Full text of Federal Reserve Bank of New York Circulars : 172. Victory Liberty Loan - Conversion Privilege

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CIRCULAR NO. 172

FEDERAL RESERVE BANK OF N E W YORK
BOND ISSUE
120
A D D R E S S ALL C O M M U N I C A T I O N S

BOND ISSUE

DIVISION

BROADWAY

TO

TELEPHONE

DIVISION

f £ R R I N

RECTOR

G

NEW

Y O R K . J U N E 10,

1919

VICTORY LIBERTY LOAN — CONVERSION PRIVILEGE

T o ALL B A N K S , T R U S T C O M P A N I E S AND SAVINGS BANKS
IN THE SECOND F E D E R A L R E S E R V E D I S T R I C T :
DEAR SIRS:

Enclosed you will find Treasury Department Circular No. 139, which contains rules and
regulations governing the conversion of Victory Liberty Loan Notes.
In accordance with this circular no conversions may be made until after July 15, 1919,
and we will appreciate your holding any notes to be converted until we furnish you with a supply
of forms to be used in this connection.




Yours very truly,
B E N j . STRONG,

Governor.

570O

VICTORY LIBERTY LOAN.
RULES AND REGULATIONS GOVERNING EXERCISE OF THE CONVERSION PRIVILEGE.

De^artxnenTctcular 139
Department Circular 139.

TREASURY

DEPARTMENT,

'

OFFICE OF T H E SECRETARY,
Loans and Currency.

Washington, May 20, 1919.
By virtue of the authority conferred upon the Secretary of the Treasury by the Second
Liberty Bond Act, as amended by the Victory Liberty Loan Act, and pursuant to the provisions
of Department Circular No. 138, dated April 21, 1919, offering for subscription United States of
America Convertible Gold Notes of 1922-1923 of the Victory Liberty Loan, in two series, as
described in said circular, the following rules and regulations are prescribed under which any
holder of 4f Per Cent Convertible Gold Notes of 1922-1923 (hereinafter called 4 | Per Cent Victory
Notes) or of 3|- Per Cent Convertible Gold Notes of 1922-1923 (hereinafter called 3f Per Cent
Victory Notes) may have his notes of either series converted at par into notes of the other
series, with adjustment in respect to accrued interest but otherwise without charge by the
United States.
In order to facilitate deliveries upon the original' issue, no conversions of the notes of
either series shall be made until after July 15, 1919.
The Secretary of the Treasury may prescribe from time to time further rules and regulations for the suspension of such privilege of conversion pursuant to the provisions of said
circular.
Conversions may be effected, subject to tne provisions of this circular, after July 15, 1919, by
presentation and surrender of notes to the respective Federal Reserve Banks in Boston, New York,
Philadelphia, Cleveland, Bichmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City,
Dallas, and San Francisco, or to the Secretary of the Treasury, Division of Loans and Currency,
Washington. Notes so presented and surrendered for conversion must be accompanied by a
"Request for Conversion" in the form prescribed by the Secretary of the Treasury (Form
L & C 214, hereto attached, copies of which may be obtained from any Federal Reserve Bank
or from the Secretary of the Treasury), signed with the respective autograph signatures of the
holders of the notes presented for conversion.
All coupon notes presented and surrendered for conversion must have attached thereto all
coupons maturing subsequent to the date of presentation and surrender, and all coupon notes
issued upon conversion thereof will have attached thereto all coupons maturing subsequent to
such date. All registered notes presented and surrendered for conversion prior to December
15, 1919, must have attached thereto coupon maturing December 15, 1919, and all registered
notes issued upon conversion thereof will have attached thereto coupon maturing on that date.
Upon conversion of coupon notes, coupon notes only will be delivered. Upon conversion
of registered notes, registered notes only will be delivered, inscribed in the respective names
of the respective holders of the notes surrendered for conversion. Registered notes so presented
for conversion need not be assigned.
Exchanges of coupon notes for registered notes or of registered notes for coupon notes, and
transfers of registered notes will not be permitted upon conversion, but must be conducted as
separate operations.
The transfer books for registered notes will be closed from May 16 to June 15 and from
November 16 to December 15 in each of the years 1920, 1921, and 1922, both dates inclusive in.
each case in each year, and will also be closed after April 20, 1923. Conversions of registered
notes will not be permitted during any such period when the transfer books for registered
notes are closed, and all registered notes presented and surrendered for conversion during any
such period will be converted as of the last day of the particular period during which such notes
are presented and surrendered, and no payment will be made or required to adjust interest.
113476°—19




_ ^

2
Notes will be delivered in like denominations as the notes upon the conversion of which
they are respectively issued, unless written request for delivery in other denominations be
submitted with Request for Conversion.
Transportation charges and risks upon notes presented for conversion must be borne by
the noteholders. Coupon notes to be delivered upon conversion will be delivered either
directly to the holders of notes surrendered for conversion at the time of such conversion,
or, in the absence of other written instructions and remittances to cover expenses, will bo
expressed at the owners' risk and expense. Registered notes to be delivered upon conversion,
unless delivered to the registered owner or his duly authorized representative, will be delivered
by registered mail, without expense to, but at the risk of, the registered owner, except that
such notes will be delivered by express at the risk and expense of the registered owner if
written request for such delivery be made. As the cost of transportation of coupon
notes by express is greater than by registered mail insured, holders of coupon note.;
desiring to present them for conversion are advised to consult with their own banks
or trust companies, for arrangements may be made, as between Federal Reserve Banks
and incorporated banks and trust companies, for transportation, to and from Federal
Reserve Banks by registered mail insured, of the notes to be converted and the notes to bo
issued upon conversion, the charges in each case to be paid by the respective holders and to be
remitted by the incorporated banks and trust companies to the Federal Reserve Banks. Information concerning any such arrangements will be furnished by Federal Reserve Banks to
incorporated banks and trust companies.
Holders of 4f Per Cent Victory Notes, who desire to convert their holdings, should present
and surrender such notes for conversion, as provided above, and, unless the notes are surrendered for conversion on an interest date (or, in the case of registered notes, during a period
when the transfer books are closed), will receive, as soon as such payment can be conveniently made, check covering the difference between interest at the rate of 4f per cent per
annum and interest at the rate of 3f per cent per annum upon the par amount of such, notes, to
the respective dates upon which such notes shall have been surrendered for conversion from the
last preceding interest date, in accordance with the Interest Table set forth in Form L & C 191,
printed on pages 5-7 of this circular.
Holders of 3f Per Cent Viotory Notes, who desire to convert their holdings, should present
and surrender such notes for conversion, as provided above, und, unless the notes are surrendered for conversion on an interest date (or, in the case of registered notes, during a period
when the transfer books are closed), must pay to the United States, in the manner provided
below, the difference between interest at the rate of 3f per cent per annum and interest at the
rate of 4f per cent per annum upon the par amounts of such notes, to the respective dates
upon which such notes shall have been surrendered for conversion from the last preceeding
interest date, in accordance with said Interest Table.
No adjustments of interest will be necessary upon conversions of either registered or coupon
notes under this circular, if the notes are surrendered for conversion on an interest date.
All payments to the United States required as provided in this circular must be made in
cash or by post office or express money order, bank draft, or certified check, collectible without
exchange at the place where conversion is to be effected, and payable, if conversion is to be
effected at the Treasury Department, in Washington, to the order of "Treasurer of the United
States, Note Conversion Account," or, if conversion is to be effected at a Federal Reserve Bank,
payable to " Federal Reserve Bank of

,
(Here insert name of city in which bank is located.)

Note Conversion Account." No other forms of payment will be accepted. Such payments
must be sufficient to cover interest up to the date when such payments will actually be received
at the place where conversion is to be effected.
The Secretary of the Treasury reserves the right to make, from time to time, any supplementary or amendatory rules and regulations governing the exercise of the conversion privilege,
information as to which may be obtained from the Treasury Department, or through any
Federal Reserve Bank.



CARTER GLASS,
Secretary of the Treasury.

•

TBEASUKY DEPARTMENT.
Loans and Currency.
F o r m I- & C 214

VICTORY NOTES
R E Q U E S T F O R CONVERSION
Only one series of notes may be entered on this form, and separate forms must also be used for (1)
coupon notes and (2) registered notes.
Dated

,19

To the SECRETARY OF THE TREASURY.
The undersigned herewith presents and surrenders—
Per Cent Victory N o t e s
$
(Interest rate borne by notes presented herewith for conversion.)
in!
. Jv
, \ form, and requests that the same be converted into an equal face amount of Victory notes of the other series
according to t h e terms of Treasury Department Circular No. 139, dated May 20, 1919.
any, are given b y the undersigned on t h e back hereof.

Special instructions, if

Autograph signature of holder in full
Address, number and street
(For delivery of notes.)
City or town
County

State.

1. If 4J Per Cent Victory Notes are surrendered for conversion, the execution of the above form is all that is required.
2. If3J Per Cent Victory Notes are surrendered for conversion, payment must be made to the United States of the amounts required to adjust
interest. The form covering remittance appearing on the back hereof must be used.
3. Payments whenever required to adjust interest must be sufficient to cover such interest up to the date when such payments will be actually
received at the place of conversion. Such payments must be made in cash, or by post-office or express money order, bank draft, or certified
check collectible without exchange at the place where conversion is to be effected, and payable, if conversion is to be effected at the Treasury
Department in Washington, to the order of "Treasurer of the United States, Note Conversion Account," or, if conversion is to be effected
at a Federal Reserve Bank, payable to "Federal Reserve Bank of
(Here insert name of city in which bank is located.)
Note Conversion Account." No other forms of payment will be accepted.
4. Registered notes surrendered for conversion need not bo assigned. Registered notes will not be converted during the period when the
registration books are closed against transfers




(3)

Following forms to be used only for giving special instructions:
I. If 3% Per Cent Victory Notes are presented for conversion, this form m u s t be used in remitting to
cover a d j u s t m e n t of interest.
Referring to $

, face amount, of notes surrendered for conversion herewith, the undersigned

herewith incloses $

, being amount necessary to adjust interest thereon from

,

1 9 . . . , to
, 1 9 . . . , in accordance with Interest Table, appearing in Treasury Department Circular
No. 139, dated May 20, 1919.
Signature of person signing request for conversion

E3_
I I . If delivery is desired of n o t e s i n a different d e n o m i n a t i o n or denominations from the note or notes
surrendered use t h i s form.
Referring to $
, J face amount of notes surrendered for conversion herewith, the
undersigned hereby requests delivery of notes upon conversion as follows:
Number of notes.

Denominations.

Total.

$50
$100
$500

'

$1,000
$5,000
$10,000
2$50,000
2*100,000
Total,* $
1

These amounts must be the same; otherwise request may be disregarded.
' Coupon notes are aot issued in these denominations.

Signature of person signing request for conversion.




5
TREASTHIY

r

DEPARTMENT,

Division oi Loans a n d Currency.
( E d . 50,000—Apr. 16-19.)
Form L & C 191.

aAio

VICTORY LIBERTY LOAN.
TABLE FOR COMPUTING INTEREST ADJUSTMENTS UPON CONVERSION OF NOTES.
I N T E R E S T AT 1 P E R C E N T P E R ANNTJM (J P E R C E N T P E R HAI^F Y E A R ) .
(See explanation at end.)
$1,000.

$5,000.

Number
of days.

$1,000.

$5,000

Number
of days.
Half year of
182 days.

Half vear of
1S3 days.

Half year of
182 days.

Half year of
183 days.

1
$0.027473
2
.054945
3
.082418
4
.109890
6....
.137363

$0.027322
.054645
.081967
.109290
.136612

$0.137363
.274725
.412088
.549451
.686813

6
7
8
9
10

.164835
.192308
.219780
.247253
.274725

.163934
.191257
.218579
.245902
.273224

.824176
.961538
1.098901
1.236264
1.373626

.819672
.956284
1.092896
1.229508
1.366120

56
57
58
59
60

1.538462
1.565934
1.593407
1.620879
1.648352

11
12
13
14
15

.302198
.329670
.357143
.384615
.412088

.300546
.327869
.355191
.382514
.409836

1.510989
1.648352
1.785714
1.923077
2.060440

1.502732
1.639344
1.775956
1.912568
2.049180

61....
62....
63
64
65

16
17
18
19
20

.439560
.467033
.494505
.521978
.549451

.437158
.464481
.491803
.519126
.546448

2.197802
2.335165
2.472527
2.60989O
2.747253

2.185792
2.322404
2.459016
2.595628
2.732240

21
22
23
24
25

.576923
.604396
.631868
.659341
.686813

.573770
•6O1093
.628415
.655738
.683060

2.884615
3.021978
3.159341
3.296703
3.434066

26
27
28
29
30

.714286
.741758
.769231
.796703
.824176

.710383
.737705
.765027
.792350
.819672

31
32
33
34
35

.851648
.879121
.906593
.934066
.961538

36
37
38
39
40

$0.136612
.273224 ,
.409836
.546448
.683060

Half year of
182 days.

Half rear of
183 days.

51.... $1.401099 $1.393443
1.428571
1.420765
52
53.... 1.456044
1.448087
54
1.483516
1.475410
55.... 1.510989
1.502732

Half year of
182 days.

Half year of
183 days.

$7.005495
7.142857
7.280220
7.417582
7.554945

$6.967213
7.103825
7.240437
7.377040
7.513661

1.530055
1.557377
1.584699
1.612022
1.639344

7.692308
7.829670
7.967033
8.104396
8.241758

7.650273
7.786885
7.923497
8.060109
8.196721

1.675824
1.703297
1.730769
1.758242
1.785714

1.666667
1.693989
1.721311
1.748634
1.775956

8.379121
8.516484
8.653846
8.791209
8.928571

8.333333
8.469945
8.606557
8.743169
8.879781

66
67
68
69
70

1.813187
1.840659
1.868132
1.895604
1.923077

1.803279
1.830601
1.857923
1.885246
1.912568

9.065934
9.203297
9.340659
9.478022
9.615385

9. CI 6393
9.153005
9.289617
9.426229
9.562842

2.868852
3.005464
3.142077
3.278689
3.415301

71
72
73
74
75....

1.950549
1.978022
2.005495
2.032967
2.060440

1.939891
1.967213
1.994536
2.021858
2.049180

9.752747
9.890110
10.027473
10.164835
10.302198

9.699454
9.836066
9.972678
10.10929O
10.245902

3.571429
3.708791
3.846154
3.983516
4.120879

3.551913
3.688525
3.825137
3.961749
4.098361

76
77
78
79
80

2.087912
2.115385
2.142857
2.170330
2.197802

2.076503
2.103825
2.131148
2.158470
2.185792

10.43956O
10.576923
10.714286
10.851648
10.989011

10.382514
10.519126
10.655738
10.792350
10.928962

.846995
.874317
.901639
.928962
.956284

4.258242
4.395604
4.532967
4.670330
4.807692

4.234973
4.371585
4.508197
4.644809
4.781421

81....
82
83.. .
84....
85

2.225275
2.252747
2.280220
2.307692
2.335165

2.213115
2.240437
2.267760
2.295082
2.322404

11.126374
11.263736
11.401099
11.538462
11.675824

11.065574
11.202186
11.338798
11.475410
11.612022

.989011
1.016483
1.043956
1.071429
1.098901

.983607
1.010929
1.038251
1.065574
1.092896

4.945055
5.082418
5.219780
5.357143
5.494505

4.918033
5.054645
5.191257
5.327869
5.464481

86...
87....
88....
89
90

2.362637
2.390110
2.417582
2.445055
2.472527

2.349727
2.377049
2.404372
2.431694
2.459016

11.813187
11.950549
12.087912
12.225275
12.362637

11.748634
11.885246
12.021858
12.158470
12.295082

41
42
43
44
45...-

1.126374
1.153846
1.181319
1.208791
1.236264

1.120219
1.147541
1.174863
1.202186
1.229508

5.631868
5.769231
5.906593
6.043956
6.181319

5.601093
5.737705
5.874317
6.010929
6.147541

91
92
93....
94....
95....

2.500000
2.527473
2.554945
2.582418
2.609890

2.486339
2.513661
2.540984
2.568306
2.595628

12.500000
12.637363
12.774725
12.912088
13.049451

12.431694
12.568306
12.704918
12.841530
12.973142

46
47
48
49
50

1.263736
1.291209
1.318681
1.346154
1.373626

1.256831
1.284153
1.311475
1.338798
1.366120

6.318681
6.456044
6.593407
6.730769
6.868132

6.284153
6.420765
6.557377
6.693989
6.830601

96....
97
©8....
99
100

2.637363
2.664835
2.692308
2.719780
2.747253

2.622951
2.650273
2.677596
2.704918
2.732240

13.186813
13.114754
13.324176
13.251366
13.461538 , 13.387978
13.598901 1 13.524590
13.736264 ; 13.661202




1

I N T E R E S T AT 1 P E R CENT P E R A N N U M (} P E R CENT P E R H A L F YEAR)—Continued
(See explanation at end.)
Lffi/

$1,000.

$5,000.

$1,000.

Number
of days.

$5,000.

Number
of days.
Half year of
182 days.

101.... $2.774725
102
2.802198
103
2.829670
104
2.857143
105
2.884615

Half year of
183 days.

Half year of
183 days.

Half year of
182 days.

$2.759563 $13.873626 $13.797814
2.786885
14.010989
13.934426
2.814208
14.148352
14.071038
2.841530
14.285714
14.207650
2.868852
14.423077
14.344262

106
107
108....
lOS
110....

2.9120882.939560
2.967033
2.994505
3.021978

2.896175
2.923497
2.950820
2.978142
3.005464

14.560440
14.697802
14.835165
14.972527
15.109890

14.480874
14.617486
14.754098
14.890710
15.027322

in
llg....
113....
114....
115...

3.049451
3.076923
3.104396
3.131868
3.159341

3.032787
3.060109
3.087432
3.114754
3.142076

15.247253
15.384615
15.521978
15.659341
15.796703

15.163934
15.300546
15.437158
15.573770
15.710383

11G....
117...
118
11G....
120....

3.186813
3.214286
3.241758
3.269231
3.296703

3.169399
3.196721
3.224044
3.251366
3.278689

15.934066
16.071429
16.208791
16.346154
16.483517

15.846995
15.983607
16.120219
16.256831
16.393443

121
122..-.
123....
124
125

3.324176
3.351648
3.379121
3.406593
3.434066

3.306011
3.333333
3.360656
3.387978
3.415301

16.620879
16.758242
16.895604
17.032967
17.170330

16.530055
16.666667
16.803279
16.939891
17.076503

126
127
126....
129....
130....

3.461538
3.489011
3.516483
3.543956
3.571429

3.442623
3.469945
3.497268
3.524590
3.551913

17.307692
17.445055
17.582418
17.719780
17.857143

131...132..-.
133....
134....
135

3.598901
3.626374
3.653846
3.681319
3.708791

3.579235
3.606557
3.633880
3.661202
3.688525

17.994505
18.131868
18.269231
18.406593
18.543956

136....
137....
138...
130....
140....

3.736264
3.763736
3.791209
3.818681
3.846154

3.715847
3.743169
3.770492
3.797814
3.825137

18.681319
18.818681
18.956044
19.093407
19.230769

141..-142..--

3.873626
3.901099

3.852459
3.879781

19.368132
19.505495

Half year of
182 days.

Half vear of
183 days.

Half year of
182 days.

Half year of
183 days.

143
144
145

$3.928571
3.956044
3.983516

146
147
148
149
150

4.0109S9
4.038462
4.065934
4.093407
4.120879

3.989071
4.016393
4.043716
4.071038
4.098361

20.054945
20.192308
20.329670
20.467033
20.604396

19.945355
20.081967
20.218579
20.355191
20.491803

151
152
153
154
155

4.148352
4.175824
4.203297
4.230769
4.258242

4.125683
4.153005
4.180328
4.207650
4.234973

20.741758
20.879121
21.016484
21.153846
21 291209

20.628415
20.765027
20.901639
21.038251
21.174863

156
157
158
159
160

4.285714
4.313187
4.340659
4.368132
4.395604

4.262295
4.289617
4.316940
4.344262
4.371585

21.428571
21.565934
21.703297
21.840659
21.978022

21.311475
21.448087
21.584699
21.721311
21.857923

161
162
163
164
165

4.423077
4.450549
4.478022
4.505495
4.532967

4.398907
4.426230
4.453552
4.480874
4.508197

22.115385
22.252747
22.390110
22.527473
22.664835

21.994536
22.131148
22.267760
22.404372
22.540984

4.560440
4.587912
4.615385
4.642857
4.670330

4.535519
4.562842
4.590164
4.617486
4.644809

22.802198
22.939560
23.076923
23.214286
23.351648

22.677596
22.814208
22.950820
23.087432
23.224044

4.697802
4.725275
4.752747
4.780220
4.807692

4.672131
4.699454
4.726776
4.754098
4.781421

23.489011
23.626374
23.763736
23.901099
24.038462

23.360656
23.497268
23.633880
23.770492
23.907104

4.835165
4.862637
4.890110
4.917582
4.945055

4.808743 S 24.175824
4.836066 t 24.313187
4.863388
24.450549
4.890710
24.587912
4.918033
24.725275

24.043716
24.180328
24.316940
24.453552
24.590164

4.972527
5.000000

4.945355
4.972678
5.000000

24.862637
25.000000

24.726776
24.863388
25.000000

166
167....
17.213115 ; 168
17.349727 169...
17.486339 170
17.622951
17.759563 171....
172
17.896175 173
18.032787 174
18.169399 175
18.306011
18.442623 176
177
18.579235 178
18.715847 179
18.852469 180
18.989071
19.125683 181....
182
19.262295 183
19.398907

$3.907104 $19.642857 $19.535519
3.934426
19.780220
19.672131
19.917582
3.961749
19.808743

The number of days elapsed, ia connection with the conversion table, Victory Liberty Loan, is found by
taking the day of the month of such conversion, and for—
Mav, 1919
June l t o l 5 , 1919

subtracting
adding

20
11

Leap year:
March
April
May
June 1 to 15

subtracting 15
adding 15
adding 46
adding 77
adding 107
adding 138
adding 168

December 15 to 31
January
February
March
April
May
June 1 to 15

adding 76
adding 107
adding 137
adding 168

For any other month—
June 15 to 30
August
September
October
November
December 1 to 15



subtracting
adding
adding
adding
adding
adding
add n?

15
16
47
.75
106
136
167

7
EXPLANATION.
The difference in interest borne by the two series of Victory Notes, each series being dated May 20, 1919,
and having identical interest payment dates, is 1 per cent per annum. Interest on such notes is payable on
December 15, 1919, thereafter semiannually on June 15 and December 15, and at maturity. If 4f per cent notes
are converted into 3f per cent notes, the interest adjustment is in favor of the holder. If 3f per cent notes- are
converted into 4J per cent notes, the interest adjustment is in favor of the Government. In making adjustments in favor of the United States, interest at 1 per cent must be computed from the last interest payment
date to the date the notes are presented (received) at a Federal Reserve Bank or the Treasury Department,
Washington, and remittance is available at par. Interest on Victory Notes is computed on a semiannual basis,
and for fractional periods on the actual number of days elapsing within such semiannual period. The semiannual period ending December 15 contains 183 days. The semiannual period ending June 15 contains 182
days, except that in leap years it contains 183 days. The correct amount of interest adjustment may be
ascertainea from the foregoing table, the interest adjustment on each $1,000 or $5,000 notes being set opposite
the actual number of elapsed days from the last interest payment date to the date the notes are presented for
conversion, the appropriate column being used.
Inasmuch as the interest payment on December 15, 1919, covers more than six months' interest, for conversions prior to such date reference must be made to both columns in order to determine the correct adjustment. For example, if conversion of a $1,000 note is made on July 15, the correct computation is as follows:
Example (a):
May 20 to June 15. 26 lapsed days. 182-day period. Reference to the table shows the interest
difference to be $0.7143.
June 15 to July 15 30 lapsed days. 183-day period. Reference to the table shows the interest
difference to be $0.8197.
Total adjustment accordingly is $1,534.
Following are examples of correct interest adjustments after December 15, 1919, for a $1,000 note:
Example (b):
Conversion February 15, 1920. Last interest payment December 15, 1919. Accordingly 62 days
have elapsed in a 183-day period (leap year), and reference to table shows the interest difference to be $1.69.
Example (c):
February 15, 1921. Last interest payment December 15, 1920. Accordingly 62 days have
elapsed in a 182-day period, and reference to table shows the interest difference to be $1.70.




WASHINGTON : GOVERNMENT riJINTING OFFICE : I 0 i l