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federal Reserve bank of Dallas F IS C A L A G E N T O F T H E U NIT E D S T A T E S DALLAS, TEXAS 75222 Circular No. 68-248 November 18, 1968 NEW OFFERING — TREASURY BILLS To All Banking Institutions a n d O thers Concerned in the Eleventh Federal Reserve District: Your attention is invited to the following s ta te m e n t giving details of tw o issues of Treasury bills: T h e Treasury Departm ent, by this public notice, invites tenders for two series of Treasury bills to the aggregate am ount of $1,500,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing N ovem ber 30, 1968, in the am ount of $1,500,519,000, as follows: 272-D A Y B IL L S (to m aturity date) to be issued D ecem ber 2, 1968, in the am ount of $500,000,000, or there abouts, representing an additional am ount of bills dated August 31, 1968, and to mature August 31, 1969, originally issued in the am ount of $1,000,387,000, the additional and original bills to be freely interchangeable. 365-D A Y B IL L S for $1,000,000,000, or thereabouts to be dated N ovem ber 30, 1968, and to mature N ovem ber 30, 1969. 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 at m aturity their face am ount will be payable w ithout interest. T h ey will be issued in bearer form only, and in denom inations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m aturity va lu e). Tenders w ill be received at Federal R eserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Standard T im e, Friday, Novem ber 22, 1968. Tenders w ill not be received at the Treasury D epartm ent, W ashington. Each tender m ust be for an even m ultiple of $1,000, and in the case of com petitive tenders the price offered m ust be expressed on the basis of 100, with not more than three decim als, e.g., 99.925. Fractions m ay not be used. (N otw ithstanding the fact that the oneyear bills will run for 365-days, the discount rate will be com puted on a bank discount basis of 3 6 0 -days, as is currently the practice on all issues of Treasury bills.) It is urged that tenders be m ade on the printed forms and forwarded in the special envelopes which w ill be supplied by Federal R eserve Banks or Branches on application therefor. B anking institutions generally m ay subm it tenders for account of custom ers provided the nam es of the customers are set forth in such tenders. Others than banking institutions w ill not be perm itted to subm it tenders except for their own account. Tenders will be received without deposit from incorporated banks and trust com panies 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 Treasury bills applied for, unless the tenders are accom panied by an express guaranty of paym ent by an incorporated bank or trust company. Im m ediately after the closing hour, tenders will be opened at the Federal R eserve Banks and Branches, follow ing which public announcem ent w ill be m ade by the Treasury D epartm ent of the am ount and price range of accepted bids. T hose subm itting tenders will be advised of the acceptance or rejection thereof. T h e Secretary of the Treasury expressly reserves the right to accept or reject any or all tenders, in w hole 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 w ill be accepted in full at the average price (in three decim als) 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 com pleted at the Federal Reserve B ank on D ecem ber 2, 1968, in cash or other im m ediately available funds or in a like face amount of Treasury bills m aturing Novem ber 30, 1968. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents w ill be m ade for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. T h e incom e derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, does not have any exem ption, 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 h e bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exem pt from all taxation now or hereafter im posed 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. For purposes of taxation the am ount of discount at which Treasury bills are originally sold by the U n ited States is considered to be interest. Under Sections 454 ( b ) and 1221 ( 5 ) of the Internal R evenue Code of 1954 the am ount of discount at 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, the owner of Treasury bills (other than life insurance com panies) issued hereunder need include in his incom e tax return only the difference betw een the price paid for such bills, whether on original issue or on subsequent purchase, and the am ount actually received either upon sale or redem ption at m aturity during the taxable year for which the return is made, as ordinary gain or loss. Treasury D epartm ent Circular No. 418 (current revision) and this notice, prescribe the term s of the Treasury bills and govern the conditions of their issue. Copies of the circular m ay be obtained from any Federal R eserve Bank or Branch. In a cco rd an ce with the a b o v e a n n o u n cem e n t, tenders will be received a t this b a n k a n d its bran c h e s a t El Paso, Houston a n d San Antonio up to tw elve-thirty p.m., Central S tan d a rd Time, Friday, N ovem ber 22, 1968. Tenders m a y not b e e n te re d by te le p h o n e. 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 272 DAYS TO MATURITY Dated August 31,1968 Maturing August 31, 1969 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or — The_________________________________ Branch E l P aso 79999 H ouston 77001 iD ate) San A ntonio 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 at the rate indicated. NONCOMPETITIVE TENDER $. .NOT TO EXCEED $200,000 N oncom petiiive tenders for $200,000 or le ss from any one bidder, w ithout stated price, w ill be accepted in fu ll at the average price (in three decim als) o f accepted com petitive bids. / --------- Prices should be ex pressed on the basis of COMPETITIVE TENDERS ($ ________________ @ ________ $____________________ t h J e r ^ e S m S ^ la ^ ___________________ @ __________$________________________ e. g., 99.925. Fractions must not be used. \ T E N D E R S M AY NOT BE E N T E R E D BY T EL E PH O N E . T E N D E R S BY W IR E, IF R ECEIVED BEFO RE THE CLOSING HOUR, A RE A CC EPTABLE. D enom inations 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 $ m $ (a) $ METHOD OF PAYMENT 1,000 $__________ 5,000 $____________ □ 10,000 $_____________ By maturing bills held by_____________________________ Payment to be made by______________ □ (5) $ 50,000 $_____________ (5) $ 100,000 $__________ □ $ 500,000 $____________ (a) $1,000,000 $____________ $3 Charge our reserve account on payment date |__] D r a f t e n c l o s e d ( E f f e c t u a l d e liv e r y o f e n c lo s e d d r a f t sh all be on la te st day w hich will p e rm it p re s e n t m e n t in o rd e r to obtain irrevocably collected fu n d s on p a y m e n t d ate) Delivery Instructions: (Subscriber’s fu ll nam e o r c o rp o rate title) □ Hold in Custody Account— Member banks for own account only □ Pledge to secure Treasury Tax and Loan Account □ Ship to______________ _________ _ (Address) By_ (A uthorized official sig n a tu re a n d title) (F o r th e account of, if te n d e r is fo r a n o th e r subscriber) (A ddress) IMPORTANT 1. No tender for less than $1,000 will be considered and each tender must be for an amount in multiples of $1,000 (maturity 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 OFFERING”. Since envelopes received with this legend will not be opened until after the closing time specified in the public announcement, communi cations relating to other matters 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 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 “ ...................................................... , 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 invest ment securities will be disregarded, unless accompanied by a deposit of 2 percent of the total amount (maturity 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 trust 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)