Bureau of Engraving and Printing

Fiscal Year Ended June 30, 1940

B.E'POiE.T OF THE SECIEE.TAB.T OF THE TREASIUKY 303 customs officers, total expenses of the Customs Service, and of the cost to collect $100 is listed below:

Customs collections and expenditures, fiscal years 1933 to 1940

Collections Cost to Fiscal year Customs for other Total Expendi receipts i departments, collections tures collect bureaus, etc. $100

1933 $251, 300, 560 $2, 765, 948 $254, 066, 508 $19,135,901 $7.53 1934 314, 058, 464 9, 456, 491 323, 514, 955 17, 636, 495 5.46 1935 346, 522, 111 17. 932, 339 364,454,450 19. 516, 708 5.36 1936 388,784, 948 23,023,542 411,808,490 20, 311, 751 4.93 1937. 488, 342, 746 35, 928, 725 524, 271, 471 20, 515, 558 3.91 1938 359, 573, 654 32, 521, 810 392, 095, 464 20, 610, 568 5. 26 1939- 321, 409, 995 29, 012, 286 350, 422, 281 20,784,163 5.93 1940 . 350, 851, 561 32, 428, 014 383, 279, 575 21,127,673 5.61

1 Excludes duties for Puerto Rico but includes other Puerto Rican collections.

BUREAU OF ENGRAVING AND PRINTING

Activities during the fiscal year 1940 The deliveries of currency, securities, stamps, and. miscellaneous printings by the Bureau during the year amounted to 446,846,250 sheets, an increase of 3,199,163 sheets over the previous year. A comparative statement of deliveries of finished work in the fiscal years 1939 and 1940 follows:

Deliveries of finished work, fiscal years 1939 and 1940

Sheets Face value. Class 1940 1940

Currency: United States notes 5, 547,000 4,025,000 $193, 260, 000 Silver certificates 95,113,000 75, 975,000 1, 666,620,000 Federal Reserve notes . 10. 366, 050 8, 983, 950 1, 901, 280, 000 specimens 40 Total. 88, 983, 990 3, 761,160,000 Bonds, notes, bills, certificates, etc: Bonds: Pre-war 2,085 1,340 1, 002,400 Treasury 665, 948 530,163 4, 350, 626, 000 United States savings 4,077, 000 5, 514, 000 1, 750, 725,000 Consolidated Federal farm loan for the Federal land banks 31, 000 13, 700 41,880,000 Farm loan 1 _. 16, 700 25,996 21, 797,000 Federal Farm Mortgage Corporation 6,500 3, 5.50 60,000, 000 Home Owners' Loan Corporation 1, 443,055 62,155 230, 850,000 Insular: Philippine 9,000 1,075 637, 500 Puerto Rican _^ 2,841 1,091, 500 Notes: Treasury 159, 625 159,195 4, 895,000,000 Commodity Credit Corporation 65,000 992,000,000 Federal National Mortgage Association 56,150 Reconstruction Finance Corporation 120,000 48, 000 801,000,000 United States Housing Authority 34, 500 Treasury bills _ 19. 570 '20," 482' 7,0.58,172, 000 Certificates: Cuban silver. — 578,333 Philippine treasury.. 2,195,600 14, 962, 000 Debentures: Consolidated collateral trust for the Federal inter mediate credit banks 17, 000 16, 000 260, 000, 000 Federal home loan banks consolidated 200 Federal Housing Administration, mutual mortgage insurance fund. 5, 000

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304 IREPORT OF THJE. SEiORETARY OF THE TREAS'URY

Deliveries of finished work, fiscal years 1939 and 1940^Contmned

Sheets Class Face value, 1940

Bonds, notes, bills, certificates, etc.—Continued Interim certificates 37, 675 Interim transfer certificates for postal savings bonds 2,000 1,000 Specimens: Bonds 135 571 Notes 44 12 Debenture.s 32 Interim certificates ... 6 Total 7, 287, 756 8,660^680 $20,479,643,400

Sheets Number of stamps, etc., 1940

Stamps: Customs.. 250, 000 3,182,960 Internal revenue: United States ..... 141, 594, 373 147, 226,135 13,280,660,070 District of Columbia 131, 750 142, 686 28, 637, 200 Federal migratory- bird hunting.. 37, 764 Philippine 217, 460 55, 226 4, 638, 900 Puerto Rican 1, 031, 685 1, 244,096 75, 076, 660 Virgin Islands 650 65,000 Specimens, United States 20 18 1,481 Postage: United States . 147, 233, 097 164,912,027 16, 576, 284, 287 United States postage surcharged "Canal Zone" 12, 200 1, 220, 000 Canal Zone 1 67, 456 164, 851 10, 040,890 Philippine 747, 276 1, 024, 592 85, 580, 508 Specimens, United States 195 95 6,211 Postal savings 5,649 19, 628 1, 962, 830 Specimens '. . 4 400 Total. 291, 316, 715 314, 938, 806 30, 067, 257, 297 Miscellaneous: Checks 29, 313, 261 27, 501, 995 137, 509, 975 Warrants 51,100 44,104 205, Oil Commissions . 132, 386 193,869 108, 419 Certificates 3, 878, 493 4, 202, 281 17, 222,107 Drafts 7, 088 6,500 13, 000 Transportation requests 293, 254 327, 299 1, 636, 495 Nontransferable food order and nontransferable surplus food order stamps 38, 229 1, 635, 721 1 259, 388, 592 Nontransferable cotton order and nontransferable surplus cotton order stamps 17, 090 3, 418, 000 Other miscellaneous 299, 248 319, 932 6,460, 087 Specimens... 3,105 11, 508 57, 640 Blank paper .402 2,475 Total. 34, 016, 566 34, 262, 774 426, 019, 226 Grand total.. 443, 647, 087 446, 846.. 250

' Excludes .395,000 fillers. Dies were engraved for new issues of postage stamps as follows: jssug Denomination Commemorative, series 1939: (cents) Three-hundredth Anniversary of the Introduction of Printing in Colonial America 3 Fiftieth Anniversary of the Statehood for North and South Dakota, Montana, and Washington. 3 Commemorative, series 1940: Fiftieth Anniversary of the Pan American Union 3 Eightieth Anniversary ofthe Pony Express 3 Fiftieth Anniversary of Wyoming Statehood . 3 Fiftieth Anniversary of Idaho Statehood . 3 Four-hundredth Anniversary of the Coronado Expedition , 3 Famous Americans series, 7 groups of 5 denominations each . 1, 2,3,5,10 Authors: Irving, Cooper, Emerson, Alcott, Clemens. Poets: Longfellow, Whittier, Lowell, Whitman, Riley. Educators: Mann, Hopkins, Eliot, Willard, Washington. Scientists: Audubon, Long, Burbank, Reed, Adams. Composers: Foster, Sousa, Herbert, MacDowell, Nevin. Artists: Stuart, Whistler, Saint-Gaudens, French, Remington. Inventors: Whitney, Morse, McCormick, Howe, Bell.

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REPORT or THE SEORETARY OF THE. TREASURY 305 Plates were prepared for a number of new issues of securities and miscellaneous jobs, the principal items being Commodity Credit Corporation notes, series D and E; Reconstruction Finance Corpora tion notes, series S; Home Owners' Loan Corporation bonds, series N; strip stamps for export distilled spirits bottled in bond; reimported American distilled spirits stamps; cotton order and surplus cotton order stamps; and Puerto Rican cigar and cigarette stamps. New designs and models were made for Tennessee Valley Authority bonds of four denominations; postal savings stamps; documentary, stock transfer, and silver tax stamps, in denominations from 1 cent to $1,000; and various Puerto Rican bonds and revenue stamps. Printing orders for revenue stamps for 1940 were abnormally heavy, due to some extent to recent legislation increasing the Federal taxes on cigarettes, tobacco, and other products. Also several large tobacco manufacturers reduced the contents of their packages, and stamps of new denominations were required. During the year, representatives of this bureau gave demonstra tions of the printing of postage stamps at four exhibitions, two of which were held in Washington, D. C, October 10 to 12, 1939, and May 2 to 4, 1940; one at the New York World's Fair, May 11 to 23, 1940; and one at the Golden Gate International Exposition in San Francisco, Calif., May 25, 1940, to continue until the close of the exposition. At the beginning of the fiscal year there were 5,802 employees on the pay roll, while at the end of the year the number of employees was 5,649, or a decrease of 153 persons, including 68 who were holding indefinite appointments. This decrease was occasioned by the re duction in the printing requirements, particularly with respect to United States currency and Federal Reserve notes. There was expended during the year for salaries and expenses $12,142,741.25, a decrease of 10.91 percent under the previous year. The following statement shows the appropriations, reimbursements, and expenditures for the fiscal years 1939 and 1940, respectively:

Appropriations, reimbursements, and expenditxires, fiscal years 1939 and 1940

Increase or 1940 decrease (—)

Appropriations: Salaries and expenses $9, 200,000.00 $8,450,000.00 -$750,000.00 Deficiency 1,000,000.00 -1,000,000.00 Reimbursements to appropriation from other bureaus for work completed ' ' 3, 475, 520.83 3, 718,888.91 243, 368. 08 Total 13, 675, 520. 83 12,168, 888. 91 -1,506,631.92 Expenditures, salaries and expenses 2 13, 628, 942. 37 12,142, 741. 25 -1,486,201.12 Unexpended balance 46, 578. 46 -20,430.80

1 An additional amount of $69.75, received from employees for lost identification cards, locker keys, pack age-booth checks, and badges, was deposited to the credit of the Treasurer of the United States as miscel laneous receipts. 2 Includes $11,300 transferred to Bureau of Standards for research work, $40,000 transferred to salaries and expenses, guard force. Treasury Department, for service rendered in connection with the protection of cur-. rency, bonds, stamps, and other papers of value, in each of the fiscal years 1939 and 1940, and $388,529.46 and $374,718.79 transferred to retirement fund in the fiscal years 1939 and 1940, respectively.

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306 'REPORT OF THE. SEORETARY OF THE TREASURY

Review of activities since 1933 The following statement shows the deliveries of finished work by the Bureau for the fiscal years 1933 to 1940:

Deliveries of finished work, fiscal years 1933 to 1940

[Expressed in single subjects]

Internal revenue and Currency Bonds, notes, and Fiscal year certificates customs stamps , 1933 957, 999, 426 10, 625, 580 8,374, 390. 793 1934 653, 528, 652 11,628.656 9, 562. 435. 380 1935 - 659, 692, 308 29, 584, 512. 10,675,415,410 1936 930, 376,800 58, 960, 794 11, 208, 847,190 1937 . 960,190,200 18, 322,176 12, 601. 944, 730 1938. 1, 086, 379, 200 18.589,383 12, 218, 374, 982 1939 . 1, 332. 312, 600 13, 975, 546 12, 791, 225, 362 1940 1, 067, 807, 880 17, 738, 392 13, 392,162,171

Total .- .. 7, 648. 287, 066 179,425,039 90, 824, 796,018

Fiscal year Postage and postal Checks, warrants, Total savings stamps etc.

1933 . . ._ - - - 12, 507, 917, 806 72, 767,041 21, 923, 700, 646 1934 11, 855,830, 740 144, 753, 745 22, 228,177,173 1935 - 13, 924, 561, 459 105, 553,853 25. 394,807, 542 1936 14,011,892,997 186, 356, 656 26, 396, 434, 437 1937 1 15, 332, 942, 626 173, 278, 939 29, 086, 678, 671 1938 15, 217, 573, 068 138. 549. 767 28, 679, 466, 400 1939 15, 286, 239, 831 171, 762. Oil 29, 595, 515. 350 1940 16, 675, 095,126 426, 414, 226 31, 579. 217. 795 Total 114, 812, 053. 653 1, 419,436. 238 214, 883, 998. 014

On March 9, 1933, the date of the enactment of legislation to pro vide relief in the banking emergency, this Bureau was directed to proceed with the production of 15,524,000 sheets of new Federal Reserve Bank notes. As there was not sufficient time to engrave new dies and make plates for the printing of this new currency, the national bank currency stock already in production was used. A stock of notes for each Federal Reserve Bank was prepared by over printing the name of the bank, the bank symbol letters, and the facsimile signatures of two of its officers. Rush orders were also received for over 5,000,000 sheets of the standard Federal Reserve notes. Additional storage vaults had to be provided and numerous changes had to be made in operating methods to expedite the handling and processing of the work. The first shipment of the new notes was delivered at the Federal Reserve Bank of New York on March 11, 1933. From that date to June 30, 1933, deliveries of currency to all Federal Reserve Banks amounted to $2,547,480,000 in Federal Reserve notes and $319,340,- 000 in Federal Reserve Bank notes. The urgent demand subsided in a short time, and deliveries of Federal Reserve Bank notes were soon discontinued. In 1934 designs were prepared and approved for a new issue of Federal Reserve notes. These notes, designated as series 1934, differed from the previous issue in that the gold redemption clause was elimi nated. Deliveries of the new notes, in denominations from $5 to $1,000, were made during the succeeding year.

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RE'PORT OF THE SEiORETARY OF THE TRIEASIURY 307

A new issue of silver certificates, in denominations of $1, $5, $10, $20, and $100, was authorized in 1934. These certificates differed from those previously issued in that a change was made in the certifi cation as to the security back of these notes and in the text appear ing on the face, the seal which formerly appeared to the left of the portrait was placed on the right side, and a large numeral designating the denomination was printed where the seal was formerly located. In the latter part of 1935 a new design for the $1 silver certificate was adopted. Production of these certificates, designated as series 1935, was begun in the following year. The design of the back of this certificate presents the obverse and reverse of the Great Seal of the United States. The face shows only minor changes, but its produc tion embodies a new process whereby the signatures of certifying officers and the number and seal are overprinted oil the certificates in one operation. Formerly, the signatures were engraved in the faceplate, thereby necessitating the making of new plates and causing considerable delay in the production of the certificates whenever there was a change in certifying officers. To conform to the established color scheme providing for the printing of signatures in black and the seal and serial number in blue, it was necessary to convert the number ing and sealing presses from single color to bi-color machines. This task was accomplished gradually, and at the present time all $1 silver certificates are completed in this manner. The first forei,gn currency ever produced in this Bureau wais printed during 1935 for the Republic of Cuba. This order, printed under authority of the State Department, amounted to approximately 500,- 000 sheets. The paper, manufactured by the same contractor who furnishes paper to the United States Government, dift'ers from the paper for United States currency in that it contains red silk fibers only, whereas the paper for United States currency contains red and blue silk fibers. The Cuban certificates involve SLTL additional printing operation—a plate printed tint on the face. Further orders for Cuban currency were printed from time to time, as were numerous orders for currency for the Philippine Islands. The financing operations of the Treasury Department and of many of the newly created Federal agencies and other activities ocJcasioned by the passage of legislation by the Congress required the preparation of various types of bonds and other forms of securities. The most outstanding issues included Treasury bonds and notes, United States savings bonds, registered adjusted service bonds. Home Owners' Loan Corporation bonds, and Federal Farm Mort gage Corporation bonds. Practically all,of these security issues were rush jobs and, in most instances, it was necessary to make new designs and models and prepare engraved dies and plates before actual printing could be begun. Printing orders were received during 1934 for 6,000,000 Home Owners' Loan Corporation bonds and 4,000,000 Federal Farm Mortgage Corporation bonds. In order to meet the delivery schedules submitted by the issuing offices, at certain periods of the year 75 percent of the presses were used for printing these bonds. A new type of security, the United States savings bonds, was ordered by the Department in 1935 in denominations of $25, $50, $100, $500, and $1,000. A great amount of original engraving was necessary in con nection with the manufacture of the dies and plates for these bonds.

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308 REPOIRT OF THE, SECRETARY OF THE TREASOTRY

but deliveries commenced within a month after the initial order was received. Provision was made on the face of the bond for the inser tion of the name and address of the purchaser and the date of sale. A perforated original stub was attached to each bond and a duplicate stub was affixed for record purposes. There have been four issues of these bonds, and the total number delivered to June 30, 1940, aggregated over 20,000,000 bonds. In 1933, following the passage of legislation modifying the Pro hibition Act, large orders were received requiring the engraving and printing of special tax stamps for breweries and dealers. Twenty- one varieties of stamps for fermented liquor and wine were prepared. The repeal of the eighteenth amendment to the Constitution revived the issue of a number of liquor stamps which had been discontinued during the prohibition period. In some cases it was found expedient to change the size of the stamps, which made it impossible to use the old rolls and dies still held in storage. In 1934 a rush order was received for 16,000,000 sheets of distilled spirits bottle strip stamps for the collection districts. These stamps were plate printed in sheets of 50 subjects, ranging in denominations from K pint to 1 gallon. The following year, as a protection against illegal use, a serial number was overprinted on each stamp. To ac commodate this additional printing the size of the stamp was enlarged and arranged in sheets of 42 subjects. Later, a less than K-pint de nomination was printed without numbers. The printing requirements for bottle strip stamps continued to in crease each year until the quantity ordered for the fiscal year 1940 was 1,326,144,000 stamps. In addition to the liquor stamps printed for the United States Government, a special issue was ordered by the District of Columbia for local tax purposes. One of the largest emergency jobs undertaken by this Bureau was the Civil Works Administration checks. The printing of these checks was started in the latter part of November 1933, and deliveries were rushed to all disbursing officers in the country for use during the first week in December. Delivery requirements continued at the rate of approximately 4,000,000 checks a week until the spring of 1934, when a gradual decline in orders took place. After May 1, 1934, no further shipments were made. In 1935, orders were received for the printing of checks for the Emergency Relief Administration. Although the quantity required per week was approximately one-half of the number required for the Civil Works Administration during the preceding year, the job was more complicated due to the fact that emergency relief checks were drawn on the Treasurer of the United States, through the Federal Reserve Banks in the respective districts, and it was, therefore, necessary to make plates and prepare a stock of checks for each of the 12 Federal Reserve districts. The quantity ordered increased each year until in 1940 the total requirements aggregated 60,000,000 checks. During the years 1933 to 1940, 145 new designs and models for various denominations of United States postage stamps were pre pared and approved. A great number of these were commemorative issues, while others were new series of regular postage stamps super seding certain previous designs. Among the large issues of stamps

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REPOET OF THE. SECEETARY OF THE TRIEAS'URY 309

were the National Park series of 1934, the Army and Navy series of 1937, and the Famous Americans stamps of 1940. Deliveries of stamps to meet the requirements of the Post Office Department have increased steadily each year. The quantity of postage stamps printed and delivered in 1940 amounted to approxi mately 17,000,000,000 stamps. The initial schedule for food order stamps (orange) and surplus food order stamps (blue) was received in 1939. During that year orders were received for over 6(),000,000 stamps, or nearly 2,000,000 books, and required that the stamps be gummed, perforated, and assembled in 13 different series of books, according to the quantity or combination of stamps per book. These stamps were first printed from 96-subject plates on flatbed power presses. Later on, 200- SLibject plates were made for power presses and finally, with the avalanche of orders, 200-subject curved plates were prepared for use on rotary presses. Orders for these stamps increased in 1940, when the food stamp program spread to a greater number of cities. De liveries for that fiscal year aggregated 259,783,592 stamps, comprising 8,313,403 books. In the latter part of January 1940, the first order was received for the production of cotton order stamps (green) and surplus cotton order stamps (brown). These stamps were required to be gummed, perforated, and assembled in 9 different combinations of books. Production was begun as soon as engraved plates could be prepared and the amount delivered to June 30, 1940, was 3,418,000 stamps, or 134,002 books. The stamps were printed on rotary presses, 200 subjects on each plate. Numerous developments and improvements were accomplished in connection with the processing methods and in the design and con struction of machinery and equipment employed in the production of currency securities, etc. The most important items include the following: The designing and installation of photo electric cell equip ment on rotary postage stamp perforators; the redesigning and re building of currency wetting machines, and the development of a new method for the wetting of currency paper; the designing and construction of new machines for sizing currency, providing for automatic temperature control of the sizing solution and of the drying units; the installation of new presses for platering securities, and the relocation of the platering activities within the sizing room; the conversion of numbering, sealing, and separating presses from single color to two-color machines, to permit the printing of signatures of certifying officers; the installation of sound and vibration absorption material to isolate the machines from their foundations; the designing of new semiautomatic banding machines for welding the steel tapes encircling the packages of currency; the designing and installation of a research laboratory for testing materials used in the manufacture of the various classes of work; the installation of improved lighting and ventilating facilities in all work rooms; and the construction of a new power substation. The new annex building, authorized by Congress on August 12, 1935, was ready for occupancy in the early part of 1938. The annex contains 840,967 square feet of floor space, of which approximately two-thirds is occupied by Bureau activities and the remainder by other divisions of the Treasury Department.

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310 :REP0RT OF THE SECRETARY OF THE TREASnjRY

To facilitate the travel of employees and the transportation of materials, tunnels connect the main building with the annex and the annex with a receiving platform adjoining the railroad yards. The passage in 1934 of the 40-hour week law for mechanics reduced the working hours of 769 employees of this Bureau from 44 to 40 hours a week. The remainder of the employees, 3,289, were not affected by the act. This presented a confusing situation with one group of employees engaged on a basis of 40 hours a week, while another group employed upon the same job was required to work 44 hours a week. This condition, however, was remedied on July 1, 1936, by legislation which placed all employees on the basis of a 40-hour week. Eft'ective May 1, 1937, the mechanics and their helpers, employees not under the Classiflcation Act, were granted a 15 percent increase in compensation for night work to conform with the practice estab lished in another Government organization. The gradual diminishing of the plate printing force because of re tirements made it advisable to appoint a limited number of young men to learn the art of plate printing. During the latter part of 1938, 32 apprentices were appointed, the flrst group since. 1918. Three additional apprentices were taken on in the flscal year 1939, making a total of 35 serving in this capacity. At the beginning of the flscal year 1933, when the printing program was small in volume, the problem of overemployment confronted the Bureau, as was the case during the previous 5 years. A system of furlough was then in effect, and continued until March 1, 1935. Beginning in the last quarter of the flscal year 1935, the work steadily increased and kept the entire force operating on a full time basis. In this period the personnel was increased from 4,139 employees in 1935 to 5,649 at the close of the flscal year 1940.

COMMITTEE ON ENROLLMENT AND DISBARMENT The Committee on Enrollment and Disbarment is an administra tive and judicial body. It has charge of the enrollment of attorneys and agents for practice before the Treasury Department and conducts hearings in disbarment proceedings. An attorney, not a member of the committee, represents the Government before the committee. All complaints are flled with the attorney for the Government, who institutes proceedings in disbarment or suspension if the charges warrant such action. The committee also issues licenses to custom house brokers and makes flndings of fact and recommendations to the Secretary in proceedings for the revocation or suspension of such licenses.

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REPORT OF THE SECRETARY OF THE TREASURY 215

The ports of Ajo, Ariz., Unalaska, Alaska, and Molson, Wash., and the stations of Columbia Falls, Mont., and Guayanilla and Jobos, P. R., were abolished. Cost oj administration.—The total revenues collected by the Customs Service, including collections for other departments and Puerto Rican collections other than duties, amounted to $429,544,621 as compared with $383,279,575 in 1940, an increase of 12.1 percent during the year. The expenses, however, were decreased by $504,250 to $20,623,423 in 1941 and the cost to coUect $100 was only $4.80 in 1941 as compared with $5.51 in 1940.

DEFENSE SAVINGS STAFF Under the Public Debt Act of 1941, approved February 19, 1941 ^ the Secretary of the Treasury was authorized, with the approval of -the President, to issue, through the Postal Service or otherwise, United States savings bonds and United States Treasury savings certificates, the proceeds of which should be available to meet any public expenditures authorized by law or to retire outstanding obligations of the United States. Under this authorization new issues of United States savings bonds and stamps were developed to help in financing the national defense program. In order to promote the sale of these bonds and stamps throughout the nation, the Defense Savings Staff was established in the Office of the Secretary in accord ance with Treasury Department Order No. 39, dated March 19, 1941. (For copy of the order, see p. 394.) The Defense Savings Staff took over those functions formerly performed by the Division of Savings Bonds in connection with the preparation of publicity material, and expanded these activities into an intensive campaign to encourage citizens to make wise investments, while at the same time supplying the Government with some of the tremendous sums of money needed for national defense. The Staff is composed of two divisions: a Field Division and a Division of In formation. The Field Division has the task of aiding in the establishment, in each State and Territory, of a State defense savings committee, which, in turn, has the duty of promoting the organization of county, city, and other local defense savings committees. The Division of Information is charged with the task of communi cating to the people, through the various existing channels, adequate information about the new bonds and stamps, the purposes of the program, and the progress of the campaign. BUREAU OF ENGRAVING AND PRINTING The deliveries of currency, securities, stamps, and miscellaneous printings by the Bureau during 1941 amounted to 460,614,558 sheets, an increase of 13,768,308 sheets over the previous year. A comparative statement of deliveries of finished work in the fiscal years 1940 and 1941 follows.

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216 REPORT OF THE SECRETARY OF THE TREASURY

Deliveries of finished work, fiscal years 1940 and 1941 ^

Sheets Face value, Class 1941 1940 1941

Currency: United States notes 4,025,000 3, 650, 000 $168, 600, 000 Silver certificates 75, 975, 000 76, 775, 000 1, 551, 300, 000 Federal Reserve notes. 8,983,950 11,362,950 2, 274, 960, 000 Specimens... 40 33

Total. 8,983, 990 91,787,983 3, 994,860, 000 Bonds, notes, bills, certificates, etc.: Bonds: Pre-war 1,340 881 841, 000 Treasury 530,163 985,056 8,946,806, 400 United States savings 5, 514, 000 11, 852, 000 5, 399, 300, 000 Consolidated Federal farm loan for the Federal land banks : 13, 700 9,800 63, 550, 000 Depositary . ... 2,000 Farm loan 25, 996 17,383 29, 721, 000 Federal Farm Mortgage Corporation 3,550 4,500 40, 500, 000 Home Owners' Loan Corporation.. 62,155 1,055 185,000, 000 Insular: Philippine... 1,075 7,850 1, 005, 000 Puerto Rican : 1...... 2,841 13,856 5, 492,000 Notes: Treasury 159,195 138,900 3, 065,100, 000 Commodity Credit Corporation •. 65, 000 38,750 571, 550, 000 Reconstruction Finance Corporation... 48,000 136,900 2, 206,900, 000 United States Housing Authority.. 27, 800 260,000, 000 Treasury bills. 20,482 82,030 23, 456, 276,000 Certificates: Indebtedness . 300 Philippine treasury 2,195, 600 32, 000 4,000, 000 Debentures: Consolidated collateral trust for the Federal inter mediate credit banks 16,000 39, 000 505, 000, 000 Federal home loan banks j3onsolidated 23, 860 121,000,000 Federal Housing Administration: Housing insurance fund 500 10,000,000 Mutual mortgage insurance fund 8,200 13,400,000 Interim certiflcates 250 Interim' transfer certificates for postal savings bonds 1,000 Specimens: Bonds 571 279 Notes and bills...---• 12 24 Debentures. - Interim certificates Total- . 8, 660,680 13,424, 214 44, 885,441, 400

Sheets Number of stamps, etc., 1941 1940

Stamps: - Customs 136, 599 101,875 2, 026, 250 Internal revenue: United States ,226,135 149,712.063 13,976,014,881 District of Columbia .142, 686 139,340 27,868,000 Federal migratory-bird hunting 23, 489 2, 630, 740 Philippine 55, 225 250, 300 21,025. 200 Puerto Rican ,244, 096 1,164; 300 76, 353, 500 Virgin Islands. 650 specimens, United States.. '. 18 145 21,240 For experimental purposes. United States Postage: United States-. 164, 912, 027 160, 508,890 16, 584, 731, 670 United States postage surcharged "Canal Zone"^. 12, 200 Canal Zone -.-. 164,851 150, 239 • 15, 085,060 Philippine. -.-. 1, 024, 592 895, 661 86,871, 944 Specimens, United States ' 95 113 7,251 Postal savings - 19, 628 1, 349,189 106, 232, 750 Specimens-. 4 6 425 Total. 314, 938,80.6 30,898,868, 919

1 Fractional parts of sheets of one-half or more have been included as whole sheets; where less than one- half, fractions have been disregarded.

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REPORT OF THE SECRETARY OF THE TREASURY 217

Deliveries of finished work, fiscal years 1940 and, 1941 —Continued

Sheets Number of Class stamps, etc.a 1941

Miscellaneous: Checks 27,501,995 27,386,154 136, 983,170 Warrants 44.104 62, 377 237,927 Commissions - _ 193,869 521, 075 287.826 Certificates _ .- 4,202, 281 4,936,972 19,043, 377 Drafts.. _• 6,500 25, 775 51, 550 Transportation requests 327, 299 1, 316, 751 6, 583,755 Nontransferable food order and nontransferable surplus- food order stamps... 1, 635, 721 5,906, 963 21,170,801,000 Nontransferable cotton order and nontransferable sur plus-cotton order stamps 17,090 299,085 8 59,817,000 Other miscellaneous _ _. 319,^932 587, 369 4,100,958 Specimens 11, 508 2,324 128,256 Blank paper..-_-_. ..-. 2,475 61,905 Total - J. — 34, 262, 774 41,106, 750 1, 398. 034,819 Grand total _._ , 446,846, 250 460,614,658

2 Excludes 11,398,000 blank fillers. 3 Excludes 783,000 blank fillers. Dies were engraved for the following new issues of postage stamps. Denomination Issue ' (cents) National Defense, series 1940 , . 1,2,3 Seventy-fifth Anniversary of the Thirteenth Amendment to the Constitution, series 1940 3 One-hundred-fiftieth Anniversary of Vermont Statehood, series 1941 . 3 Air Mail", series 1941...... J 6,10,15,20,30,50 Canal Zone, postage due . 15 Canal Zone Air Mail . . 30 Philippine postage, series 1941 (centavos) _ 2 Philippine Air Mail, series 1941 (centavos) • 8,20,60 . Philippine Air Mail, series 1941 (peso) •. 1 Dies and plates were prepared for various classes of bonds, revenue stamps, and miscellaneous printed work. The principal items in cluded Treasury bonds, bills, and notes; Puerto Rican bonds and interim certificates; Philippine Islands currency, bonds, and revenue stamps; documentary, stock transfer, and silver tax stamps; rectified and distilled spirits stamps; certificates for the purchase of wine tax stamps; and migratory-bird hunting stamps. In connection with the defense program, the printing of new issues of United States savings bonds and postal savings stamps was author ized in March 1941. The savings bonds comprised three series, designated as series E, F, and G, respectively, and were in denomina tions of $25, $50, $100, $500, and $1,000 for series E; and denomina tions of $100, $500, $1,000, $5,000 and $10,000 for series F and G. The postal savings stamps, designated series 1941, included lOjzS, 25^, 50{i, $1, and $5 denominations. Dies and plates were prepareci and by June 30, 1941, deliveries of the printed securities aggregated over eight million bonds and one hundred and five million stamps. At the beginning of the fiscal year the number of employees on the pay roll was 5,649, while at the end of the year the total number was 6,345, an increase of 696 persons, or 12.3 percent. This additional personnel was occasioned by the increased volume of plate-printed work required, particularly with respect to Federal Reserve notes, United States savings bonds, postal savings stamps, distilled spirits bottled strip stamps, and food order and cotton order stamps.

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218 REPORT OF THE StECRETARY OF THE TREASURY Due to the insufficient number of eligibles on the Civil Service registers, considerable difficulty was experienced in obtaining plate printers, printers' assistants, and skilled helpers. In some instances it was necessary to make temporary appointments of qualified per sons outside the register. In. anticipation of future production re quirements, the Civil Service Commission was requested to. conduct ah examination for apprentice plate printers. It was also requested that the minimum age of the applicants be lowered from sixteen to fifteen years, and that eligibles be retained on the register until they have reached their twenty-second year. The unit prices for most of the major items of materials purchased . during the fiscal year 1941 were considerably higher than the previous year. The price of unbleached wiping paper for flatbed printing increased 71.79 percent; bleached wiping paper, 36.58 percent; wiping paper for rotary printing, 15.03 percent; revenue paper, 26.47 percent; postage stamp paper, 16.63 percent; dextrine, 15.89 percent; rubber drilling, 16.92 percent; and certain items of dry colors, 4 to 18 percent. Materials oh which price decreases were jioted included check paper, 19.54 percent; light separator paper, 3.99 percent; and mixed black, 8.91 percent. . Expenditures for the year amounted to $13,203,911.53, an increase 'Over the previous year of approximately 8.74 percent. The following :statement shows the appropriations, reimbursements, and expendi- tnres for-the fiscal years 1940 and 1941, respectively.

1940 1941 Increase

Appropriations: Salaries and expenses ..- $8,450,000.00 $8,450,000.00 Deficiency 260,000.00 $260,000.00 Reimbursements to appropriation from other bureaus for work completed 1 .. 3, 718, 888. 9l' 4,562,477.23 843, 588. 32

Total .--- '--- 12,168, 888.91 13, 272, 477. 23 1,103v 588. 32 Expenditures, salaries and expenses 2 12,142, 741. 25 13, 203, 911. 53 1,061,170. 28

Unexpended balance -_ _ .- 26,147.66 68, 565. 70 42, 418. 04

1 An additional amount of $191.75, received from employees for lost identification cards, locker keys, package-booth checks and badges, was, deposited to the credit of the Treasurer of the United States as miscellaneous receipts; and $37.50, received from reimbursements for jury service by employees, was de posited to general fund receipt account. 2 Includes $11,300 transferred to Bureau of Standards for research work; $40,000 transferred to salaries and expenses, guard force. Treasury Department, for service rendered in connection with the protection of currency, bonds, stamps and other papers of value, in each of the fiscal years 1940 and 1941; and $1,776 trans ferred to "United States Oflicial Mail and Messenger Service, Post Office Department" in the fiscal year 1941. The amounts of $374,718.79 and $377,132.19 were transferred to the retirement fund in the fiscal years" 1940 and 1941, respectively. COMMITTEE ON ENROLLMENT AND DISBARMENT. The Committee on Enrollment and Disbarment is an administra tive and judicial body. • It has charge of the enrollment of attorneys and agents for practice before the Treasury Department and conducts hearings in disbarment proceedings. An attorney, not a member of the committee, represents the Government before .the committee. All complaints are filed with the attorney for the Government, who insti tutes proceedings in disbarment or suspension if the charges warrant such action. The committee also issues licenses to customhouse brokers and makes findings of fact and recommendations to the Sec retary in proceedings for the revocation or suspension of such licenses.

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156 REPORT OF THE SECRETARY OF THE TREASURY

facilities so as to avoid delay in the handling of imports at new loca tions and in unusual quantities as a result of the dislocation of com merce due to World War conditions. The increasing use of larger trucks to move from the piers critical materials, especiahy wool, for which there was an urgent need in industry and which was imported in much larger quantities than formerly, necessitated the increase in the capacity of many customs scales and the relocation of others. Both of these accomplishments were performed without delay or serious interference with the movement of merchandise and without detriment to the revenue. In addition, this Division assisted, as in the past, in the preparation of data and plans for customs houses, appraiser's stores, and border stations as well as the selection of sites for new buildings necessitated by the relocation or new construction of highways crossing the border. Division oj Laboratories.—During the fiscal year 1942, the ten cus toms laboratories tested.^ a total of 100,562 samples of merchandise, only 2.8 percent fewer than in the previous year. The number of samples of sugar, ores, petroleum products, and most other types tested constituted about the same ratio of the total as in 1941. The number of wool samples tested, however, greatly increased from 1,318 in 1941 to 8,000 in 1942 as a result of the inception of the wool testing program on October 1, 1941. The increase in revenue derived from importations of wool directly attributable to the increased accuracy of the sampling and testing procedure is estiinated to be approximately $5,000,000 annually. The Division of Laboratories also made available to the Army, Navy, Lend-Lease Administration, Office of Price Administration, Postal Censors, and other Federal agencies the services of the customs laboratories. These agencies utilized to a considerable extent the diversified experience, technical skill, and equipment available in customs laboratories to satisfy some of their technical needs. Changes in ports and stations.—During the year two ports of entry were established and three were abolished. The ports of entry established were at GuayaniUa and at Jobos, Puerto Rico, and those abolished were at Lancaster, iClinn., Grand Forks, Mich., and Peskan, Mont. No stations were established during the year, but the one at Fargo, N. Dak., was abohshed. Cost oj administration.—The total revenues collected by the Cus toms Service, including collections for other departments and Puerto Rican cohections other thun duties, amounted to $428,596,660 as compared with $429,544,621 in 1941, a decrease of two-tenths of 1 percent during the year. The expenses, however, were $21,194,075, an increase of $570,650 over 1941, due to increases in salaries pro vided under the Mead-Ramspeck Act and to the employment during the last months of the year of 600 additional temporary guards. The cost to collect $100 was $4.94 in 1942 as compared with $4.80 in 1941. BUREAU OF ENGRAVING AND PRINTING The deliveries of currency, securities, stamps, and miscellaneous printings by the Bureau during 1942 amounted to 613,538,841 sheets, an increase of 152,924,283 sheets over the previous year, or 33 percent.

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REPORT OF THE SECRETARY OF THE TREASURY- 157 A comparative statement of deliveries of finished work in the fiscal years 1941 and 1942 follows:

Deliveries of finished work, fiscal years 1941 and

Sheets Face value Class 1941 1942

Currency: United States notes 3, 650,000 4, 515,000 $216,180,000 Silver certificates 76, 775,000 89, 370,000 1, 633,080,000 Overprinted "Hawaii". 250,000 3, 000, 000 Federal Reserve notes..i... 11, 362,950 24,165,867 4,066, 420,000 Overprinted "Hawaii".. 179,167 22,000,000 Specimens. '33" 3 Total. 91, 787, 983 118. 480, 037 5, 940, 680,000 Bonds, notes, bills, certificates, etc.: Bonds: Panama Canal ._ 500 600,000 Postal savings 881 1, 545 946, 900 Treasury 985,056 1, 595, 505 14, 886, 389, 500 United States savings 11, 852,000 65, 554, 500 9, 756, 075,000 United States war savings 15,187,000 . 636,850,000 Consolidated Federal farm loan for the Federal land banks . 9,800 500 50,000 Depositary 2,000 Farm loan _ 17,383 2,476 3, 427,000 Federal Farm Mortgage Corporation 4,500 1,000 750,000 Home Owners' Loan Corporation 1,055 2,668 800,000,000 Insular: Philippine. 7, 850 Puerto Rican 13,856 Notes: Treasury 138, 900 1,550,900 16, 577, 200,000 Commodity Credit Corporation 38,750 64,000 870,000,000 Reconstruction Finance Corporation.... 136, 900 12, 000 65,000,000 United vStates Housing Authority .' 27, 800 Treasury bills 82,030 33, 900 7, 595,000,000 Certificates: Indebtedness 69,300 5, 705,000,000 Cuban silver 15,000 6,000,000 Philippine treasury 32,000 2, 664, 400 16, 770,000 Debentures: Consolidated collateral trust for the Federal inter mediate credit banks. 39,000 37, 500 485,000, 000 Consolidated for Federal home loan banks 23,860 8,305 104,000,000 Federal Housing Administration: D efense housing insurance fund 3,375 4,975,000 Housing insurance fund 500 2,575 26,947, 500 Mutual mortgage insurance fund. _ : ;,200 17,100 30, 350,000 interim certificates: Treasury bonds 217, 500 Puerto Rican bonds. 250 Interim transfer certificates for postal savings bonds 1,000 2,000 Interim.receipts: Federal home loan banks.- .*. 13 Federal Savings and Loan Insurance Corporation... 100 Specimens: Bonds -, - 279 Notes and bills 24 Certificates ^ — Debentures Interim certificates. — Total. 13, 424, 214 87,043,852 67, 571, 230, 900

Sheets Number of stamps, etc., 1942

Stamps: Customs 101,876 175,000 3, 950,000 Internal Revenue.. 149, 712,063 157,305,191 15, 644, 720, 394 District of Columbia.. 139, 340 200,883 40,176, 650 Federal migrafory-bird hunting. 23,489 25,000 2,800,000 Philippine... 250, 300 Puerto Rican 1,164, 300 2,300, 270 139, 055, 700

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158 REPORT OF THE SECRETARY OF THE TREASURY

Deliveries of finished work, fiscal years 1941 and 1942—Continued

Sheets Number of Class stamps, etc., 1942 1942

Stamps—Continued. Specimens: United States. 145 4,322 For experimental purposes. United States.. 2 ... District of Columbia Postage: United States ., 160, 508,890 186, 579,088 19, 752, 724,833' Canal Zone • 150, 239 220, 468 20, 298,800' Philippine 895, 661 187, 589 11,020,760 Specimens, United States 113 35 ' 1,770' Postal savings • 1, 349,189 .17,154, 946 •1, 926,176, 290 Specimens 5

Total. 314, 295, 611 364,148, 574 37, 540, 930,119 Miscellaneous: Checks 27, 386,154 29,086,821 145, 481, 915 Warrants 62, 377 85, 414 287, 507 Commissions 521,075 462, 670 . 275,956 Cert ificates 4, 936, 972 5, 727, 213 19,801,033- Drafts 25, 775 13,313 26,625' Transportation requests '. 1, 316, 751 1,256,442 6, 282, 210 Nontransferable food order and nontransferable surplus- food order stamps ^ 5, 906, 963 6,201,300 1 1, 239, 589,000^ Nontransferable ,cotton order and nontransferable sur plus-cotton order stamps 299, 085 455, 220 2 91^ 044, 000- 0 th er miscellaneous . ^ 587, 369 503, 894 2, 276, 290' Specim ens . 2,324 3,451 17, 235' Blank paper. 61,905 70, 640 Total 41,106,750 43,866,'378 1,505,081,770^ Grand total. 460, 614, 568 613, 538,841

1 Excludes 64,370 blank fillers. 2 Excludes 6,270 blank fillers. Dies were engraved for the following new issues of postage stamps:.

r--.,. . Denomination ^^^^^^ (cents) Sesquicentennial of the Statehood of Kentucky, series 1942 3' 'Win the War/' series 1942 : 3 ''Free China/' series 1942 ... 5- New dies and plates were prepared for various classes of bonds, notes, revenue stamps, and other printed work. The principal items, comprised Treasury bonds. United States w^ar savings bonds and stamps, Treasury notes including four series of tax notes, revenue stamps for distilled spirits, special tax stamps, and Federal use tax stamps for motor vehicles and pleasure boats. The most outstanding task was the production of United States: savings bonds. The printing of these bonds, designated as defense savings bonds, series E, F, and G, was begun in the pievious year and continued until April!942. In the latter m.onth the designation was- changed to United States war savings bonds, the same series classifica tions being maintained. Production was increased from 100,000" bonds per day at the beginning of the year .to 1,000,000 per day in January 1942. Total deliveries for the year amounted to 80,741,500* bonds, with a face value of $10,392,925,000. . The number of employees on the.pa}^ roll at the beg.inning of the fiscal year was 6,345. The increased requirements for United States and Federal Reserve currency, bonds, postal savings stam.ps, and postage and revenue stamps made it necessary to secure additional

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REPORT OF THE SECRETARY OF THE TREASURY 159 personnel, and at the end of the year the number of employees was 7,803, an increase of 1,458 persons, or 23 percent. Expenditures for the year amounted to $17,348,492.43, an increase of $4,144,580.90 over the previous year, or 31.39 percent. The follow ing statement shows the appropriations, reimbursements, and expendi tures for the fiscal years 1941 and 1942, respectively.

Increase or 1942 decrease (—)

Appropriations: Salaries and expenses 8,450,000.00 $10, 050, 000. 00 ;i, 600, 000. 00 Deficiency 260,000. 00 -260,000.00 Reimbursements to appropriation from other bu reaus for work completed i 4, 562,477. 23 7, 753, 724.13 3,191, 246. 90 Total 13, 272, 477. 23 17,803, 724.13 4, 531, 246. 90 Expenditures, salaries and expenses 2 13, 203, 911. 53 17, 348,492. 43 4,144, 580. 90 Unexpended balance — S, 565. 70 455, 231. 70 386, 666. 00

1 An additional amount of $227.50, received from employees for lost identification cards, locker keys, package-booth checks, and badges, was deposited to the credit of the Treasurer of the United States as miscellaneous receipts; and $62.50, received from reimbursement for jury service by employees, was deposited to the general fund receipt account. 2 Includes $11,300 transferred to the Bureau of Standards for research work in each of the fiscal years 1941 and 1942; $40,000 in the fiscal year 1941 and $80,000 in the fiscal year 1942 transferred to salaries and expenses,, guard force. Treasury Department, for service rendered in connection with the protection of currency, bonds, stamps, and other papers of value; and $1,776 transferred to United States official mail and messenger service. Post Office Department, in the fiscal year 1941. The amounts of $377,132.19 and $430,965.84 were transferred to the retirement fund in the fiscal years 1941 and 1942, respectively.

FOREIGN FUNDS CONTROL ' ' By virtue of the authority given the Secretary of the Treasury by Executive Order No. 8389, as amended, and by Executive Order No. 9095, as amended, under the Trading with the Enemy Act (U. S. C, 1940 ed., title 50, App., Sec. 3; Supp. I, Sec. 5 (b)). Foreign Funds Control has blocked the holdings subject to the jurisdiction of the United States of 36 countries and their nationals. The total volume of property now frozen and subject to regulation by Foreign Funds Control is about $8.5 billions. By principal type this property is divided as follows: (In millions) Short-term funds, including earmarked gold $4,000.0 Secmities 2,000.0 Direct investments and miscellaneous . 2,000.0 Holdings of blocked nationals resident in United States 500.0 The distribution of blocked property by nationality of the owner is as follows: (In miilions) Netherlands, including Netherlands (East) Indies , $1,800.0 Switzerland . . ..: 1,500.0 France and Monaco 1,400.0 Belgium . 400.0 Sweden •. 600.0 China . 300.0 Norway J .-- 100.0 Japan .- • 150.0 Germany 150.0 Italy . 100.0 All others ,- 750.0 Blocked "nationals resident in the United States (other than business enterprises owned abroad).. • 500.0 Holdings of American citizens in blocked enterprises .. 750. 0 Total . 8,500.0 During the fiscal year 1942, Foreign Funds Control considered 330,747 applications for hcenses to effect specific transactions involv- 487543—43 12

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