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F ederal 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 DALLAS, TEXAS 7 5 2 2 2 Circular No. 70-40 February 17, 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 $1,700,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing February 28, 1970, in the amount of $1,500,540,000, as follows: 273-D A Y BILLS (to maturity date) to be issued March 2, 1970, in the amount of $500,000,000, or there abouts, representing an additional amount of bills datedNovember 30, 1969, and to mature November 30, 1970, originally issued in the amount of $1,001,199,000, the additional and original bills to be freely interchangeable. 365-DAY BILLS for $1,200,000,000, or thereabouts, to be dated February 28, 1970, and to mature February 28, 1971. The bills of both series will be issued on a discount basis under com petitive 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, February 24, 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 o f 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 w ill 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 w ill be opened at the Federal Reserve Banks and Branches, following which public announcement w ill be made by the Treasury Department of the amount and price range of accepted bids. Only those sub mitting com petitive tenders w ill 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. Settlem ent for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on March 2, 1970, in cash or other immediately available funds or in a like face amount of Treasury bills maturing February 28, 1970. 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. 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. The 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 will be received at this bank and its branches at El Paso, Houston and San Antonio up to twelve-thirty p.m., Central Standard Time, Tuesday, February 24, 1970. Tenders m ay 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 February 28,1970 Maturing February 28,1971 To : Federal Reserve Bank, Station K, Dallas, Texas 75222 or— The___________________________ Branch El Paso 79999 Houston 77001 (Date) San Antonio 78206 P ursuant to the provisions of Treasury Departm ent Circular No. 418 (current revision) and the provisions of the public announcement issued by the Treasury Department, the undersigned offers to purchase Treasury bills in the amount shown below, and agrees to pay fo r the amount allotted, on or before the issue date, by the method and a t the ra te indicated. NONCOMPETITIVE T E N D E R $ . _NOT T O E X C E E D $200,000 Noncompetitive tenders for $200,000 or less from any one bidder, without stated price, will be accepted in full a t the average price (in three decimals) of accepted competitive bids. / Prices should be ex\ ? -----------------------------@ ________$ ----------------------------------pressed on the basis of COMPETITIVE T E N D E R S \ $-------------- @ ------$------------- --e. g., 99.925. Fractions m ust not be used. 0 S P TENDERS MAY NOT BE EN TERED BY TELEPH O N E. TEND ERS BY W IRE, IF RECEIVED BEFO RE TH E CLOSING HOUR, ARE ACCEPTABLE. » @ Denominations Desired N u m b e r of Pieces $ Paym ent fo r this issue of bills cannot be made by credit to Treasury Tax and Loan Account. M a tu rity V alu e () $ 3 @ $ 5,000 $ . () $ 5 10,000 $ . (5) $ METHOD OF PAYMENT 1,000 $ . 50,000 □ By maturing b l s il held by_________________________ □Payment to be made by___________ □ Charge our reserve account on payment date (5) $ 100,000 $ . @ $ 500,000 $ @ $1,000,000 $ | | D r a f t e n c l o s e d (Effectual delivery of enclosed draft 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 XiOan Account By(Authorized official signature and title) □ Ship to______________________ (For the account of, if tender is for another subscriber) (Address) IMPORTANT 1. No tender fo r less than $1,000 will be considered and each tender m ust be for an amount in multiples of $1,000 (m aturity value). 2. Tenders should be forwarded in an envelope clearly addressed to this bank or appropriate branch as Fiscal Agent of the United States, w ith notation on the envelope reading “TENDER FOR TREASURY O FFER IN G ”. Since envelopes received with this legend will not be opened until a fte r the closing time specified in the public announcement, communi cations relating to other m atters should not be enclosed. Envelopes fo r subm itting tenders may be obtained from this bank or appropriate branch. 3. Any qualified or conditional tender will be rejected. 4. If a corporation makes the tender, the form should be signed by an officer of the corporation authorized to make the tender and the signing of the form by an officer of the corporation will be construed as a representation by him th a t he has been so authorized. If the tender is made by a partnership it should be signed by a member of the firm, who should sign in the form “________________1 ___________ , a copartnership, by----------------------------------------------------------- , a member of the firm”. 5. Tenders from those other than incorporated banks and tru s t companies or responsible and recognized dealers in invest ment securities will be disregarded, unless accompanied by a deposit of 2 percent of the total amount (m aturity value) of the Treasury bills applied for, or unless the tenders are accompanied by an express guaranty of full payment by an incorporated bank or tru st company. 6. If the language of this form is changed in any respect, which, in the opinion of the Secretary of the Treasury is m aterial, the tender may be disregarded. (See reverse for announcement)