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F e d er a l R eser ve Ba n k 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 Circular No. 70-170 Ju ly 16, 1970 NEW OFFERING — TREASURY BILLS To All 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 Ju ly 31, 1970, in the am ount of $1,702,317,000, as follows: 273-DAY B ILLS (to m aturity d ate) to be issued Ju ly 31, 1970, in the am ount of $500,000,000, or thereabouts, representing an additional am ount of bills dated A pril 30, 1970, and to m ature April 30, 1971, originally issued in the am ount of $1,199,980,000, th e additional and original bills to be freely interchangeable. 365-DAY B ILLS for $1,200,000,000, or thereabouts, to be dated Ju ly 31, 1970, and to m ature Ju ly 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 aturity th eir face am ount will be payable w ithout interest. T hey 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 aturity value). T enders will be received a t Federal R eserve B anks and B ranches up to th e closing hour, one-thirty p.m., E astern D aylight Saving Tim e, T hursday, July 23, 1970. T enders will not be received a t the T reasury D epartm ent, Washington. Each tender m ust be for an even m ultiple of $10,000, and in the case of com petitive tenders th e price offered m ust be expressed on the basis of 100, with not more than three decimals, e.g., 99.925. Fractions m ay not be used. (N otw ithstanding the fact th a t th e oneyear bills will run for 365-days, th e 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.) It is urged th a t tenders be m ade on the printed forms and forwarded in th e special envelopes which will be supplied by Federal Reserve B anks or B ranches on application therefor. Banking institutions generally m ay subm it tenders for account of customers provided th e names of the customers are set forth in such tenders. O thers than banking institutions will not be perm itted to subm it tenders except for th eir 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 Treasury 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 after th e closing hour, tenders will be opened a t th e Federal R eserve Banks and Branches, following which public announcem ent will be m ade by the 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 the 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. S ubject 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 decimals) of accepted com petitive bids for the respective issues. Settlem ent for accepted tenders in accordance w ith the bids m ust be m ade or com pleted a t the Federal Reserve Bank on Ju ly 31, 1970, in cash or other im m ediately available funds or in a like face am ount of T reasury bills m aturing Ju ly 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 the issue price of th e new bills. T he income derived from T reasury bills, w hether interest or gain from the sale or other disposition of th e bills, does not have any exemption, 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 he bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, b u t are exem pt from all taxation now or hereafter im posed 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 a t which Treasury 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 R evenue Code of 1954 the 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, th e owner of T reasury bills (other th an life insurance com panies) issued hereunder need include in his income tax retu rn 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 aturity during the taxable year for which the return is made, as ordinary gain or loss. T reasury D epartm ent Circular No. 418 (current revision) and this notice, prescribe the term s of th e T reasury bills and govern th e conditions of their issue. Copies of the circular m ay be obtained from any Federal R eserve B ank or Branch. In accordance with the above announcement, tenders will be received a t this bank a n d its branches a t El Paso, Houston and San Antonio up to twelve-thirty p.m., Central Daylight Saving Time, Thursday, July 23, 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 BILLS 273 DAYS TO MATURITY Dated April 30, 1970 Maturing April 30, 1971 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or— The------------------------------------------------Branch E l P a so 79999 H o u sto n 77001 (D ate) S a n A nto n io 78206 Pursuant 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. NONCOMPETITIVE TENDER $_ JNOT TO EXCEED $200,000 N o n co m p etitiv e te n d e rs fo r $200,000 o r le ss from a n y one bidder, w ith o u t s ta te d p rice, w ill be a ccep ted in fu ll a t th e a v e ra g e p rice (in th re e d ecim als) o f a ccep ted co m p etitiv e bids. S $---------------------------- @ -------------$------------------------------------ Prices should be expressed on the basis of V \ $---------------------------- @ -------------$-----------------------------------_______________@ ________ $_______________________ JS e e " d eetaa“ 7 la c e ” e. g., 99.925. Fractions must not be used. TENDERS MAY NOT BE EN TERED BY TELEPH ON E. TENDERS BY W IRE, IF RECEIVED BEFORE THE CLOSING HOUR, ARE ACCEPTABLE. (s D en o m in atio n s D esired 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 METHOD OF PAYMENT (5) $ 10,000 $ (5) $ 50,000 $ (5) $ 100,000 $ (2) $ 500,000 $ □ □ (5) $1 ,000,000 $ □ Delivery Instructions: □ sh all be on la te st day w hich will p e rm it p re s e n tm e n t in o rd e r to o b ta in irrevocably collected fu n d s on pay m e n t d ate) Pledge to secure Treasury Tax and Loan Account □ Charge our reserve account on payment date Draft enclosed (E ffectual delivery o f enclosed d r a f t Hold in Custody Account—Member banks for own account only □ By maturing bills held by_____________________ □P a y m en t to be made by_ Ship to_________________________ (S u b scriber’s fu ll n am e o r c o rp o ra te title) (Address) By- (A utho rized official s ig n a tu re a n d title) (F or the account of, if tender is for another su bscrib er) (Address) IM P O R T A N T 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 a fter 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)