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FED ER AL RESERVE BANK OF NEW YORK Fiscal Agent of the United States r C ircular No. 6 9 0 5 ~| L F e b ru a ry 25, 1972 j Treasury Offers $3.0 Billion Strip of Weekly Bills To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve D istrict: The follow ing statem en t w as m ade public y esterd a y by the T re a su ry D e p a rtm e n t: The Treasury announced today that it will raise $3.0 billion by auctioning a “ s trip ” of bills consisting of additions to fifteen outstanding weekly series of Treasury bills. The reopened bills are those which m ature March 30 to Ju ly 6, 1972, inclusive. They will be reopened in the amount of $200 million each — a total of $3.0 billion. The Treasury noted that the issuance of this amount of securities is possible under the existing debt limit because of an anticipated drop in the debt on the last day of February, but that this borrowing and additions to the debt as trust-fund receipts are invested in early March will raise the debt to the limit by mid-March. The auction will be on Wednesday, March 1, with payment on Monday, March 6. Commercial banks may make payment for 50% of their own and their customers’ accepted tenders by credit to Treasury Tax and Loan Accounts. F ollow ing is the te x t of the public notice offering the bills re fe rre d to in the above s ta te m ent : The Treasury Deparment, by this public notice, invites tenders for additional amounts of fifteen series of Treasury bills to the aggregate amount of $3,000,000,000 or thereabouts, for cash. The addi tional bills will be issued March 6, 1972, will be in the amounts, and will be in addition to the bills originally issued and maturing, as follows: Amount of additional issue $ 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 M aturity D ates 1972 Original issue dates September October October October October November November November November December December December December December January 30, 7, 14, 21, 28, 4, 11, 18, 26, 2, 9, 16, 23, 30, 6, 1971 1971 1971 1971 1971 1971 1971 1971 1971 1971 1971 1971 1971 1971 1972 March April April April April May May May May June June June June June July 30 6 13 20 27 4 11 18 25 1 8 15 22 29 6 CUSIP No. 912793 912793 912793 912793 912793 912793 912793 912793 912793 912793 912793 912793 912793 912793 912793 $3,000,000,000 Days from March 6,1972 to m aturity MU7 MV5 MW3 MX1 MY9 MZ6 NA0 NB8 NC6 ND4 NE2 NF9 NG7 NH5 NT9 (Average) 24 31 38 45 52 59 66 73 80 87 94 101 108 115 122 Amount currently outstanding (in millions) $3,903 3,901 3,903 3,901 3,902 3,902 3,901 4,007 4,001 1,601 1,601 1,600 1,602 1,601 1,601 73 The additional and original bills will be freely interchangeable. Each tender submitted must be in the minimum amount of $ 1 5 0 ,0 0 0 . Tenders over $ 1 5 0 ,0 0 0 must be in multiples of $75,000. One-fifteenth of the amount tendered will be applied to each of the above series of bills. The bills offered hereunder will be issued on a discount basis under competitive and noncompeti tive bidding as hereinafter provided, and at m aturity their face amount will be payable without inter- ( oveb) est. 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 (m aturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, oneth irty p.m., Eastern Standard time, Wednesday, March 1, 1972. Tenders will not be received at the Treasury Department, Washington. 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. A single price must be submitted for each tender. I t 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 generally may submit tenders for account of customers, provided the names of the customers are set forth in such tenders. Others than banking institutions wiii not be permitted to submit tenders except for their own account. Tenders will be received without deposit from incorpo rated banks and tru st 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 incor porated bank or tru st company. All bidders are required to agree not to purchase or to sell, or to make any agreements with respect to the purchase or sale or other disposition of, any bills of these additional issues at a specific rate or price, until after one-thirty p.m., Eastern Standard time, Wednesday, March 1, 1972. 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 $300,000 or less (in amounts as set forth in the second paragraph) without stated price from any one bidder will be accepted in full at the average price (in three decimals) of accepted competitive bids. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank in cash or other immediately available funds on March 6, 1972. Any qualified depositary will be permitted to make settlement by credit in its Treasury Tax and Loan Account for not more than 50 percent of the amount of Treasury bills allotted to it for itself and its customers. Under Sections 454(b) and 1221(5) of the Internal Revenue Code of 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 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 m aturity during the taxable year for which the return is made. Purchasers of a strip of the bills offered hereunder should, for tax purposes, take such bills onto their books on the basis of their purchase price prorated to each of the fifteen outstanding issues using as a basis for proration the closing market prices for each of the issues on March 6, 1972. (Federal Reserve Banks will have avail able a list of these market prices, based on the mean between the bid and asked quotations furnished by the Federal Reserve Bank of New York.) 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 B ank will receive ten d ers up to 1 :30 p.m., E a s te rn S ta n d a rd time, W ednesday, M arch 1, 1972, a t the S ecu rities D ep artm en t of its H ead Office an d a t its Buffalo B ranch. P lease use the enclosed te n d er form to subm it a ten d er, and re tu rn it in the enclosed envelope m arked “ T ender fo r S trip of O utstanding T re a su ry B ills.” T en d ers not req u irin g a deposit m ay be subm itted by teleg rap h , subject to w ritten confirm ation; no ten d ers m ay be subm itted by telephone. S ettlem en t fo r accepted ten d ers m u st be m ade on M arch 6, 1972, in cash or other im m ediately available funds, except th a t any qualified d ep o sitary will be p erm itted to make settlem ent by cred it in its T re a su ry T ax and Loan A ccount fo r not more th an 50 p ercent of the am ount of T re a su ry bills allo tted to it fo r itself and its custom ers. A lfred H ay es, President.
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