Full text of Federal Reserve Bank of New York Circulars : 63. United States Certificates of Indebtedness

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

CIRCULAR NO. 63.

FEDERAL RESERVE BANK
OF N E W YORK
N E W YORK,

May

1st,

1917.

U N I T E D STATES CERTIFICATES OF I N D E B T E D N E S S
DEAR SIRS:

Under the act of Congress approved by the President April 24, 1917, the Secretary of the
Treasury is authorized to borrow on short time certificates of indebtedness of the United States
in anticipation of or in addition to the forthcoming issue of government bonds. T h e certificates
of indebtedness, as well as the bonds, are exempt, both as to principal and interest, from all taxation, except estate or inheritance taxes, imposed by authority of the United States, or its possessions, or by any State or local taxing authority.
These certificates will be accepted a t par and accrued interest in payment for subscriptions
to the bond issues.
They are issued payable to bearer in denominations of $5,000, $10,000 and $100,000 each.
Interest from d a t e of issue is payable, with the principal, at maturity and is computed for the exact
number of days elapsed on a basis of 365 days to the year.

'

We are advised t h a t many investors who intend to purchase the new government bonds
have inquired for the 3 % certificates of indebtedness and t h a t since April 25th a large amount
of the certificates has been sold to such investors.
I t is believed t h a t banks and bankers throughout the country can render most effective
aid in the government financing by assisting in a wide distribution of these certificates to intending purchasers of the bonds. T h e gradual absorption of the certificates of indebtedness during
the next few weeks by investors other t h a n banks will thus greatly facilitate the ultimate distribution of very considerable amounts of the bonds with the least disturbance to the money market
a n d investment values.
We suggest, therefore, t h a t you consider bringing to the attention of your depositors and
customers, especially those who may be interested in the purchase of the bonds, the desirability
of purchasing certificates of indebtedness as they may be issued and of thus placing themselves in
a position to use the certificates in p a y m e n t for the bonds when the subscriptions are called,
meanwhile employing their funds a t a profitable rate of interest.
Appreciating the generous response of the banks and bankers of the district to the first
offering of certificates, we make these suggestions to indicate a means by which they may prepare themselves to render further valuable cooperation in regard to subsequent issues.




Respectfully,
R.

H.

TREMAN,

Deputy

Governor.

FEDERAL RESERVE BANK
OF N E W YORK
New York, May 2, 1917

Dear Sirs :
The Secretary of the Treasury has to-day authorized the Federal
reserve banks to receive subscriptions for an additional issue of two
hundred million dollars of United States Treasury certificates of indebtedness .
Certificates dated May 10, 1917, due July 17, 1917, will be issued in
bearer form in denominations of $1,000., $5,000., $10,000., and $100,000., and
will carry interest at the rate of 3$ per annum.
Payments for subscriptions in this district are to be made May 10, 1917,
at the Federal Reserve Bank of New York in New York funds.
The issue will be limited to two hundred million dollars, and as
soon as subscriptions for the full amount have been received, the subscription
list for this issue will be closed.

Should the certificates of indebtedness

*not be ready for delivery on May 10th, interijn receipts will be issued pending delivery of the certificates.
In accordance with our circular letter of yesterday, we suggest that
you consider bringing to the attention of your depositors and customers, especially those who may be interested in the purchase of the forthcoming issue
of Government bonds, the desirability of purchasing the certificates of indebtedness which may be used in payment for the bonds and, meanwhile, will give
employment to their funds at a profitable rate of interest.
As fiscal agents, we shall be pleased to receive subscriptions to this
issue on the enclosed blank forms which kindly execute and return to this bank
before 1 P. M., Monday, May 7, 1917.




Respectfully,
R. H. TREMAN,
Deputy Governor.

FEDERAL RESERVE BANK
OF N E W YORK

Dear Sirs :
Under the Act of Congress approved by the President, April 24, 1917, the
Secretary of the Treasury has announced that he will make an additional issue
of Treasury certificates of indebtedness of the United States, to be dated May
25, 1917 ; to mature July 30, 1917 ; to carry interest at the rate of 3 1/4$ payable from date of issue with the principal at maturity, the interest computed
for the exact number of days elapsed on the basis of 365 days to the year.
Subscriptions will be accepted until $200,000,000 shall have been
subscribed and then subscription to this issue will be closed. The right to
scale subscriptions is reserved.
Certificates of indebtedness will be issued in denominations of
$1,000., $5,000., $10,000., $100,000., payable to bearer. The certificates, with
accrued interest, will be payable at maturity at the Treasury Department in
Washington and, optional with holders, at the Federal reserve banks.
These certificates will be receivable at par and accrued interest in
payment of accepted subscriptions for Liberty Loan bonds, under the same conditions as the certificates already issued.
These certificates of indebtedness are exempt, both as to principal
and interest, from all taxation except estate or inheritance taxes imposed by
authority of the United States or by its possessions, or any State or local taxing authority.
Payments for this issue of certificates are to be made to the Federal
Reserve Bank of New York on Friday, May 25, 1917, the date of issue, and you are
requested to advise this bank before 1 p. m. on Wednesday, May 23, 1917, as to
the amount for which you desire to subscribe, using the enclosed subscription
blanks in making your subscriptions, indicating the denominations desired, and
other details.
Interim receipts will be issued if necessary pending delivery of
definitive certificates.
T,he Secretary of the Treasury strongly recommends that these certificates be widely distributed and to that end has established a rate of 3 1/4%
with the particular purpose in view of encouraging the sale of these certificates to investors and smaller banks, even in those districts where higher money
rates usually prevail, and thus bring about a gradual general preparation
throughout the country for a convenient method of anticipating the payments for
the Liberty Loan.
We feel sure of your valuable cooperation in placing this additional
amount of certificates of indebtedness.
Respectfully,

New York, May 18,


R. H. TREMAN,
1917.

Deputy Governor.

Dated at

1917

FEDERAL RESERVE BANK OF N E W YORK,
N E W YORK, N.

Y.

DEAR SIRS:

Pursuant to the terms stated in your letter of May 2, 1917, please enter our subscription
at par for $

United States 3 per cent Temporary Loan dated

May 10, 1917, due July 17, 1917, which we agree to pay for at the Federal Reserve Bank of New
York on May 10, 1917.
Please be governed by the following instructions:
Issue the definitive certificates in the following denominations:
..„

at

$ 1,000 I

at

5,000

at

10,000

at

100,000
Total $_

Regarding disposition of temporary receipt (if any) :

Regarding disposition of definitive certificates:

Regarding method of payment by us:




Signed

Address

FEDERAL RESERVE BANK
OF N E W YORK

Sirs :
We have your favor of

and note your inquiry regarding

the Liberty Loan.
For your information, we beg to advise that the bonds will be dated
July 1, 1917, and will be ready for delivery on or about that date, and will
carry interest at the rate of 3 1/2%* per annum, payable semi-annually on January
1st and July 1st.
We expect subscriptions will be closed on June 15, 1917.
The bonds will be convertible into issues bearing a higher rate of
interest, if issued before the termination of the war.
Other details concerning this issue have not yet been determined upon,
but you will be promptly advised as soon as they are available.




Respectfully,
R. H. TREMAN,

Deputy Governor.

FEDERAL RESERVE BANK
OF N E W YORK

Sirs :
We acknowledge receipt of your subscription of $
"Liberty Loan".

*.

to the

Formal subscription blanks will be forwarded to you when

received from the Treasury Department.
For your information, we beg to advise that the bonds will be dated
July 1, 1917 and will be ready for delivery on or about that date, and will
carry interest at the rate of 3 1/2^ per annum, payable semi—annually on January
1st and July 1st.

We expect subscriptions will be closed on June 15, 1917.
The bonds will be convertible into issues bearing a higher rate of
interest, if issued before the termination of the war.

Other details concerning this issue have not yet been determined

upon, but you will be promptly advised as soon as they are available.




Respectfully,
R. H. TREMAN,
Deputy Governor.

FEDERAL RESERVE BANK
OF N E W YORK

Sirs :
We are pleased to advise that you have been allotted $
on account of your subscription to the temporary loan to the United States
Government to be dated May 10, 1917, bearing interest at 3<& per annum and to
mature July 17, 1917.
Kindly make payment for the same at par in New York funds between
10 a. m. and 1 p. m. on May 10th at this bank, at which time you will receive
our temporary receipt, which will be in negotiable form and exchangeable in
a few days for definitive certificates of indebtedness.
Will you also please furnish us with instructions regarding the
disposition of temporary receipt and or definitive certificates?




Very truly yours,
R. H. TREMAN,
Deputy Governor.