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F E D E R A L R E S E R V E B A N K O F N EW YO R K Fiscal Agent of the United States rC ircular No. 6 5 4 9 T I M ay 27, 1970 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,800,000,000 of 91-Day Bills, Additional Amount, Series Dated March 5, 1970, Due September 3, 1970 (To Be Issued June 4, 1970) $1,300,000,000 of 182-Day Bills, Dated June 4, 1970, Due December 3, 1970 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 at 4 p.m. today: The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $3,100,000,000, or thereabouts, for cash and in exchange for Treas ury bills maturing June 4, 1970, in the amount of $3,001,707,000, as follows: 91-day bills (to maturity date) to be issued June 4, 1970, in the amount of $1,800,000,000, or thereabouts, repre senting an additional amount of bills dated March 5, 1970, and to mature September 3, 1970, originally issued in the amount of $1,301,680,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,300,000,000, or thereabouts, to be dated June 4, 1970, and to mature December 3, 1970. The bills of both series will be issued on a discount basis under competitive and noncompetitive 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 $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, Monday, June 1, 1970. Tenders will not be received at the Treasury Department, Washington. Each tender must be for an even multiple of $10,000, 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. 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 per mitted 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 invest ment 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. Only those submitting competitive 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) of accepted competi tive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on June 4, 1970, in cash or other immedi ately available funds or in a like face amount of Treasury bills maturing June 4, 1970. 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 treatment, 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 taxation now or hereafter im posed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing au thority. For purposes of taxation the amount of discount at which Treasury bills are originally sold by the United States is consid ered 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. Accord ingly, 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 ob tained from any Federal Reserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday, June 1, 1970, 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 the enclosed envelope marked “Tender for Treasury Bills (W eekly).” Tenders may be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. Paym ent for the Treasury bills cannot be made by credit through the Treas ury T ax and Loan Account. Settlem ent 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 May 28, 1970, representing an additional amount of bills dated February 26, 1970, m aturing August 27, 1970 ; and 183-day bills dated May 28, 1970, m aturing November 27, 1970) are shown on the reverse side of this circular. A lfred H a y es, President. ( o ver ) RESULTS OF LAST W EEKLY O FFER IN G OF TREASURY BILLS (TW O SERIES TO BE ISSUED MAY 28, 1970) Range of Accepted C om petitive Bids 91-Day Treasury Bills M aturing A ugust 27, 1970 Price 183-Day Treasury Bills Maturing Novem ber 2 7, 1970 Approx. equiv. annual rate Price Approx. equiv. annual rate H igh .............................. .................. 98.230a 7.002% 96.294 b 7.290% Low ............................. .................. 98.185 7.180% 96.256 7.365% Average ....................... .................. 98.197 7.133% 1 96.261 7.355% 1 a Excepting two tenders totaling $450,000. b Excepting two tenders totaling $520,000. 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 7.36 percent for the 91-day bills, and 7.75 percent for the 183-day bills. (3 percent of the amount of 91-day bills bid for at the low price was accepted.) (84 percent of the amount of 183-day bills bid for at the low price was accepted.) Total Tenders A pplied for and Accepted (By F ederal Reserve D istricts) 91-Day Treasury Bills M aturing A ugust 27, 1970 District Applied for Boston ......................... ............ $ 20,170,000 183-Day Treasury Bills M aturing Novem ber 27, 1970 Applied for Accepted $ 20,170,000 $ 6,500,000 Accepted $ 6,150,000 New York ..................... ............ 2,175,060,000 1,268,510,000 2,508,860,000 1,013,270,000 Philadelphia ................ ............ 35,950,000 20,950,000 9,710,000 9,710,000 Cleveland ....................... ............ 43,420,000 43,420,000 41,390,000 21,960,000 Richmond ..................... ............ 30,860,000 26,440,000 23,750,000 10,050,000 A tlanta ........................... ........... 39,900,000 34,500,000 42,960,000 17,470,000 Chicago ......................... ............ 225,270,000 191,280,000 285,760,000 136,500,000 St. Louis ....................... ............ 35,260,000 31,070,000 26,220,000 23,020,000 Minneapolis ................ ............ 28,730,000 15,820,000 22,420,000 4,530,000 Kansas C ity .................. ............ 33,200,000 31,430,000 29,790,000 22,950,000 Dallas ............................. ............ 27,530,000 15,530,000 24,480,000 11,180,000 San Francisco .............. ............ 156,600,000 100,980,000 194,080,000 23,480,000 ................ ............ $2,851,950,000 T otal $1,800,100,000c $3,215,920,000 c Includes $328,400,000 noncompetitive tenders accepted at the average price of 98.197. d Includes $193,220,000 noncompetitive tenders accepted at the average price of 96.261. $1,300,270,000 d
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