View PDF

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

FED ER A L R E SE R V E BANK O F DALLAS
F IS C A L A G EN T O F T H E U N IT E D ST A T E S

Dallas, Texas, January 27, 1955
PRELIMINARY ANNOUNCEMENT
EXCHANGE OFFERING
To All Banking Institutions and Others Concerned
in the Eleventh Federal Reserve District:

There is quoted below a press statement issued today by the Treasury Department:
‘The Treasury announced today that on Tuesday, February 1, it will offer holders of
the 2% percent Treasu^ Bonds of 1955-60, called for redemption on March 15, an oppor­
tunity to exchange their holdings for a 3 percent 40-year Treasury Bond or a 13-month
1% percent Treasury Note. Cash subscriptions will not be received.
“At the same time holders of the 1% percent Certificates of Indebtedness, maturing
February 15, and the l^^ percent Treasury Notes, maturing March 15, will be given the
choice of exchanging their holdings for the new 13-month Note or a 2 percent 2^-year
Treasury Note.
“The subscription books will be open for three days, Tuesday through Thursday, for
these offerings.
Eligible
Maturing Issues

1%% Certificates
1^% Notes
2%% Bonds

for

Exchange

$7,007
5,365

New Issues to Be Dated February 15, 1955

2% 2^-year Note and 1%% 13-month Note

3% 40-year Bond and 1%% 13-month Note
The 13-month Note will mature March 15, 1956
The 21/^-year Note will mature August 15, 1957
The 40-year Bond will mature February 15, 1995
2,611

“Holders of the 2%% called Bonds will be credited with the full six-months’ interest
to March 15 on the bonds surrendered, they will be charged accrued interest from Febru­
ary 15 to March 15 on the new securities they elect to receive, and they will be paid the
difference.
“In determining the amount of interest received upon the bonds exchanged, and the
exemption to which such interest is entitled, for Federal income tax purposes, the full
amount which is allowed as interest on the bonds surrendered in the exchange will be
regarded as such to the extent that it accrued to the holder making the exchange, and
not as a capital recovery; similarly the amount of interest charged the subscriber on the
new securities issued will be regarded as an investment of capital, and therefore upon
subsequent recovery of such amount (i.e., upon payment of interest to him on the securities
or upon sale or other disposition by him of the securities) as a return of capital and not
as interest income.
“Exchanges of the maturing certificates will be made par for par as of February 15.
Exchanges of the notes maturing March 15 will be made at par with an adjustment of
accrued interest as of February 15.
“Full information concerning this exchange offering will be released on Monday,
January 31.”
The official circulars and subscription forms for the exchange offering will be mailed to reach
all banking institutions on or before February 1, the date the books open. If the circulars and
forms are not received in sufficient time, however, subscriptions may be entered by mail or by
telephone, subject to confirmation with an official application blank.
Yours very truly.

WATROUS H. IRONS
President

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

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