Monthly index numbers

[From data issued by A. E. Ames & Co., Ltd.]

[1926=100]

DOMINION OF CANADA LONG-TERM, BOND PRICES, 1929-37

DOMINION OF CANADA LONG-TERM BONDS YIELDS, 1929-37

Weekly index numbers of Dominion of Canada long-term bonds, 1937 1

1 Based upon an average of daily figures for the week ending on dates specified.

Dominion Bureau of Statistics, Internal Trade Branch-monthly average of Dominion of Canada long-term bond yields, 1919–37

NOTE. In 1919, 3 issues were used, viz, 5 percent, 1931; 51⁄2 percent, 1933; and 51⁄2 percent, 1937. In January 1920, 52 percent, 1934, was added. In October 1923, 5 percent, 1943, was substituted for 5 percent, 1931, while in January 1926, 52 percent, 1933; 51⁄2 percent 1934; and 51⁄2 percent, 1937, were dropped and 41⁄2 percent, 1940; 42 percent, 1944; and 41⁄2 percent, 1936, were added. In January 1932, 42 percent, 1948, and 42 percent, 1949, were added, and at the end of 1932, 4 percent, 1947, was substituted for 42-percent, 1940. In January 1936, 41⁄2 percent, 1947, and 3 percent, 1950, were substituted for 5 percent, 1943, and 41⁄2 percent, 1944. This left as at present, 42 percent, 1946; 4 percent, 1947; 42 percent, 1948; 42 percent, 1949; 3 percent, 1950; 41⁄2 percent, 1947.

Dominion Bureau of Statistics, internal trade branch-Yield of representative Ontario long-term bonds, 1900-37

Dominion Bureau of Statistics, internal trade branch-Yield of representative Ontario long-term bonds, 1900-37-Continued

NOTE.-Yields for months of February, March, May, July, August, September, and November not obtained prior to 1920. Issues used 1934-37 were 5 percent, 1948, and 42 percent, 1950.

Prices and yields on July 8, 1937, of certain dominion, provincial and industria bonds payable in Canadian currency only

Issuer

[A. E. Ames & Co., Ltd., quotations]

STATEMENT OF ROSWELL MAGILL, UNDER SECRETARY OF THE TREASURY

Senator VAN NUYS. You may proceed, Mr. Magill.

Mr. MAGILL. Mr. Chairman and gentlemen of the committee, Senate Joint Resolution 5 proposes a constitutional amendment whereunder the United States shall have the power to lay and collect taxes on income derived from securities issued after the ratification of the article by or under the authority of any State, but without discrimination against such income; and whereunder each State shall have the power to lay and collect taxes on income derived by its residents from securities issued after the ratification of the article by or under the authority of the United States, but without discrimination against such income.

The Treasury Department is thoroughly in favor of the principle and objectives of this resolution. The issue of tax-exempt securities results in a serious impairment of the effectiveness of the progressive income-tax system adopted by the Federal Government and by a number of the States. A constitutional amendment of this character has been advocated on a number of occasions by the present and previous administrations. It was advocated by Secretary Morgenthau in his statement of February 19, 1935, before the Judiciary Committee of the House of Representatives. Subject to such textual changes as the drafting experts may believe necessary, I should greatly welcome favorable action on this resolution at this time.

Senate Joint Resolution 154 differs from S. J. Res. 5 in three respects: First, while it would empower the United States to lay and collect taxes on the income derived from securities issued by or under the authority of any State, it would not empower the States to tax income derived from securities issued by or under the authority of the United States. Second, it would empower the United States to tax the securities themselves, as well as the income derived therefrom.

Third, it would empower the United States to tax the incomes received by individuals as officers and employees of the States and of their political subdivisions.

I believe that two objections can be raised to this resolution: The first is that it would grant no reciprocal power to the States to tax the incomes of Federal employees, or the securities and the income derived therefrom issued by or under the authority of the United States. This would appear to be inequitable.

The second is that it would empower the Federal Government to levy taxes on the securities themselves, as contrasted with the income therefrom, issued after the ratification of the article, by or under the authority of the Federal and State Governments. In other words, the Federal Government would be empowered to levy a property tax on these securities. It is not clear to me whether the intent of this section of the proposed amendment is that the revenues from this tax are to be collected in the several States in proportion to populationin accordance with article II, section 9, paragraph 4, of the Constitution. If this is the intent, enormous difficulties would obviously be involved in the collection of the tax. If, on the other hand, this is not the intent, and if the Federal Government is to enter the field of property taxation, I am aware of no good reason why the securities of the Federal, State, and local governments should be singled out for