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FED ER A L RESERVE BANK O F NEW YORK Fiscal A gen t of the United States r C ir c u la r L N o. 7 3 8 9 M a y 7, 1974 OFFERING OF TWO SERIES OF TREASURY BILLS $2,600,000,000 of 91-Day Bills, Additional Amount, Series Dated February 14, 1974, Due August 15, 1974 (To Be Issued May 16, 1974) $1,900,000,000 of 182-Day Bills, Dated May 16, 1974, Due November 14, 1974 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: F ollow in g is the text of a notice issued by the Treasury Department, released at 4 p.m. tod a y : The Treasury Department, by this public notice, invites tenders for two series o f Treasury bills to the aggregate amount of $4,500,000,000, or thereabouts, to be issued M ay 16, 1974, as fo llo w s: 91-day bills (to maturity date) in the amount of $2,600,000,000, or thereabouts, representing an additional amount of bills dated February 14, 1974, and to mature August 15, 1974 ( C U S I P N o. 912793 U K 0 ) , originally issued in the amount of $1,799,305,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,900,000,000, or thereabouts, to be dated M ay 16, 1974, and to mature November 14, 1974 ( C U S I P No. 912793 U Y 0 ) . The bills will be issued for cash and in exchange for Treasury bills maturing M ay 16, 1974, outstanding in the amount of $4,303,280,000, of which Government accounts and Federal Reserve Banks, for themselves and as agents of foreign and international monetary authorities, presently hold $2,518,280,000. These accounts may exchange bills they hold for the bills now being offered at the average prices of accepted tenders. 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, $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 Daylight Saving time, Monday, M ay 13, 1974. Tenders will not be received at the Treasury Department, Washington. 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 forms and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions and dealers who make primary markets in Government securities and report daily to the Federal Reserve Bank of New Y ork their positions with respect to Government securities and borrowings thereon may submit tenders for account of customers provided the names of the customers are set forth in such tenders. Others will not be permitted to submit tenders except for their own accounts. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment 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 com pany. 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 M ay 16, 1974, in cash or other immedi ately available funds or in a like face amount of Treasury bills maturing M ay 16, 1974. 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. Under Sections 4 5 4 (b ) and 1 22 1(5) of the Internal Revenue Code of 1954, the amount of discount at which bills issued here under are sold is considered to accrue when the bills are sold, redeemed or otherwise disposed of, and the bills are excluded from consideration 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 of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. T his Bank will receive tenders for both series up to 1 :30 p.m., Eastern D aylight Saving time, M onday, M ay 13, 1974, at the Securities Department of its H ead Office and at its B uffalo Branch. T ender form s for the respective series are enclosed. Please use the appropriate form s to submit tenders and return them in the enclosed envelope marked “ T ender for Treasury B ills.” Tenders not requiring a deposit may be submitted by telegraph, subject to written confirm ation; no tenders may be submitted by telephone. Payment for 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 of the last weekly offering of Treasury bills (9 1 -day bills to be issued M ay 9, 1974, representing an additional amount of bills dated February 7, 1974, maturing August 8, 1 9 7 4 ; and 182-day bills dated M ay 9, 1974, maturing November 7, 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 M AY 9, 1974) R a n g e o f A c ce p te d C o m p e titiv e B id s 182-Day Treasury Bills Maturing N ovem ber 7, 1974 91-Day Treasury Bills Maturing August 8, 1974 Price Approx. equiv. annual rale 9 7 .7 3 7 a 8.953% 95.477b L ow ...................................................... 97.707 95.439 A v e r a g e ............................................... 97.716 9 .0 7 1 % 9 .0 3 6 % 1 H igh .................................................... Approx. equiv. annual rate Price 8 .9 4 7 % 9 .0 2 2 % 9 .0 0 6 % ! 95.447 a Excepting three tenders totaling $2,300,000. b Excepting three tenders totaling $175,000. 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 9.38% for the 91-day bills, and 9.57% for the 182-day bills. (3 8 percent o f the amount of 91-day bills (5 percent o f the amount o f 182-day bills bid fo r at the low price was accepted.) bid fo r at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve District) 91-Day Treasury Bills Maturing August 8, 1974 ............................. ............. B oston Accepted Applied for District $ 54,970,000 182-Day Treasury Bills Maturing N ovem ber 7, 1974 $ 35,665,000 Applied for $ 35,405,000 Accepted $ 17,180,000 N ew Y o r k ...................... ............. 3,236,585,000 2,065,830,000 2,750,470,000 1,532,345,000 Philadelphia ................... ............. 36,810,000 36,045,000 14,895,000 12,310,000 Cleveland ........................ ............. 66,320,000 49,115,000 75,845,000 36,095,000 Richm ond ........................ ............. 47,150,000 32,955,000 27,840,000 20,450,000 Atlanta ............................. ............. 37,425,000 34,940,000 22,845,000 21,375,000 ........................... ............. 247,925,000 62,350,000 311,305,000 51,015,000 St. L ouis ........................ ............. 66,475,000 45,760,000 51,325,000 30,825,000 M inneapolis .................... ............. 9,865,000 4,865,000 8,395,000 4,155,000 Kansas City .................... ............. 47,300,000 43,600,000 33,275,000 27,760,000 ............. 48,555,000 23,750,000 23,655,000 16,665,000 ............. 145,420,000 65,910,000 112,840,000 29,830,000 T o t a l ...................... ............. $4,044,800,000 C hicago $2,500,785,000° Includes $492,350,000 noncompetitive tenders accepted at the average price, d Includes $272,200,000 noncompetitive tenders accepted at the average price. C $3,468,095,000 $1,800,005, OOW
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