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FEDERAL RESERVE BANK
OF NEW YORK

J-Circular N o . 2 4 7 6 * 1
L
A u g u s t 8, 1942
J

PURCHASE
BY

AND

RESALE

FEDERAL

OF TREASURY

RESERVE

BILLS

BANKS

To all Incorporated Banks and Trust Companies in the
Second Federal Reserve District and Others Concerned:

In this bank's Circular No. 2430 dated May 8, 1942, it was stated that as an
added means of assuring the liquidity of investments in Treasury bills, aside from
the short maturity and ready marketability of the securities, the Board of Governors
of the Federal Reserve System announced on April 30, 1942, that the Federal Open
Market Committee had directed the Federal Reserve banks to purchase for the
System Open Market Account all Treasury bills that may be offered to them, on a
discount basis at the rate of % per cent per annum. Also in this bank's Circular
No. 2453, dated June 26, 1942, there w,as outlined the procedure used in submitting
tenders for new issues of Treasury bills and other pertinent data.
Your attention is now invited to the announcement on August 7, 1942, by the
Board of Governors of the Federal Reserve System, that
" T h e Federal Open Market Committee has supplemented its direction of
April 30, 1942, to the Federal Reserve banks to purchase all Treasury bills
that may be offered to such banks on a discount basis at the rate of % per cent
per annum, by a further direction that any such purchases shall, if desired by
the seller, be upon the condition that the Federal Reserve bank, upon the request
of the seller before the maturity of the bills, will sell to him Treasury bills of
a like amount and maturity at the same rate of discount."
If sellers desire this option to repurchase Treasury bills sold by them to this
bank, it is requested that they so notify this bank in writing at the time of sale.




ALLAN SPROUL,

President.

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