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F E D E R A L R E S E R V E BANK O F N E W Y O R K
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Fiscal A gent o f the United States

Public Notice of Offering of $ 1 ,3 0 0 ,0 0 0 ,0 0 0 , or thereabouts, of 91-Day Treasury Bills
Dated July 2 5 , 1 9 4 6

Maturing October 2 4 , 1946

To all Incorporated Banks and Trust Companies in the
Second Federal R eserve District and Others Concerned:

Following is the text of a notice today made public by the Treasury Department with respect to a new offering of Treas­
ury bills payable at maturity without interest to be sold on a discount basis under competitive and fixed-price bidding.
TREASURY DEPARTM ENT
Washington

F O R R E L E A S E , M O R N IN G N E W S P A P E R S ,
Friday, July 19, 1946.
The Secretary o f the
bills, to be issued on a
series will be dated July
They will be issued in
(maturity value).

Treasury, by this public notice, invites tenders for $1,300,000,000, or thereabouts, of 91-day Treasury
discount basis under competitive and fixed-price bidding as hereinafter provided. The bills of this
25, 1946, and will mature October 24, 1946, when the face amount will be payable without interest.
bearer form only, and in denominations of $1,000, $5,000, $10,000, $100,000, $500,000, and $1,000,000

Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, two o’clock p.m., Eastern
Standard time, Monday, July 22, 1946. Tenders will not be received at the Treasury Department, Washington. Each tender
must be fo r an even multiple of $1,000, and the price offered must be expressed on the basis o f 100, with not more than
three decimals, e. g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed forms and forwarded
in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor.
Tenders will be received without deposit from incorporated banks and trust companies and from
recognized dealers in investment securities.
Tenders from others must be accompanied by payment o f 2
face amount o f Treasury bills applied for, unless the tenders are accompanied by an express guaranty of
incorporated bank or trust company.

responsible and
percent of the
payment by an

Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which
public announcement will be made by the Secretary of the Treasury o f the amount and price range o f accepted bids. Those
submitting tenders will be advised o f the acceptance or rejection thereof. The Secretary o f the Treasury expressly reserves
the right to accept or reject any or all tenders, in whole or in part, and his action in any such respect shall be final. Subject
to these reservations, tenders for $200,000 or less from any one bidder at 99.905 entered on a fixed-price basis will be accepted
in full. Payment o f accepted tenders at the prices offered must be made or completed at the Federal Reserve Bank in cash
or other immediately available funds on July 25, 1946.
The income derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, shall
not have any exemption, as such, and loss from the sale or other disposition o f Treasury bills shall not have any special
treatment, as such, under Federal tax Acts now or hereafter enacted. The bills shall be subject to estate, inheritance, gift,
or other excise taxes, whether Federal or State, but shall be exempt from all taxation now or hereafter imposed on the
principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority.
For purposes o f taxation the amount of discount at which Treasury bills are originally sold by the United States shall be
considered to be interest. Under Sections 42 and 117 (a ) (1 ) o f the Internal Revenue Code, as amended by Section 115 o f
the Revenue A ct o f 1941, the amount of discount at which bills issued hereunder are sold shall not be considered to accrue
until such bills shall be sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital
assets. Accordingly, the owner o f Treasury bills (other than life insurance companies) issued hereunder need include in
his income tax return only the difference between the price paid for such bills, whether on original issue or on subsequent
purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return
is made, as ordinary gain or loss.
Treasury Department Circular No. 418, as amended, and this notice, prescribe the terms o f the Treasury bills and govern the
conditions o f their issue. Copies o f the circular may be obtained from any Federal Reserve Bank or Branch.

In accordance with the above announcement tenders will be received at the Securities Department of this bank (9th
floor, 33 Liberty Street) New York 7, N. Y ., or at the Buffalo Branch of this bank (270 Main Street) Buffalo 5, N. Y.,
up to two o’clock p.m., Eastern Standard time (three o’clock p.m., “ Daylight Saving time” ), on Monday, July 22,
1946. It is requested that tenders be submitted on special form printed on reverse side and returned in special envelope
enclosed herewith. Payment for the Treasury bills cannot be made by credit through the War Loan Deposit Account.

Payment must be made in cash or other immediately available funds.
A lla n

S p r o u l,

President.

( Extract from Treasury Department statement released for publication July 16, 1946, announcing
results after tenders were opened for Treasury bills dated Jidy 18, 1946 maturing October 17, 1946)
Total applied for ..... $1,894,854,000
Total accepted ........... $1,310,517,000 (includes $40,356,000
entered on a fixed-price basis at
99.905 and accepted in full)
Average price .......

99.905+

Equivalent rate o f discount
approx. 0.375% per annum

Range o f accepted competitive bids :
H igh ........................

99.907

Equivalent rate o f discount
approx. 0.368% per annum

Low ..........................

99.905

Equivalent rate o f discount
approx. 0.376% per annum

(61 percent o f the amount bid for at the low price
was accepted)




Federal R eserve

Total
District Applied f o r

Boston ................................$
N ew Y ork .........................
Philadelphia .....................
Cleveland ..........................
Richmond ..........................
Atlanta ..............................
Chicago ..............................
St. Louis ...........................
Minneapolis .....................
Kansas City ......................
Dallas ................................
San Francisco .................

15,275,000
$
1,427,782,000
18,735,000
5,450,000
10,145,000
11,515,000
277,280,000
29,629,000
1,955,000
26,438,000
9,875,000
60,775,000

T otal ....................$1,894,854,000

Total
Accepted
10,985,000
920,236,000
14,445,000
5,450,000
8,702,000
11,476,000
243,350,000
19,216,000
1,955,000
21,368,000
9,719,000
43,615,000
$1,310,517,000
(O T D )

15Q
IM PORTAN T— If it is desired to bid on a competitive basis, fill in rate per 100 and
maturity value in paragraph headed "Competitive Bid” . If it is desired to bid on a fixedprice basis, fill in only the maturity value in paragraph headed "Fixed-Price Bid” .
DO N O T fill in both paragraphs on one form . A separate tender must be used fo r each bid.
No.

T E N D E R FOR 9 1 -D A Y TR E A SU R Y BILLS
Dated July 25, 1946.

Maturing October 24, 1946.

Dated at .............
To

.. . „1946
.

F e d e ra l R eserve B a n k o f N ew Y o rk ,

Fiscal Agent of the United States.
COMPETITIVE BID

FIXED-PRICE BID

Pursuant to the provisions of Treasury
Department Circular No. 418, as amended, and
to the provisions of the public notice on
July 19, 1946, as issued by the Secretary of
the Treasury, the undersigned offers to pay

Pursuant to the provisions of Treasury
Department Circular No. 418, as amended, and to
the provisions of the public notice on July
19, 1946, as issued by the Secretary of the Treas­
ury, the undersigned offers to pay a fixed-price
of 99.905 (rate per 100) for a total amount of

.......................................... * for a total amount of
(Rate per 100)

$.................................................. (maturity value)
of the Treasury bills therein described, or for
any less amount that may be awarded, payment
therefor to be made at your bank in cash or other
immediately available funds on the date stated
in the public notice.

$............................ ......... ........... (maturity value)
(Not to exceed $200,000)

of the Treasury bills therein described, payment
therefor to be made at your bank in cash or other
immediately available funds on the date stated
in the public notice.

The Treasury bills for which tender is hereby made are to be dated July 25, 1946, and are to mature on
October 24, 1946.
This tender will be inserted in special envelope entitled “ Tender for Treasury bills.”
N am e o f Bidder.
(Please print)
B y ........

(Official signature required)

(Title)

Street A ddress ...............................................
(City, Town or Village, P.O. No., and State)
I f this tender is subm itted fo r the account o f a custom er, indicate the custom er’s name on line b elow :

(Name of Customer)

(City, Town or Village, P.O. No., and State)

U se a separate tender fo r each custom er’s bid.

IMPORTANT INSTRUCTIONS:
1. N o tender for less than $1,000 w ill be considered, and each tender must be for an even multiple of
$1,000 (m aturity valu e). A separate tender must be executed for each bid.
2. I f the person m aking the tender is a corporation, the tender should be signed b y an officer o f the cor­
poration authorized to make the tender, and the signing o f the tender by an officer of the corporation will be construed as
a representation by him that he has been so authorized. If the tender is made by a partnership, it should be signed b y a
m em ber o f the firm, w ho should sign in the form “ ................................................................................................. a copartnership, by
..................................................................................................................... . a m em ber of the firm.”
3. T en ders will be leceived w ithout deposit from incorporated banks and trust com panies and from respon­
sible and recognized dealers in investm ent securities. T en ders from others must be accom panied by payment o f 2 per­
cent o f the face am ount of Treasury bills applied for, unless the tenders are accom panied b y an express guaranty of
paym ent by an incorporated bank or trust com pany.
4. I f the language o f this tender is changed in any respect, which, in the opinion of the Secretary o f the
Treasury, is material, the tender m ay be disregarded.

Payment b y credit through W ar Loan Deposit A ccount will not be permitted.


T E N T B -8 3 8-a


* Price must be expressed on the basis o f 100, with not more than
three decimal places. Fractions may not be used.

(ora)

¿1/ J///

FEDERAL RE SER VE BANK
O F NEW YORK
Fiscal Agent of the United States

July 19, 1946.
UNITED STATES SAVINGS BONDS
Received for Payment Shortly Before Increase in Redemption Value
To all Financial Institutions in the Second Federal Reserve
D istrict Authorized to M ake P aym en ts in Connection toitli
the Redemption o f United States Savings B on d s:

Paragraph 25 of the “ Memorandum of Instructions and Explanation Issued in Conjunction
with Department Circular No. 750, Revised, Prescribing Regulations Governing Payments by
Banks and Other Financial Institutions in Connection with the Redemption of United States
Savings Bonds” , which appears at page 19 of our Circular No. 2972, dated July 10, 1945, provides
as follows:
“ Bonds increase in redemption value at the end o f the first year from the issue date and at the end of
each successive half-year period thereafter until maturity. In the event a bond is presented to an agent
for payment just prior to a change in value o f the bond, the owner should be reminded of this fact by
the agent, if practicable, so that the owner may take advantage o f the pending increase in value, if he so
desires. Tn those cases, o f course, payment will be postponed to the appropriate tim e.”

The Treasury Department has received complaints from some bond owners that bonds, which
they presented for payment shortly before the dates on which such bonds increased in value, have
been redeemed at the redemption values current on the respective dates of presentation. These
owners felt that they were entitled to the increased value which became effective shortly after the
bonds were presented. It appears that this situation has arisen in some cases as the result of
misunderstanding or lack of specific instructions from the owners to defer payment until the date
on which the value increased, and in other cases as the result of the disregard by paying agents of
such instructions given by the owners.
In order to avoid situations of this nature and to insure that bond owners will receive payment
at the redemption values which they desire and to whicli they may be entitled, the Treasury
Department has requested us to instruct all paying agents to the following effect:
Whenever a bond is presented over-the-counter to a paying agent within 10 days prior to the maturity
date or any other date on which the bond increases in value, the paying agent should request the bond
owner to give it specific instructions whether he desires to wait until such date and receive, at that time,
the increased value o f the bond. I f the owner desires to obtain such increased value, he should be requested
to present the bond again on or after the date on which such increased value becomes payable. W henever
a paying agent receives a bond for payment by mail, or otherwise than over-the-counter, within or just
prior to the ten-day period before the maturity date or other date on which the bond increases in value,
the paying agent (in the absence of specific or implied instructions that immediate payment is desired)
may assume that the owner desires payment at the increased va lu e; in such a case, the paying agent should
hold the bond until such date and make payment in the usual manner at that time. In no case should the
increased redemption value be paid to a bond owner prior to the date on which such increase becomes
effective.

Additional copies of this letter will be furnished to any paying agent upon request.




A l l a n S prou l,

President.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102