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FEDERAL RESERVE BANK OF N E W YORK Fiscal Agent of the United States f Circular No. 5 6 3 2 j t March 18,1965 Offering of $1,000,000,000 of Special 365-Day Treasury Bills Dated March 31, 1965 Due March 31, 1966 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice issued by the Treasury Department for release today: The Treasury Department, by this public notice, invites tenders for $1,000,000,000, or thereabouts, of 365-day Treasury bills, for cash and in exchange for Treasury bills maturing March 31, 1965, in the amount of $1,001,464,000, to be issued on a discount basis under competitive and noncompetitive bidding, as hereinafter provided. The bills of this series will be dated March 31, 1965, and will mature March 31, 1966, when the face amount will be payable without interest. They will be issued in bearer form only, and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (maturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Standard time, Thursday, March 25, 1965. Tenders will not be received at the Treasury Department, Washington. Each tender must be for an even multiple of $1,000, and in the case of competitive tenders the price offered must be expressed on the basis of 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. (Notwithstanding the fact that these bills will run for 365 days, the discount rate will be computed on a bank discount basis of 360 days, as is currently the practice on all issues of Treasury bills.) 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. Banking institutions generally may submit tenders for account of customers provided the names of the customers are set forth in such tenders. Others than banking institutions will not be permitted to submit tenders except for their own account. Tenders will be received without deposit from incor porated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. 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 Treasury Department of the amount and price range of accepted bids. Those sub mitting tenders will be advised of the acceptance or rejection thereof. The Secretary of 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, noncompetitive tenders for $200,000 or less without stated price from any one bidder will be accepted in full at the average price (in three decimals) of accepted com petitive bids. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on March 31, 1965, in cash or other immedi ately available funds or in a like face amount of Treasury bills maturing March 31, 1965. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. The income derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, does not have any exemption, as such, and loss from the sale or other disposition of Treasury bills does not have any special treat ment, as such, under the Internal Revenue Code of 1954. The bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exempt from all taxa tion 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 of taxation the amount of discount at which Treasury bills are originally sold by the United States is considered to be interest. Under Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954, the amount of discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance com panies) 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 (current revision) and this notice, prescribe the terms of the Treasury bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. This Bank will receive tenders up to 1 :30 p.m., Eastern Standard time, Thursday, March 25, 1965, at the Securities Department of its Head Office and at its Buffalo Branch. Please use the form on the reverse side of this circular to submit a tender, and return it in the enclosed yellow envelope marked “ Tender for Special Treasury Bills.” Tenders may be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. Payment for the Treasury bills cannot be made by credit through the Treasury Tax and Loan Account. Settlement must be made in cash or other immediately available funds or maturing Treasury bills. A lfred H ayes , President. (over) IM PORTANT— The discount rate on the bills of this issue will be computed on a bank discount basis of 360 days, as is currently the practice on all issues of Treasury bills. No.................................. TENDER FOR SPECIAL 365-DAY TREASURY BILLS Dated March 31, 1965 To F e d e r a l R eserve B a n k of N ew Due March 31, 1966 Y Dated at .................................................... ..........................................................., 1965 ork, Fiscal Agent of the United States. Pursuant to the provisions of Treasury Department Circular No. 418 (current revision) and provisions of the public notice issued by the Treasury Department and printed on the reverse side of this the undersigned hereby offers to purchase the above described Treasury bills in the amount indicated and agrees to make payment therefor at your Bank on or before March 31, 1965 at the price indicated COMPETITIVE TENDER Do not fill in both Competitive and 1 Noncompetitive tenders on one form $ .........................................................(maturity value), or any lesser amount that may be awarded. P r ic e :...................................per 100. (Price must be expressed with not more than three decimal places, for example, 99.925) to the tender, below, below: NONCOMPETITIVE TENDER $ ........................................................ (maturity value). (Not to exceed $200,000 jor one bidder through all sources) At the average price of accepted competitive bids. Subject to allotment, please issue, deliver, and accept payment for the bills as indicated below: Pieces Denomination $ Maturity value 1,000 □ □ □ 5,000 u u 10,000 50,000 1. Deliver over the counter to the undersigned 2. Ship to the undersigned 3. Hold in safekeeping (for ac count of member bank only)* 4. Allotment transfer (see list attached) 5. Special instructions: Payment will be made as follows: O By charge to our reserve account □ By cash or check in immediately available funds □ By surrender of $ ................................ (maturity value) of maturing Treasury bills. Pay cash adjust ment, if any— 100,000 □ By check 500,000 □ By credit to our reserve account 1,000,000 /ATo changes in delivery instructions will be accepted) Total ( Payment cannot be made through Treasury Tax and Loan Account) * If this item is checked, the undersigned certifies that the allotted bills will be owned solely by the undersigned. Name of subscriber Insert this tender in yellow envelope marked “ Tender for Special Treasury Bills” | J ( Please print) By ............................... By (Official signature(s) required) T i t l e ............................. ................... T i t l e ................ A d d r e s s ............................................................................................................................... (Banks submitting tenders for customer account must indicate name on line below, or attach a list) (Name of customer) IN S T R U C T I O N S : 1. No tender for less than $1,000 will be considered, and each tender must be for an even multiple of $1,000 (maturity value). 2. Others than banking institutions will not be permitted to submit tenders except for their own account. Banks submitting tenders for customer account may consolidate competitive tenders at the same price and may consolidate non competitive tenders, provided a list is attached showing the name of each bidder, the amount bid for his account, and method of payment. Forms for this purpose will be furnished on request. 3. If the person making the tender is a corporation, the tender should be signed by an officer of the corporation authorized to make the tender, and the signing of 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 by a member of the firm, who should sign in the form “ .................................................................................................. . a copartnership, by .................................................................................................................. a member of the firm.” 4. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. 5. If the language of this tender is changed in any respect, which, in the opinion of the Secretary of the Treasury, is material, the tender may be disregarded.
@FedFRASER