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F ederal 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. TEX AS 7 5 2 2 2 Circular No. 70-22 Jan u ary 28, 1970 NEW OFFERING — TREASURY BILLS To All Banking Institutions and Others Concerned in the Eleventh Federal Reserve District: Your attention is invited to the following statement giving details of two issues of Treasury bills: T he T reasury D epartm ent, by this public notice, invites tenders for two series of Treasury bills to the aggregate am ount of $3,000,000,000, or thereabouts, for cash and in exchange for T reasury bills m aturing February 5, 1970, in the am ount of $3,004,928,000, as follows: 91-DAY B IL L S (to m aturity date) to be issued F ebruary 5, 1970, in the am ount of $1,800,000,000, or there abouts, representing an additional am ount of bills dated Novem ber 6, 1969, and to m ature M ay 7, 1970, originally issued in the am ount of $1,201,387,000, the additional and original bills to be freely interchangeable. 182-DAY B ILLS for $1,200,000,000, or thereabouts, to be dated F ebruary 5, 1970, and to m ature August 6, 1970. 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 a t m aturity th eir face am ount will be payable w ithout interest. T hey 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 atu rity v alu e). T enders will be received a t Federal R eserve Banks and Branches up to the closing hour, one-thirty p.m., E astern Standard Tim e, M onday, February 2, 1970. T enders will not be received a t the T reasury 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 decimals, e.g., 99.925. Fractions m ay not be used. I t is urged th a t tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by F ederal Reserve Banks or B ranches on application therefor. Banking institutions generally m ay subm it tenders for account of customers provided th e nam es of the customers are set forth in such tenders. O thers than banking institutions will not be perm itted to subm it tenders except for their own acco un t T enders will be received w ithout deposit from incorporated banks and tru st companies and from responsible and recognized dealers in investm ent securities. T enders from others m ust be accom panied by paym ent of 2 percent of th e face am ount of T reasury bills applied for, unless th e tenders are accom panied by an express guaranty of paym ent by an incorporated bank or tru st company. Im m ediately after th e closing hour, tenders will be opened a t th e Federal Reserve Banks and Branches, following which public announcem ent will be made by the T reasury D epartm ent of the am ount and price range of accepted bids. O nly those subm itting com petitive tenders will be advised of the acceptance or rejection thereof. T h e Secretary of the T reasury 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. Sub ject to these reservations, noncom petitive tenders for each issue for $200,000 or less w ithout stated price from any one bidder will be accepted in full at the average price (in three decimals) of accepted com petitive bids for the respective issues. S ettlem ent for accepted tenders in accordance with the bids m ust be m ade or com pleted a t the Federal Reserve B ank on F ebruary 5, 1970, in cash or other im m ediately available funds or in a like face am ount of T reasury bills m aturing F ebruary 5, 1970. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be m ade for differences between th e par value of m atur ing bills accepted in exchange and the issue price of new bills. T he income derived from T reasury bills, w hether interest or gain from the sale or other disposition of the bills, does not have any exemption, as such, and loss from the sale or other disposition of T reasury bills does not have any special treatm ent, as such, under the Internal Revenue Code of 1954. T he bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, bu t are exem pt from all taxation now or hereafter imposed on the principal or interest thereof by any State, or any of the possessions of th e U nited States, or by any local taxing authority. F or purposes of taxation the am ount of discount a t which T reasury bills are originally sold by th e U nited States is considered to be interest. U nder Sections 454 (b ) and 1221 (5 ) of th e Internal Revenue Code of 1954 the am ount of discount a t which bills issued hereunder are sold is no t con sidered 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 T reasury bills (other th an life insurance com panies) issued hereunder need include in his income tax retu rn only the difference between the price paid for such bills, w hether on original issue or on subsequent purchase, and the am ount actually received either upon sale or redem ption a t m aturity during th e taxable year for which the return is made, as ordinary gain or loss. T reasury D epartm ent Circular No. 418 (current revision) and this notice, prescribe the term s of the T reasury bills and govern the conditions of their issue. Copies of the circular m ay be obtained from any Federal Reserve B ank or Branch. In accordance with the above announcement, tenders will be received a t this bank an d its branches at El Paso, Houston and San Antonio up to twelve-thirty p.m., Central Standard Time, Monday, February 2, 1970. Tenders may not be entered by telephone. Yours very truly, P. E. Coldwell President LAST PREVIOUS OFFERING OF TREASURY BILLS Amount, R ange and A pproxim ate Yield of Accepted Tenders 91-Day Bills 182-Day Bills D ue A pril 30, 1970 D ue July 30, 1970 $2,773,975,000 T otal Applied F o r_______________________________ $2,263,718,000 $1,800,093,000________________________________-Total_Accepted________________________________ $1,200,191,000 Price Yield Price Yield 98.018 7.841% _________________________ H igh______________________ 96.090___________ 7.734% 97.998 7.920% __________________________Low______________________ 96.061___________ 7.791% 98.006 7.888% ________________________ Average____________________ 96.069____________ 7.776% (1 ) ( 1 ) T hese rates are on a b an k discount basis. T h e eq uivalent coupon issue yields are 8 .1 6 % for th e 91-day bills, an d 8 .2 1 % for th e 182-day bills. (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 TREASURY BILLS 182 DAYS TO MATURITY Dated February 5,1970 Maturing August 6,1970 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or— The______________________________Branch El Paso 79999 H ouston 77001 (D ate) San Antonio 78206 P u rsu a n t to the provisions of T reasu ry D epartm ent C ircular No. 418 (cu rre n t revision) and th e provisions of th e public announcem ent issued by the T reasu ry D epartm ent, the undersigned offers to purchase T reasu ry bills in the am o u n t shown below, and agrees to pay fo r the am ount allotted, on or before the issue date, by th e method and a t the ra te indicated. NONCOMPETITIVE TENDER $_______________________________ NOT TO EXCEED $200,000 N oncompetitive tenders for $200,000 or less from any one bidder, w ithout stated price, will be accepted in full a t the av e ra g e price (in three decimals) of accepted com petitive bids. Prices should b« ex pressed on the basis o f 100, w ith not more th a n th r e e d ec im a l p la c e s , ___________________ e, g., 99.925. F ra c tio n s m ust not be used. ---------------------------- -@ - COMPETITIVE TENDERS -@ -@ - fSSg* T E N D E R S MAY NOT BE E N T E R E D BY T E L E P H O N E . T E N D E R S BY W IR E , I F R E C E IV E D B E F O R E T H E CLOSING HOUR, A RE A CC EPTA BLE. P aym ent fo r th is issue of bills cannot be m ad e by credit to T reasu ry T ax and Loan Account. M ETHOD O F PA Y M E N T Denominations Desired Number o f Pieces M aturity Value @ @ @ @ @ @ @ $ $ $ $ $ $ 1,000 5,000 10,000 50,000 100,000 500,000 ,000,000 ?■ $■ By maturing bills held by _____________ Payment to be made by_ □ $. $$. $$. Delivery Instructions: □ Hold in Custody Account—Member banks for own account only □ Pledge to secure Treasury Tax and Loan Account □ Ship to------------------------------------" □ □ Charge our reserve account on payment date Draft enclosed (E ffectual delivery o f enclosed d r a f t □ shall be on la te st day w hich w ill p e rm it p re s e n tm e n t i n o rd e r to o b ta in irrevocably collected fu n d s on p a y m e n t date) (S ub scrib er’s fu ll n a m e o r co rp o ra te title ) (A ddress) Bv . ............. —........... .. (A u tho rized official s ig n a tu re a n d title) (F o r the acco u n t of, if te n d e r is fo r a n o th e r su bscriber) — — (A ddress) IM PORTANT 1. No tender fo r less th a n $1,000 will be considered and each tend er m ust be fo r an am ount in multiples of $1,000 ( m a tu rity v alue). 2. Tenders should be forw arded in an envelope clearly addressed to this bank or app ropriate branch as Fiscal A gent of t h e U nited States, w ith notation on the envelope reading “ T E N D E R FOR T R E A SU R Y O F F E R IN G ”. Since envelopes received w ith th is legend will not be opened until a fte r the closing time specified in the public announcement, com m uni cations relatin g to other m a tte rs should not be enclosed. Envelopes fo r subm itting tenders m ay be obtained from t h i s bank or ap p ro p riate branch. 3. A ny qualified or conditional tender will be rejected. 4. I f a corporation makes the tender, the form should be signed by an officer of the corporation authorized to make t h e tender and the signing of the form by an officer of the corporation will be construed as a representation by him th a t h e has been so authorized. I f the ten der is made by a partn ersh ip it should be signed by a member of the firm, w h o should sign in the form “____________________________ _ , a copartnership, by-----------------------------------------------------------a member of the firm ”. 5. Tenders from those other th a n incorporated banks and tr u s t companies or responsible and recognized dealers in in v e s t m ent securities will be disregarded, unless accompanied by a deposit of 2 percent of the total am ount (m atu rity v a lu e ) of the T reasu ry bills applied for, or unless the tenders are accompanied by an express g u ara n ty of full paym ent by a n incorporated bank or tr u s t company. 6. If the language of this form is changed in any respect, which, in the opinion of the S ecretary of the T re asu ry j a m aterial, th e tender may be disregarded. (See reverse for announcement)