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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 ITED S T A T E S DALLAS, TEXAS 75222 C ircular No. 71-86 A pril 13, 1971 NEW OFFERING — TREASURY BILLS To All Banking Institutions a n d Others Concerned in the Eleventh Federal Reserve District: Your attention is invited to the fo llo w in g statem ent giving details of tw o issues of Treasury bills: T he T reasury D epartm ent, by this public notice, invites tenders for two series of T reasury bills to the aggregate am ount of $3,400,000,000, or thereabouts, for cash and in exchange for T reasury bills m aturing April 22, 1971, in the am ount of $7,665,455,000, as follows: 91-DAY B IL L S (to m aturity d ate) to be issued A pril 22, 1971, in the am ount of $2,000,000,000, or thereabouts, representing an additional am ount of bills dated Jan u ary 21, 1971, and to m ature July 22, 1971 (C U S IP No. 912793 K Z 8), originally issued in the am ount of $1,400,855,000 (an additional $200,520,000 was issued A pril 6, 1971), the additional and original bills to be freely interchangeable. 182-DAY B IL L S for $1,400,000,000, or thereabouts, to be dated A pril 22, 1971, and to m ature O ctober 21, 1971 (C U S IP No. 912793 L N 4). T he 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 their face am ount will be payable w ithout interest. T hey will be issued in bearer form only, and in denom inations of $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (m atu rity value). T enders will be received a t Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., E astern Standard Tim e, Monday, A pril 19, 1971. T enders will not be received a t the Treasury D epartm ent, W ashington. Each tender m ust be for a m inim um of $10,000. T enders over $10,000 m ust be in m ultiples of $5,000. In th e case of com petitive tenders th e 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. It is urged th a t tenders be made on the printed forms and forwarded in th e special envelopes which will be supplied by F ederal Reserve Banks or Branches on application therefor. Banking institutions generally m ay subm it tenders for account of customers provided th e nam es of th e customers are set forth in such tenders. O thers than banking institutions will not be perm itted to subm it tenders except for th eir own accou n 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. Tenders 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 the tenders are accom panied by an express guaranty of paym ent by an incorporated bank or tru st company. Im m ediately after the closing hour, tenders will be opened a t the 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. Only those subm itting com petitive tenders will be advised of the acceptance or rejection thereof. T he 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 a t the average price (in three decim als) of accepted com petitive bids for the respective issues. S ettlem ent for accepted tenders in accordance with the bids m ust be made or completed a t the Federal Reserve B ank on April 22, 1971, in cash or other im m ediately available funds or in a like face am ount of T reasury bills m aturing A pril 22, 1971. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be made for differences between the p ar value of m atur ing bills accepted in exchange and the issue price of the new bills. U nder Sections 454 (b ) and 1221 (5 ) of the Internal Revenue Code of 1954 the am ount of discount a t which bills issued hereunder are sold is considered to accrue when the bills are sold, redeem ed or otherwise disposed of, and the bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance com panies) issued here under m ust include in his income tax return, as ordinary gain or loss, the difference between the price paid for the bills, w hether on original issue or on subsequent purchase, and th e am ount actually received either upon sale or redem ption a t m aturity during the taxable year for which the retu rn is made. T reasury D epartm ent Circular No. 418 (cu rren t revision) and this notice, prescribe th e term s of the T reasury bills and govern the conditions of th eir issue. Copies of the circular may be obtained from any Federal Reserve B ank or Branch. In a ccord ance with the a b o v e an n o u n c em en t, tenders will b e received at this bank a n d its branches at El Paso, Houston a n d San Antonio up to twelve-thirty p.m., Central Standard Time, M o n d ay, April 19, 1 97 1. Tenders m a y not be entered by tele p h o n e . Yours very truly, P. E. Coldwell President LAST PREVIOUS OFFERING OF TREASURY BILLS Amount, R ange and A pproxim ate Y ield of A ccepted T enders 91-Day Bills 182-Day Bills D ue Ju ly 15, 1971 D ue O ctober 14, 1971 $3,100,895,000_______________________________ T otal Applied F o r_______________________________ $2,618,395,000 $2,000,125,000________________________________ T o tal Accepted_________________________________$1,600,115,000 P rice Y ield P rice Y ield 99.012 3.909% ------------------------------------- .H igh_____________________ 97.953____________ 4.049% 98.961 .4.110% ---------------------------------------X ow ______________________97.865________ _ 4.223% 98.979 .4.030% ( 1 ) ------------------------------ Average_________ __________ 97.907____________ .4.140% (1 ) (1 ) These rates are on a bank discount basis. The equivalent coupon issue yields are 4.15% for the 91-day bills and 4.30% for the 182-day bills. (See reverse 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 April 22,1971 Maturing October 21,1971 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or — The-------------------------------------- Branch El Paso 79999 H ouston 77001 San A ntonio 78206 (D ate) P u rsu an t to th e provisions of T reasury D epartm ent Circular No. 418 (current revision) and th e provisions of th e public announcement issued by the T reasury 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 for the am ount allotted, on or before the issue date, by the method and a t th e ra te indicated. NONCOMPETITIVE TENDER $_ .NOT TO EXCEED $200,000 Noncompetitive tenders for $200,000 or less from any one bidder, w ithout stated price, will be accepted in full at the a v e rag e price (in three decimals) of accepted competitive bids. Prices should be e x pressed on the basis of 100, w ith not m ore th a n t h r e e d ecim al p la c e s , e. g., 99.925. F ra c tio n s m ust not be used. ' ----------------------COMPETITIVE TENDERS \>$___________ ) $ ----------------------- I S P TEND ERS MAY NOT BE ACCEPTED BY T ELEPH O N E. TEND ERS BY W IRE, IF RECEIV ED BEFO RE T H E CLOSING HOUR, A RE ACCEPTABLE. Denominations Desired N um b er of pieces Paym ent fo r th is issue of bills cannot be m ade b y credit to T reasu ry Tax and Loan Account. METHOD OF PAYM ENT M a tu rity V alue @ $ 10,000 $@ $ 15,000 $. @ ? 50,000 $@ ? 100,000 * @ ? 500,000 $@ $1,000,000 $Delivery Instructions: □ Hold in Custody Account— Member banks for own account only □ Pledge to secure Treasury Tax and Loan Account □ Ship to------------------------------------- □ By maturing bills held by____________________________ Payment to be made by______________ _ □ □ 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 will p e rm it p re s e n tm e n t in o rd er to o b ta in irrevocably collected fu n d s on p a y m e n t d a te ) (S u b sc rib e r’s fu ll n a m e o r c o rp o ra te title ) (A d d ress) By(A u th o rized official s ig n a tu re a n d title ) (F o r th e a cc o u n t of. if te n d e r is f o r a n o th e r su b scrib er) (A dd ress) IM PORTANT 1. No tender fo r less th a n $10,000 will be considered and each tender over $10,000 m ust be fo r an am ount in m ultiples of $5,000 (m atu rity value). 2. Tenders should be forw arded in an envelope clearly addressed to th is bank or app ropriate branch as Fiscal A gent of th e U nited States, w ith notation on the envelope reading “TEN D ER FOR TREA SU RY O FF E R IN G ”. Since envelopes received w ith this legend will not be opened until a fte r th e closing tim e specified in th e public announcem ent, com m uni cations relating to other m a tte rs should not be enclosed. Envelopes for subm itting tenders m ay be obtained from th is bank or appro priate branch. 3. Any qualified or conditional tender will be rejected. 4. If a corporation m akes the tender, the form should be signed by an officer of the corporation authorized to m ake th 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 he h as been so authorized. If the tender is m ade by a p artn e rsh ip it should be signed by a m em ber of th e firm, who should sign in the form “___________________________ , a copartnership, by_______________________________________ t a m em ber of th e firm.” 5. Tenders from those other th an incorporated banks and tru s t companies or responsible and recognized dealers in in v e st m ent securities will be disregarded, unless accompanied by a deposit of 2 percent of th e total am ount (m atu rity v alue) of th e T reasury bills applied for, or unless the tenders are accompanied by an express g u ara n ty of full paym ent by an incorporated bank or tru s t company. * 6. If th e language of this form is changed in any respect, which, in the opinion of the S ecretary of the T reasu ry is m aterial, th e ten der m ay be disregarded. (See reverse for announcement)