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FE D E R A L R E SE 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 THE U N ITE D ST A T E S

D allas, T ex a s, A p r il 3, 1951

O P T IO N S O P E N TO O W N E R S O F M A T U R IN G
S E R IE S E S A V IN G S B O N D S

T o A ll B a n k in g In stitu tion s, and O th ers C oncerned,
in th e E lev en th F ed era l R e se rv e D is t r ic t :

T h e re is en closed a co p y o f T rea su ry D ep artm en t C ircu lar N o. 885, R E G U L A T IO N S
G O V E R N IN G O P T IO N S O P E N TO O W N E R S O F M A T U R IN G U N IT E D S T A T E S S A V ­
IN G S B O N D S O F S E R IE S E . P a rticu la r a tten tion is d irected to th e fo llo w in g fe a tu re s o f
th e re g u la tio n s :
B O N D S C O V E R E D U N D E R O P T IO N S
T h e op tion s specified in th e reg u la tion s are applicable o n ly to Series E b ond s w h ich
b egin t o m a tu re M a y 1, 1951, and con cern ow n ers, coow n ers, su rv iv in g beneficiaries, n ex t
o f k in and legatees o f a deceased ow n er, and oth e rs as outlined in S ection 329.11.
O P T IO N 1
C A S H R E D E M P T IO N
T h e ow n er o f a n y S eries E b on d m ay receiv e fu ll
m a tu rity in a ccord an ce w ith S ection 329.2. T h e op tion s
n ot in a n y w a y re strict th e r ig h t o f an ow n er to cash h is
H e h as th e p rivilege, h ow ever, o f ta k in g a dva n ta ge o f
h e so d esires.

cash p a ym en t f o r his bon d at
exten ded u nder th e circu lar do
S eries E b ond s A T A N Y TIM E .
one o f th e fo llo w in g option s if

O P T IO N 2
IN T E R E S T A F T E R M A T U R IT Y
S ection 329.3 con ta in s th e p rov ision w h e re b y ow n ers m a y retain th e ir m atu red Series
E b ond s f o r an oth er ten -y ea r p eriod and ob tain a dd ition al interest. N o a ction is requ ired
o f ow n ers d esirin g to take a dva n ta ge o f such exten sion , and in te re st w ill be earned in
a ccord a n ce w ith th e schedule set fo r t h in th e table o f red em p tion values a pp earin g on
the last p a g e o f th e circu lar.
O P T IO N 3
E X C H A N G E F O R S E R IE S G B O N D S W IT H S P E C IA L
P A R R E D E M P T IO N P R IV IL E G E
U n d er S ection 329.5, a m eth od is provid ed w h e re b y ow n ers o f m a tu rin g S eries E
b onds m a y ex ercise th eir r ig h t o f ex ch a n g in g th em f o r Series G b onds w h ich will bear
th e special p riv ileg e o f red em p tion A T P A R _A T A N Y T IM E a fte r six m on th s fr o m
th e issu e date upon one calendar m on th ’ s n otice. Series G bonds cu rre n tly on sale fo r
cash su b scrip tion are n ot redeem able a t par p rio r to m a tu rity e x ce p t in th e even t o f death.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

P rov ision is m ade in S ection 329.7 f o r th e e x ch a n g e o f m a tu red S eries E b ond s f o r
bonds o f S eries G in denom in ation s o f $500, $1,000, $5,000, and $10,000. T h e m a tu rin g
S eries E b on d s so exch an ged m u st be p resen ted n o t later th a n tw o calen d ar m on th s a fte r
m a tu rity. A n o th e r p rivilege giv en ow n ers is th a t o f a ccu m u latin g a n u m ber o f m a tu rin g
S eries E b on d s f o r exch a n ge f o r b ond s o f Series G in m ultiples o f $500. U n d er th is plan,
th e b onds m a y be accu m u lated d u rin g a n y tw elve con secu tive calendar m on th s and i f
p resen ted n ot later than tw o calendar m on th s a ft e r m a tu rity o f th e last bon d in th e
g rou p , an ow n er m a y receiv e in exch a n ge a S eries G bon d dated on a w eigh ted avera ge
d atin g basis.
F E D E R A L IN C O M E T A X
H old ers o f Series E b on d s w h o have n ot been re p o rtin g th e in crease in redem ption
value o f su ch bonds cu rren tly f o r ta x p u rp oses m a y, as p rovid ed in S ection 329.8, d e fe r
p a yin g incom e ta x on th e in terest until th e y ea r in w h ich th e b onds finally m a tu re o r
are redeem ed.
In th e case o f th e ex ch a n g e o f b ond s o f S eries E f o r b onds o f S eries G, a n y differen ce
b etw een th e p u rch a se p rice o f th e S eries E b ond s and th eir m a tu rity value n o t rep orted in
previou s retu rn s m u st b e rep orted in retu rn s f o r th e y e a r in w h ich th e S eries E b onds
m atu re. T h e re a fte r, in terest on th e S eries G b on d s m u st be rep orted as incom e f o r th e
ta xa ble y ea r in w h ich receiv ed or accru ed.
E X E M P T U N D E R L IM IT A T IO N S O F H O L D IN G S
T h e am ou n t o f b onds o f S eries E retain ed a fte r m a tu rity and S eries G b ond s acquired
upon exch a n g e w ill n ot b e included in th e m a xim u m annual lim ita tion on h old in gs.
A d d ition a l cop ies o f th e en closed circu la r w ill be fu rn ish ed u pon requ est.
Y ou rs v e r y tru ly,
R . R . G IL B E R T
P resid en t

REGULATIONS GOVERNING OPTIONS OPEN TO OWNERS OF
MATURING UNITED STATES SAVINGS BONDS OF SERIES E

1951
Department Circular No. 885
Fiscal Service
Bureau of the Public Debt

TREASU RY DEPARTM ENT
Office o f th e S e cre ta ry
W a sh in g ton , M arch 2 6 ,1 9 5 1

SUBPART
A

O fferin g to O w ners o f S eries E S a vin gs B on ds H e r e to fo r e or
H e re a fte r Issued.

B

F u rth e r In terest A ft e r M a tu rity.

C

E x ch a n g e f o r S eries G B on ds B ea rin g Special P a r R edem ption
P riv ilege.

D

F ed era l In com e T a x.

E

G eneral P rov ision s.

S u bp art A — O F F E R IN G T O O W N E R S O F S E R IE S E S A Y IN G S B O N D S H E R E T O F O R E
O R H E R E A F T E R IS S U E D
Sec. 329.1. P u rsu a n t to S ection 22 (b ) (2 ) o f th e Second L ib e r ty B on d A c t, as am ended (31
U .S.C. 757c [b] [ 2 ] 1) , the S e creta ry o f th e T re a su ry o ffers to ow n ers o f U n ited S tates S avin gs B on ds
o f S eries E (h e re in a fte r re fe r re d to as B on ds o f S eries E ) w h o w ish to con tin u e th e ir in vestm en t
b e y o n d m a tu rity , th e op tion s h e re in a fte r se t fo r th . B on ds o f S eries E w ere first issued on M a y 1,
1941 and w ill m a tu re b egin n in g on M ay 1, 1951. Such op tion s are h e re b y gran ted f o r th e benefit
o f ow n ers o f B on ds o f S eries E h e re to fo r e o r h e re a fte r issued and a re as b in d in g on the U nited
S ta tes as i f e x p re ssly set fo r th in th e te x t o f th e bonds. T h e term “ o w n ers” as used in th ese re g u ­
lation s is defined in S u bp art E.
Sec. 329.2. T h e p rovision s o f S u bp art B h e r e o f d o n o t in a n y w a y re s tr ic t th e r ig h t o f ow n ers
o f B onds o f S eries E to cash th eir bonds A T A N Y T IM E in a ccord an ce w ith th e term s o f su ch bonds.
S u bpart B— F U R T H E R IN T E R E S T A F T E R M A T U R IT Y
Sec. 329.3. O w n ers o f B on ds o f S eries E , w h ich m a tu re on and a fte r M ay 1, 1951, h ave the
op tion o f reta in in g th e m atu red b ond s f o r a fu r th e r 10-yea r p eriod and ea rn in g in terest upon th e
m a tu rity valu es th e r e o f to a ccru e at th e ra te o f 2 ^ p ercen t sim ple in terest p er annum f o r th e first
7 '/2 yea rs and a t a h ig h er ra te th e re a fte r so th a t th e a g g re g a te return f o r th e 10-year exten sion
p eriod will b e a b ou t 2.9 p ercen t com pou n d ed sem iannually. N O A C T IO N IS R E Q U IR E D O F O W N ­
E R S D E S IR IN G TO T A K E A D V A N T A G E O F T H E E X T E N S IO N . M E R E L Y B Y C O N T IN U IN G
T O H O L D T H E IR B O N D S A F T E R M A T U R IT Y O W N E R S W IL L E A R N F U R T H E R IN T E R E S T
IN A C C O R D A N C E W IT H T H E S C H E D U L E S E T F O R T H IN T H E T A B L E A T T H E E N D O F
T H E S E R E G U L A T IO N S .
Sec. 329.4. In terest h ereu n d er accru es at th e end o f th e first h a lf-y e a r p eriod fo llo w in g m a tu rity
and each su ccessiv e h a lf-y e a r p eriod th erea fte r. I f th e b ond s are redeem ed b e fo r e the end o f the
first h a lf-y e a r p eriod fo llo w in g m a tu rity , th e ow n er is entitled to p a ym en t o n ly a t the fa c e value
th e re o f.
S u b p a rt C— E X C H A N G E F O R S E R IE S G B O N D S B E A R IN G S P E C IA L
P A R R E D E M P T IO N P R IV IL E G E
Sec. 329.5. O w ners o f B on ds o f Series E w h ich m atu re on and a fte r M a y 1, 1951, w h o p re fe r
to h ave an in v estm en t p a yin g cu rren t incom e ra th er than to exercise th e ir r ig h t to req u est cash,
o r to retain th e b ond s u nder S u bp art B , h ave th e op tion o f p resen tin g th e ir m atu red b onds in
am ou nts o f $500 (m a tu rity va lu e) or m u ltiples th e re o f in exch a n ge fo r S eries G B onds w h ich will
b e a r th e special p riv ileg e o f red em p tion A T P A R A T A N Y T IM E at th e o w n e r’s op tion as set fo r th
in section 329.6. T h e exch a n ge w ill be gov ern ed b y th e rules set fo r t h in section 329.7. E x c e p t as
1Act of March 26, 1951.

set fo r t h in th is Subpart, the S eries G b onds issued u pon e xch a n ge w ill in all o th er resp ects b e the
sam e as th e S eries G bonds cu rren tly on sale w h ich m atu re 12 ye a rs fr o m issue date and bear
in terest a t th e ra te o f 2 y% p ercen t p er annum p ayable sem iannually b y ch eck draw n to th e ord er
o f th e reg istered ow ner.
Sec. 329.6. T h e S eries G b on d s issu ed u pon exch a n g e will be specially stam ped to in d icate th at
th e y are u n con d ition ally red eem a ble b y th e ow n er A T P A R A T A N Y T IM E a fte r 6 m on th s fro m
th e issue date upon one calen d ar m on th ’s n o tice to a F ed era l R e se rv e B an k o r B ra n ch or to the
T re a s u ry D ep artm en t. T h e S eries G b ond s cu rre n tly on sale f o r cash su bscrip tion m a y n o t be
red eem ed a t par p rior to m a tu rity e x ce p t in th e even t o f death as set fo r t h in th e reg u la tion s
g o v e rn in g U n ited States S a vin gs B onds.
Sec. 329.7. T h e fo llo w in g rules g o v e rn th e e x ch a n g e under th is S u b p a rt: (1 ) T h e S eries G
b ond s w ill b e reg istered in th e n am es o f th e ow n ers o f the m a tu red B on ds o f S eries E in any
a u th orized fo r m o f r e g is tr a tio n ; (2 ) Series G b on d s w ill b e issued upon e x ch a n g e O N L Y in d en om i­
n ation s o f $500, $1,000, $5,000 and $10,000 (m a tu r ity v a lu e ) ; (3 ) T h e B on ds o f Series E used in
th e exch a n ge m u st be p resen ted to a F ed eral R ese rv e B ank o r B ra n ch o r to th e T rea su ry D e p a rt­
m ent, W a s h in g to n 25, D. C., n ot later th a n tw o calendar m on th s a fte r th e m on th o f m a tu rity and
th e b on d s o f S eries G issu ed u pon e x ch a n g e w ill be dated as o f th e first d a y o f th e m on th in w h ich
th e B on ds o f S eries E m a tu re d ; b u t (4 ) I f an ow n er desires to accu m u late a n u m ber o f B on ds o f
S eries E f o r ex ch a n g e to b ond s o f S eries G in a n y au th orized den om in ation set fo r th in (2 ) he m a y
a ccu m u late su ch b on d s d u rin g a n y tw elve con secu tive calendar m on th s and p resen t th em f o r
exch a n ge n ot la te r th a n tw o calendar m on th s a fte r th e m on th o f m a tu rity o f th e last bond in th e
g rou p to b e e x ch a n g e d and th e S eries G b onds issued upon such exch a n g e w ill be dated on a
w eigh ted a vera ge d atin g b asis w h ich w ill a fford an adequ ate in te re st a d ju stm e n t f o r th e p eriod
d u rin g w h ich th e ow n er has accu m u lated th e B on ds o f S eries E f o r th e e x c h a n g e ; and (5 ) Cash sub­
scrip tion s in w h ole or in p a r t w ill n ot b e a ccep ted f o r th e Series G b ond s offe re d under th is Su bpart.
S u bp a rt D — F E D E R A L IN C O M E T A X
Sec. 329.8. A ta x p a y e r w h o h as been re p o rtin g th e increase in re d em p tion value o f his B on ds
o f S eries E , f o r F ed era l in com e ta x p urposes, each y e a r as it accru es, m u st con tin u e to do so i f he
retain s th e b ond s u nder S u b p a rt B, unless in a ccord an ce w ith incom e ta x reg u la tion s (R e g u la tio n s
111, section 2 9.42-6) th e ta x p a y e r secu res p erm ission fr o m th e C om m ission er o f In tern al R even u e
to ch a n g e to a d ifferen t m eth od o f rep o rtin g incom e fr o m such ob ligation s. A ta x p a y e r w h o has
n ot been re p o r tin g th e in crease in red em p tion value o f su ch b ond s cu rre n tly f o r ta x p u rp oses m a y
in a n y y e a r p rior to final m a tu rity, and s u b je c t to th e p rovision s o f section 42 (b ) o f th e Internal
R even u e C ode and o f th e reg u la tion s p rescrib ed th ereu n d er, elect f o r such y e a r and su bsequ en t
yea rs to re p o r t su ch in com e annually. H old ers o f B on ds o f Series E w h o h a v e n ot rep orted th e
in crease in red em p tion value cu rre n tly are req u ired to include su ch am ou nt in g ro ss in com e f o r th e
ta xa ble y ea r o f actu al red em p tion or f o r the ta xa ble y e a r in w h ich th e p eriod o f exten sion ends,
w h ich ev er is earlier.
Sec. 329.9. T a x p a y ers w h o exch a n ge th eir m a tu red B onds o f S eries E f o r S eries G bonds under
th e p rovision s o f S u bpart C m u st re p o r t th e d ifferen ce b etw een th e p u rch a se p rice o f th e ir S eries E
b ond s and th e m a tu rity value th e r e o f in th eir retu rn s f o r th e y ea r in w h ich th e bonds m a tu re to
th e ex te n t t o w h ich such d ifferen ce has n o t been rep orted in p reviou s retu rn s. T h e in terest p ayable
on th e S eries G bonds issued upon exch a n ge m u st be rep orted as incom e f o r th e ta xa ble y e a r in
w h ich receiv ed o r accrued.
Sec. 329.10. I f fu r th e r in form a tion con cern in g th e incom e ta x is desired, in q u iry sh ould be
addressed to th e C ollector o f In tern al R even u e o f th e ta x p a y e r’ s d is trict o r to th e B ureau o f Internal
R even u e, W a sh in g ton 25, D . C.
S u bp art E — G E N E R A L P R O V IS IO N S
Sec. 329.11. D efin ition o f term s.— (a ) T h e term “ B on ds o f Series E ” as used in th ese reg u la tion s
includes all B on ds o f S eries E issued as U nited S ta tes D e fe n se S a vin gs B onds, U nited S ta tes W a r
S a vin gs B on ds and all th ose issued as Series E savin gs bonds w ith o u t special d e sig n a tio n ; (b ) T h e
term “ ow n ers” as used in th ese reg u la tion s includes re g iste re d ow n ers, coow n ers, su rv iv in g bene­
ficiaries, n ex t o f kin and legatees o f a deceased ow n er, and p erson s w h o have a cq u ired b ond s pursuan t
to ju d icia l p roceed in gs a ga in st th e ow n er, e x ce p t th a t ju d g m e n t cred itors, tru stees in b a n k ru p tcy
and receiv ers o f in solven ts’ estates will h ave th e r ig h t on ly to p aym en t o f B on ds o f S eries E in
a ccord an ce w ith th e reg u la tion s g ov ern in g U nited S ta tes S avin gs Bonds.
Sec. 329.12. R ig h t to p urch ase B on ds o f S eries E and G cu rren tly.— T h e am ou nt o f m atu red
B on ds o f S eries E retain ed a fte r m a tu rity and th e am ou nt o f b ond s o f S eries G issued upon exch an ge
in a ccord an ce w ith th ese regu la tion s w ill n ot be included in th e lim itation on h old in g s applicable to
th e am ou n t o f bonds o f such series w h ich m a y b e pu rch ased b y an in v estor each calendar y e a r ;

e x c e p t th a t n o th in g h erein con ta in ed shall b e con stru ed to p e rm it th e cu rren t p u rch a se o f savin gs
b on d s o f S eries E f o r th e a ccou n t o f organ iza tion s and fidu ciaries o r th e p u rch a se o f savin gs bonds
o f eith er series f o r th e a ccou n t o f person s w h o are n o t en titled to h ave th em on origin a l issue, con ­
tr a r y to th e p rov ision s o f th e reg u la tion s g o v e rn in g U n ited S tates S avin gs B onds.
Sec. 329.13. M od ification o f o th e r circu la rs.— Th e p rovision s o f th ese reg u la tion s shall be co n ­
sid ered as a m en d a tory o f and su pp lem en ta ry to th e o ffe rin g circu la r f o r savin gs b ond s o f S eries E
(D e p a rtm en t C ircu lar N o. 653 and its r e v is io n s ), th e o ffe r in g circu la r f o r savin gs bonds o f S eries G
(D e p a rtm en t C ircu lar N o. 654 and its rev isio n s) and th e circu la r con ta in in g th e reg u la tion s g o v ­
e rn in g U n ited States S a vin gs B on d s2, w h ich circu lars are h e re b y m odified to a cco rd w ith th e p ro ­
vision s h e re o f.
Sec. 329.14. O th er circu la rs gen era lly applicable.— E x c e p t as p rovid ed in th ese regu la tion s, th e
circu la rs re fe r re d to in th e p reced in g section w ill con tin u e to b e gen erally applicable.
Sec. 329.15. Supplem en ts and am en dm en ts.— T h e S e cre ta ry o f th e T re a su ry m a y a t a n y tim e or
fr o m tim e to tim e supplem en t or am end th e term s o f th ese reg u la tion s, o r o f a n y am en dm en t or
su pp lem en t th ereto.
JOH N W . SN Y D E R
S e cre ta ry o f th e T re a su ry

2The regulations currently in force governing United States Savings Bonds are set forth in Department Circular
No. 530, Sixth Revision, as amended.

O P T IO N A L E X T E N S IO N O F U N IT E D S T A T E S S A V IN G S B O N D S — S E R IE S E
T A B L E O F R E D E M P T IO N V A L U E S A N D IN V E S T M E N T Y IE L D S R E L A T IN G TO E X T E N D E D B O N D S
T able f o r th e 10-year exten sion period s h o w in g : (1 ) H o w b on d s o f S eries E , b y d enom in ation s, in crea se in red em p tion value d u rin g su ccessive
h a lf-y e a r p eriods fo llo w in g date o f origin a l m a tu r ity ; ( 2 ) th e a p p rox im a te in v estm en t y ie ld on th e p urch ase p rice fro m issue date to th e b egin n in g
o f each h a lf-y e a r p e r io d ; and (3 ) th e a p p rox im a te in v estm en t yield on th e cu rren t red em p tion value fr o m th e b eg in n in g o f each h a lf-y e a r p eriod to
exten d ed m a tu rity . Y ield s are exp ressed in term s o f ra te p ercen t p er annum , com pou n ded sem iannually.
rrmtnritv v a l i i p
$13 33
O rigin al m a tu rity (o r fa c e ) value____ .... 10.00
7.50
Issue p rice ______________________________ ....
"R lvtp n rlp rl

to 101/2 y e a rs____________________ ....
y e a rs____________________
to 11
to n y 2 y e a rs _________
_______
y e a rs ____________________ ....
to 12
to 121/2 y e a rs _________
_______ ....
to 13
y e a rs ____________________ ._
to 131/2 y e a rs ____________________
y e a rs ____________________ ....
131/2 to 14
14
to 141/2 y e a rs .__
—
___ ....
1 4 i/j to 15
y e a rs _________ ________
15
to 151/2 y e a rs ____________________ ....
y e a rs ____________________
151/2 to 16
16
to I 6 I y e a rs ____________________
/2
I 6 I to 17
/2
y e a rs ___
_____________
17
to 171/2 y e a rs ________________ __
171/2 to 18
y e a rs ____________________
18
to I 8 I y e a rs ____________________ ....
/2
1 8 1/2 to 19
y e a rs ____________________ ....
19
to 191/2 y e a rs ____________________ ..
19 1/2 to 20
y e a rs ____________________
E xten d ed m a tu rity value (20 yea rs
fr o m issue d a t e )____________________
10

$66.67
50.00
37.50

$133.33
100.00
75.00

$266.67
200.00
150.00

$666.67
500.00
375.00

$1,333.33
1,000.00
750.00

(1) Redemption values during each half-year period

Period after issue date

1 0 i/2
11
H I /2
12
121/2
13

$33.33
25.00
18.75

Approximate investment yields1
(2) On purchase price
from original issue
date to beginning of
each half-year period

50.00
50.62
51.25
51.87
52.50
53.12
53.75
54.37
55.00
55.62
56.25
56.87
57.50
58.12
58.75
60.00
61.33
62.67
64.00
65.33

100.00
101.25
102.50
103.75
105.00
106.25
107.50
108.75
110.00
111.25
112.50
113.75
115.00
116.25
117.50
1 2 0 .0 Q
122.67
125.33
128.00
130.67

200.00
202.50
205.00
207.50
210.00
212.50
215.00
217.50
220.00
222.50
225.00
227.50
230.00
232.50
235.00
240.00
245.33
250.67
256.00
261.33

500.00
506.25
512.50
518.75
525.00
531.25
537.50
543.75
550.00
556.25
562.50
568.75
575.00
581.25
587.50
600.00
613.33
626.67
640.00
653.33

1,000.00
1,012.50
1,025.00
1,037.50
1,050.00
1,062.50
1,075.00
1,087.50
1,100.00
1,112.50
1,125.00
1,137.50
1,150.00
1,162.50
1,175.00
1 , 200.00
1,226.67
1,253.33
1,280.00
1,306.67

2 .9 0 %
2.88
2.86
2.84
2.82
2.81
2.79
2.77
2.75
2.74
2.72
2.71
2.69
2.67

12.27
12.53
12.80
13.07

25.00
25.31
25.62
25.94
26.25
26.56
26.87
27.19
27.50
27.81
28.12
28.44
28.75
29.06
29.37
30.00
30.67
31.33
32.00
32.67

13.33

33.33

66.67

133.33

266.67

666.67

1,333.33

2.90

10.00
10.12
10.25
10.37
10.50
10.62
10.75
10.87
11.00
11.12
11.25
11.37
11.50
11.62
11.75
12.00

1Calculated on basis of $1,000 bonds (face value).

2 .66

2.70
2.75
2.79
2.83
2.87

(3) On current
redemption value from
beginning of each
half-year period to
extended maturity
2 .9 0 %
2.92
2.94
2.97
3.01
3.05
3.10
3.16
3.23
3.32
3.43
3.56
3.73
3.96
4.26
4.26
4.21
4.17
4.12
4.08


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102