Public Law 74–5

That the Second Liberty Bond Act, as amended, is further amended as follows:

The first paragraph of section 1 is amended to read as follows:

“The Secretary of the Treasury, with the approval of the President, is hereby authorized to borrow, from time to time, on the credit of the United States for the purposes of this Act, to provide for the purchase, redemption, or refunding, at or before maturity, of any outstanding bonds, notes, certificates of indebtedness, or Treasury bills of the United States, and to meet expenditures authorized for the national security and defense and other public purposes authorized by law, such sum or sums as in his judgment may be necessary, and to

Proviso.

Maximum Issue.

Post, p. 21.

issue therefor bonds of the United States: Provided, That the face amount of bonds issued under this section and section 22 of this Act shall not exceed in the aggregate $25,000,000,000 outstanding at any one time.”

Sec. 2.

The first sentence of subsection (a) of section 5 is amended to read as follows: “In addition to the bonds and notes authorized by sections 1, 18, and 22 of this Act, as amended, the Secretary of the Treasury is authorized, subject to the limitation imposed by section 21 of this Act, to borrow from time to time, on the credit of the United States, for the purposes of this Act, to provide for the purchase, redemption, or refunding, at or before maturity, of any outstanding bonds, notes, certificates of indebtedness or Treasury bills of the United States, and to meet public expenditures authorized by law, such sum or sums as in his judgment may be necessary, and to issue

Vol. 48, p. 343.

therefor (1) certificates of indebtedness of the United States at not less than par (except as provided in section 20 of this Act, as amended) and at such rate or rates of interest, payable at such time or times as he may prescribe; or, (2) Treasury bills on a discount basis and payable at maturity without interest.”

Sec. 3.

Section 5 is further amended by striking out the final sentence of subsection (a) thereof, reading as follows: “The sum of the

Vol. 46, p. 20; U. S. C., p. 1419.

par value of such certificates and Treasury bills outstanding hereunder and under section 6 of the First Liberty Bond Act shall not at any one time exceed in the aggregate $10,000,000,000.”

Sec. 4.

Subsection (a) of section 18 is amended to read as follows:

“In addition to the bonds and certificates of indebtedness and war-savings certificates authorized by this Act and amendments thereto, the Secretary of the Treasury, with the approval of the President, is authorized, subject to the limitation imposed by section 21 of this Act, to borrow from time to time on the credit of the United States for the purposes of this Act, to provide for the purchase, redemption, or refunding, at or before maturity, of any outstanding bonds, notes, certificates of indebtedness, or Treasury bills of the United States, and to meet public expenditures authorized by law, such sum or sums as

Vol. 48, p. 343.

in his judgment may be necessary and to issue therefor notes of the United States at not less than par (except as provided in section 20 of this Act, as amended) in such form or forms and denomination or

Terms and conditions.

Interest rate.

denominations, containing such terms and conditions, and at such rate or rates of interest, as the Secretary of the Treasury may prescribe, and each series of notes so issued shall be payable at such time not less than one year nor more than five years from the date of its

Redemption.

issue as he may prescribe, and may be redeemable before maturity (at the option of the United States) in whole or in part, upon not more than one year’s nor less than four months’ notice, and under such rules and regulations and during such period as he may prescribe.”

Sec. 5.

The Second Liberty Bond Act, as amended, is further

Certificates of indebtedness, etc.

amended by adding a new section, as follows:

“Sec. 21.

The face amount of certificates of indebtedness and

Vol. 40, pp. 36, 200, 1309; U. S. C., p. 1421.

Aggregate amount of issue.

Treasury bills authorized by section 5 of this Act, certificates of indebtedness authorized by section 6 of the First Liberty Bond Act, and notes authorized by section 18 of this Act shall not exceed in the aggregate $20,000,000,000 outstanding at any one time.”

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Sec. 6.

The Second Liberty Bond Act, as amended, is further amended, by adding a new section, as follows:

“Sec. 22.

(a)(a)

The Secretary of the Treasury, with the approval

United States Savings Bonds.

of the President, is authorized to issue, from time to time, through the Postal Service or otherwise, bonds of the United States to be

Issue; use of proceeds from sale.

known as ‘United States Savings Bonds.’ The proceeds of the Savings Bonds shall be available to meet any public expenditures authorized by law and to retire any outstanding obligations of the United States bearing interest or issued on a discount basis. The various issues and series of the Savings Bonds shall be in such forms,

Forms, amounts, etc.

shall be offered in such amounts within the limits of section 1 of this Act, as amended, and shall be issued in such manner and subject to

Terms and conditions.

such terms and conditions consistent with subsections (b) and (c) hereof, and including any restriction on their transfer, as the Secretary of the Treasury may from time to time prescribe.

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“(b)“(b)

Each Savings Pond shall be issued on a discount basis to

Maturity.

mature not less than ten nor more than twenty years from the date as of which the bond is issued, and provision may be made for redemption

Redemption.

before maturity upon such terms and conditions as the Secretary of the Treasury may prescribe: Provided, That the issue price of

Proviso.

Issue price, redemption terms, etc.

Savings Bonds and the terms upon which they may be redeemed prior to maturity shall be such as to afford an investment yield not in excess of three per centum per annum, compounded semiannually. The denominations of Savings Bonds shall be in terms of their

Denominations.

maturity value and shall not be less than $25. It shall not be lawful for any one person at any one time to hold Savings Bonds issued

Holdings limited.

during any one calendar year in an aggregate amount exceeding $10,000 (maturity value).

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“(c)“(c)

The provisions of section 7 of this Act, as amended (relating

General tax exemptions.

Savings bonds included.

Vol. 40, pp. 288, 291; U. S. C., p. 1418.

to the exemptions from taxation both as to principal and as to interest of bonds issued under authority of section 1 of this Act, as amended), shall apply as well to the Savings Bonds; and, for the purposes of determining taxes and tax exemptions, the increment in value represented by the difference between the price paid and the redemption value received (whether at or before maturity) shall be considered as interest. The Savings Bonds shall not bear the

Circulation privilege.

circulation privilege.

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“(d)“(d)

The appropriation for expenses provided by section 10 of this

Appropriation available for expenses.

Vol. 40, p. 292; Vol. 42, p. 36; U. S. C., p. 1422.

Act and extended by the Act of June 16, 1921 (U. S. C., title 31, secs. 760 and 761), shall be available for all necessary expenses under this section; and the Secretary of the Treasury is authorized to advance, from time to time, to the Postmaster General from such appropriation such sums as are shown to be required for the expenses of the Post Office Department, in connection with the handling of the bonds issued under this section.

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“(e)“(e)

The board of trustees of the Postal Savings System is

Exchange of, for savings deposits.

authorized to permit, subject to such regulations as it may from time to time prescribe, the withdrawal of deposits on less than sixty days’ notice for the purpose of acquiring Savings Bonds which may be offered by the Secretary of the Treasury; and in such cases to make payment of interest to the date of withdrawal whether or

Vol. 36, p. 817; U. S. C., p. 1761.

not a regular interest payment date. No further original issue of bonds authorized by section 10 of the Act approved June 25, 1910 (U. S. C., title 39, sec. 760), shall be made after July 1, 1935.

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“(f) Postal Service employees as fiscal agents.

At the request of the Secretary of the Treasury the Post-master General, under such regulations as he may prescribe, shall require the employees of the Post Office Department and of the Postal Service to perform, without extra compensation, such fiscal agency services as may be desirable and practicable in connection with the issue, delivery, safe-keeping, redemption, and payment of the Savings Bonds.”

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Sec. 7.

Section 1126 of the Revenue Act of 1926 is amended by adding at the end thereof the following: “In order to avoid the frequent substitution of securities such rules and regulations may limit the effect of this section, in appropriate classes of cases, to bonds and notes of the United States maturing more than a year

Term construed.

after the date of deposit of such bonds as security. The phrase ‘bonds or notes of the United States’ shall be deemed, for the purposes of this section, to mean any public-debt obligations of the United States and any bonds, notes, or other obligations which are unconditionally guaranteed as to both interest and principal by the United States.”