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FE D E R AL R E SE R V E B AN K O F N E W Y O R K Fiscal Agent of the United States r Circular No. 6 9 8 6 1 L August 8, 1972 J OFFERING OF TWO SERIES OF TREASURY BILLS $2,300,000,000 of 91-Day Bills, Additional Amount, Series Dated May 18, 1972, Due November 16, 1972 (To Be Issued August 17, 1972) $1,800,000,000 of 182-Day Bills, Dated August 17, 1972, Due February 15, 1973 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve D istrict: F ollow in g is the te x t o f a notice issued by the Treasury D epartm ent, released at 4 p.m. to d a y : T he T reasury Departm ent, by this public notice, invites tenders fo r two series of T reasury bills to the aggregate amount of $4,100,000,000, or thereabouts, fo r cash and in exchange fo r T reas ury bills m aturing A ugust 17, 1972, in the am ount of $4,101,135,000, as follows : 91-day bills (to m aturity date) to be issued A ugust 17, 1972, in the amount of $2,300,000,000, o r thereabouts, representing an additional amount of bills dated M ay 18, 1972, and to m ature November 16, 1972 (C U S IP No. 912793 P M 2 ), originally issued in the amount of $1,800,580,000, the additional and original bills to be freely interchangeable. 182-day bills, fo r $1,800,000,000, or thereabouts, to be dated A ugust 17, 1972, and to m ature February 15, 1973 (C U S IP No. 912793 Q F 6 ). T he bills o f both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at m aturity 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 (m aturity value). Tenders will be received a t Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., E astern Daylight Saving time, Monday, A ugust 14, 1972. Tenders will not be received at the T reasury Departm ent, 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 forw arded 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 of customers, provided the names of the customers are set forth in such tenders. O thers than banking institutions will not be per mitted to submit tenders except fo r their own account. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in invest ment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of T reasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or tru st company. Immediately a fte r the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the T reasury D epartm ent 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 T reasury expressly reserves the right to accept o r 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 fo r each issue fo r $200,000 or less w ithout stated price from any one bidder will be accepted in full at the average price (in three decimals) of accepted competi tive bids fo r the respective issues. Settlem ent fo r accepted tenders in accordance w ith the bids must be made or completed at the Federal Reserve Bank on A ugust 17, 1972, in cash or other im mediately available funds or in a like face amount of T reasury bills m aturing A ugust 17, 1972. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be made fo r d if ferences between the par value of m aturing bills accepted in ex change and the issue price of the new bills. U nder Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954, the am ount of discount at which bills issued here under are sold is considered to accrue when the bills are sold, re deemed or otherwise disposed of, and the bills are excluded from consideration as capital assets. Accordingly, the owner of T reasury bills (other than life insurance companies) issued hereunder must include in his income tax return, as ordinary gain or loss, the d if ference between the price paid fo r the bills, w hether on original issue or on subsequent purchase, and the amount actually received either upon sale or redemption at m aturity during the taxable year fo r which the return is made. T reasury D epartm ent C ircular No. 418 (current revision) and this notice prescribe the term s of the T reasury bills and govern the conditions of their issue. Copies of the circular may be ob tained from any Federal Reserve B ank or Branch. T h is Bank w ill receive tenders for both series up to 1 :30 p.m ., E astern D aylight S avin g tim e, M onday, A u gu st 14, 1972, at the Securities D epartm ent o f its H ead Office and at its B uffalo Branch. T ender form s for the respective series are enclosed. P lease use the appropriate form s to subm it tenders and return them in the enclosed envelope marked “T ender for T reasury B ills (W e e k ly ) .” T enders not requiring a deposit m ay be subm itted by telegraph, subject to w ritten confirm ation; no tenders m ay be subm itted 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 (91-day bills to be issued August 10, 1972, representing an additional amount of bills dated May 11, 1972, maturing November 9, 1972; and 182-day bills dated August 10, 1972 maturing February 8, 1973) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED AUGUST 10, 1972) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing November 9,1972 Price 182-Day Treasury Bills Maturing February 8,1973 A pprox. equiv. annual rate Price A pprox. equiv. annual rate ............................... ................... 99.026 3.853% 97.782a 4.387% L ow ................................. ................... 99.001 3.952% 97.748 4.455% ........................ ................... 99.007 3.9 2 8 % 1 97.760 4.431% ! H ig h A verage aExcepting three tenders totaling $990,000. 1These rates are on a bank discount basis. The equivalent coupon issue yields are 4.02% fo r the 91-day bills, and 4.60% fo r the 182-day bills. (1 3 percent o f the am ount o f 91-day bills bid for at the low price w as accep ted .) (6 8 percent o f the am ount o f 182-day bills bid fo r at the low price w as accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing November 9,1972 Accepted Applied fo r D istrict ... $ 24,525,000 182-Day Treasury Bills Maturing February 8,1973 $ 13,655,000 Applied fo r $ 26,535,000 Accepted $ 12,215,000 3,174,325,000 1,993,590,000 2,528,885,000 1,537,685,000 11,205,000 11,205,000 23,615,000 3,615,000 19,510,000 19,510,000 19,640,000 19,640,000 11,570,000 9,570,000 12,505,000 6,505,000 34,290,000 22,680,000 28,585,000 18,585,000 231,275,000 89,340,000 244,895,000 116,895,000 St. L ou is ........................ 44,090,000 2 9,610,000 25,775,000 17,635,000 M inneapolis ................... 32,500,000 18,760,000 32,325,000 19,005,000 K ansas C i t y ................... 39,840,000 2 8,415,000 24,550,000 14,550,000 D allas ............................... ............ 33,025,000 15,025,000 29,120,000 12,120,000 S an F rancisco .............. ............ 86,660,000 48,660,000 73,780,000 21,780,000 T o ta l .................. ............ $3,742,815,000 .. P h ila d e lp h ia ................... $2,300,020,000b blncludes $163,700,000 noncompetitive tenders accepted at the average price of 99.007. clncludes $73,790,000 noncompetitive tenders accepted at the average price o f 97.760. $3,070,210,000 $ 1,800,230,000c
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