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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, T E X A S 7 5 2 2 2 Circular No. 71-63 M arch 16, 1971 NEW OFFERING — TREASURY BILLS To All Banking Institutions a n d Others Concerned in the Eleventh Federal Reserve District: Your attention is invited to the follow in g statem ent giving details of tw o issues of Treasury bills: T h e T reasury D epartm ent, by this public notice, invites tenders for two series of T reasury bills to th e aggregate am ount of $3,500,000,000, or thereabouts, for cash and in exchange for T reasury bills m aturing M arch 25, 1971, in the am ount of $3,304,795,000, as follows: 91-DAY B IL L S (to m aturity date) to be issued M arch 25, 1971, in the am ount of $1,900,000,000, or th ere abouts, representing an additional am ount of bills dated D ecem ber 24, 1970, and to m ature June 24, 1971 (C U S IP No. 912793 K P O ), originally issued in the am ount of $1,403,800,000 (an additional $200,745,000 was issued F ebruary 26, 1971), the additional and original bills to be freely interchangeable. 182-DAY B IL L S for $1,600,000,000, or thereabouts, to be dated M arch 25, 1971, and to m ature Septem ber 23, 1971 (C U S IP No. 912793 L K O ). 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 a t m aturity their 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, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (m atu rity value). T enders will be received a t F ederal R eserve Banks and Branches up to th e closing hour, one-thirty p.m., E astern S tandard Tim e, Monday, M arch 22, 1971. T enders will not be received a t the Treasury D epartm ent, W ashington. Each tender m ust be for a m inim um of $10,000. T enders over $10,000 m ust be in m ultiples of $5,000. In the case of com petitive tenders the price offered m ust be expressed on the basis of 100, with not more th an three decimals, e.g., 99.925. Fractions m ay not be used. It is urged th a t tenders be m ade on the printed forms and forwarded in the special envelopes which will be supplied by F ederal Reserve B anks or Branches on application therefor. B anking institutions generally m ay subm it tenders for account of customers provided the nam es of the customers are set forth in such tenders. O thers th an banking institutions will not be perm itted to subm it tenders except for their own account. T enders will be received w ithout deposit from incorporated banks and trust companies 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 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 after the closing hour, tenders will be opened a t the F ederal R eserve Banks and Branches, following which public announcem ent will be made by the T reasury D epartm ent of the am ount and price range of accepted bids. Only those subm itting com petitive tenders will be advised of the acceptance or rejection thereof. T h e 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. Sub ject 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 with the bids m ust be m ade or com pleted a t the F ederal Reserve B ank on M arch 25, 1971, in cash or other im m ediately available funds or in a like face am ount of T reasury bills m aturing M arch 25, 1971. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be m ade for differences between th e par value of m atur ing bills accepted in exchange and the issue price of the new bills. U nder Sections 454 (b ) and 1221 (5 ) of th e Internal R evenue Code of 1954 the am ount of discount a t which bills issued hereunder are sold is considered to accrue when th e bills are sold, redeem ed or otherwise disposed of, and the bills are excluded from consideration as capital assets. Accordingly, the owner of T reasury bills (other than life insurance com panies) issued here under m ust include in his income tax return, as ordinary gain or loss, the difference between the price paid for the 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. T reasury D epartm ent Circular No. 418 (curren t revision) and this notice, prescribe the term s of the T reasury bills and govern th e conditions of th eir issue. Copies of the circular m ay be obtained from any Federal Reserve B ank or Branch. In accord ance with the a b o v e a n n o u n c em en t, tenders will b e received at this b ank a n d its branches at El Paso, Houston a n d San Antonio up to twelve-thirty p.m., Central Standard Time, M on d ay , March 22, 1 971. Tenders may not b e entered b y te le p h o n e . Yours very truly, P. E. Cold well President LAST PREVIOUS OFFERING OF TREASURY BILLS Amount, R ange and A pproxim ate Yield of A ccepted Tenders 91-Day Bills 182-Day Bills D ue June 17, 1971 D ue Septem ber 16, 1971 $2,813,410,000 T otal A pplied F or_______________________________ $2,527,435,000 $1,900,095,000________________________________ T o tal A ccepted_________________________________$1,400,075,000 P rice Y ield Price Yield 99.183----------------- 3.232% ---------------------------------------.H igh______________________ 98.295___________ 3.373% 99.153___________ 3.351% __________________________L o w ______________________ 98.258___________ 3.446% 99.164----------------- 3.307% ( 1 ) ----------------------------- .Average____________________ 98.273___________ 3.416% (1 ) (1 ) These rates are on a bank discount basis. The equivalent coupon issue yields are 3.39% for the 91-day bills and 3.53% for the 182-day bills. (See reverse 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 182 DAYS TO MATURITY Dated March 25,1971 Maturing September 23,1971 To: Federal Reserve Bank, Station R, Dallas, Texas 75222 or — The-------------------------------------- Branch E l Paso 79999 H ouston 77001 San Antonio 78206 (D ate) P u rsu an t to the provisions of T reasury D epartm ent Circular No. 418 (cu rren t revision) and the provisions of th e public announcement issued by the T reasury D epartm ent, the undersigned offers to purchase T reasury bills in the am ount shown below, and agrees to pay for the am ount allotted, on or before the issue date, by the method and a t the ra te indicated. NONCOMPETITIVE TENDER $_ _NOT TO EXCEED $200,000 Noncompetitive tenders for $200,000 or less from any one bidder, w ithout stated price, will be accepted in full at the average price (in three decimals) of accepted competitive bids. $_________________________ COMPETITIVE TENDERS W -@ - )• $ c j» ^ " ? -------------------------------------- Prices should be ex pressed on the basis of 100, with not more th a n th r e e d ecim al p la c e s , e. g., 99.925. F ractions m ust not be used. TEND ERS MAY NOT BE ACCEPTED BY TELEPH O N E. TEND ERS BY W IRE, IF RECEIVED BEFO RE T H E CLOSING HOUR, ARE ACCEPTABLE. ~ Denominations Desired N um ber of pieces Paym ent for this issue of bills cannot be m ade by credit to T reasury Tax and Loan Account. METHOD OF PAYM ENT M a tu rity V alue @ $ @ $ 10,000 $15,000 S P □ 50,000 S. S 100,000 * @$ P @ $ 500,000 S $1,000,000 S@ S 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___________________________ Payment to be made by---------------- — □ Charge our reserve account on payment date | | Draft enclosed (E ffectual delivery o f enclosed d r a f t shall 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 ob tain irrevocably collected fu n d s on p a y m e n t d a te ) (S u b sc rib e r’s fu ll n am e o r c o rp o ra te title ) (A dd ress) By- (A u th o rized official s ig n a tu re a n d title ) (F o r th e acco u n t of, if te n d e r is f o r a n o th e r su b scrib er) (A d d ress) IM PORTANT 1. No ten der fo r less th a n $10,000 will be considered and each tender over $10,000 m ust be for an am ount in m ultiples of $5,000 (m atu rity value). 2. Tenders should be forw arded in an envelope clearly addressed to th is bank or app ropriate branch as Fiscal A gent of th e U nited S tates, w ith notation on the envelope reading “TEN D ER FOR TREASURY O FF E R IN G ”. Since envelopes received w ith this legend will not be opened until a fte r the closing tim e specified in th e public announcement, com muni cations relatin g to other m a tte rs should not be enclosed. Envelopes for subm itting tenders m ay be obtained from th is bank or appro priate branch. 3. A ny qualified or conditional tender will be rejected. 4. If a corporation m akes the tender, the form should be signed by an officer of the corporation authorized to m ake th e tend er and th e signing of the form by an officer of the corporation will be construed as a representation by him th a t he h as been so authorized. If th e tender is made by a p artn e rsh ip it should be signed by a m em ber of the firm, who should sign in th e form “___________________________ , a copartnership, by----------------------------------------------------------------, a m em ber of th e firm .” 5. Tenders from those other th an incorporated banks and tr u s t companies or responsible and recognized dealers in in v e st m ent securities will be disregarded, unless accompanied by a deposit of 2 percent of the total am ount (m atu rity v alue) of th e T reasu ry bills applied for, or unless the tenders are accompanied by an express g u ara n ty of full paym ent b y an incorporated bank or tru s t company. 6 If th e language of this form is changed in any respect, which, in the opinion of th e S ecretary of th e T re asu ry is m aterial, th e ten der m ay be disregarded. (See reverse for announcement)