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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 N IT E D S T A T E S Dallas, Texas, May 12, 1952 To All Savings Bond Issuing and Paying Agents and Others Concerned: There is enclosed a copy of a letter addressed to Paying and Issuing Agents for United States Savings Bonds by the Fiscal Assistant Secretary of the Treasury, which this bank has been requested to transmit to all such agents in this district. Your cooperation in acquainting holders of savings bonds with the information contained in the letter will be appreciated. Additional copies of the letter will be forwarded on request. Yours very truly, R. R. GILBERT President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) TREASURY DEPARTMENT WASHINGTON May 5, 1952 TO PAYING AN ISSUING AGENTS FOR UNITED STATES SAVINGS BONDSt D The increase in the in terest rates on Series E Savings Bonds issued on and a fte r May 1, which was announced on A pril 29, may raise a question in the minds o f some bond owners whether they should cash any o f th e ir bonds issued p rio r to May 1 in order to reinvest the proceeds in one o f the new Series E bonds* I t is believed that paying and issuing agents fo r United States Savings Bonds are in a p osition to render a valuable service to th eir customers in order to avoid ill-a d v is e d cashing o f Series E bonds which were issued p rior to May 1, and p a rticu la rly those which are more than 4 months old* Special attention i s ca lled to the fa c t that outstanding Series E bonds which were purchased p rio r to January 3, 1952, by th e ir orig in a l terms and con dition s, w il l earn more than Z% in terest compounded semiannually fo r the period from May 1, 1952 to maturity* As you know, the annual y ie ld to maturity increases with the age o f the bonds* Series E bonds, which have been outstanding fo r 5 years, fo r example, earn in te re st on th e ir current redemption value fo r the remaining 5 years o f th e ir l i f e at an annual rate o f approximately 4% per annum* The Treasury, o f course, is anxious that paying and issuing agents fo r United States Savings Bonds cooperate as fu lly as possible where the owner o f a savings bond issued p rior to May 1 wishes to reinvest in the new Series E bond; on the other hand i t would be helpfu l from the standpoint o f both the bond owner as w ell asthe Government i f paying and issuing agents fo r United States Savings Bonds would make a sp ecia l e ff o r t to acquaint bond owners, when i t seems appropriate, o f the investment values o f th e ir Series E bonds which have been outstanding fo r several months* In order to avoid misunderstanding i t does not appear to be practicable to make a general announcement concerning th is matter* I t is believed that b etter resu lts oould be obtained i f "the situation should be handled on a personal basis* This is because o f the varying personal factors which are involved in the purchase or redemption o f savings bonds* Because o f your clo se contacts with owners o f Series E savings bonds you are in a p osition to render valuable services to your customers in a d ire ct and personal manner by bringing to the attention o f any holders who are contemplating switching in to new E bonds the investment return on the current redemption value o f th e ir present Series E savings bonds* These values are shown in Table B attached to Treasury C ircular No* 653, revised A pril 29, 1952, previously furnished to you. Very tru ly yours, F iscal Assistant Secretary