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F E D E R A L R E S E R V E B A N K OF D A L L A S F IS C A L A G E N T O F T H E U N ITED S T A T E S DALLAS, TEXAS 75222 Circular No. 67-208 October 18, 1967 N EW OFFERING — TREASURY BILLS To A ll Banking Institutions an d Others Concerned in the Eleventh Federal Reserve District: Your attention is invited to the follow ing statement giving details of tw o issues of Treasury bills: The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $2,500,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing October 26, 1967, in the amount of $2,400,935,000, as follows: 91-DAY BILLS (to maturity date) to be issued October 26, 1967, in the amount of $1,500,000,000, or there abouts, representing an additional amount of bills dated July 27, 1967, and to mature January 25, 1968, origi nally issued in the amount of $1,000,293,000, the additional and original bills to be freely interchangeable. 182-DAY BILLS for $1,000,000,000, or thereabouts, to be dated October 26, 1967, and to mature April 25, 1968. 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 $1,000, $5,000, $10,000, $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 Saving Time, Monday, October 23, 1967. Tenders will not be received at the Treasury Department, Washington. Each tender must be for an even multiple of $1,000, and in the case of competitive tenders the price offered must be expressed on the basis of 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 of 2 percent of 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. Those submitting 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. Subject 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) of 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 October 26, 1967, in cash or other immediately available funds or in a like face amount of Treasury bills maturing October 26, 1967. 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 of the new bills. The income derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, does not have any exemption, as such, and loss from the sale or other disposition of Treasury bills does not have any special treatment, as such, under the Internal Revenue Code of 1954. The bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exempt from all taxation now or hereafter imposed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority. For purposes of taxation the amount of discount at which Treasury bills are originally sold by the United States is considered to be interest. 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 not con sidered to accrue until such bills are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued hereunder need include in his income tax return only the difference between the price paid for such 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, as ordinary gain or loss. 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 w ill be received a t this b a n k an d its branches a t El Paso, Houston and San Antonio up to tw elve-thirty p.m., Central Daylight Saving Time, M o n d a y , October 23, 1967. Tenders may not be entered by telephone. Yours very truly, Watrous H. Irons President LAST PREVIOUS OFFERING OF TREASURY BILLS Amount, Range and Approximate Yield of Accepted Tenders 91-Day Bills 182-Day Bills Due January 18, 1968 Due April 18, 1968 $2,452,135,000______________________________ Total Applied For______________________________ $2,005,979,000 $1,500,272,000________________________________ Total Accepted________________________________ $1,000,009,000 Price Yield Price Yield 98.827 .4.640%_________________________ -High-------------------------------- 97.403____________5.137% 98.808 .4.716%_________________________ Low______________________ 97.376____________5.190% 98.818 4.676% ( 1 ) ____________________ Average-------------------------------97.389____________ 5.165% (1) ( 1 ) T h e s e rates are on bank d iscou nt basis. T h e e q u iv a le n t coupon issue y ie ld s are 4 .8 1 % for th e 9 1 -d a y b ills, an d 5 .3 9 % for th e 1 8 2 -day bills. (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 182 DAYS TO MATURITY Dated October 26, 1967 M aturing April 25, 1968 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or — The Branch El Paso 79999 Houston 77001 _____ ____________________ ____________ San A ntonio 7820G ( D a te ) Pursuant to the provisions of T reasury D epartm ent Circular N o. 418 (current revision) and the provisions of the public announcement issued by the Treasury Department, the undersigned offers to purchase T reasury 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. NONCOMPETITIVE TENDER $_____________________________ NOT TO EXCEED $200,000 N oncom petitive tenders for $200,000 or less from any one bidder, without stated price, w ill be accepted in fu ll at the average price (in three decim als) of accepted com petitive bids. Prices should be ex pressed on the basis of ; (ft $ COMPETITIVE TENDERS < $_______________ @________$___________________ i $; ____________________ @ ...... -... -..@ __________ $ ___________________________ % -... th re ^ d m ^ p fa c e f e. g., 99.925. Fractions must not be used. T E N D E R S MAY NOT BE E N T E R E D BY TELEPHO NE. T E N D E R S BY W IRE, IF RECEIVED BEFO RE THE CLOSING HOUR, ARE ACCEPTABLE. Denom inations D esired N u m b er P iece s Paym ent fo r this issue of bills cannot be made by credit to Treasury T ax and Loan Account. of M atu rity V a lu e @ $ @ $ @ $ @ $ METHOD OF PAY M E N T 1,000 $ 5,000 $ □ 10,000 $ □ By m aturing bills held by____________________ Paym ent to be made by_ 50,000 $ □ @ $ 100,000 $ @ ? 500,000 $ □ Charge our reserve account on paym ent date D raft enclosed ( E f f e c t u a l d e l i v e r y o f e n c l o s e d d r a ft sh a ll be on la te st d ay w h ich w ill p e r m it p resen t m e n t in ord er to o b ta in ir revocab ly collected fu n d s on p a y m e n t d a te) @ $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--------------------------------------- □ (S u b scrib er’s f u ll n a m e o r corp o r a te t it le ) (A d d re ss) (A u th o rized official s ig n a tu r e and t it le ) ----( F o r th e a c c o u n t o f, i f ten d er is f o r an o th e r su b scrib er) (A d d re ss) IM PORTANT 1. No tender for less than $1,000 w ill be considered and each tender m ust be for an amount in multiples o f $1,000 (m aturity value). 2. Tenders should be forw ai’ded in an envelope clearly addressed to this bank or appropriate branch as F iscal A g en t o f the United States, w ith notation on the envelope reading “T E N D E R FOR T R E A SU R Y B IL LS”. Since envelopes received w ith this legend w ill not be opened until after the closing tim e specified in the public announcement, communications relating to other m atters should not be enclosed. Envelopes for subm itting tenders m ay be obtained from this bank or appropriate branch. 3. A ny qualified or conditional tender w ill be rejected. 4. If a corporation makes the tender, the form should be signed by an officer of the corporation authorized to m ake the tender and the signing of the form by an officer of the corporation w ill be construed as a representation by him that 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 “......................................................... t a copartnership, by......................................................................................., a member of the firm”. 5. Tenders from those other than incorporated banks and trust companies or responsible and recognized dealers in in v est m ent securities w ill be disregarded, unless accompanied by a deposit of 2 percent of the total amount (m aturity value) of the T reasury bills applied for, or unless the tenders are accompanied by an express guaranty of fu ll paym ent by an incorporated bank or trust company. 6. If the lan guage of this form is changed in any respect, which, in the opinion of the Secretary of the T reasury is m aterial, the tender may be disregarded. (See reverse for announcement)