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federal reserve bank of Dallas F IS C A L A G E N T O F T H E U N IT E D S T A T E S D ALLAS, TEX A S 7 5 2 2 2 Circular No. 70-14 January 21, 1970 NEW OFFERING — TREASURY BILLS To All Banking Institutions and Others Concerned in the Eleventh Federal Reserve District: Your attention is invited to the following statement giving details of two issues of Treasury bills: The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $1,500,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing January 31, 1970, in the amount of $1,500,666,000, as follows: 271-DAY BILLS (to maturity date) to be issued February 2, 1970, in the amount of $500,000,000, or there abouts, representing an additional amount of bills dated October 31, 1969, and to mature October 31, 1970, originally issued in the amount of $1,002,537,000, the additional and original bills to be freely interchangeable. 365-DAY BILLS for $1,000,000,000, or thereabouts, to be dated January 31, 1970, and to mature January 31, 1971. 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 $1,000, $5,000, $10,000, $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, Tuesday, January 27, 1970. Tenders will not be received at the Treasury Department, Washington. Each tender must be for an even multiple of $1,000, and 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. (Notwithstanding the fact that the oneyear bills will run for 365-days, the discount rate will be computed on a bank discount basis of 360-days, as is currently the practice on all issues of Treasury bills.) 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 generally may submit tenders for account of customers provided the names of the customers are set forth in such tenders. Others than banking institutions will not be permitted to submit tenders except for their own account. 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 company. 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 sub mitting 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 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 Febru ary 2, 1970, in cash of other immediately available funds or in a like face amount of Treasury bills maturing January 31, 1970. 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. The income derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, does not have any exemption, as such, and loss from the sale or other disposition of Treasury bills does not have any special treatment, as such, under the Internal Revenue Code of 1954. T he bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exempt from all taxation now or hereafter imposed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority. For purposes of taxation the amount of discount at which Treasury bills are originally sold by the United States is considered to be interest. 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 not considered to accrue until such bills are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued hereunder need include in his income tax return only the difference between the price paid for such 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, as ordinary gain or loss. 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. In accordance with the above announcement, tenders w ill be received a t this bank and its branches at El Paso, Houston and San Antonio up to twelve-thirty p.m., Central Standard Time, Tuesday, January 27, 1970. Tenders may not be entered by telephone. Yours very truly, P. E. Coldwell President ( See reverse side for tender form ) This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) TENDER FOR TREASURY BILLS 365 DAYS TO MATURITY Dated January 31,1970 Maturing January 31,1971 T o : Federal Reserve Bank, Station K, Dallas, Texas 75222 or— The___________________________ Branch El Paso 79999 Houston 77001 (Date) San Antonio 78206 P u rsu an t to th e p rovisions o f T reasu ry D epartm ent C ircular N o. 418 (cu rren t revision ) and th e provisions o f the public announcem ent issued by th e T reasu ry D epartm ent, th e undersigned offers to purchase T reasu ry b ills in the am ount show n below, and agrees to p a y fo r th e am ount allotted, on or before th e issu e date, by th e m ethod and a t th e ra te indicated. JNOT T O E X C E E D $200,000 NONCOMPETITIVE T E N D E R $ . Noncompetitive tenders for $200,000 or less from any one bidder, without stated price, will be accepted in full at the average price (in three decimals) of accepted competitive bids. ....... Prices should be ex pressed on the basis of 100, with not more than COMPETITIVE T E N D E R S three decim al places, e. g., 99.925. Fractions $ $ must not be used. t TENDERS M AY NOT BE ENTERED BY TELEPHONE. TENDERS BY WIRE, IF RECEIVED BEFORE THE CLOSING HOUR, ARE ACCEPTABLE. Denominations Desired N um b er of Pieces P aym en t fo r th is issu e o f b ills cannot be m ade by credit to T reasu ry T ax an d L o a n Account. Maturity Value M E TH O D O F P A Y M E N T 1,000 $ @ $ ,<> $: a 5,000 $ (5) $ 10,000 $ □ By maturing b l s il held by_________________________ □Payment to be made by.___________ @ $ 50,000 $ .<© $ 100,000 $ □ Charge our reserve account on payment date | | Draft enclosed (Effectual delivery o f enclosed draft @ $ 500,000 $ .(§> $1,000,000 $ shall be on latest day which will permit presentment in order to obtain irrevocably collected funds on payment date) Delivery Instructions: (Subscriber’s full name or corporate title) □ Hold in Custody Account— Member banks for own .account only (Address) □ Pledge to secure Treasury Tax and Loan Account By. (Authorized official signature and title) □ Ship to______________________ (For the account of, if tender is for another subscriber) (Address) IMPORTANT 1. N o tender for less than $1,000 w ill be considered and each tender m u st be fo r an am ount in m ultiples o f $1,000 (m aturity v a lu e ) .’ ” "v • '.* • ? " '• ” ■ 2. Tenders should be forw arded in an envelope clearly addressed to th is bank or appropriate branch as F isca l A g en t o f the U nited S tates, w ith notation on the envelope reading “ T E N D E R FOR T R E A S U R Y O F F E R IN G ”. Since envelopes received w ith th is legend w ill not be opened u n til a fte r th e closin g tim e specified in th e public announcem ent, comm uni cations relatin g to other m atters should not be enclosed. E nvelopes fo r su b m ittin g tenders m ay be obtained from th is bank or appropriate branch. 3. A n y qualified or conditional tender w ill be rejected. v 4. I f a corporation m akes th e tender, th e form should be signed by an officer o f th e corporation authorized to m ak e the tender and the sig n in g o f th e form by an officer o f th e corporation w ill be construed as a representation by him th a t he has been so authorized. I f th e tender is m ade by a partnership it should be signed b y a member o f th e firm, who should sig n in the form “— ________— --------------------------- , a copartnership, by------------------------------------------------------------------ , a m em ber o f the firm”. 5. T enders from those other th an incorporated banks and tr u st com panies or responsible and recognized dealers in in vest m ent securities w ill be disregarded, u n less accompanied by a deposit o f 2 percent o f th e to ta l am ount (m a tu rity valu e) of the T reasury b ills applied for, or u n less th e tenders are accom panied by an exp ress gu aran ty o f fu ll p aym ent by an incorporated bank or tr u st company. 6. I f the la n gu age o f th is form is changed in an y resp ect, w hich, in the opinion of the Secretary of the Treasury is m aterial, the tender m ay be disregarded. (See reverse for announcement)