Table 2.-Size and ‘average yieki on investments of social insurance and Notes and Brief Reports related trust funds, as of June 30, 1948 Trust Fund Operations During the year ended December 31, 1948, the fund’s net acquisitions I in 1948 amounted to $1,287 million. Fund The unemployment trust fund is In addition to the old-age and sur- vivors insurance trust fund and the composed of 51 separate State ac- Old-age and survivors insw- unemployment trust fund, the Treas- ante trust fund ...... _. -. $9,930,137 2.21 counts and the railroad unemploy- ~lET3lDlOY~~~t trust fund.. _ 8.297.000 2.16 ment insurance account: however, in- ury manages 10 other social insurance NatioGl service life insurance I and related trust funds (table 2). fund.... ___.._... _..... --..6,934,685 3.00 vestments are made for the fund as a Civil-service retirement and Interest rates on investments of these disabilityfund...... __. -.. 2,794,611 3.98 unit by the Secretary of the Treas- U. S. Government life insur- ury, and interest earned on the fund’s funds are higher than those for the sncefund... .__... -- ...... --1,402,413 3.50 Railroad retirement account... 1,374,500 3.00 investments is distributed quarterly two large social security funds, and District of Columbia teachers’ all rates are determined administra- retirement fund __.._ 13,809 2.62 among all accounts on the basis of Canal Zone retirement and tively rather than by statute. disability fund __...... 13,127 3.98 the average daily balance of each ac- Foreign Service retirement count. For the year 1948 as a whole and disability fund..--- 12,087 3.98 Investments Alaska Railroad retirement the fund showed a net acquisition of and disability fund . .._...... 3,070 4. M) During the calendar year 1948 the Longshoremen’s and harbor $394 million of United States securi- workers’ compensation fund. 402 2.54 ties (table 1). two social security trust funds ac- District of Columbia work- men’s compensation fund... 81 2.47 9 All sums collected under the Fed- quired a net total of $1,681 million of eral Insurance Contributions Act are Government securities (table 11. This appropriated to the old-age and sur- was 3 percent less than the invest- 2 B&d on par value of securities. Source: Annual Report ojthe Secretary ojthe Tmzs- * vivors insurance trust fund as they ments made during the preceding ury on the State of the Finances for the Fiscal Year are received by the Treasury. k ad- year but 55 percent more than the Ended June SO, 1948. dition to contributions of $1,685 mil- $1,082 million invested in 1946. benefits, to $787 million. Onerations lion received in 1948, $4.9 million was Net investments by the unemploy- during 1948 continued to reflect fa- transferred from the general fund to ment trust fund during the 3 years vorable economic conditions as in the the old-age and survivors insurance ended December 31. 1946, 1947, and preceding year. Deposits by States trust fund to meet additional admin- 1948, were $56 million, $538 million, were $989 million, and withdrawals istrative and other costs of benefits to and $394 million respectively. The for benefit payments were $852 mil- survivors of certain World War II vet- sums available for investment in a lion. The decline in deposits was the erans as provided under the Social Se- given period consist of that portion of result of lower contribution rates un- curity Act Amendments of 1946. the fund’s receipts not needed to meet der experience-rating provisions, and The Secretary of the Treasury-the current expenditures. The relatively the increase in withdrawals reflected Managing Trustee of the fund-in- small net acquisition during 1946 re- an increase in compensable unem- vests that part of contributions ap- flects the effects of the reconversion ployment and in average benefits. propriated to the fund which, in his period, with its lay-offs and shifts in Rhode Island’s withdrawals from the judgment, is not required to meet cur- employment. fund included $14 million and New rent expenditures for benefit pay- In 1947, State deposits amounted Jersey’s included $50 million for State ments and administrative expenses. to $1,097 million, and withdrawals for disability insurance programs. Table 1.-Changes in social security trust fund investments and the interest- bearing public debt, as of the end of December, 194.548 [Amounta in millions]

Investments at end of Decembek- _-P--P ------I_------Net acquisitions 1945 1946 1947 1948 __-_---- I -- _-----.---- ___ -.----- Item Average Average f*;g,; Amount ‘?ztyt Amount rate Amount “gtFt Amount (percent) (percent) (percent) ------d-Y- -p-_----_c_---- Total interest-bearing public debt---...-.. $275,694 1.965 $257,619 2.057 $254,205 2.144 $250.579 2.216 -$18,044 --%3,444 -$3,626 pp--pp___----- Securities acquired by social security trust funds, total--m..- ._..__ _..._.___._..._.___ I$&$ .-... i:ii l$E4 .--..i:or- 12x& _-.-.__ _-- 19,052 ._._. i:~- +1,082 +1.681 Old-age and survivors insurance trust fund.. 2.09 10,556 +l, 026 Unemployment trust fund...... ___._..._____ 7: 508 1.93 7’ 564 All other inter&-bearing securities. __.______261,133 ____.____. 242;006 ___._ !:“m 2&i: ____. “:“. &;! .___. “:‘“. -19::: -5,172 -5,307

Source: Daily Statement of the U. S. ‘kcaaury.

Bulletin, 13 Average yields on special groups of United States obligations, the computed rate of interest on thepublic debt, and yields on obligations acquired by two social insurance trust funds, 1936-48

I COMPUTE0VUERESTWTE TAXABLE LONG-TERM BONDS I I

I

” 1936 1938 1940 1942 1944 1946 1948 The railroad unemployment insur- ante trust fund was much less affected gan purchasing Treasury bonds on ance account in the unemployment by the economic shifts of the recon- the open market for the two social trust fund declined during the cal- version period than the unemploy- security trust funds. The bulk of endar year 1948. Deposits were $67 ment trust fund. The relationship these securities bear 2%-percent in- million as compared with $126 million between receipts and expenditures terest, and as a result of these opera- in 1947, a decrease of 47 percent. De- shows minor fluctuations from year tions the average interest rate on the posits for the first 6 months of 1948 to year. old-age and survivors insurance trust were $67 million and for the last 6 At the end of the months $31,000. This decline was a old-age and survivors insurance trust Table 3.-Average interest rate on result of the amendments of fdnd held United States securities social security trust fund invest- ments and interest-bearing public to the Railroad Unemployment Insur- amounting to $10,556 million. f;ts8t end of spectfied period, ance Act, which effectively reduced The public debt reached its peak in the current contribution rate of 3 , when it amounted to percent to % of 1 percent retroactively $279, billion. In the Computed average interest rate to , 1948, although, legally, Treasury started a debt retirement (percent) contribution rates are scaled from ‘/2 program, and by the At end of- Old-ago Unem- of 1 percent to 3 percent depending gross public debt had dropped to $256 Interest. md survi- m,“-y “,“g?? ‘0~s insur- upon the size of the ‘balance to the billion. A large proportion of the debt mcc! trust fund debt fund in- invest- credit of the railroad unemployment retired or maturing consisted of se- :estments ments insurance account on September 30 curities with high coupon rates of in- of any year. Credits taken by con- terest which were paid off or refunded 2.570 .___--_._. 2.50 2.568 3.00 2.50 tributors during the last half of the into issues with lower rates. However, 2.586 2.50 year were $2.4 million. Benefit pay- the rise in the rate on short-term 2.598 Ei 2.566 2: 84 2: ments increased by 10 percent from issues, the higher accrued rate on 2.400 2.66 2: 50 2.059 2.44 2.21 $55 million in 1947 to $60 million in savings bonds purchased during the 1.956 2.26 1.89 1948. Even though contributions war, and the net rise in securities 1.919 2.20 1.91 1.965 2.14 1.93 dropped sharply and benefit payments issued to Government trust funds 2.04 1.94 increased slightly, the balance in the with relatively high interest earnings ;: iii 2.09 2.05 account increased by $41 million to caused the average interest rate on $948 million by the end of 1948. the debt as a whole to rise almost con- January- ___._- _ 2.155 2.09 2.05 February ______2.170 2.10 2.05 During 1948 the excess of receipts tinuously throughout 1948 (table 3). March .______.___ 2.168 2.10 2.05 over expenditures permitted the net On December 31, 1946, the com- April .___ -- ___.__ 2.174 2. 10 2.05 May. _____-.-___ 2.174 2.10 2.05 acquisition of $394 million in Gov- puted average interest rate was 2.057 June ____-___. ___ _ 2.182 2.21 2.16 July .______, 2.197 2.21 2.16 ernment securities and increased the percent; by the end of August- ._____ -__ 2.199 2.21 2.16 September-.w 2.200 2.21 2.16 total assets of the fund from $8,124 it was 2.144 percent, and by the end October. .__.___. 2.212 2. 16 million to $8,520 million. of 1948, 2.216 percent. November----- 2.214 ;:;: 2.16 The old-age and survivors insur- In November 1947 the Treasurer be- DW?ember--..--. 2.216 2.20 2.16

14 Social Security Table 4.-Investments of social secu- rity trust funds and the interest- bearing public debt at end of speci- Recent Publications in the fied period, 1936-48 [Amounts in millions] Field of Social Secwity* Social security trust fund inrestmcnts Social Security INTER-AMERICAN COMMITTEE ON SOCIAL SECURI~. Preliminary Study of a Old- Administration Common Plan of Work for the Sta- Per- wx CHILDREN’S BUREAU. Your Child From tistical Services of Social Insurance Atendof- cent and Unom- on the American Continent. Mon- Total of survi- ploy 6 to 12. Washington: U. S. Govt. VOrS ment treal: International Labor Office. amount pub- insur- trust Print. Off., 1949. 141 pp. 20 cents. lic ante fund Nov. 1948. (Bulletin No. 10.) 48 debt trust A guide for parents that explains the fund behavior of children, discusses their PP. physical and mental limitations, and Points out problems to be encoun? 1936.___ -_.. $33,699 $64 0.2 .-_--_. $64 suggests how their abilities can be best tered in compiling social insurance 1937__.___ -. 36, 715 1,138 3.1 Sk; 625 Limited statistics. Includes a paper on The 1938----..-. 38,899 1,926 5.0 1,064 developed as they grow older. 1939.----.-. 41,445 2,944 7.1 1,435 1,509 free distribution; apply to the Child- Child and Social Security, by Dr. 1940.--.-.. 44,458 3,962 91 1,945 Manuel Salcedo, and Recent Develop- 1941..-..--. 57,451 5,468 ::5 i:E 2,732 ren’s Bureau, Social Security Admin- 1942... .._.. 107,308 7,342 6.8 3,655 3,687 istration, Washington, D. C. ments in the Field of Social Security 1943.-.-.--. 164,513s 9,874 6.0 4,779 5,095 in America. 1944.-.-.-.. 228,891 12,546 5.5 5,967 6,579 Ross, MARY. Social Security in the 1945---.---. 275,694 14,562 5.3 7,n54 7,508 United States. Washington: U. S. INTERNATIONAL LABOR CONFERENCE. 1946---_._.. 257,649 15,643 6.1 8,079 7,564 Thirtieth Session, Geneva, 1947: 1947... .__.. 254,205 17.371 6.8 9,2R8 8,102 Govt. Print. Off., 1948. ‘72 pp. 20 cents. Record of Proceedings. Geneva: 1948 International Labor Office, 1948. Jmuarg.~~. 253,958 17,401 6.9 9,268 8,132 Traces the origin and development 676 pp. $5. February. 252, loo 17,651 7. 0 9,425 8,225 of social security in the United States March..... 250, fiY4 17,720 7.1 9, 530 8, 190 and describes in detail the various MCCABE, DAVID ALOYSIUS, and LESTER, April....--. 249,920 17,646 7. 1 9,506 8,140 RICHARD ALLEN. Labor May-.---- 249,958 17,771 7.1 9,506 8,265 programs and services under the So- and Social Jlln....~. 2YIl, 06’1 18.235 7.3 9,9.37 8,298 Organization. Boston: D. C. JUIY.....-e 251.168 18,185 7.2 9,917 8,268 cial Security Act. Includes a chronol- August.... 250,875 18.306 7.3 9,917 8,389 ogy of significant events in social se- Heath and Company, 1948. Rev. September. 250.518 1X, 631 7.4 10.282 8.349 ed. (Economics and Social Institu- October... 250, 300 7.4 10,256 8,314 curity and related fields, and a se- November. 250,391 7.5 10,256 8,481 lected bibliography. tions, Vol. 6.) 373 pp. $2.75. December- 250,579 7.6 10,556 8,496 Considers the problem of economic General insecurity, compensation for indus- trial accidents and unemployment, se- fund had increased to 2.09 percent by ADVISORY COUNCIL ON SOCIAL SECURITY. curity for old age, and social security the end of the year and to 2.10 percent Recommendations for Social Secu- issues. by the end of , when open- rity Legislation. A Report to the UNIVERSITY OF CHICAGO ROUND TABLE. market purchases ceased. The unem- Senate Committee on Finance from Should Congress Increase Social Se- the Advisory Council on Social Se- curity Benefits? Chicago : The ployment trust fund was affected less curity. Washington: U. S. Govt. by the open-market purchases because University, 1948. 29 pp. (No. 532.) Print. Off., 1949. (S. Dot. 208, 80th 10 cents. of a much smaller amount of net ac- Cow., 2d sess.) 236’pp. 40 cents. A radio discussion by David Dill- quisitions during the period; however, A compilation of the Council’s four man, Alton Linford, and S. H. Nerlove. the computed average interest rate reports-on old-age and survivors in- Includes a special supplement on was 1.94 percent as of December 31, surance, permanent and total disabil- social security in America and also 1946, increasing to 2.05 percent and ity insurance, public assistance, and the text of President Truman’s mes- 2.16 percent by the end of the ye’ars unemployment insurance-which ap- sage $0 Congress on May 24, 1948, 1947 and 1948 respectively (table 3). peared in 1948 as separate Senate asking for an expanded social security documents. By the end of 1948 the old-age and program. survivors insurance trust fund held ALTMEYER, ARTHUR J. “Social Secu- WILLIAMSON, WILLIAM RULON. Em- $8,328 million of 2%-Percent special rity: 1948 Developments and 1949 ployee Insurance Plans-Assisting Employees to Meet Personal Re- certificates of indebtedness, $4 mil- Prospects.” Social Work Journal, New York, Vol. 30, Jan. 1949. pp. sponsibilities Through Group In- lion of 2%-percent Treasury bonds, 4-7. $2 a year. surance, Pension Plans, Etc. New and $2,224 million of 2l/-percent York: Funk & Wagnalls Company, Treasury bonds. As of the same date *Prepared in the Library, Federal Secu- rity Agency. The inclusion of prices of 1948. 98 pp. (Section III, Book 5, the unemployment trust fund held publications in this list is intended as a Reading Course in Executive Tech- $7,698 million of 21/8-percent special service to the reader, but orders must be nique.) $6 for the section; books certificates of indebtedness, $4 mil- directed to publishers or booksellers and not sold separately. lion of as-percent Treasury bonds, not to the Social Security Administration “World Boom in Social Security.” or the Federal Security Agency. Federal U. S. News & World Report, Wash- and $794 million of 21/2-percent publications for which prices are listed Treasury bonds. should be ordered from the Superintend- ington, Vol. 26, Feb. 18, 1949, pp. ent of Documents, TJ. S. Government 54-56. 15 cents. (Continued on page 17) Printing Office.Washington 25, D. C. (Continued on page 18)

Bulletin, March 1949 15 Table 2.-Contributions and taxes under selected social Table 3.-Federal appropriations and expenditures under insurance and related programs, by specified period, Social Security Administration programs, by specified 1946-49 period, 1947-49 [In thousandsl [In thousands] - Retirement, disability, ) Fiscal year 19474f Fiscal yeai 19t8-49 and survivors insurance Unemployment iasurance Expendi E;;;;;i- Rail- Item tures AlWo- Appro- road priations through priations 1 Janoarythrough Period J~;;;Y %- unem-Ploy 1949 2 unem- ment ---_ Ploy- insur- ment ante Total __..__. -.-...- __... -.--...$1.438.i77 $‘309.941 F1,595,340 $1,018,242 taxes ’ contri- ___-______tions 1 ployees bu- Administrative expenses .._._.... _- 31,790 45,420 31,772 tions -. -.-I_ -_____ Federal Security Agency, Social I- -I- l--l- Security Administration 3..-... 42,376 24,508 45,318 1 24,023 Fiscal year: Department of Commerce, Bu- 194647. -___--_ _. ___ $1,459,492 $481,448 $380,057 $1,001,50~ i184,823 $141,750 reau of the Census...... __ 100 102 194748.. _._. -_- .._. 1,616,16” 482,585 557,061 1, ‘X7,08; 207,919 145,148 Department of the Treasury (.--- (9 7,2;; (7 7,6;: 7 months ended: --e.-.. 750,595 372,816 171,542 47G,231 40,114 72,118 &%ntstO Ststcs.-..--...... --.... 881.455 496,106 949,000 647,759 January 1948..____. 841,171 381,165 276,875 640,264 39,040 70,7i2 -.___- January 1949_... -_.. 912,121 407,396 286,914 634,651 44,794 4,999 Unemployment insurance and employment service admin- 1948 istration- . .._ -- ._.____...._..._ 130,455 6 37,907 130,000 96,549 Old-age assistance ._..___...._..._ 345.723 411,221 January.. ..___.____ -. 35,496 20,084 2,539 77,51[ 12.906 33 Aid to the blind- _.... ~~--.-._~.._ 726,000 10.246 11 797,000 11,511 February _..___. -_-_-- 277,662 IX, 579 6,499 109,5% 138,448 1,212 Aid to dependent children _._ I 86,74!31 111,884 March--.--- ____ .___. 30,415 18,978 132,618 6,864 12,912 36,401 Maternal and child health sew- April _..__ -- ____-- ___. 74,324 19,256 5,6Ki 112,186 2,921 76 ices....~...... -.--.-.--- 6,624 11,000 8,217 May _.______-.__-_-.._ 376, Ooo 19,998 11,598 132,47! 13,417 1,289 Services for crippled children..... 4,577 7,500 5,684 JUIW _---_.__ .___ -.... 16,590 24,607 123,808 5,712 1,181 35,399 Child welfare services.. _~. ~. 2,532 3,500 2,&u JUlY.-.-...~.-...~--~~ 63,057 5 244,676 2,378 112,OQi 1,586 Emergency maternity and infant August . ..__ -- ____--__ 379,573 24,331 17,161 152,242 12,924 : care...-...-...... -.----...... 1,748 60 September ..___.__ --__ 7, 968 26,779 121,632 10,97t 242 12 October- - ___._.__.._. 58,804 25.904 4,649 95,1X 1,683 Benefit payments, old-age and November ..___.. _.-__ 357,617 29,454 14.050 176,088 12,336 survivors insurance.. .._...... _ 8 511,6i6 5 280,600 9 599,000 8 337,440 December.--.---...-. 7,062 27,7G3 125,842 8,707 1,531 Reconversion unemployment bene- fits for seamen. ______-_. _ 3,170 1,445 1,920 1,271 1949 - I

January-. .__. . ..____ 38,039 28,489 1,201 79,355/ 14,492 l 2,564 1 Excludes unexpended balance of appropriations for preceding Escal year. * Inrludes expenditures from unexpended balance of appropriations for pre- - ceding Escal year. 1 Represents contributions of employees and employers in employments 3 1947-48 data exclude expenses for administering U. S. Employment Service: covered by old-age and survivors insurance. the Service became a part of the Social Security Administration on July 1, * Represents employee and oovernment contributions to the civil-service, 1948. Canal Zone, and Alaska Railroad retirement and disability funds; in recent 4 Amounts expended by the Treasury in administering title II of the Social years Ctovernment contributions are made in 1 month for the entire fiscal year. Security Act and the Federal Insurance Contributions Act, reimbursed from 3 Represents deposits in State clearing accounts of contributions plus pen- the old-age and survivors insurance trust fund to the general fund of the Treas- alties and interest collected from employers and, in 2 State?, contributions from ury. employees; excludes contributions collected for deposit in State sickness in- 6 Not available because not separated from appropriations for other purposes. surance funds. Data reported by State agencies; corrected to Mar. 1, 1949. 8 Excludes grants for employment service administration. -4 Represents taxes paid by employers under the Federal Unemployment 7 Amount appropriated for 194748 available until June 30, 1949. ‘I‘ax Act. 8 Actual payments from the old-age and survivors insurance trust fund. 6 Represents July contributions of $17.3 million from employees, and contri- 0 Estimated expenditures as shown in 1948-49 budget. butions for fiscal year 194849 of $225.4 million from the Federal Government Source: Federal appropriation acts and 194849 budget (appropriations); and $2.0 million from the District of Columbia for certain District government Daily Statement ofthe U. S. Treasury and reports from administrative agencies employees. (expenditures). S&t&: IlaiZg Statement of the U. S. 7’reaw~r~, unless otherwise noted. TRUST FUNDS next lower than the average interest percent. Other trust funds held most (Continued from page 15) rate. of the remainder. Among them, the The interest provisions for the un- national service life insurance fund Interest Rates employment trust fund investments held 22 percent; the civil-service re- The original Social Security Act have remained unchanged since the tirement and disability fund, ‘10 per- stipulated that investments of the establishment of the fund in 1936. cent; and the Government life in- old-age reserve account (superseded The rates on “special” obligations is- surance fund, 4 percent. + in 1940 by the old-age and survivors sued to it are determined in the same The securities held by the two trust insurance trust fund) must earn at manner as those for the old-age and funds at the end of December 1948 least 3 percent. The 1939 amend- survivors insurance trust fund, and comprised 7.6 percent of the total investments in other issues must bear interest-bearing public debt ($250.6 c ments, however, deleted all reference to a minimum yield except on “spe- rates at least equal to those of the billion) as compared with 6.8 percent cial” obligations issued to the fund, special obligations. at the end of December 1947 and 6.1 which are required to bear the average At the close of 1948 the two funds percent as of December 31,1946. The rate on the interest-bearing public owned United States securities total- percentage increases were due to net debt, computed as of the end of the ing $19,052 million, of which $16,026 acquisitions of almost $2 billion in million, or 84 percent, was in special month next preceding the date of obligations. The total amount of all 1947 and 1948-in contrast to more issue. If this average is not a mul- types of special issues outstanding than $1 billion in 1946-and the re- tiple of one-eighth of 1 percent, the was $31,714 million, of which the two duction in the interest-bearing public rate of interest is to be the multiple social security trust funds held 51 debt (table 4). Bulletin, March 1949 17