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FED ER A L R E S E R V E BANK OF N EW YORK Fiscal Agent of the United States TCircular No. 6 2 8 7 1 L February 5, 1969 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,600,000,000 of 91-Day Bills, Additional Amount, Series Dated November 14,1968, Due May 15,1969 (To Be Issued February 13, 1969) $1,100,000,000 of 182-Day Bills, Dated February 13, 1969, Due August 14, 1969 To All Incorporated BanTcs and Trust Companies, and Others Concerned, in the Second Federal Reserve D istrict: 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 $2,700,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing February 13, 1969, in the amount of $2,704,449,000, as follow s: 91-day bills (to maturity date) to be issued February 13, 1969, in the amount of $1,600,000,000, or thereabouts, representing an additional amount of bills dated N o vember 14, 1968, and to mature M ay 15, 1969, orginally issued in the amount of $1,102,720,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,100,000,000, or thereabouts, to be dated February 13, 1969, and to mature August 14, 1969. 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 am ount will be payable without interest. T h ey 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, M onday, February 10, 1969. Tenders will not be received at the Treasury Department, W ashington. Each tender must be for an even multiple of $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 enve lopes 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 o f 2 percent o f the face amount of Treasury bills applied for, unless the tenders are accom panied by an express guaranty of payment by an incorporated bank or trust com pany. Imm ediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, follow in g which public announcement will be made by the Treasury D epart ment of the amount and price range of accepted bids. Th ose submitting tenders will be advised o f the acceptance or rejec tion thereof. The Secretary of the Treasury expressly reserves the right to accept or reject any or all tenders, in w hole or in part, and his action in any such respect shall be final. Subject to these reservations, noncom petitive 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 com petitive bids for the respective issues. Settle ment for accepted tenders in accordance with the bids must be made or com pleted at the Federal Reserve Bank on F eb ruary 13, 1969, in cash or other im mediately available funds or in a like face amount o f Treasury bills maturing February 13, 1969. Cash and exchange tenders w ill 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 o f the bills, does not have any exemption, as such, and loss from the sale or other disposition o f 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 o r hereafter im posed on the principal or interest thereof by any State, or any o f the possessions o f the United States, or by any local taxing authority. F or purposes o f taxa tion the am ount of discount at w hich Treasury bills are origi nally sold by the United States is considered to be interest. Under Sections 454(b) and 1221(5) o f the Internal Revenue Code of 1954, the amount o f discount at w hich 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. A ccordin gly, the owner of Treasury bills (other than life insurance co m 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 ordinary gain or loss. Treasury Departm ent Circular No. 418 (current revision) 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. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, February 10, 1969, at the Securities Department o f 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 the enclosed 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 February 6 , 1969, representing an additional amount of bills dated November 7, 1968, maturing May 8 , 1969; and 182-day bills dated February 6 , 1969, maturing August 7, 1969) are shown on the reverse side of this circular. A lfred H a y e s , President. RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED FEBRUARY 6, 1969) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing May 8,1969 182-Day Treasury Bills Maturing August 7, 1969 Price Approx. equiv. annual rate Price Approx. equiv. annual rate .. 98.429 6.215% 96.800 6.330% Low . . . 98.417 6.262% 96.781 6.367% Average 98.420 6.251%! 96.785 6.359%! High 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 6.44 percent for the 91-day bills, and 6.66 percent for the 182-day bills. (23 percent of the amount of 91-day bills bid for at the low price was accepted.) (50 percent of the amount of 182-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 May 8, 1969 .......... $ 27,870,000 Applied fo r Accepted Applied fo r District 182-Day Treasury Bills Maturing August 7,1969 $ 17,770,000 $ 5,684,000 Accepted $ 5,609,000 New York .................. .......... 2,097,084,000 1,145,344,000 1,661,449,000 799,771,000 Philadelphia................ .......... 36,595,000 21,113,000 16,894,000 6,894,000 .......... 41,519,000 41,238,000 41,487,000 29,937,000 .......... 28,066,000 18,066,000 18,354,000 6,254,000 .......... 35,780,000 26,114,000 33,991,000 20,466,000 188,091,000 128,676,000 174,025,000 114,425,000 42,004,000 39,314,000 35,914,000 17,489,000 25,688,000 9,188,000 14,759,000 .......... .......... .......... 53,835,000 31,863,000 .......... 33,736,000 31,236,000 17,778,000 ........ 31,579,000 21,194,000 23,346,000 13,346,000 191,453,000 90,241,000 131,161,000 43,461,000 San F ra n cisco .............. T otal ................. ........ $2,797,471,000 $l,600y485,000a $2,189,171,000 a In clu d e s $324,728,000 n o n co m p e titiv e ten ders a ccep ted at the average p rice o f 98.420. b In clu d e s $178,222,000 n o n com p etitiv e ten ders a ccep ted at the a vera ge p rice o f 96.785. $1,100,024,000b