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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 75222 Circular N o. 70-119 M ay 20, 1970 NEW OFFERING — TREASURY BILLS To All Banking Institutions a n d Others Concerned in th e Eleventh Federal Reserve District: Your atten tio n is invited to the following s ta te m e n t giving details of two issues of Treasury bills: T h e Treasury Departm ent, by this public notice, invites tenders for two series of Treasury bills to the aggregate am ount of $1,700,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing M ay 31, 1970, in the am ount of $1,500,544,000, as follows: 272-D A Y B IL L S (to m aturity date) to be issued June 1, 1970, in the am ount of $500,000,000, or thereabouts, representing an additional am ount of bills dated February 28, 1970, and to mature February 28, 1971, orig inally issued in the am ount of $1,200,147,000, the additional and original bills to be freely interchangeable. 365-D A Y B IL L S for $1,200,000,000, or thereabouts, to be dated M ay 31, 1970, and to mature M ay 31, 1971. T h e bills of both series will be issued on a discount basis under com petitive and noncom petitive bidding as hereinafter provided, and at m aturity their face am ount will be payable without interest. T h ey w ill be issued in bearer form only, and in denom inations of $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m aturity v a lu e ). Tenders will be received at Federal R eserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern D ayligh t Saving T im e, Tuesday, M ay 26, 1970. Tenders w ill not be received at the Treasury 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, with not more than three decim als, e.g., 99.925. Fractions m ay not be used. (N otw ithstanding the fact that the 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 Treasury bills.) It is urged that tenders be m ade 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 m ay subm it tenders for account of custom ers provided the nam es of the custom ers are set forth in such tenders. Others than banking institutions will not be perm itted to subm it tenders except for their own account. Tenders will be received without deposit from incorporated banks and trust com panies and from responsible and recognized dealers in investm ent securities. Tenders from others m ust be accom panied by paym ent of 2 percent of the face am ount of Treasury bills applied for, unless the tenders are accom panied by an express guaranty of paym ent by an incorporated bank or trust company. Im m ediately after the closing hour, tenders w ill be opened at the Federal R eserve Banks and Branches, follow ing which public announcem ent will be m ade by the Treasury D epartm ent of the am ount and price range of accepted bids. Only those sub m itting com petitive tenders will be advised of the acceptance or rejection thereof. T h e 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, noncom petitive tenders for each issue for $200,000 or less w ithout stated price from any one bidder will be accepted in full at 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 the bids must be m ade or com pleted at the Federal R eserve B ank on June 1, 1970, in cash or other im m ediately available funds or in a like face am ount of Treasury bills maturing M ay 31, 1970. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents w ill be m ade for differences betw een the par value of m aturing bills accepted in exchange and the issue price of the new bills. T h e incom e derived from Treasury bills, whether interest or gain from the sale or other disposition o f the bills, does not have any exem ption, as such, and loss from the sale or other disposition of Treasury bills does not have any special treatm ent, as such, under the Internal R evenue Code of 1954. T h e bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exem pt from all taxation now or hereafter im posed on the principal or interest thereof b y any State, or any of the possessions of the U nited States, or by any local taxing authority. For purposes of taxation the am ount of discount at which Treasury bills are originally sold by the U n ited States is considered to be interest. Under Sections 45 4 ( b ) and 1221 ( 5 ) of the Internal R evenue Code of 1954 the am ount of discount at 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 incom e tax return only the difference betw een the price paid for such bills, whether on original issue or on subsequent purchase, and the am ount actually received either upon sale or redem ption at m aturity during the taxable year for which the return is m ade, as ordinary gain or loss. Treasury D epartm ent Circular No. 418 (current revision) and th is notice, prescribe the term s of the Treasury bills and govern the conditions of their issue. Copies of the circular m ay be obtained from any Federal R eserve Bank or Branch. In a c co rd an ce with the a b o v e a n n o u n c e m e n t, te nders will b e received a t this b a n k a n d its bra n c h e s a t El Paso, Houston a n d San Antonio up to twelve-thirty p.m., Centra! Daylight Saving Time, Tuesday, M ay 26, 1970. Tenders m a y not b e e n te re d by te le p h o n e . 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 Maturing May 31,1971 Dated May 31,1970 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 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 a t 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 ex13__________________ @ ________ $_______________________ pressed on the basis of q. « COMPETITIVE TENDERS «p-------------------------------------------- «p------------------------------------ 100, with not more than th re e decim al places, ____$ _______________________ 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 um ber of Pieces _(5) $ 10,000 (a) $ 50,000 (5) $ 100,000 (5) $ 500,000 (5) $1,000,000 Payment for this issue of bills cannot be made by credit to Treasury Tax and Loan Account. M aturity Value METHOD OF PAYMENT $ $ $ $ $ Delivery Instructions: □ Hold in Custody Account—Member banks for own account only □ Pledge to secure Treasury Tax and Loan Account □ Ship to________________________ □ □ By maturing bills held by___________________________ □P a y m e n t to be made by_ Charge our reserve account on payment date [ | D r a f t e n c l o s e d (Effectual delivery of enclosed d raft shall be on latest day which will perm it presentm ent in order to obtain irrevocably collected funds on paym ent date) (Subscriber’s fu ll nam e o r corporate title) (Address) By- (Authorized official sig n atu re and title) (F or the account of, if tender is for another subscriber) (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 FFERIN 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 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 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 “____________________________, 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 s t 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)