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Circular Kb. 287.

FEDERAL RESERVE BANK OF HOT YORK
Offering of $400,000,000 {or thereabouts)
• UNITED STATES OF AMERICA TREASURY CERTIFICATES OF INDEBTEDNESS
Dated and bearing interest from June 15, 1920
Series A 1921, 5f Per Cent Due January 3, 1921
Series T J-1921, 6 Per Cent Due June 15, 1921.
To all Banks, Trust Companies, Savings Banks, Bankers, Investment Dealers and Principal Corporations in the Second Federal Reserve District:
The Secretary of the Treasury, under the authority of the act approved September 24, 1917, as amended, offers for subscription, at par and accrued interest,
through the Federal Reserve Banks, Treasury certificates of indebtedness, in two
series, both dated and bearing interest from June 15, 1920, the certificates of
Series A 1921 being payable on January 3, 1921 with interest at the rate of five
and three-quarters per cent per annum and the certificates of Series T J-1921 being
payable on June 15, 1921, and bearing interest at the rate of six per cent per annum payable semi-annually*
Applications will be received at the Federal Reserve Banks.
Bearer certificates will De issued in denominations of #500, $1,000, $5,000,
$10,000 and $100,000. The certificates of Series A 1921 will be issued without coupons. The certificates of Series T J-1921 will have two interest coupons attached
payable December 15, 1920 and June 15, 1921.
The certificates of both s&id series shall be exempt, both as to principal
and interest, from all taxation now or hereafter imposed by the United States, any
State, or any of the possessions of the United States, or by any local taxing authority, except (a) estate or inheritance taxes, and (bj graduated additional income
taxes, commonly known as surtaxes, and excess profits and war profits taxes, nor or
hereafter imposed by the United States, upon the income or profits of individuals,
partnerships, associations, or corporations. The interest on an amount of bonds and
certificates authorized by said act approved September 24, 1917, and amendments
thereto, the principal of which does not exceed in the aggregate $5,000, owned by
any individual, partnership, association or corporation, shall be exempt from the
taxes provided for in clause (b) above.
The certificates of these series do not bear the circulation privilege. The
certificates of Series A 1921 will not be accepted in -payment of taxes. The certificates of Series T-J 1921 will be accepted at par, with an adjustment of accrued interest, during such ticse and under such rules and regulations as shall be -prescribed
or approved by the Secretary of the Treasury.in payment of income and profits taxes
payable at the maturity of the certificates.
The right is reserved to reject any subscription and to allot less than the
amount of certificates of either or both series applied for any to close the subscriptions as to either or both series at any time without notice. Payment at par and accrued interest for certificates allotted must be made on or before June 15, 1920, or
on latter allotment. After allotment and upon payment Federal Reserve Banks may issue
interim receipts pending- delivery of the definitive certificates. Any qualified depositary will be permitted to make payment by credit for certificates alloted to it
for itself and its customers up to any amount for which it shall be qualified in excess of existing deposits, when so notified by the Federal Reserve Bank of its district.
Treasury certificates of Indebtedness of Series T J-1920. maturing June 15.1920, of
Series £ 1920. maturing July 1. 1920. and of Series F 1920. maturing July 15. 1920T
will be accepted at par with an adjustment of accrued interest, in payment for any




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Circular No. 287

certificates of the Series A 1921 or T J-1921 now offered which shall be subscribed for and allotted.
As fiscal agents of the United States, Federal Heserve Banks are authorized and requested to receive subscriptions and to make allotment in full in
the order of the receipt of applications up to amounts indicated by the Secretary
of the Treasury to the Federal Beserve Banks of the respective districts.
Yours very truly,
J. H. CASE,
Acting Governor.

New York, June 10, 1920.
(Reference to reprint of letter of the Secretary of the Treasury, page 3)




Circular tfo* 287 (Continued)

Heprint of Letter of the Secretary of the Treasury to the Presidents of
Banking Institutions of the United States on the Current 5-f
and 6 Per Gent Issues of Treasury Certificates
of Indebtedness.
Washington, D. C , June 10, 1920
Dear Sir: Treasury certificates
to the amount of nearly $1,000,000000 mature on or before July 15.
The greater part of these are prov
vided for by the income and profits
tax installment payable in June.
To refund the balance and provide
for current requirements up to July
15, according to the best estimates
now available, it seems desirable at
this time to issue Treasury certificates to the amount of v400,000,000
or thereabouts; and accordingly the
Treasury is offering certificates in
two saries, both dated June 15, Series A 1921, bearing interest at 5f$
and maturing January 3, 1921, and
Series T J-1921, bearing interest at
6% and maturing June 15, 1921, particulars concerning which will be
furnished by the federal Beserve
Banks.

nearly $26,600,000,000 had been reduced May 31, 1920, to less than
£25,000,000,000. The floating debt
outstanding (loan and tax certificates) which on June 30, 1919 amounted
to over #3,250,000,000 and on August
31, 1919, to nearly |4,000,000,000,
had been reduced 2&y 31, 1920, to less
than *2,850,000,000. The reduced ordinary and public debt disbursements
have made possible a very Important
reduction in the amount of the net balance in the general fund, which has
been applied to the reduction of debt.
Both gross debt and floating debt will
be further greatly reduced by the operations outlined in the first paragraph of this letter.
During the coming fiscal year beginning July 1, 1920, the Treasury expects, though it is impossible to speak
positively, that there will be a further
reduction of both gross debt and floating debt in the first two quarters and,
unless additional burdens should be imposed be future legislation, that there
will be a very important reduction in
the last two quarters.

On the basis of Treasury daily
statements and excluding tranaotions
in the principal of the public debt:
though the first quarter, ended September 30, 1919,of the present fiscal year ending June 30,1920, was
marked by a deficit of about *>770,000,000, in the second quarter,
The period of upwards of twelve months
ended December 31, 1919, there was a
since the flotation of the Victory Libsurplus of over #150,000,000; in the
erty loan has witnessed great expansion
third quarter ended Iflarch. 31, 1920,
of commercial credits, but steady liquithere was a surplus of nearly #400,dation of United States Government war
000,000 and the fourth quarter endsecurities. The Federal Reserve Banks'
ing June 30 next, should also show a
combined loans and discounts secured by
surplus. The completed fiscal year's United States Government war securities
operations should show little, if any have been reduced by more than $400,000deficit—the Government having about
000 though they have increased their
balanced its budget, current receipts other loans and investments by about $1,against current disbursements, for
200,000,000. All reporting member banks
the first full fiscal year after
(about 800 member banks in leading cities
fighting stopped.
which are believed to control about 40$
of the ooiaaerciEl bank deposits of the
The total gross debt of the United
country) have reduced their holdings of
States, which, on June 30, 1919, on
and loans upon United States Government
the basis of Treasury daily statewar securities by about #2,000,000,000
but have increased their other loans and
 ments, amounted to nearly *25,500,000,000 and on August 31, 1919, to
http://fraser.stlouisfed.org/
investments by about $4,000,000,000.
Federal Reserve Bank of St. Louis

Circular no, 287 (aont'd)
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The Treasury confidently asks the
banking institutions of the country
for their continued support, and,
in particular, to subscribe liberally for the certificates now offerad and use their best efforts to




obtain the widest possible distribution of them among investors.
Oordially yours,
D. F. HOUSTON.

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