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FE D E R A L R E S E R V E B A N K O F N E W Y O R K Fiscal Agent of the United States T Circular No. 7 2 5 6 *1 October 23, 1973 J V OFFERING OF TWO SERIES OF TREASURY BILLS $2,500,000,000 of 91-Day Bills, Additional Amount, Series Dated Aug. 2, 1973, Due Jan. 31, 1974 (T o Be Issued November 1, 1973) $1,800,000,000 of 182-Day Bills, Dated November 1, 1973, Due May 2, 1974 To All 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 fo r two series of Treasury bills to the aggregate amount of $4,300,000,000, or thereabouts, for cash and in exchange fo r Treasury bills maturing November 1, 1973, in the amount of $4,301,340,000, as fo llo w s : companies and from responsible and recognized dealers in invest ment securities. Tenders from others must be accompanied by payment of 2 percent o f 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. 91-day bills (to maturity date) to be issued November 1, 1973, in the amount o f $2,500,000,000, or thereabouts, representing an additional amount of bills dated August 2, 1973, and to mature January 31, 1974 ( C U S I P N o . 912793 S W 7 ) , originally issued in the amount of $1,700,980,000, the additional and original bills to be freely interchangeable. 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 o f accepted bids. Only those submitting competitive tenders will be advised o f the acceptance or rejection thereof. The 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 reserva tions, 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) o f accepted competitive 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 November 1, 1973, in cash or other immediately available funds or in a like face amount of Treasury bills maturing November 1, 1973. 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 o f the new bills. 182-day bills, for $1,800,000,000, or thereabouts, to be dated November 1, 1973, and to mature M ay 2, 1974 ( C U S I P N o . 912793 T K 2 ) . 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. T h ey will be issued in bearer form only, and in denominations of $10,000, $15,000, $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, Monday, October 29, 1973. Tenders will not be received at the Treasury Department, W ashington. Each tender must be for a minimum of $10,000. Tenders over $10,000 must be in multiples of $5,000. 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 form s 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 fo r account o f 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 Under Sections 4 5 4 (b ) and 1 2 2 1 (5 ) of the Internal Revenue Code o f 1954, the amount of discount at which bills issued hereunder are sold is considered to accrue when the bills are sold, redeemed or otherwise disposed of, and the bills are excluded from considera tion as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued hereunder must include in his income tax return, as ordinary gain or loss, the difference between the price paid for 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 for which the return is made. Treasury Department Circular No. 418 (current revision) and this notice prescribe the terms of the Treasury bills and govern the conditions o f 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 Standard time, Monday, October 29, 1973, 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.” Tenders not requiring a deposit may be submitted by telegraph, subject to written confirmation; 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. Results o f the last weekly offering of Treasury bills (91-day bills to be issued October 25, 1973, representing an additional amount o f bills dated July 26, 1973, maturing January 24, 1974; and 182-day bills dated October 25, 1973, maturing April 25, 1974) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST W EEKLY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED OCTOBER 25, 1973) Range of Accepted Competitive Bids 91 -Day Treasury Bills Maturing January 24,1974 Price High ............................................... L o w .................................................. A verage........................................... 182-Day Treasury Bills Maturing April 25,1974 Approx. equiv. annual rate Price Approx. equiv. annual rate 98.251 6.919% 96.510 6.903% 98.220 7.042% 96.461 7.000% 98.241 6.959 % 1 96.486 6.951%* 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 7.18% for the 91-day bills, and 7.30% fo r the 182-day bills. (20 percent of the amount of 91-day bills (77 percent of the amount of 182-day bills bid for at the low price was accepted.) bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing January 24,1974 Applied for District ........... $ 20,665,000 182-Day Treasury Bills Maturing April 25,1974 Accepted $ 10,415,000 Applied for $ 15,060,000 Accepted $ 4,360,000 New Y o r k ................... ........... 2,914,850,000 2,050,090,000 2,508,555,000 1,599,905,000 Philadelphia................. ........... 19,235,000 19,235,000 31,200,000 6,180,000 ........... 33,265,000 32,765,000 11,250,000 11,075,000 ........... 11,160,000 11,160,000 9,290,000 8,320,000 ........... 22,065,000 19,775,000 18,520,000 12,210,000 Chicago.......................... ........... 282,095,000 226,195,000 232,100,000 65,600,000 ........... 42,505,000 26,055,000 39,780,000 26,860,000 Minneapolis ................. ........... 15,010,000 14,850,000 11,875,000 11,875,000 Kansas C it y ................. ........... 39,010,000 30,630,000 23,695,000 13,055,000 ........... 34,760,000 12,260,000 34,750,000 12,250,000 64,690,000 46,690,000 58,445,000 28,445,000 $3,499,310,000 $2,500,120,000 $2,994,520,000 San Francisco............. T o tal ...................... .... a Includes $233,375,000 noncompetitive tenders accepted at the average price, b Includes $120,905,000 noncompetitive tenders accepted at the average price. $1,800,135,000b