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FEDERAL RESERVE BANK OF DALLAS F I S 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 EX A S 7 5 2 2 2 Circular No. 71-93 A pril 20, 1971 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 o f $3,400,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing April 29, 1971, in the amount of $3,402,650,000, as follows: 91-DAY BILLS (to maturity date) to be issued April 29, 1971, in the amount of $2,000,000,000, or thereabouts, representing an additional amount of bills dated January 28, 1971, and to mature July 29, 1971 (CU SIP No. 912793 L A 2 ), originally issued in the amount of $1,400,440,000 (an additional $200,520,000 was issued April 6, 1971), the additional and original bills to be freely interchangeable. 182-DAY BILLS for $1,400,000,000, or thereabouts, to be dated April 29, 1971, and to mature October 28, 1971 (CU SIP No. 912793 L P 9 ). The bills of both series will be issued on a discount basis under competitive 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 $10,000, $15,000, $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 Daylight Savings Time, Monday, April 26, 1971. Tenders will not be received at the Treasury Department, Washington. Each tender must be for a minimum of $10,000. Tenders over $10,000 must be in multiples of $5,000. In the case of competitive tenders the price offered must be expressed on the basis o f 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. 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 o f 2 percent o f 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 will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price range of accepted bids. Only those submitting competitive tenders will 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. Sub ject 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) o f accepted competitive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on April 29, 1971, in cash or other immediately available funds or in a like face amount of Treasury bills maturing April 29, 1971. Cash and exchange tenders will receive equal treatment Cash adjustments will be made for differences between the par value of matur ing bills accepted in exchange and the issue price o f the new bills. 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 considered to accrue when the bills are sold, redeemed or otherwise disposed of, and the bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued here under must include in his income tax return, as ordinary gain or loss, the difference between the price paid for the 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. 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 Daylight Savings Time, Monday, April 26, 1971. Tenders may not be entered by telephone. Yours very truly, P. E. Coldwell President LAST PREVIOUS OFFERING OF TREASURY BILLS Amount, Range and Approximate Y ield of Accepted Tenders 91-Day Bills 182-Day Bills Due July 22, 1971 Due October 21, 1971 $3,576,245,000___ -__________________________ _-T ota l Applied For_________________________________ $3,132,795,000 $2,000,285,000----------------------------------------------------- Total Accepted----------------------------------------------------- $1,400,700,000 Price Yield Price Yield 99.055_____________3.738% ___________________________ JEIigh______________________ 98.010_____________3.936% 99.041______ 3.794% ____________________________L o w _______________________97.992_____________3.972% 99.047_____________ 3.770% ( 1 ) ______________________Average_____________________ 97.998_____________ 3.960% (1 ) ( 1 ) These rates are on a bank discount basis. The equivalent coupon issue yields are 3 . 8 7 % for the 91-day bills and 4 . 1 1 % for the 182-day bills. (S e e 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 Maturing October 28,1971 Dated April 29,1971 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or — Branch The---------------------------El Paso 79999 Houston 77001 San Antonio 78206 (D ate) ^ P u rsu an t to the provisions of T reasury D epartm ent Circular No. 418 (current revision) and th e provisions of th e public announcement issued by the T reasury D epartm ent, th e 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 at the ra te indicated. NONCOMPETITIVE TENDER $________________________ __ _NOT TO EXCEED $200,000 Noncompetitive tenders for $200,900 or less from any one bidder, w ithout stated price, will be accepted in full a t the average price (in three decimals) of accepted com petitive bids. _________________________ Prices should be ex pressed on the basis of 100, with not more th a n -----------------------------th r e e decim al p la c e s, e. g., 99.925. F ractions -----------------------------m ust not be used. $- \ COMPETITIVE TENDERS >$ .<§>. K i f 9 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 b er of pieces Paym ent for this issue of bills cannot be made by credit to T reasury Tax and Loan Account. METHOD OF PAYM ENT M a tu rity V alue -@ $ 10,000 ?_ $ ? 50.000 $_ $ □ 15.000 $_ By maturing bills held by_____________________ ______ _ Payment to be made by —------------- 1 0 0 .0 0 0 $ l □ □ Charge our reserve account on payment date [H Draft enclosed (E ffectual delivery o f enclosed d r a f t 500.000 $_ @ $ 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---- —• .— ------ shall be on latest day w hich will p e rm it p re se n tm e n t in ord e r to o b ta in irrevocably collected fu n d s on p a y m e n t da te ) ( S u bscriber’s fu ll n am e o r c o rp o ra te title ) (A ddress) By- (A u th o rize d official sig n a tu re a n d title ) ( F o r the a cc o 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 ddress) IMPORTANT 1. No tender fo r less th a n $10,000 will be considered and each ten der over $10,000 m ust be fo r 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 this bank or appropriate branch as Fiscal A gent of th e U nited States, 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 the public announcement, communi cations relatin g to other m a tte rs should not be enclosed. Envelopes fo r 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 tender 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 has been so authorized. If the 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 the form “___________________________ , a copartnership, by — —.— , a m em ber of the firm.” 5. Tenders from those other th an incorporated banks and tr u s t companies or responsible and recognized dealers in invest m ent securities will be disregarded, unless accompanied by a deposit of 2 percent of the total am ount (m atu rity value) of the T reasu ry bills applied for, or unless the tenders are accompanied by an express g u ara n ty of full paym ent by an incorporated bank or tru st company. 6. If th e language of this form is changed in any respect, which, in the opinion of th e Secretary of the T reasury is m aterial, th e tender m ay be disregarded. (See reverse for announcement)