Regional President Speech

FINANCIAL FIGHT ON THE HOME FRONT Earl R. Bopp The Bridgeton Hotel Bridgeton, Nev Jersey Friday, April 9> 1943 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FINANCIAL FIGHT ON THE HOME FRONT Definition of a consultant Objectives A. To win the war B. To share the burdens and hardships C. To win the peace Size of the financial task A. liho determines it? 1* The armed forces 2. Congress 3« The Treasury B. Budgetary requirements (See Chart 1) 1. Fiscal years m i Expenditures 85 109 Revenues.... 21 JÛL Deficit 62 76 2. Public debt June 30, 1942 |72 billion December 31» 1942.. 108 billion June 30» 1943 (est) 135 billion June 30, 1944 (est) 211 billion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 2 - 3* Current expenditures - $7-3 billion a month C. How requirements are met 1. Taxation 2. Borrowing (December - Banks, ¿0$ Others^ bO%) 3* In England Heavier taxes Banks, 25$ Others, 15% I* Are the funds available? A. Real vs. financial aspects of the war (See Chart 2) B. Evidences of available funds 1* National income August, 1939 - $6 billion January, 1943 -$11 billion 2« Employment United States - + 66* since Aug. 1939 Pennsylvania - up 42% since Aug. 1939 3. Weekly wages - |25 to |43 since Aug. 1939 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 3 - 4. Savings of individuals JSâO 12£1 1942 Liquid........ 4.3 10.3 28.9 Nonliquid..... 11.8 U.A 9.3 Gross savings.. 16.1 24.7 38.2 5. Demand deposits Increased 85 to 90% since 1939. Excess reserves at country banks are still large. 6. Pltul $9 billion since 1939 Plus ¿5 billion in 1942 C. Reasons for accumulation 1. Large public expenditures 2. Less goods to boy - living on coupons Threat of inflation A. Examples of unbalance (See Chart 2) B. Consequences 1. Individuals and institutions 2. Workers - homes and savings 3. Farmers - farms 4. Business - inventory losses 5. Cost of war Digitized for F6R»ASEMR orale - sprite http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - A - C. How to cope with inflation 1. Stretch supply of goods 2. Stabilize prices 3* Siphon off excess buying power a* Taxation b. Purchase of Government bonds The urgency of widespread bond ownership A. What happens if funds are borrowed from 1. Individuals, business concerns 2. Banks (See Chart 3) B. Personal reasons 1. Reserves - buying power if the war is won 2. Backing up our fighting men - they give their lives, we lend our money C. Community reasons for broad sales 1. Personal interest in fiscal affairs 2. Minimizes disagreements between bond holders and nonbond holders 3. Sense of stability and responsibility A» The habit of thrift Community assets Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 5 - I. Organization - United States Treasury War Finance Committee A* Victory Fund and War Savings 1. Cooperative effort B. The basket of securities 1. Seven types of bonds and notes to meet needs of all types and classes of investors 2. The best investment in the world £ i-S ss tog Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis $ , , 13000 000,000 SECOND WAR LOAN DRIVE SUMMARY OF UNITED STATES GOVERNMENT SECURITIES ON SALE DURING APRIL 1943 UNITED STATES TREASURY WAR FINANCE COMMITTEE THIRD FEDERAL RESERVE DISTRICT War Savinas Staff Victory Fund Committee Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis tcirtsiD evreseR laredeF driiTI KNALB REDRO R O NOITAMROFNI COMPUTATION OF ACCRUED INTEREST Accrued interest to be collected on subscriptions for $25,000 or more for any of the following issues should be computed on an actual basis, using the following decimals: 2Yz Percent Treasury Bonds of 1964-69 — $0.06868 per day per $1,000 2 Percent Treasury Bonds of 1950-52 — $0.05435 per day per $1,000 Percent Treasury Certificates of Indebtedness of Series B-1944 — $0.02391 per day per $1,000 The following short form table, showing cents per day per $1,000, may be used in computing accrued erest to be collected on subscriptions for more than $1,000 and less than $25,000: 2%% Treasury 2% Treasury Certificates Bonds of Bonds of of Indebtedness Date Day* 1964-69 1950-52 Series B-1944 April 16 1 $0.07 $0.05 $0.02 17 2 0.14 0.10 0.04 18 Sunday 19 4 0.28 0.20 0.08 20 5 0.35 0.25 0.10 21 6 0.42 0.30 0.12 22 7 0.49 0.35 0.14 23 8 0.56 0.40 0.16 24 9 0.63 0.45 0.18 25 Sunday 26 11 0.77 0.55 0.22 27 12 0.84 0.60 0.24 28 13 0.91 0.65 0.26 29 14 0.98 0.70 0.28 30 15 1.05 0.75 0.30 Interest on all subscriptions should be figured to the date funds will be available at the Federal Reserve Bank. No accrued interest need be collected on individual subscriptions for $500 or $1,000, of the 2 Percent Treasury Bonds of 1950-52 or the 2 Percent Treasury Bonds of 1964-69. Normally, accrued interest should be calculated on the basis of making payment for the securities on the next business day following the day upon which the order is taken. Example—What amount of accrued interest should be obtained with respect to $13,500 principal amount of 2}/2% Treasury Bonds of 1964-69, where the order is taken April 16, 1943 but will not reach the bank addressed until the next day? The interest factor, opposite April 17, in the column regarding the 2y3% bonds is $0.14 per $1,000. Multiply $0.14 by 13.5 and obtain $1,890 or $1.89, accrued interest to be obtained. Payment may be made on the day upon which the order is taken when the purchaser and subscribing £ bank so arrange, or may be made subject to several days delay when circumstances require. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis $13,000,000,000 SECOND WAR LOAN DRIVE SUMMARY OF UNITED STATES GOVERNMENT SECURITIES ON SALE DURING APRIL, 1943, DRIVE 2y2% Treasury 2% Treasury Ctfs. of Indebtedness, Tax Savings Notes United States War United States Savings United States Savingi Bonds of 1964-69 Bonds of 1950-52 - Series B-1944 Series C Bonds, Series E Bonds, Series F Bonds, Series G $500 or $1,000 — 100%. $500 or $1,000 — 100%. 75% of maturity 74% of maturity Issue price ............................................... Over $1,000— 100% Over $1,000 — 100% 100% and interest 100% value value 100% and interest. and interest. First day of month First day of month in First day of month First day of month Dated ........................................................ April 15, 1943 April 15, 1943 April 15, 1943 in which purchased which purchased in which purchased in which purchased 3 years from 10 years from 12 years from 12 years from Due .......................................................... June 15, 1969 Sept. 15, 1952 April 1, 1944 issue date issue date issue date issue date Rate .......................................................... 2 y2% 2% %% if V he a l r d i e t s o — m 1. a 0 t 7 u % ri ty h V e a l r d i e t s o — m 2. a 9 t 0 u % ri t i y f if V he a l r d i e t s o — m 2. a 5 t 3 u % r ity 2^2% Bearer or registered Bearer or registered In inscribed form Registration ........................................... form form Bearer form only only Registered form only Registered form only Registered form only Denominations ....................................... $500 to $1,000,000 $500 to $1,000,000 $1,000 to $1,000,000 $1,000 to $1,000,000 $25 to $1,000 $25 to $10,000 $100 to $10,000 Banks Apr. 28, 1943 Banks Apr. 12, 1943 Books open ............................................. April 12, 1943 Others Apr. 12, 1943 Others Apr. 12, 1943 Continuously Continuously Continuously Continuously Banks Apr. 30, 1943 Banks Apr. 14, 1943 Upon order of Upon order of Upon order of Upon order of Upon order of Books close ............................................. Treasury Others upon order Others upon order of Treasury Treasury Treasury Treasury of Treasury Treasury Payment due on..................................... Subscription Banks--------- Banks--------- Application Application Application Application Others on subscription Others on subscription A few days after Banks--------- Banks--------- A few days after A few days after A few days after A few days after Delivery date ......................................... payment Others a few days Others a few days payment payment payment payment after payment after payment Taxable by Federal Government....... Yes Yes Yes Yes Yes Yes Yes Eligible for subscription by Yes Yes Yes Yes Yes Yes Yes individuals ........................................... Eligible for subscription by commercial banks.............................. No3 Yes Yes Yes No No No Acceptable in payment of Federal Federal estate taxes Yes, during and after (income, estate or gift) taxes prior only, on death of No No 2nd calendar month No No No to maturity ......................................... owner after purchase At holder’s option At holder’s option At holder’s option At Government option At Government’s option At holder’s option Redeemable for cash prior to on or after June 15, ’64 on or after Sept. 15, ’50 No only, after 6 months, only, after 60 days only, after 6 months, only, after 6 months, maturity ............................................... at 100% and interest on variable schedule on variable schedule at 100% and interest at 100% and interest from issue date on 1 month's notice2 on 1 month’s notice on 1 month’s notice For loans from banks Eligible for hypothecation................... Yes Yes Yes No No No only Eligible for deposit of public moneys Not before April 15, 1953 Yes Yes No No No No Salable in open market.......................... Yes Yes Yes No No No No Not more than $5000 Amount for which eligible investor Not more than $100,000 issue price of Series No limit No limit1 No limit1 No limit maturity value in one may subscribe .................................... F and G together in one calendar year calendar year3 (1) Total sales to commercial banks limited to 2 billion. (3) Additional purchases in co-ownership permitted in certain (4) Upon death of owner redeemable at 100% after six months (5) May not be held by commercial banks for own account Digitized(2 f)o rA Ft RpAurSchEaRse price only if commercial bank is holder for cases. from issue date, if application for redemption is made until April 15, 1953. http://frasero.swtnlo uaciscofeudnt..org/ within four months after decease. Federal Reserve Bank of St. Louis

Karl R. Bopp (1943, April 8). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_19430409_karl_r_bopp

@misc{wtfs_regional_speeche_19430409_karl_r_bopp,
  author = {Karl R. Bopp},
  title = {Regional President Speech},
  year = {1943},
  month = {Apr},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_19430409_karl_r_bopp},
  note = {Retrieved via When the Fed Speaks corpus}
}