The Tacoma times. [volume] (Tacoma, Wash.) 1903-1949, 1942-01-31

The words OF Oscar NJ. Powell
executive director of the social Sc
curity board. explain the system
of handling those huge and sccu-
mulating contributions OF working
American men and women.
TWO FUNDS CREATED
There are. a. you know" he
writes. two federal funds ere
ated by the social seeurity act, as
amended. the old-age and survivors
insurance trust fund. and the I'M
employment trust fund.
Expenditures from the old-age
and survivors insurance trust
fund are limited by law to benefit
payments under the old-age and
survivors insurance program. and
necessary expenditures incurred in
administration Of the program.
Disbursements may be made
from the unemployment trust
fund only 10 meet current re-
tpt
compensation payments.
1T Is obvious that the money
not required for current expendi-
lures cannot be kept in cash The
assets of these two social security
trust funds are. therefore. invest
ed in much the same manner that
the reserve funds OF any financial
institution are invested. Invest
ments Of social insurance funds
must be safe. must be readily con-
vertible into cash. and should bring
in some return. The investments
of the two trust funds in United
States government securities as
required by law meet these invest
ment criteria.
NOT PRIVATE INVESTORS
The purchase by In two trust
funds of special government obh-
cations at issue rather than in the
open market makes available to
the general fund of the treasury
the amounts 80 invested Fiscally.
the transactions are equivalent to
the treasury's selling the obliga-
tions TO the public and receiving
cash. In this case, however. the
trust funds rather than private in
vestors are the creditors OF the
treasury.
because funds are made
available to the treasury In
this manner. the privately
held government debt, though
not the total government debt,
Ia less than II the government
relied entirely ON private Dor
rowing 10 meet budget def
cits.
Funds borrowed from the trust
funds by the treasury in this man.
ner are not unmarked or in any
other manner related to specific
expenditures from tho general
fund of the treasury. Portions Of
the assets of the trust fund are
converted into cash whenever nee
essary TO meet the requirements
for benefit payments under either
Of the two social insurance pro-
grams
VARY IN INTEREST
The social security director
showed that the total old-age and
survivors insurance trust fund at
+ the end OF October amounted TO
S2.6ll 900 900. OF that, S2.546.-
00O. 900 has been invested in spe-
cial government securities. The re-
mainder is held in cash To meet
current disbursements.
Treasury notes held. first Of
which Will mature June SO. 1912.
vary in interest. paying 10 the
fund some pa per cent, pa and
three per cent
With the socisl insurance trust
funds the government can look for
ward in future times of budget
balance 70 purchasing securities
in the open market and thus re-
ducing the privstely-held govern
ment debt
SECONDARY INCOME
Already the interest on those
treasury obligations has paid TO
the trust fund total of si43. 800
/ 600. Such interest constitutes q
secondary stream Of income.
+ The plan can be followed into
{ the future when the pubic.
through It's social insurance tax
contributions. may OWE = ms lor
part OF the government debt. In
turn those public funds will be put
20 work In government eNpendi-
lures and viii return 10 the pubic
as whole the interest payments
which formerly have gone 10 pri-
sate investors.
ITO lie Continnedl
Siork Doubles Up
Twice in Same Year
CESrRAIIA. m-Mrs. James
Stziiings Of centrsiia had four
children during 1871. She gave