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FEDERAL RESERVE BANK
OF N EW YORK
Fiscal Agent of the United States

J
rCircular No. 5 8 o 8 ~ l
U August 18, 1966 J

Offering of $1,000,000,000 of Special 365-Day Treasury Bills
D a ted A u g u st 3 1 , 1 9 6 6

D u e A u g u st 3 1 , 1 9 6 7

To All 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, released for publication today at 4 p.m.,
Eastern Daylight Saving time:
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
August 31, 1966, in the amount of $1,000,277,000, to be issued
on a discount basis under competitive and noncompetitive
bidding, as hereinafter provided. The bills of this series will
be dated August 31, 1966, and will mature August 31, 1967, 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
Daylight Saving time, Thursday, August 25, 1966. 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 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.
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 1 reasury 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 August 31, 1966, in cash or other immediately
available funds or in a like face amount of Treasury bills matur­
ing August 31, 1966. 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 Daylight Saving time, Thursday, August 25, 1966, 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 in maturing Treasury bills.




A

lfred

H

ayes,

President.
( over)

No.
TENDER FOR SPECIAL 365-DAY TREASURY BILLS
Dated August 31, 1966

Due August 31, 1967
Dated at ........................................................
.........................................................., 19____

T o F e d e r a l R e s e r v e B a n k o f N ew Y o r k ,

Fiscal Agent of the United States.

Pursuant to the provisions o f Treasury Department Circular No. 418 (current revision) and to the
provisions of the public notice issued by the Treasury Department and printed on the reverse side of this tender,
the undersigned hereby offers to purchase the above-described Treasury bills in the amount indicated below,
and agrees to make payment therefor at your Bank on or before the settlement date specified in the public notice
at the price indicated b elow :
C O M P E T IT IV E TEN D ER

r

Do not till in both Competitive and
Noncompetitive tenders on one form

$ ............................................................ (maturity value),
or any lesser amount that may be awarded.
P rice : .....................................per 100.
(Price must be expressed with not more than three
decimal places, for example, 99.925)

]

N O N C O M PE TITIV E TE N D E R

$ ............................................................ (maturity value).
(Not to excccd $200,000 for one bidder through all sources)

A t 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

□
□

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:
□

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

(Payment cannot be made through
Treasury Tax and Loan Account)

zvill be accepted)

Total

* 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”
-1

B y ...............................
T i t l e .............................

(Please print)

By

(Official signature(s) required)

..................

Title ...........

Address

(Banks submitting tenders for customer account must indicate names below, or attach a list)

(Name of customer)

(Name of customer)

IN S T R U C T IO 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.




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