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FEDERAL RESERVE BANK OF N EW YORK Fiscal Agent of the United States Circular No. 6 0 7 1 1 December 6, 1967 J OFFERING OF TWO SERIES OF TREASURY BILLS ,500,000,000 of 91-Day Bills, Additional Amount, Series Dated September 14,1967, Due March 14,1968 (To Be Issued December 14, 1967) $1,000,000,000 of 182-Day Bills, Dated December 14, 1967, Due June 13, 1968 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, released for publication today at 4 p.m., Eastern Standard time: The Treasury Department, by this public notice, invites tenders for tw o series of Treasury bills to the aggregate amount of $2,500,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing Decem ber 14, 1967, in the amount of $2,400,635,000, as follow s: 91-day bills (to maturity date) to be issued Decem ber 14, 1967, in the amount of $1,500,000,000, or thereabouts, representing an additional amount o f bills dated Sep tember 14, 1967, and to mature March 14, 1968, origi nally issued in the amount of $1,000,527,000, the addi tional and original bills to be freely interchangeable. 182-day bills, for $1,000,000,000, or thereabouts, to be dated D ecem ber 14, 1967, and to mature June 13, 1968. The bills of both series will be issued on a discount basis under competitive and noncom petitive bidding as hereinafter provided, and at maturity their 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 Stand ard time, M onday, D ecem ber 11, 1967. Tenders will not be received at the Treasury Department, W ashington. Each tender must be for an even multiple o f $1,000, and in the case of com petitive tenders the price offered must be expressed on the basis of 100, with not m ore than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed form s 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 ow n 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 o f 2 percent of the face amount o f 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, follow ing 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 each issue for $200,000 or less without stated price from any one bidder will be accepted in full at the average price (in three decimals) o f accepted competitive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or com pleted at the Federal Reserve Bank on D ecem ber 14, 1967, in cash or other immediately available funds or in a like face amount of Treasury bills maturing Decem ber 14, 1967. 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 o f the new bills. The incom e 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 o f 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 o f taxation the amount o f 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 o f 1954, the amount of discount at which bills issued here under 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. A ccordingly, the owner o f Treasury bills (other than life insurance com panies) issued hereunder need include in his incom e 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 ordi nary gain or loss. Treasury Department Circular No. 418 (current revision) and this notice prescribe the terms o f the Treasury bills and govern the conditions of their issue. Copies o f the circular may be obtained from any Federal Reserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, December 11 1967, at the Securities Department of its Head Office and at its Buffalo Branch. Tender forms for the respective series are enclosed. Please use the appropriate forms to submit tenders and return them in an envelope marked “ Tender for 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 Results of the last weekly offering of Treasury bills (91-day bills to be issued December 7, 1967, representing an additional amount of bills dated September 7, 1967, maturing March 7, 1968; and 182-day bills dated December 7 1967, maturing June 6, 1968) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST W EEK L Y OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED DECEMBER 7, 1967) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing March 7,1968 182-Day Treasury Bills Maturing June 6, 1968 Price A pprox. equiv. annual rate Price High ........................................... 98.746 4.961% 97.190 5.558% Low ........................................... 98.736 5.000% 97.174 5.590% Average ..................................... 98.739 4.989% 1 97.179 5.580%! Approx. equiv. annual rate 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 5.14 percent for the 91-day bills, 5.84 percent for the 182-day bills. (34 percent of the amount of 182-day bills bid for at the low price was accepted.) (46 percent of the amount of 91-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing March 7,1968 Applied for District Boston............... .......................... $ 19,161,000 182-Day Treasury Bills Maturing June 6, 1968 Applied for Accepted $ 9,161,000 $ 28,253,000 Accepted $ 7,153,000 ........................ 1,888,148,000 1,054,068,000 1,647,400,000 756,133,000 Philadelphia . . . .......................... 37,455,000 12,605,000 14,983,000 4,917,000 Cleveland ......... ........................ 48,773,000 23,690,000 64,010,000 29,390,000 Richmond......... ...................... 20,456,000 17,279,000 20,584,000 9,604,000 Atlanta ............. ...................... 57,263,000 34,261,000 43,433,000 23,323,000 Chicago............. ............... 247,267,000 135,089,000 277,607,000 78,917,000 St. L o u is........... .......................... 51,803,000 33,903,000 31,812,000 16,442,000 Minneapolis . . . ................. 28,746,000 18,336,000 21,328,000 7,868,000 Kansas City . . . ................... 26,729,000 20,487,000 13,787,000 11,287,000 26,129.000 13,929,000 14,174,000 8,874,000 . .......................... 309,780,000 127,320,000 238,498,000 46,823,000 T otal . . .......................... $2,761,710,000 New Y o r k ......... Dallas ............... .......................... San Francisco $1,500,128,000“ a Includes $216,041,000 noncompetitive tenders accepted at the average price of 98.739. b Includes $133,936,000 noncompetitive tenders accepted at the average price of 97.179. $2,415,869,000 $1,000,73 l,000l