During the year the Chief Accountant and his staff participated in the determination of requirements regarding disclosures and financial statements pertaining to employee stock purchase, savings or similar plans. On July 23, 1962, a new Form 11-K was adopted for use in filing annual reports with respect to such plans, and Regulation S-X was amended by the addition of a new Article 6C which prescribes the form and content of the financial statements to be filed."

Shortly after the close of the fiscal year, the Commission issued its findings, opinions, and orders in two proceedings under Rule 2(e) of its Rules of Practice. In Arthur Levison," the Commission found that Levison, a certified public accountant, was not in fact independent with respect to a registrant and was therefore disqualified under Rule 2-01(b) of Regulation S-X from certifying its financial statements. Levison's lack of independence resulted from the facts that he had been an employee of the registrant and had served as a director of an associated company during the period under report. In addition he certified materially false and misleading financial statements of the registrant and an affiliated company without having audited or ever having seen the books and records of either company. Because Levison's conduct constituted a serious breach of the standards of his profession and of his responsibilities to the Commission and to the public, he was denied the privilege of practicing before the Commission.

In Morton I. Myers," the Commission held that Myers, a certified public accountant, engaged in unethical and improper professional conduct when he prepared a balance sheet for a "proposed corporation" on the basis of information supplied over the telephone by a client and sent the statement to the client with a covering letter addressed to the "Board of Directors," which falsely stated that he had examined the books and records of the "corporation." The balance sheet was used to obtain a bank loan, the proceeds of which were used to purchase control of a company whose stock was listed on the American Stock Exchange. After consideration of several factors urged by Myers in mitigation of his conduct, the Commission ruled that Myers should be denied the privilege of appearing or practicing before the Commission without its prior approval and that no application for approval would be entertained for a period of 1 year from the date of the order.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

Section 15 of the Bretton Woods Agreements Act, as amended, exempts from registration under both the Securities Act of 1933 and the Securities Exchange Act of 1934 securities issued, or guaranteed as to both principal and interest, by the International Bank for Reconstruction and Development. The Bank is required to file with the Commission such annual and other reports with respect to such securities as the Commission shall determine to be appropriate in view of the special character of the Bank and its operations and necessary in the public interest or for the protection of investors. The Commission has, pursuant to the above authority, adopted rules requiring the Bank to file quarterly reports and also to file copies of each annual report of the Bank to its board of governors. The Bank is also required to file reports with the Commission in advance of any distribution in the United States of its primary obligations. The Commission, acting in consultation with the National Advisory Council on International Monetary and Financial Problems, is authorized to suspend the exemption at any time as to any or all securities issued or guaranteed by the Bank during the period of such suspension.

During the Bank's last fiscal year ending June 30, 1962, the Bank made 29 loans totaling the equivalent of $882.3 million, compared with a total of $610 million last year. The loans were made in Argentina, Australia, Austria, Colombia (2 loans), Costa Rica (2 loans), Ethiopia (2 loans), Finland, Ghana, Iceland, India (5 loans), Israel, Japan, Kenya, Mexico (2 loans), Peru, Philippines (2 loans), South Africa (2 loans), Trinidad and Tobago and Venezuela. This brought the gross total of loan commitments at June 30 to $6,672.8 million. By June 30, as a result of cancellations, repayments, sales of loans and exchange adjustments, the portions of loans signed still retained by the Bank had been reduced to $4,665.4 million.

During the year the Bank sold or agreed to sell $318.8 million principal amount of loans. On June 30, the total sales of loans amounted to $1,332 million, of which all except $69 million was without the Bank's guarantee.

The outstanding funded debt of the Bank amounted to $2,520.8 million on June 30, 1962, reflecting a net increase of $292.3 million in the past year. During the year there was a gross increase in borrowings of $463 million. This increase consisted of three public bond issues, including an Italian lire issue in the amount of Lit. 15 billion (U.S. $24 million), a $100 million U.S. dollar issue, and a Swiss franc issue in the amount of Sw F 100 million ($23.3 million); the

private placement of an issue of $100 million of U.S. dollar bonds; the drawing down of the Swiss franc borrowing of Sw F 100 million ($23.2 million) of October 1961; the drawing down of U.S. $120 million and the balance of DM 250 million ($62.5 million) of the German borrowing of August 1960, and the delivery of $10 million of bonds which had been subject to delayed delivery arrangements. The funded debt was decreased by $170.7 million as a result of the maturing of $122.7 million of bonds, the redemption of Sw F 100 million ($23.2 million), the revaluation of the Canadian dollar issues by $3.2 million, $4.5 million of unissued bonds which were subject to delayed delivery, and sinking and purchase fund transactions amounting to $17.1 million.

During the fiscal year, Laos (with a capital subscription of $10 million), Liberia ($15 million), New Zealand ($166.7 million), Nepal ($10 million) and Cyprus ($15 million) became members of the Bank; the Dominican Republic was readmitted to membership in the Bank with a capital subscription of $8 million; and Syria resumed separate membership in the Bank with a capital subscription of $20 million. At June 30, 1962, the Bank had 75 members with capital subscriptions totaling $20,484.8 million.

INTER-AMERICAN DEVELOPMENT BANK

The Inter-American Development Bank Act, which authorizes the United States to participate in the new Inter-American Development Bank, provides an exemption for certain securities which may be issued by the Bank similar to that provided for securities of the International Bank for Reconstruction and Development. Acting pursuant to this authority, the Commission adopted Regulation IA, which requires the Bank to file with the Commission substantially the same information, documents and reports as are required from the International Bank for Reconstruction and Development. The Bank is also required to file a report with the Commission prior to the sale of any of its primary obligations to the public in the United States. Up to June 30, 1962, no such sales had been made.

During the year ending June 30, 1962, the Bank made 37 loans totaling the equivalent of $131,607,014 from its ordinary capital resources, bringing the gross total of loan commitments at June 30, to 49 loans aggregating $156,102,014, including $450,000 representing one loan which was cancelled. During the year, the Bank sold or agreed to sell $4,197,632 in participations in the aforesaid loans, all of such participations being without the guarantee of the Bank. The loans from the Bank's ordinary capital resources were made in Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Paraguay, Peru and Uruguay.

During the year the Bank also made 14 loans from its Fund for Special Operations totaling the equivalent of $39,035,000, bringing the gross total of loan commitments at June 30, to 21 loans aggregating $68,185,000, including $150,000 representing one loan which was cancelled. The Bank made 36 loans from the Social Progress Trust Fund, which it administers for the United States, aggregating $223,787,000. Lending operations of the Trust Fund commenced during the period.

The outstanding funded debt of the Bank on June 30, 1962, was Italian lire equivalent to $24,193,548 resulting from the sale of its bonds in Italy.

The subscribed capital of the Bank on June 30, 1962, was the equivalent of $813,160,000, of which $431,580,000 represented callable capital.

STATISTICS AND SPECIAL STUDIES

During the past fiscal year the Branch of Economic Research continued its regular work in connection with the statistical activities of the Commission and the overall Government statistical program under the direction of the Office of Statistical Standards, Bureau of the Budget. In addition, the Branch of Exchange Regulation continued its compilation of data on the stock market.

The statistical series described below are published in the Commission's Statistical Bulletin and in addition, except for data on registered issues, on corporate pension funds, and on the stock market, current figures and analyses of the data are published in quarterly press releases.

Issues Registered Under the Securities Act of 1933

Monthly statistics are compiled on the number and volume of registered securities, classified by industry of issuer, type of security, and use of proceeds. Summary statistics for the years 1935-62 are given in Appendix Table 1 and detailed statistics for the fiscal year 1962 appear in Appendix Table 2.

New Securities Offerings

This is a monthly and quarterly series covering all new corporate and noncorporate issues offered for cash sale in the United States. The series includes not only issues publicly offered but also issues privately placed, as well as other issues exempt from registration under the Securities Act such as intrastate offerings and railroad securities. The offerings series includes only securities actually offered for cash sale, and only issues offered for account of issuers. Annual statistics on new offerings for recent years as well as monthly figures

from January 1961 through June 1962, are given in Appendix Tables 3, 4, and 5.

Estimates of the net cash flow through securities transactions are prepared quarterly and are derived by deducting from the amount of estimated gross proceeds received by corporations through the sale of securities the amount of estimated gross payments by corporations to investors for securities retired. Data on gross issues, retirements and net change in securities outstanding are presented for all corporations and for the principal industry groups.

Individuals' Saving

The Commission compiles quarterly estimates of the volume and composition of individuals' saving in the United States. The series represents net increases in individuals' financial assets less net increases in debt. The study shows the aggregate amount of saving and the form in which the saving occurred, such as investment in securities, expansion of bank deposits, increases in insurance and pension reserves, etc. A reconciliation of the Commission's estimates with the personal saving estimates of the Department of Commerce, derived in connection with its national income series, is published annually by the Department of Commerce as well as in the Securities and Exchange Commission Statistical Bulletin.

Corporate Pension Funds

An annual survey is made of pension plans of all United States corporations where funds are administered by corporations themselves, or through trustees. The survey shows the flow of money into these funds, the types of assets in which the funds are invested and the principal items of income and expenditures.

Financial Position of Corporations

The series on the working capital position of all United States corporations, excluding banks, insurance companies and savings and loan associations, shows the principal components of current assets and liabilities, and also contains an abbreviated analysis of the sources and uses of corporate funds.

The Commission, jointly with the Federal Trade Commission, compiles a quarterly financial report of all United States manufacturing concerns. This report gives complete balance sheet data and an abbreviated income account, data being classified by industry and size of company.

Plant and Equipment Expenditures

The Commission, together with the Department of Commerce, conducts quarterly and annual surveys of actual and anticipated plant and equipment expenditures of all United States business, exclusive