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FE D E R A L R E S E R V E BAN K O F D A LLA S FISCAL. AGENT OF THE UNITED STATES Dallas, Texas, January 3, 1962 365-DAY TREASURY BILLS Dated January 15, 1962 $2,000,000,000 Maturing January 15, 1963 To All Banking institutions and Others Concerned in the Eleventh Federal Reserve District: Your attention is invited to the following statement giving details of a new issue of Treasury bills: “ T h e Treasury Department, b y this public notice, invites tenders for $2,000,000,000, or thereabouts, o f 365-day Treasury bills, fo r cash and in exchange for Treasury bills maturing January 15, 1962, in the amount o f $1,501,672,000, to be issued on a discount basis under com petitive and noncom petitive bidding as hereinafter provided. T h e bills o f this series w ill be dated January 15, 1962, and w ill mature January 15, 1963, when the face amount w ill be payable without interest. T h e y w ill be issued in bearer form only, and in denominations o f $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m aturity valu e). “ Tenders w ill be received at Federal R eserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Standard time, Tuesday, January 9, 1962. Tenders w ill not be received at the Treasury Department, Washington. Each tender must be for an even multiple o f $1,000, and in the case o f com petitive tenders the price offered must be expressed on the basis o f 100, w ith not more than three decimals, e.g., 99.925. Fractions may not be used. (Notwithstanding the fact that these bills w ill run for 365 days, the discount rate w ill be computed on a bank discount basis o f 360 days, as is currently the practice on all issues o f Treasury bills.) I t is urged that tenders be made on the printed forms and forwarded in the special envelopes which w ill be supplied b y Federal R eserve Banks or Branches on application therefor. “ Banking institutions generally m ay submit tenders for account o f customers provided the names o f the customers are set forth in such tenders. Others than banking institutions w ill not be perm itted to submit tenders except for their own account. Tenders w ill be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment o f 2 percent of the face amount o f Treas ury bills applied for, unless the tenders are accompanied by an express guaranty o f payment b y an incorporated bank or trust company. “ Im m ediately after the closing hour, tenders w ill be opened at the Federal R eserve Banks and Branches, follow ing which public announcement w ill be made by the Treasury Department o f the amount and price range o f accepted bids. Those sub m itting tenders w ill be advised o f the acceptance or rejection thereof. T h e Secretary o f the Treasury 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, noncompetitive tenders for $400,000 or less without stated price from any one bidder w ill be accepted in full at the average price (in three decim als) o f accepted com petitive bids. Settlem ent for accepted tenders in accordance with the bids must be made or completed at the Federal R eserve Bank on January 15, 1962, in cash or other im m ediately available funds or in a like face amount o f Treasury bills maturing January 15, 1962. Cash and exchange tenders w ill receive equal treatment. Cash adjustments w ill be made for differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. “ T h e income derived from Treasury bills, whether interest or gain from the sale or other disposition o f the bills, does not have any exemption, as such, and loss from the sale or other disposition o f Treasury bills does not have any special treatment, as such, under the Internal Revenue Code o f 1954. T h e bills are subject to estate, inheritance, g ift or other excise taxes, whether Federal or State, but are exem pt from all taxation now or hereafter imposed on the principal or interest thereof b y any State, or any o f the possessions o f the United States, or by any local taxing authority. F or purposes o f taxation the amount o f discount at which Treasury bills are originally sold by the United States is considered to be interest. Under Sections 454 ( b ) and 1221 ( 5 ) o f the Internal Revenue Code o f 1954 the amount o f discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner o f Treasury bills (oth er than life insurance com panies) issued hereunder need include in his income tax return only the difference between the price paid for such bills, whether on original issue or on subsequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made, as ordinary gain or loss. “ Treasury Department Circular No. 418 (current revision ) and this notice, prescribe the terms o f the Treasury bills and govern the conditions o f their issue. Copies o f the circular m ay be obtained from any Federal R eserve Bank or Branch.” Payment for this issue of Treasury bills must be made or completed at this bank or appropriate branch in cash or other immediately available funds on January 15, 1962, or in a like face amount of Treasury bills maturing January 15, 1962. Payment for this issue of bills CANNOT be made by credit to Treasury Tax and Loan Account. In accordance with the above announcement, tenders will be received at this bank and its branches at El Paso, Houston and San Antonio, up to twelve-thirty p.m., Central Standard time, Tuesday, January 9, 1962. Tenders may not be entered by telephone. 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) TENDER FOR TREASURY BILLS 365 Days Dated January 15,1962 Maturing January 15,1963 To: Federal Reserve Bank, Station K, Dallas 2, Texas or The..—......................................................................Branch E l Paso Houston ___________________ San Antonio (D ate) Pursuant to the provisions of Treasury Department Circular No. 418 (current revision) and to the provisions of the public announcement, as shown on reverse side, as 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. NO N C O M PE T IT IV E T E N D E R $................................................... N O T TO E X C E ED $400,000 Noncompetitive tenders fo r $400,000 or less without stated price from any one bidder w ill be accepted in full at the average price (in three decimals) o f accepted competitive bids. ....... $ .................... ............... $ .................. ..................@ COM PETITIVE TEND ER S P rices should be « pressed on the b a d s o f 100, w ith not m ore than $ .................. .................. @ ........ ....... $ .................... ........ ....... three d e c im a l p la c e s, e. g., 99.925. Fractions $ .................. ..................@ ........ ....... $ .................... ............... m ust not be used. jq s p TENDERS M A Y N O T BE ENTERED B Y TELEPH O NE. TENDERS B Y W IR E , IP RECEIVED BEFORE TH E CLOSING HOUR, A R E ACCEPTABLE. Number of Pieces Denominations Desired METHOD O P P A Y M E N T Maturity Valve @ $ 1,000 $. @ $ 5,000 $ @ $ 10,000 $ $ 50,000 $. □ Payment to be made by......................... (Nam e o f Bank) □ By charge to our reserve account on payment date. □ By draft enclosed (effectual delivery o f enclosed draft shall be on latest day which w ill permit presentment in order to obtain irrevocably collected funds on payment date). @ $ 100,000 $ @ $ 500,000 $ @ $ 1, 000,000 $ (Subscriber's full name or corporate title) Delivery Instructions: □ Hold in Custody Account— Member banks for own account only □ Pledge to Secure Treasury Tax and (Address) By.... (Authorized official signature and title) T .n an A c c o u n t (For the account o f, it tender is for another subscriber) □ Ship to (Address) IM PO R TA N T 1. No tender fo r less than $1,000 w ill be considered and each tender must be fo r an amount in multiples o f $1,000 (maturity value). 2. Tenders should be forwarded in an envelope clearly addressed to this bank or appropriate branch as Fiscal Agent o f the United States, with notation on the envelope reading “ TEN D ER FOR TR E A S U R Y BILLS.” Since envelopes received with this legend will not be opened until after the closing time specified in the public announcement, communications relating to other matters should not be enclosed. Envelopes fo r submitting tenders may be requested from this bank or appropriate branch. 3. Any qualified or conditional tender will be rejected. 4. I f a corporation makes the tender the form should be signed by an officer o f the corporation authorized to make the tender and the signing o f the form by an officer o f the corporation will be construed as a representation by him that he has been so authorized. I f the tender is made by a partnership it should be signed by a member o f the firm, who should sign in the form “ ................................................ , a copartnership, by...................................— ......... ..................., a member o f the firm.” 5. Tenders from those other than incorporated banks and trust companies or responsible and recognized dealers in invest ment securities w ill be disregarded, unless accompanied by a deposit o f 2 percent o f the total amount (maturity value) of the Treasury bills applied for, or unless the tenders are accompanied by an express guaranty o f full payment by an incorporated bank or trust company. 6. I f the language o f this form is changed in any respect, which, in the opinion o f the Secretary o f the Treasury, is material, the tender may be disregarded. Tenders will be received at this bank and its branches at El Paso, Houston and San Antoniof up to twelvethirty p.m.. Central Standard time, Tuesday, January 9, 1962.