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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States f Circular No. 7 4 1 7 1 L July 2, 1974 J OFFERING OF TWO SERIES OF TREASURY BILLS $2,600,000,000 of 91-Day Bills, Additional Amount, Series Dated April 11, 1974, Due October 10, 1974 (To Be Issued July 11, 1974) $1,900,000,000 of 182-Day Bills, Dated July 11, 1974, Due January 9, 1975 T o A ll In corporated Banks and Trust Companies, and O thers Concerned, in the Second Federal R eserv e D istrict: F ollow in g is the text o f a notice issued by the T reasu ry Department, released at 4 p.m. today: T he Treasury Department, by this public notice, invites tenders for tw o series o f Treasury bills to the aggregate amount of $4,500,000,000, or thereabouts, to be issued July 11, 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 o f bills dated A pril 11, 1974, and to mature O ctober 10, 1974 (C U S I P N o. 912793 U T 1 ), originally issued in the amount o f $1,801,960,000 (an additional $100,065,000 was issued on June 5, 1974), the additional and original bills to be freely interchangeable. 182-day bills, for $1,900,000,000, or thereabouts, to be dated July 11, 1974, and to mature January 9, 1975 (C U S I P N o. 912793 V Q 6 ). The bills will be issued for cash and in exchange for Treasury bills maturing July 11, 1974, outstanding in the amount of $4,310,745,000, o f which Government accounts and Federal Reserve Banks, for themselves and as agents of foreign and international monetary authorities, presently hold $2,440,125,000. These accounts may exchange bills they hold for the bills now being offered at the average prices o f accepted tenders. The bills o f both series w ill be issued on a discount basis under com petitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount w ill be payable without interest. T h ey 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 va lu e). Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Daylight Saving time, M onday, July 8, 1974. Tenders w ill not be received at the Treasury Department, W ashington. Each tender must be for a minimum o f $10,000. Tenders over $10,000 must be in multiples o f $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 forw arded in the special envelopes which w ill be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions and dealers w ho make primary markets in Government securities and report daily to the Federal Reserve Bank o f N ew Y ork their positions with respect to Government securities and borrow ings thereon may submit tenders for account o f customers provided the names of the customers are set forth in such tenders. Others will not be permitted to submit tenders except for their ow n account. Tenders w ill 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 o f 2 percent o f the face amount o f Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, follow ing which public announcement will be made by the Treasury Department o f 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 reserva tions, noncompetitive tenders for each issue for $200,000 or less without stated price from any one bidder w ill be accepted in full at the average price (in three decim als) of 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 July 11, 1974, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing July 11, 1974. Cash and exchange tenders w ill 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 1221(5) o f 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. A ccordin gly, the owner o f Treasury bills (other 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 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 N o. 418 (current revision) and this notice prescribe the terms of the Treasury bills and govern the conditions o f their issue. Copies o f the circular may be obtained from any Federal Reserve Bank or Branch. T h is Bank will receive tenders for both series up to 1 :30 p.m ., Eastern Daylight Saving time, M onday, July 8, 1974, at the Securities Departm ent o f 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 en d er fo r T reasu ry B ills.” T enders not requiring a deposit may be submitted by telegraph, subject to written con firm 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 (90-day bills to be issued July 5, 1974, representing an additional amount of bills dated April 4, 1974, maturing October 3, 1 9 7 4 ; and 181-day bills dated July 5, 1974. maturing January 2, 1975) are shown on the reverse side of this circular. A lfred H a y es . President. ( o ver ) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED JULY 5, 1974) R a n g e o f A cc e p te d C om p e titiv e B ids 90-Day Treasury Bills Maturing October 3, 1974 P rice H igh ................................................... 181-Day Treasury Bills Maturing January 2, 1975 A p p rox. equiv. annual rate P rice A p p rox . equiv. annual rate 98.064a 7 .7 4 4 % 95.987b 7.9 82% L o w ..................................................... 98.038 7 .8 4 8 % 95.927 8 .1 01% A v e r a g e .............................................. 98.048 7 .8 0 8 % ! 95.950 8 .0 5 5 % ! a E xcepting one tender o f $10,000. b Excepting three tenders totaling $575,000. 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 8.07% for the 90-day bills, and 8.51% for the 181-day bills. (5 9 percent of the amount of 90-day bills bid for at the low price was accepted.) (7 3 percent o f the amount of 181-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve District) 90-Day Treasury Bills Maturing October 3,1974 A ccepted A pplied for D istrict B oston ..................................... ......... $ 42,220,000 181-Day Treasury Bills Maturing January 2, 1975 $ 30,955,000 A pplied for $ 27,200,000 A ccepted $ 16,830,000 ............................ ......... 3,420,905,000 2,241,380,000 ......................... ......... 36,110,000 35,445,000 12,965,000 12,965,000 C le v e la n d ................................ ......... 69,120,000 42,490,000 41,340,000 26,340,000 R ich m on d 46,980.000 28,480,000 32,385,000 20,385,000 .................................. ......... 33,390,000 28,755,000 27,085,000 25,985,000 C hicago .................................. ......... 207,920,000 59,705,000 192,455,000 76,255,000 St. L o u i s ................................ ......... 41,300,000 28,480,000 33,740,000 20,740,000 ......................... ......... 13,185,000 4,185,000 9,925,000 3,925,000 Kansas City ......................... ......... 34,125,000 26,730,000 38,295,000 31,085,000 ..................................... ......... 29,195,000 18,570,000 32,515,000 20,275,000 ..................... ......... 140,900,000 55,560,000 102,205,000 ..................... ......... $4,115,350,000 N ew Y o r k Philadelphia Atlanta .............................. M inneapolis Dallas San F rancisco T otal $2,600,735,000° c Includes $412,375,000 noncompetitive tenders accepted at average price. d Includes $279,160,000 noncompetitive tenders accepted at average price. 2,615,905,000 1,612,220,000 $3,166,015,000 33,105,000 $1,900,110,000d