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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 ITED ST A T E S DALLAS, TEXAS 75222 Circular No. 71-242 October 12, 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 following statem ent giving details of two issues of Treasury bills: T h e Treasury D epartm ent, by this public notice, invites tenders for two series of Treasury bills to th e aggregate am ount of $3,900,000,000, or thereabouts, for cash and in exchange for T reasury bills m aturing October 21, 1971, in th e am ount of $3,703,200,000, as follows: 91-DAY B IL L S (to m aturity d ate) to be issued October 21, 1971, in the am ount of $2,300,000,000, or there abouts, representing an additional am ount of bills dated Ju ly 22, 1971, and to m ature January 20, 1972 (C U S IP No. 912793 M J 2 ) , originally issued in the am ount of $1,600,715,000, the additional and original bills to be freely interchangeable. 182-DAY B IL L S for $1,600,000,000, or thereabouts, to be dated October 21, 1971, and to m ature April 20, 1972 (C U S IP No. 912793 M X 1 ). 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 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). Tenders will be received a t Federal R eserve Banks and Branches up to the closing hour, one-thirty p.m., E astern D aylight Saving Tim e, M onday, October 18, 1971. T enders will not be received a t th e Treasury D epartm ent, W ashington. Each tender m ust be for a minim um of $10,000. T enders over $10,000 m ust be in m ultiples of $5,000. In the case of com petitive tenders the price offered m ust be expressed on th e basis of 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. It is urged th a t tenders be made on the printed forms and fonvarded in the special envelopes which will be supplied by F ederal Reserve Banks or Branches on application therefor. B anking institutions generally may subm it tenders for account of customers provided the names of the customers are set forth in such tenders. Others than banking institutions will not be perm itted to subm it tenders except for their own account. 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 the face am ount of Treasury 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 ep artm en t 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 th e 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 decimals) of accepted com petitive bids for th e respective issues. Settlem ent for accepted tenders in accordance with th e bids m ust be m ade or com pleted a t the Federal Reserve B ank on October 21, 1971, in cash or other im m ediately available funds or in a like face am ount of Treasury bills m aturing October 21, 1971. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be m ade for differences between the par value of maturing bills accepted in exchange and the issue price of th e new bills. Under Sections 454 (b ) and 1221 (5 ) of the Internal R evenue 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 th e bills are excluded from consideration as capital assets. Accordingly, the owner of T reasury bills (other th an 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 the am ount actually received either upon sale or redem ption a t m aturity during the taxable year for which the return is made. 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 the ir issue. Copies of the circular may be obtained from any F ederal Reserve B ank or Branch. In accordance with the above announcement, tenders will be received a t this bank a n d its branches a t El Paso, Houston an d San Antonio up to twelve-thirty p.m., Central Daylight Saving Time, Monday, October 18, 1971. 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 January 13, 1972 D ue April 13, 1972 $3,788,060,000 T o tal Applied F or - . _______ _____ _____ ________ '52,841,440^00 $2,300,420,000.— ................... ___Total_A ccepted______ — $1,600,300,000 Price Y ield Price Y ield 98.875------------------4.451% ------------------------------------- H igh__________________.....97.700... 4.549% 98.860-----------------4,510% ....---------------------Low__________ ....97.656____________ 4.636% 98.866—--- ----------- 4.486% ( 1 ) ------------------------------ Average_____________ .97.677________ 4.595% (1) ( 1 ) T h e s e r a t e s a r e o n a b a n k d i s c o u n t b a s is . T h e e q u i v a l e n t c o u p o n i s s u e y i e l d s a r e 4 . 6 1 % 1 8 2 - d a y b ills . f o r t h e 9 1 - d a y b ills a n d 4 . 7 8 % f o r th e (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 Maturing April 20, 1972 Dated October 21,1971 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or — The--------------------------------- .Branch £3 Paso 79999 Houston 77001 San Antonio 78295 (D a te ) 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, will be accepted in full at the average price (in three decimals) of accepted competitive bids. Prices should be ex pressed on the basis of 100, with not more than COMPETITIVE TENDERS * $ th re e decimal places, e. g., 99.925. Fractions ... $ .._ . must not be used. * JSgr’ T E N D E R S M AY NOT BE ACCEPTED BY TELEPHONE. TENDERS BY WIRE, IF RECEIVED BEFORE THE C LO SIN G HOUR, ARE ACCEPTABLE. Denominations Desired N u m b e r of pieces Payment for this issue of bills cannot be made by credit to Treasury Tax and Loan Account. METHOD OF PAYMENT M a tu rity VaJue § © <> i ? 10,000 ? $ 15,000 ?O ? 50,000 ?- @ ? 100,000 $ ----- @ $ 500,000 $(5) $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--------------------------- — ------- □ 1 By maturing bills held by-----------------------------------------Payment to be made by____________ □ □ [ Charge our reserve account on payment date | D r a f t e n c lo s e d ( E ffe c tu a l d e liv e ry of en c lo se d d r a f t aha]] be o n l a t e s t d a y w h ic h w ill p e r m i t p r e s e n t m e n t in o r d e r to o b t a i n i r r e v o c a b ly collected f u n d s o n p a y m e n t d ate) (S u b scrib er's fu ll n a m e o r c o rp o r a te title ) (A ddress! By( A u t h o r i z e d o f f i c ia l s i g n a t u r e a n d t i t l e ) ( F o r t h e a c c o u n t of , i f t e n d e r is f o r a n o t h e r s u b s c r i b e r ) (A ddress) IMPORTANT 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 appropriate 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 fter the closing time specified in the public announcement, communi cations relating to other m atters should not be enclosed. Envelopes for submitting tenders may be obtained from th is 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 a t 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 ment 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. Tf the language of this form is changed in any respect, which, in the opinion of the Secretary of the T reasury js material, the tender may be disregarded. (S ee re v e rse f o r an n o u n cem en t)