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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 No. 68-3 January 3, 1968 NEW OFFERING — TREASURY BILLS To All B a n k in g Institutions a n d O th e r s C o n c e r n e d in t h e E leventh F e d e r a l R e se rv e District: Y our a t t e n t i o n is in v ite d to th e f o llo w in g s t a t e m e n t giving d e t a i l s of tw o is s u e s of T re asury bills: T h e T reasury D epartm ent, b y this public notice, invites tenders for two series of T reasury bills to the aggregate am ount of $2,500,000,000, or thereabouts, for cash and in exchange for Treasury bills m aturing January 11, 1968, in the am ount of $2,501,746,000, as follows: 91-DAY B IL L S (to m aturity date) to be issued January 11, 1968, in the am ount of $1,500,000,000, or there abouts, representing an additional am ount of bills dated O ctober 13, 1967, and to m ature April 11, 1968, originally issued in the am ount of $1,000,840,000, the additional and original bills to be freely interchangeable. 182-DAY B IL L S for $1,000,000,000, or thereabouts, to be dated Jan u ary 11, 1968, and to m ature Ju ly 11, 1968. T h e bills of both series will be issued on a discount basis under competitive and noncompetitive 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 denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m atu rity value). Tenders will be received a t Federal R eserve B anks anrl Branches up to the closing hour, one-thirty p.m., E astern Standard Tim e, Monday, Janu ary 8, 1968. T enders will not be received a t th e T reasury D epartm ent, Washington. Each tender m ust be for an even m ultiple of $1,000, and in th e case of com petitive tenders the 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. I t is urged th a t tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by Federal R eserve Banks or Branches on application therefor. Banking institutions generally m ay subm it tenders for account of customers provided the 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 their own account. T enders will be received w ithout deposit from incorporated banks and tru st companies and from responsible and recognized dealers in investm ent securities. Tenders from others m ust be accompanied 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 th e Federal Reserve B anks 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. Those subm itting tenders will be advised of th e 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. 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 a t the average price (in three decimals) of accepted com petitive bids for the respective issues. Settlem ent for accepted tenders in accordance with the bids m ust be m ade or completed a t the Federal R eserve B ank on January 11, 1968, in cash or other im m ediately available funds or in a like face amount of T reasury bills m aturing January 11, 1968. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be made for differences between the par value of m atur ing bills accepted in exchange and the issue price of the new bills. T h e income derived from T reasury bills, w hether interest or gain from the sale or other disposition of the bills, does not have any exemption, as such, and loss from th e sale or other disposition of T reasury bills does not have any special treatm ent, as such, under th e Internal Revenue Code of 1954. T he bills are subject to estate, inheritance, gift or other excise taxes, w hether F ederal or State, b u t are exem pt from all taxation now or hereafter imposed on the 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 T reasury 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 Revenue Code of 1954 the am ount of discount a t which bills issued hereunder are sold is not con sidered 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 companies) issued hereunder need include in his income tax return 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 retu rn 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 the conditions of their issue. Copies of the circular m ay be obtained from any Federal Reserve B ank or Branch. In a c c o r d a n c e w ith t h e a b o v e a n n o u n c e m e n t , te n d e r s will b e r e c e iv e d a t this b a n k a n d its b r a n c h e s a t El P a so , Houston a n d S a n A n to n io u p to tw e lv e - th ir ty p .m ., C e n tral S t a n d a r d Time, M o n d a y , J a n u a r y 8, 1 968 . T e n d e rs m a y not b e e n t e r e d by t e l e p h o n e . Yours v e r y truly, W a tr o u s H. Irons P re sid e n t LAST PREVIOUS OFFERING OF TREASURY BILLS Amount, Range and A pproxim ate Yield of Accepted Tenders 91-Day Bills 183-Day Bills D ue April 4, 1968 D ue Ju ly 5, 1968 $2,375,792,000___________________ * __________T otal Applied F o r_______________________________$2,052,216,000 $ 1,500,272,000_______________________________ .Total Accepted_____________ ___________________$ 1,000,084,000 Price Yield Price Yield 98.722____________5.056% __________________________High_______________ ___ _ 97,168..__ _ ____ 5.571% _ 98.700____________5.143% _________________________ l o w __________________ .....97.146____________5.614% 98.710______ ....5.103% ( 1 ) _________ ________ ...A verage____________________ 97.157 __________ 5.593% (1) ( 1 ) T h e s e r a t e s a r e o n a b a n k d is c o u n t b asis. T h e e q u iv a l e n t co u p o n issu e y i e l d s a re t h e 1 8 3 - d a y b i ll s . 5.26% for t h e 9 1 - d a y b i ll s , a n d 5.85% for ( S e e r e v e r s e s id e fo r t e n d e r f o r m ) 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 July 11, 1968 Dated January 11, 1968 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or — The_________________________________Branch El Paso 79999 Houston 77001 (D ate) San Antonio 78206 P u rs u a n t to th e pro visions of T re a s u r y D e p a rtm e n t C irc u la r No. 418 (c u r re n t revision ) an d th e p rovision s of th e public anno uncem ent issued by th e T re a s u r y D e p a rtm e n t, th e u n d ersig n ed offers to p u rc h a s e T re a s u r y bills in th e a m o u n t show n below, an d a g re e s to p a y fo r th e a m o u n t allo tte d , on o r before th e issue date, b y th e m e th o d an d a t th e r a t e in dicated. NONCOMPETITIVE TENDER $_ JSTOT TO EXCEED $200,000 N oncom petitive te n d e rs fo r $200,000 o r less from an y one bid d er, w ith o u t s ta te d price, w ill be accepted in fu ll a t th e a v e ra g e price (in th re e d ecim als) o f accepted co m petitiv e bids. (?■ $ () a @ $ P ric e s should be ex p re s se d on th e b a sis of 100, w ith n o t m o re th a n t h r e e d e c im a l p la c e s , e. g., 99.925. F ra c tio n s m u s t n o t be used. ...... B S T T E N D E R S M A Y N O T B E E N T E R E D BY T E L E P H O N E . T E N D E R S BY W IR E , I F R E C E IV E D B E F O R E T H E C LO SIN G H O U R , A R E A C C E P T A B L E . D en o m in atio n s D esired Number of Pieces P a y m e n t f o r th is issue of bills c an n o t be m ad e by c re d it to T re a s u r y T a x a n d L o an A ccount. Maturity Value <> $ S ? M ETHOD O F PAY M EN T 1,000 $ 5,000 ? 10,000 $ (a) $ (a) $ 50,000 $ (a) $ 100,000 $ < ) $ 500,000 $ a □ □ By maturing bills held by_____________________________ Payment to be made by_____________ - □ Charge our reserve account on payment date I I Draft enclosed ( E f f e c t u a l d e liv e r y o f enclosed draft shall be on latest day which will permit present ment in order to obtain irrevocably collected funds on payment date) (a) $1,000,000 $ Delivery Instructions: □ □ Pledge to secure Treasury Tax and Loan Account (Subscriber’s full name or corporate title) Hold in Custody Account— Member banks for own account only □ (Address) B y_ (Authorized official signature and title) Ship to___________________________ (For the account of. i f tender is for another subscriber) (Address) IM PO R T A N T 1 . No te n d e r f o r less th a n $1,000 w ill be considered an d each te n d e r m u s t be f o r a n a m o u n t in m u ltip les of $1,000 ( m a tu r it y v alu e). 2 . T en d ers should b e fo rw a rd e d in a n envelope cle a rly ad d re s se d to th is b an k o r a p p ro p r ia te b ran ch as F is c a l A g e n t o f t h e U nited S ta te s, w ith n o ta tio n on th e envelope re a d in g “ T E N D E R F O R T R E A S U R Y B IL L S ”. Since envelopes receiv ed w ith th is legend w ill n o t be opened u n til a f t e r th e closing tim e specified in th e public an nouncem ent, co m m u n icatio n s re la tin g to o th e r m a tte rs should n o t be enclosed. E nv elo p es fo r su b m ittin g te n d e rs m a y be obtained fro m th is b a n k or a p p ro p r ia te b ranch. A n y qualified o r conditional te n d e r w ill be rejected . I f a co rp o ratio n m a k es th e te n d e r, th e fo rm should be sig n ed by a n officer of th e co rp o ra tio n a u th o riz e d to m a k e t h e te n d e r a n d th e sig n in g of th e fo rm b y a n officer o f th e corp o ratio n w ill be co n stru ed as a re p r e s e n ta tio n b y him t h a t h e h a s been so au th o rized . If th e te n d e r is m ad e b y a p a rtn e rs h ip it should be sig n ed b y a m e m b er of th e firm , w h o should sig n in th e fo rm “ ........................................................... , a co p artn ersh ip , b y .............................................................. ...................... a m e m b er o f th e firm ” . 5. T en d ers fr o m th o se o th e r th a n in c o rp o rated b an k s an d tr u s t com panies o r resp onsible a n d recogn ized d ealers in in v e s t m e n t secu rities w ill be d isreg ard ed , u nless accom panied b y a d e p o sit of 2 p e rc e n t o f th e to ta l a m o u n t ( m a tu r ity v a lu e ) of th e T re a s u r y bills ap p lied fo r, o r u n le ss th e te n d e rs a re accom panied b y a n ex p ress g u a r a n ty of fu ll p a y m e n t b y a n in c o rp o rated b a n k o r t r u s t com pany. 6. If the language of this form is changed in any respect, which, in th e opinion of the S ecretary of the T reasury i s m aterial, the tender m ay be disregarded. (See reverse fo r announcem ent)