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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States r Circular No. 6 8 6 3 1 U December 17, 1971 -J OFFERING OF TWO SERIES OF TREASURY BILLS 5,300,000,000 of 91-Day Bills, Additional Amount, Series Dated September 30,1971, Due March 30,1972 (T o Be Issued December 30,1971) $1,600,000,000 o f 182-Day Bills, Dated December 30, 1971, Due June 29, 1972 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: T h e Treasury Department, by this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o f $3,900,000,000, o r thereabouts, fo r cash and in exchange fo r Treasury bills maturing Decem ber 30, 1971, in the amount o f $3,901,690,000, as fo llo w s : companies and from responsible and recognized dealers in invest ment securities. Tenders from others must be accompanied by payment o f 2 percent o f the face amount o f Treasury bills applied for, unless the tenders are accompanied by an express guaranty o f payment b y an incorporated bank or trust company. 91-day bills (to maturity date) to be issued Decem ber 30, 1971, in the amount o f $2,300,000,000, or thereabouts, representing an additional amount o f bills dated Septem ber 30, 1971, and to mature M arch 30, 1972 (C U S I P N o. 912793 M U 7 ), originally issued in the amount o f $1,600,085,000, the additional and original bills to be freely interchangeable. Immediately after the closing hour, tenders w ill be opened at the Federal Reserve Banks and Branches, follow in g which public announcement w ill be made by the Treasury Department o f the amount and price range o f accepted bids. Only those submitting competitive tenders will be advised o f the acceptance or rejection thereof. T h e Secretary o f 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 fo r each issue fo r $200,000 or less w ithout stated price from any one bidder will be accepted in full at the average price (in three decimals) o f accepted com peti tive bids fo r the respective issues. Settlement fo r accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on Decem ber 30, 1971, in cash or other im mediately available funds or in a like face amount o f Treasury bills maturing Decem ber 30, 1971. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made fo r differ ences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. 182-day bills, fo r $1,600,000,000, or thereabouts, to be dated D ecem ber 30, 1971, and to mature June 29, 1972 (C U S I P N o. 912793 N H 5 ). T h e bills o f both series will be issued on a discount basis under competitive and noncom petitive bidding as hereinafter provided, and at maturity their face amount w ill be payable without interest. T h e y w ill be issued in bearer form only, and in denominations o f $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (m aturity v a lu e }. Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m.. Eastern Standard time, M onday, Decem ber 27, 1971. Tenders will not be received at the Treasury Department, W ashington. Each tender must be f o r a minimum o f $10,000. Tenders over $10,000 must be in mul tiples o f $5,000. In the case o f com petitive tenders the price offered must be expressed on the basis o f 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 forw arded in the special envelopes w hich w ill be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions generally m ay submit tenders fo r account o f customers, provided the names o f the customers are set forth in such tenders.^ Others than banking institutions w ill not be per mitted to submit tenders except fo r their ow n account. Tenders w ill be received w ithout deposit fro m incorporated banks and trust U nder Sections 4 5 4 (b ) and 1221(5) o f the Internal Revenue Code o f 1954, the amount o f discount at which bills issued here under are sold is considered to accrue when the bills are sold, re deemed or otherwise disposed o f, and the bills are excluded from consideration as capital assets. A ccordin gly, the ow ner o f Treasury bills (oth er than life insurance com panies) issued hereunder must include in his income tax return, as ordinary gain or loss, the difference between the price paid fo r the 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 fo r which the return is made. T reasury Department Circular N o. 418 (current revision) and this notice prescribe the terms o f the Treasury bills and govern the conditions o f their issue. Conies o f 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 Standard time, Monday, December 27,1971, 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 not requiring a deposit may be submitted by telegraph, subject to written con firmation; no tenders may be submitted by telephone. Payment fo r 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. The results o f bidding for the previous offering o f Treasury bills, to be issued December 23, 1971, were not available at the time o f printing this circular; those results will be announced after release by the Treasury Department. A lfred H ayes, President
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