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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 NITED S T A T E S DALLAS, TEXAS 75222 C ircular No. 70-118 M ay 20, 1970 NEW OFFERING — TREASURY BILLS To A!l Banking Institutions an d Others Concerned in the Eleventh Federal Reserve District: Your attention is invited to the following statement giving details of two issues of Treasury bills: T he T reasury D epartm ent, by this public notice, invites tenders for two series of T reasury bills to the aggregate am ount of $1,700,000,000, or thereabouts, for cash and in exchange for T reasury bills m aturing M ay 31, 1970, in th e am ount of $1,500,544,000, as follows: 272-DAY BILLS (to m atu rity d ate) to be issued Ju n e 1, 1970, in th e am ount of $500,000,000, or thereabouts, representing an additional am ount of bills dated February 28, 1970, and to m ature F ebruary 28, 1971, orig inally issued in the am ount of $1,200,147,000, the additional and original bills to be freely interchangeable. 365-DAY BILLS for $1,200,000,000, or thereabouts, to be dated M ay 31, 1970, and to m ature M ay 31, 1971. T he bills of both series will be issued on a discount basis under com petitive and noncom petitive bidding as hereinafter provided, and a t m atu rity their face am ount will be payable w ithout interest. T h ey will be issued in bearer form only, and in denom inations of $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m atu rity v alue). T enders will be received at F ederal Reserve B anks and Branches up to the closing hour, one-thirty p.m., E astern D aylight Saving Tim e, Tuesday, M ay 26, 1970. T enders will not be received a t the T reasury D epartm ent, W ashington. Each tender m ust be for an even m ultiple of $10,000, and in the case of com petitive tenders the price offered m ust be expressed on the basis of 100, w ith not more than three decimals, e.g., 99.925. F ractions may not be used. (N otw ithstanding the fact th a t th e oneyear bills will run for 365-days, the discount rate will be com puted on a bank discount basis of 360-days, as is currently the practice on all issues of T reasury bills.) I t is urged th a t tenders be m ade on th e p rinted forms and forwarded in th e special envelopes which will be supplied by Federal R eserve B anks or Branches on application therefor. B anking institutions generally m ay subm it tenders for account of customers provided th e nam es of th e customers are set forth in such tenders. O thers th an banking institutions will not be p erm itted to subm it tenders except for th e ir own account. T enders will be received w ithout deposit from incorporated banks and tru st com panies and from responsible and recognized dealers in investm ent securities. T enders from others m ust be accom panied by paym ent of 2 percent of the face am ount of T reasury bills applied for, unless the tenders are accom panied by an express guaranty of paym ent by an incorporated bank or tru st company. Im m ediately a fter the closing hour, tenders will be opened a t th e Federal R eserve B anks and Branches, following which public announcem ent will be made by th e T reasury D epartm ent of th e am ount and price range of accepted bids. Only those sub m itting com petitive tenders will be advised of th e acceptance or rejection thereof. T he Secretary of the T reasury 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, noncom petitive tenders for each issue for $200,000 or less w ithout stated price from any one bidder will be accepted in full a t the average price (in three decim als) of accepted com petitive bids for the respective issues. S ettlem ent for accepted tenders in accordance w ith th e bids m ust be m ade or com pleted a t th e Federal Reserve B ank on June 1, 1970, in cash or other im m ediately available funds or in a like face am ount of T reasury bills m aturing M ay 31, 1970. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be m ade for differences between the p ar value of m aturing bills accepted in exchange and th e issue price of th e new bills. T he income derived from T reasury bills, w hether interest or gain from th e sale or other disposition of th e bills, does not have any exemption, as such, and loss from the sale or other disposition of T reasury bills does not have any special treatm ent, as such, under the Internal Revenue Code of 1954. T he bills are subject to estate, inheritance, gift or other excise taxes, w hether Federal or State, but are exem pt from all taxation now or hereafter imposed on th e principal or interest thereof by any State, or any of the possessions of the U nited States, or by any local taxing authority. F or purposes of taxation the am ount of discount at which T reasury bills are originally sold by the U nited States is considered to be interest. U nder Sections 454 (b ) and 1221 (5 ) of the Internal Revenue Code of 1954 th e am ount of discount a t which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeem ed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance com panies) issued hereunder need include in his income tax return only the difference between the price paid for such bills, w hether on original issue or on subsequent purchase, and the am ount actually received either upon sale or redem ption a t m atu rity during the taxable year for which th e return is made, as ordinary gain or loss. T reasury D epartm ent C ircular No. 418 (cu rren t revision) and this notice, prescribe th e term s of the T reasury bills and govern the conditions of th eir issue. Copies of th e circular may be obtained from any Federal R eserve B ank or Branch. In accordance with the above announcement, tenders will be received at this bank an d its branches a t El Paso, Houston and San Antonio up to twelve-thirty p.m., Central Daylight Saving Time, Tuesday, May 26, 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 ADDITION TO TREASURY RILLS 272 DAYS TO MATURITY Maturing February 28,1971 Dated February 28,1970 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or— The_______________________________ Branch El Paso 79999 Houston 77001 (D ate) San Antonio 78206 P ursuant to the provisions of Treasury Department 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 for the amount allotted, on or before the issue date, by the method and at the rate indicated. _NOT TO EXCEED $200,000 NONCOMPETITIVE TENDER $. 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 exi $ ---------------------------- @ ------------$----------------------- ________ pressed on the basis of COMPETITIVE I * TENDERS <$---------------------- @---------- $------------------------------_______________@ ________ $_______________________ JhSefdeclmaTplaceS e. g., 99.925. Fractions must not be used. TENDERS MAY NOT BE EN TERED BY TELEPH O N E. TENDERS BY W IRE, IF RECEIVED BEFORE THE CLOSING HOUR, ARE ACCEPTABLE. Denominations Desired N u m b e r of Pieces Payment for this issue of bills cannot be made by credit to Treasury Tax and Loan Account. M a tu rity V alue (5) $ (5) $ METHOD OF PAYMENT 10,000 $ □ (5) $1:,000,000 $ Delivery Instructions: □ Hold in Custody Account—Member banks for own account only □ Pledge to secure Treasury Tax and Loan Account Ship to_________________________ □ Charge our reserve account on payment date | - By m aturing bills held by_____________________________ □P a y m e n t to be made by_____________ □ 50,000 $ (5) $ 100,000 $ (3) $ 500,000 $ | D r a f t e n c l o s e d (E ffectual delivery o f enclosed d ra ft sh all be on la te st day w hich w ill p e rm it p re sen tm en t in o rd e r to o b ta in irrevocably collected fu n d s on p aym ent date) (S u b scrib er’s fu ll nam e o r c o rp o ra te title ) (A ddress) By(A uthorized official s ig n a tu re a n d title ) (F o r th e account of, if te n d e r is fo r a n o th e r su b scrib er) (Address) IMPORTANT 1. No tender for less than $10,000 will be considered and each tender must be for an amount in multiples of $10,000 (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, with notation on the envelope reading “ TENDER FOR TREASURY O FFER IN G ”. Since envelopes received with this legend will not be opened until after the closing time specified in the public announcement, communi cations relating to other m atters should not be enclosed. Envelopes for submitting 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 at 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 “____________________________, a copartnership, by----------------------------------------------------------- , a member of the firm”. 5. Tenders from those other than incorporated banks and tru st 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 material, the tender may be disregarded. (See reverse for announcement)