owners the bond will be paid to either coowner upon his separate request without requiring the signature of the other coowner; and upon payment to either coowner the other person shall cease to have any interest in the bond. The bond will also be paid to both coowners upon their joint request, in which case payment will be made by check drawn to the order of both coowners in the form "John A. Jones and Mrs. Mary C. Jones", and the check must be endorsed by both payees.

(b) Reissue during the lives of both coowners. If one of the coowners is unmarried at the time of issue of the bond and subsequently marries, the bond may be reissued upon the request of both coowners to substitute the husband and wife as coowners. Such request should be on a form provided for that purpose by any Federal Reserve Bank or Branch or by the Treasury Department, Division of Loans and Currency, Merchandise Mart, Chicago 54, Illinois. No other reissue will be permitted in any form during the lives of both coowners except as specifically provided in this part.

(c) Payment or reissue after the death of one coowner. If either coowner dies without having presented and surrendered the bond for payment to a Federal Reserve Bank or the Treasury Department, the surviving coowner will be recognized as the sole and absolute owner of the bond, and payment will be made only to him: Provided, however, That if a coowner dies after he has properly executed the request for payment and after the bond has actually been received by a Federal Reserve Bank or the Treasury Department, payment of the bond, or check if one has been issued, will be made to his estate (see Subpart P hereof). Upon proof of the death of one coowner and appropriate request by the surviving coowner (unless a nonresident alien, in which case see § 315.3) the bond will be reissued in the name of such survivor alone, or in his name with another individual as coowner, or in his name payable on death to a designated beneficiary.

(d) Payment or reissue on death of both coowners in common disaster. If both coowners die in a common disaster under such conditions that it cannot be established, either by presumption of law or otherwise, which coowner died

first, the bond will be considered as belonging to the estates of both coowners, and payment or reissue will be made accordingly.

(e) Payment or reissue after the death of the surviving coowner. If a surviving coowner who became solely entitled to the bond under the provisions of paragraph (c) of this section dies without having submitted the bond for payment or reissue, the bond will be paid or reissued as though it were registered in the name of such last deceased coowner alone. In this case proof of the death of both coowners and of the order in which they died will be required. (R.S. 161, 55 Stat. 7; 5 U.S.C. 22, 31 U.S.C., Sup., 757c) [1944 Dept. Circ. 530, 5th Rev., Amdt. 5, May 1, 1944, 9 F.R. 47871

PART 316-OFFERING OF WAR SAVINGS BONDS, SERIES E

Sec. 316.12

Authorization of additional denomination. [Added]

§ 316.12 Authorization of additional denomination. (a) An additional denomination of $10 (maturity value) is hereby authorized, the issue price of which will be $7.50: Provided, The bonds of this denomination may be purchased only by persons in the Military and Naval Forces of the United States, under such conditions as may be prescribed and through such agencies as may be provided within their respective establishments by the Secretary of War and the Secretary of the Navy: And provided further, That on original issue the bonds of this denomination shall be registered only in the name of any such person either alone or with any other person added as coowner or designated beneficiary as provided by regulation.

(b) The bonds of this denomination may not be obtained on partial redemption of bonds of a higher denomination; and except for restrictions on purchase and issue, the terms of bonds in the denomination of $10 now authorized and the conditions of their issue and provisions for their redemption shall conform to those of bonds of Series E of other denominations authorized by said Circular No. 653, Second Revision. (55 Stat. 7; 31 U.S.C., Sup., 757c) [1944 Dept. Circ. 653, 2d Rev., 1st Supp., June 7, 1944, 9 F.R. 66491

318.9

Limitations on holdings.

Authorized forms of registration. Delivery and safekeeping of bonds. Payment at maturity or redemption

prior to maturity.

Series designation.

Lost, stolen, or destroyed bonds. 318.10 General provisions. 318.11

Redemption values and investment yields.

AUTHORITY: §§ 318.1 to 318.10, inclusive, issued under 55 Stat. 7; 31 U.S.C., Sup., 757c.

SOURCE: $318.1 to 318.11, inclusive, with exceptions noted in text, contained in 1944 Department Circular 654, 2d Revision, Secretary of the Treasury, Jan. 1, 1944, 9 F.R. 39.

§ 318.1 Offering of United States Savings Bonds of Series F and Series G. (a) The Secretary of the Treasury, pursuant to the authority of the Second Liberty Bond Act, as amended, offers for sale, to the people of the United States, through the Federal Reserve Banks, United States Savings Bonds of Series F and Series G, which may hereinafter

be referred to as bonds of Series F and Series G. Bonds of a new design, without change in terms, will be provided for issue hereunder in regular course without further notice as stocks of the prior bonds of Series F and Series G become exhausted. The sale of bonds of Series F and Series G will continue until terminated by the Secretary of the Treasury.

(b) United States Savings Bonds of Series F and Series G include bonds of any designation issued under the regulations in this part as originally published and amended, and those issued under the regulations in this part as previously or as now revised. As their terms are identical, no distinction is to be made between any bonds of Series F or Series G so issued.

§ 318.2 Description and terms of bonds. (a) Bonds of Series F and Series G will be issued only in registered form, in denominations of $25 (for Series F only), $100, $500, $1,000, $5,000 and $10,000 (maturity values), at prices hereinafter set forth. Each bond will bear the facsimile signature of the Secretary of the Treasury, and will bear an imprint in color (brown for Series F and blue for Series G) of the Seal of the Treasury. At the time of issue, on the face of each bond, the issuing agent will inscribe the name and address of the owner and the name of the coowner or beneficiary, if any, will enter the issue date (which is the first day of the month in which payment of the issue price is received by the Treasury or an authorized issuing agent), and will imprint his dating stamp (to show the date the bond is actually inscribed). Bonds of Series F and Series G shall be valid only if duly inscribed and dated, as above provided, and delivered by an authorized agent following receipt of payment therefor.

(b) The bonds of each series will, in each instance, be dated as of the first day of the month in which payment of the issue price is received by an agent authorized to issue the bonds, which date is herein referred to as the issue date; the bonds will mature and be payable at face value 12 years from such issue date. The issue date is the basis for determining the redemption or maturity period of the bond, and the date appearing in the issuing agent's stamp should not be confused therewith. The bonds of either series may not be called for redemption by the Secretary of the Treasury prior to maturity, but they

may be redeemed prior to maturity, after six months from the issue date, at the owner's option, at fixed redemption values.

(c) Bonds of Series F will be issued on a discount basis at 74 percent of their maturity value. No interest as such will be paid on the bonds, but they will increase in redemption value at the end of the first year from issue date, and at the end of each successive halfyear period thereafter until their maturity, when the face amount becomes payable. The increment in value will be payable only upon redemption of the bonds. A table of redemption values appears on each bond. The purchase price of bonds of Series F has been fixed so as to afford an investment yield of about 2.53 percent per annum compounded semiannually if the bonds are held to maturity; if the owner exercises his option to redeem a bond prior to maturity the investment yield will be less.

(d) Bonds of Series G will be issued at par, and will bear interest at the rate of 22 percent per annum, payable semiannually from issue date. Interest will be paid by check drawn to the order of the registered owner. Interest will cease at maturity, or, in case of redemption before maturity, at the end of the interest period next preceding the date of redemption.

A table of redemption

values appears on each bond, and the difference between the face amount of the bond and the redemption value fixed for any period represents an adjustment (or refund) of interest. Accordingly, if the owner exercises his option to redeem a bond prior to maturity, the investment yield will be less than the interest rate on the bond. Bonds of Series G may be redeemed at par, in whole or in part, (1) upon the death of the owner, or a coowner, if a natural person, or (2) as to bonds held by a trustee or other fiduciary, upon the death of any person which results in termination of the trust. the trust is terminated only in part, redemption at par will be made only to the extent of the pro rata portion of the trust so terminated, to the next lower multiple of $100. In any case request for redemption at par must be received by the Treasury Department, Division of Loans and Currency, Merchandise Mart, Chicago 54, Illinois, or by a Federal Reserve Bank or Branch within 4 months after the date of death and in accordance

If

with the regulations governing savings bonds.

(e) Tables at the end of $318.11 show separately, for bonds of Series F and those of Series G: (1) The redemption values, by denominations, during the successive half-year periods following issue, (2) the approximate investment yield on the issue price from issue date to the beginning of each half-year period, and (3) the approximate investment yield on the current redemption value from the beginning of each halfyear period to maturity at the end of the 12-year period.

(f) Bonds of Series F and Series G will not be transferable, and will be payable only to the owner named thereon, except in case of death or disability of the owner or as otherwise specifically provided in the regulations governing savings bonds, and in any event only in accordance with said regulations. Accordingly they may not be sold, discounted, hypothecated as collateral for a loan or the performance of a service, or disposed of in any manner other than as provided in the regulations governing savings bonds, and, except as provided in said regulations, the Treasury Department will recognize only the inscribed owner, during his lifetime and competency, and thereafter his estate or heirs.

CROSS REFERENCE: For regulations governing savings bonds, see Part 315 of this chapter.

(g) Taxation. For the purpose of determining taxes and tax exemptions, the increment in value represented by the difference between the price paid for bonds of Series F (which are issued on a discount basis), and the redemption value received therefor (whether at or before maturity) shall be considered as interest, and that interest and interest on bonds of series G, are not exempt from income or profits taxes now or hereafter imposed by the United States.1 The bonds shall be subject to estate, inheritance, gift, or other excise taxes, whether

1For information concerning the taxable and exempt status under Federal tax laws of the interest (increment in value) on United States Savings Bonds issued on a discount basis (including bonds of Series F), and alternate methods of reporting such interest, see Internal Revenue Mimeograph, Coll. No. 5299, R. A. No. 1177, dated December 17, 1941. For credits on account of Victory Tax, see Internal Revenue Regulation 103, sections 19.453 and 19.454, as amended by Treasury Decision 5249.

Series F, or of Series G, or the combined aggregate amount of both series, originally issued during any one calendar year to any one person, including those registered in the name of that person alone, and those registered in the name of that person with another named as coowner, that may be held by that person at any one time shall not exceed $100,000 (issue price): Provided, however, That as to bonds of these series originally issued on or after January 1, 1944, the amount held by a commercial bank holding savings deposits or issuing time certificates of deposit (as each is defined in 12 CFR 217.1) shall not in any case exceed $100,000 (issue price) or 20 percent of the combined amount of such time certificates of deposit (but only those issued in the names of individuals and of corporations, associations, and other organizations not operated for profit) and savings deposits as shown on the bank's books as of the date of the most recent call statement required by the supervising authorities prior to the date of subscription for such savings bonds, whichever is less: And provided further, That the amount of savings bonds of Series F and G, issued on or after January 1, 1944, held by a commercial bank, together with 21⁄2 percent Treasury Bonds of 1965-70, subscribed for under Department Circulars Nos. 729 and 740 (9 FR. 696, 6363, 7616), 24 percent Treasury Bonds of 1956-59, subscribed for under Department Circular No. 730 (9 F.R. 697), and 2 percent Treasury Bonds of 1952-54, subscribed for under Treasury Department Circular No. 741 (9 F.R. 6365, 7616), shall not exceed in the aggregate 20 percent of the combined amount of such savings deposits and time certificates of deposits of such bank or $400,000, whichever is less. No such bank shall hold more than $100,000 (issue price) of Series F and Series G savings bonds (Series 1944) combined. [Paragraph (a) amended by Amdt. 1, June 12, 1944, 9 F.R. 6332]

[Preceding paragraph, in small type, superseded by following paragraph during period covered by this Supplement]

§ 318.4 Limitation on holdings. (a) The amount of United States Savings Bonds of Series F, or of Series G, or the combined aggregate amount of both series originally issued during any one calendar year to any one person, including those registered in the name of that person alone, and those registered in the name of that person with another named as coowner, that may be held by that person at any one time shall not exceed $100,000 (issue price): except that in the case of commercial banks authorized to acquire such bonds in accordance with § 318.5 (a) (2) hereof, the amount shall be such as may have been or may hereafter be provided specifically in official circulars governing the offering of other Treasury securities, but in

no event in excess of $100,000 (issue price) for any one calendar year. [Paragraph (a) amended by Amdt. 2, Nov. 17, 1944, 9 F.R. 14010]

(b) Any bonds acquired on original issue which create an excess must immediately be surrendered for refund of the issue price, as provided in the regulations governing savings bonds.

§ 318.5 Authorized forms of registration. (a) United States Savings Bonds of Series F and Series G may be registered only in one of the following forms:

(1) In the names of natural persons (that is, individuals), whether adults or minors, in their own right, as follows: (i) in the name of one person; (ii) in the names of two (but not more than two) persons as coowners; and (iii) in the name of one person payable on death to one (but not more than one) other designated person.

(2) In the name of an incorporated or unincorporated body, in its own right, except that they may not be registered in the names of commercial banks which are defined for this purpose as those accepting demand deposits: Provided, however, That bonds originally issued on or after January 1, 1944, may be registered in the name of a commercial bank having savings deposits to the extent and under the conditions set forth in § 318.4 hereof.

[Preceding subparagraph, in small type, superseded by following subparagraph also in small type during period covered by this Supplement]

(2) In the name of an incorporated or unincorporated body, in its own right, except that they may not be registered in the names of commercial banks which are defined for this purpose as those accepting demand deposits: Provided, however, That bonds originally issued on or after January 1, 1944, may be registered in the name of a commercial bank holding savings deposits or issuing time certificates of deposit to the extent and conditions set forth in § 318.4 hereof. [Subparagraph (2) amended by Amdt. 1, June 12, 1944, 9 F.R. 6332]

[Preceding subparagraph, in small type, superseded by following subparagraph, during period covered by this Supplement]

(2) In the name of an incorporated or unincorporated body in its own right; but may not be registered in the names of commercial banks, which are defined for this purpose as those accepting demand deposits, except to such extent and under such conditions as may have been or may hereafter be provided specifically in official circulars governing the offering of other Treasury securities.