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FEDERAL RESERVE BANK O F 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 75222 Circular No. 71-162 July 21, 1971 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: The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $1,700,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing July 31, 1971, in the amount of $1,703,030,000, as follows: 272-DAY BILLS (to maturity date) to be issued August 2, 1971, in the amount of $500,000,000, or there abouts, representing an additional amount of bills dated April 30, 1971, and to mature April 30, 1972 (C USIP No. 912793 M A I), originally issued in the amount of $1,200,535,000, the additional and original bills to be freely interchangeable. 366-DAY BILLS for $1,200,000,000, or thereabouts, to be dated July 31, 1971, and to mature July 31, 1972 (C U SIP No. 912793 N J 1 ). The bills of both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. They will be issued in bearer form only, and in denominations of $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (maturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Daylight Saving Time, Tuesday, July 27, 1971. Tenders will not be received at the Treasury Department, Washington. Each tender must be for a minimum of $10,000. Tenders over $10,000 must be in multiples of $5,000. In the case of competitive tenders the price offered must be expressed on the basis of 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. (Notwithstanding the fact that the one-year bills will run for 366-days, the discount rate will be computed on a bank dis count basis of 360-days, as is currently the practice on all issues of Treasury bills.) It is urged that tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions generally m ay submit tenders for account of customers provided the names of the customers are set forth in such tenders. Others than banking institutions will not be permitted to submit tenders except for their own account. Tenders will 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 of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price range of accepted bids. Only those sub mitting competitive tenders will be advised of the acceptance or rejection thereof. The Secretary of 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 each issue for $200,000 or less without stated price from any one bidder will be accepted in full at the average price (in three decimals) of accepted competitive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on August 2, 1971, in cash or other immediately available funds or in a like face amount of Treasury bills maturing July 31, 1971. Cash and exchange tenders will receive equal treatm ent Cash adjustments will be made for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. Under Sections 454 (b ) and 1221 (5 ) of the Internal Revenue Code of 1954 the amount of discount at which bills issued hereunder are sold is considered to accrue when the bills are sold, redeemed or otherwise disposed of, and the bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued here under must include in his income tax return, as ordinary gain or loss, the difference between the price paid for the 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. Treasury Department Circular No. 418 (current revision) and this notice, prescribe the terms of the Treasury bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. In accordance with the above announcement, tenders w ill be received at this bank and its branches at El Paso, Houston and San Antonio up to twelve-thirty p.m., Central Daylight Saving Time, Tuesday, July 27, 1971. Tenders may not be entered by telephone. Your very truly, P. E. Coldwell President (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 366 DAYS TO MATURITY Maturing July 31,1972 Dated July 31,1971 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or — The--------------------------------------- Branch E l Paso 79999 Houston 77001 San Antonio 78295 (Date) Pursuant to the provisions of Treasury Department Circular No. 418 (current revision) and the provisions of the public announcement 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 a t the rate indicated. NONCOMPETITIVE TENDER $. _NOT TO EXCEED $200,000 Noncompetitive tenders for $200,000 or less from any one bidder, without stated price, w ill be accepted in fu ll at the average price (in three decimals) of accepted competitive bids. ( ’------------------------------------------ v w Prices should be ex pressed on the basis of 100, with not more than th re e decim al places, e. g., 99.925. Fractions m ust not be used. ----- COMPETITIVE TENDERS ; *; fn) $ *i @ $ TENDERS MAY NOT BE ENTERED BY TELEPHONE. TENDERS BY WIRE, IF RECEIVED BEFORE THE CLOSING HOUR, ARE ACCEPTABLE. Payment for this issue of bills cannot be made by credit to Treasury Tax and Loan Account. Denominations Desired Number of Pieces Maturity Value (5) $ (ft $ METHOD OF PAYMENT 10,000 $15,000 $- □ 50,000 $<> $ 100,000 $a (5) $ 500,000 $- .0> $ □ □ (3) $1 ,000,000 * By maturing bills held by_____________________________. Payment to be made by---------------------Charge our reserve account on payment date I I D r a f t e n c l o s e d (Effectual delivery of enclosed draft shall be on latest day which will permit presentment in order to obtain irrevocably collected funds on payment date) Delivery Instructions: □ Hold in Custody Account—Member banks for own account only (Subscriber’s full name or corporate title) □ Pledge to secure Treasury Tax and Loan Account (Address) □ Ship to__________________________ By(Authorized official signature and title) (For the account of, if tender is for another subscriber) (Address) IM P O R T A N T 1. No tender for less than $10,000 will be considered and each tender over $10,000 m ust be for an amount in multiples of $5,000 (m aturity value). 2. Tenders should be forwarded in an envelope clearly addressed to this bank or apropriate branch as Fiscal Agent of the United States, with notation on the envelope reading “TENDER FOR TREASURY OFFERING”. Since envelopes received with this legend will not be opened until a fte r the closing time specified in the public announcement, communi cations relating to other m atters should not be enclosed. Envelopes for subm itting tenders m ay be obtained from this bank or appropriate branch. 3. Any qualified or conditional tender will be rejected. 4. If a corporation makes the tender, the form should be signed by an officer of the corporation authorized to make the tender and the signing of the form by an officer of the corporation will be construed as a representation by him th at he has been so authorized. If the tender is made by a partnership it should be signed by a member of the firm, who should sign in the form “........................................................., a copartnership, by............................................................................. , a member of the firm”. 5. Tenders from those other than incorporated banks and tru st companies or responsible and recognized dealers in invest m ent securities will be disregarded, unless accompanied by a deposit of 2 percent of the total amount (m aturity value) of the Treasury bills applied for, or unless the tenders are accompanied by an express guaranty of full payment by an incorporated bank or tru st company. 6. If the language of this form is changed in any respect, which, in the opinion of the Secretary of the Treasury is m aterial, the tender m ay be disregarded. (See reverse fo r announcement)