of 1941 (31 U.S.C. 742a)), is subject to all Federal taxes.

Established by the act of June 25, 1910, as amended (39 U.S.C. 751-771).
Established by the act of June 13, 1940 (2 Canal Zone Code 273-280).

Authority for the issuance of Federal Reserve notes was given under the act of Dec. 23, 1913, as amended (12 U.S.C. 411-416). The notes are obligations of the United States and are receivable by all national and member banks and Federal Reserve Banks and for all taxes, customs, and other public dues. They are redeemable in lawful money on demand at the Treasury Department, Washington, D.C., or at any Federal Reserve Bank.

Funds due depositors on June 30, 1960, including interest of $77,097,940 totaling $912,897,609, are offset by cash in designated depositary banks amounting to $19,137,686, which is secured by the pledge of collateral as provided in the regulations of the Postal Savings System, having a face value of $21,057,500; Government securities with a face value of $845,703,000; and cash in possession of the System and other net assets of $48,056,923.

Funds due depositors on June 30, 1960, including interest of $248,492 totaling $5,315,862, are offset by Government securities having a face value of $5,350,000 and other assets.

In actual circulation, exclusive of $935,379,509 redemption fund deposited in the Treasury and $889,327,925 of their own Federal Reserve notes held by the issuing banks. The collateral security for Federal Reserve notes issued consists of $10,565,000,000 in gold certificates and in credits with the Treasurer of the United States payable in gold certificates, $19,145,000,000 face amount of U.S. Government securities, and $90,032,000 face amount of commercial paper. Notes issued by a Federal Reserve Bank are a first lien against the assets of such Bank.

TABLE 30.-Statutory limitation on the public debt and guaranteed obligations, June 30, 1960

[In millions of dollars)

PART I.-STATUS UNDER LIMITATION, JUNE 30, 1960

Maximum amount of securities which may be outstanding at any one time under limitations
imposed by section 21 of the Second Liberty Bond Act, as amended by the acts of Feb. 26,
1958, and June 30, 1959, (31 U.S.C. 757b). (The following table lists the amendments)
Amount of securities outstanding subject to such statutory debt limitation:

U.S. Government securities issued under the Second Liberty Bond Act, as amended.
Guaranteed obligations held outside the Treasury..

Total amount of securities outstanding subject to statutory debt limitation..

Balance issuable under limitation..

1 295,000

285, 925

140

286, 065

8,935

PART II.-APPLICATION OF LIMITATION TO PUBLIC DEBT AND GUARANTEED OBLIGATIONS OUTSTANDING, JUNE 30, 1960

1 For debt limit effective July 1, 1960, see following table.

* Includes public debt incurred to finance expenditures of certain wholly owned Government corporations and other business-type activities in exchange for which obligations of the corporations and activities were issued to the Treasury, see table 115.

2,238

191

157

6

2,292

353

2,645

285, 925

406

286, 331

139

139

1

1

140

140

286, 065

406

286, 471