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F ederal Reserve Bank of Dallas F I S 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. 71-302 Decem ber 20, 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 December 31, 1971, in the amount of $1,701,550,000, as follows: 274-DAY BILLS (to maturity date) to be issued December 31, 1971, in the amount o f $500,000,000, or there abouts, representing an additional amount of bills dated September 30, 1971, and to mature September 30, 1972 (CU SIP No. 912793 N L 6 ), originally issued in the amount of $1,200,730,000, the additional and original bills to be freely interchangeable. 366-DAY BILLS for $1,200,000,000, or thereabouts, to be dated December 31, 1971, and to mature December 31, 1972 (CU SIP No. 912793 N P 7). 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 Standard Time, Tuesday, December 28, 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 ten ders 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 may 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 December 31, 1971, in cash or other immediately available funds or in a like face amount of Treasury bills maturing December 31, 1971; provided, however, that settlement for tenders submitted to the Federal Reserve Banks of Minneapolis and Dallas, or to the Federal Reserve Bank Branches in Little Rock, El Paso, Houston and San Antonio, must be completed at those Banks or Branches on January 3, 1972, and must include three days’ accrued interest if settlement is made with other than Treasury bills maturing December 31. Cash and exchange tenders will receive equal treatment. 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 o f the circular may be obtained from any Federal Reserve Bank or Branch. 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, December 28, 1971. Tenders may not be entered by telephone. Your very truly, P. E. Coldwell President (S e e 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 FO R ADDITION TO TREASURY BILLS 274 DAYS TO MATURITY Maturing September 30,1 9 72 Dated September 3 0,1971 T o : Federal Reserve Bank, Station K, Dallas, Texas 75222 or — The_______________________________ Branch El Paso 79999 Houston 77001 San Antonio 78295 Pursuant to the provisions o f 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 at 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 decim als) of accepted com petitive bid s. ( $ COMPETITIVE TENDERS ) * <rb $ (ob $ --------------------- ------------------ ( @ $ l Prices should be expressed on the basis of 100, with not more than th re e decim al places, e. g., 99.925. Fractions must not be used. T E N D E R S M A Y N O T BE E N T E R E D B Y T E L E P H O N E . T E N D E R S B Y W IR E , IF R E C E IV E D B EFO R E TH E CLO SIN G H O U R , A R E A C C E P T A B L E . Denominations Desired Number of Pieces Payment for this issue o f bills cannot be made by credit to Treasury Tax and Loan Account. Maturity Value _________ @ $ @ $ @ $ M E TH O D O F P A Y M E N T 10,000 $_________________ □ Charge our reserve account on payment date □ @ $1.,000,000 *- Payment to be made by__________________ □ @ $ 100,000 @ $ 500,000 By maturing bills held by____________________________________ □ 15,000 ?50,000 $ • Draft enclosed (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 Pledge to secure Treasury Tax and Loan Account (Subscriber’s full name or corporate title) (Address) By----------------------------------------------------------------(Authorized official signature and title) Ship to------------------------------------------------ (For the account of, if tender i3 for another subscriber) (Address) 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 apropriate branch as Fiscal A gen t of the United States, with notation on the envelope reading “ T E N D E R FO R T R E A S U R Y O F F E R IN G ” . Since envelopes received with this legend will not be opened until after the closing time specified in the public announcement, communi cations relating to other m atters should not be enclosed. Envelopes for submitting tenders m ay be obtained from this bank or appropriate branch. 8. 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 o f 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 that he has been so authorized. I f 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 trust 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) o f 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 of this form is changed in any respect, which, in the opinion of the Secretary o f the Treasury is material, the tender m ay be disregarded. (S e e reverse f o r announcem ent)