Appeal No. 2005-2643
Reexamination Control No. 90/005,842
Id. at 51, 3d full para. In January 1957, a choice of two kinds of index-linked accounts
became available to the public: in addition to the above taxable accounts, thereafter
called ‘A’ accounts, ‘B’ accounts were offered which were tax-free (like normal,
nonindexed deposit accounts) but gave only 50 per cent index compensation. Id. at 52,
2d full para. The interest rates for the two types of accounts were as follows:
`A’ and ‘B’ accounts at first carried the same basic rate of interest of
4¾ per cent. In January 1957, when ‘B’ accounts started, the index
clause for ‘A’ accounts was made more sensitive. Compensation was
now to be paid for full 1 per cent changes in the cost-of-living index,
instead of full 2 per cents. ‘B’ accounts received exactly half the index-
related compensation rate paid on ‘A’ accounts.
Id. at 54, 4th full para. The phrase “basic rate of interest” in the foregoing passage
refers to a fixed rate of interest. Appellant does not contend otherwise.
‘B’ accounts suffered a death blow when ‘A’ accounts, which provided full
indexing, were freed from taxation. Mukherjee at 56, 2d para.
Under the heading “Sudden death” at page 56, Mukherjee explains that in March
1968, a stabilization agreement signed by the central trade union and employer
organizations abolished the system of index linkage for wages, rents, business
contracts, bonds, and bank deposits and that this agreement precluded the index clause
from being applied to bank deposits after November 30, 1968. Id. at 56, 4th para.
Banks paid for the inflation-related costs of the indexed deposit accounts in
several ways. In the discussion of indexed government and industry bonds (at 57-63),
Mukherjee notes that “[b]anks and cooperative credit societies needed the income from
index bonds to help pay compensation on indexed deposit accounts.” Id. at 59, 1st full
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