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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. 67-256 D ecem ber 18, 1967 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 sta te m e n t giving details of tw o issues of Treasury bills: T he Treasury D epartm ent, by this public notice, invites tenders for tw o series of Treasury bills to the aggregate amount of $1,500,000,000, or thereabouts, for cash and in exchange for Treasury bills m aturing D ecem ber 31, 1967, in the am ount of $1,401,121,000, as follow s: f 272-D A Y B IL L S (to m aturity d ate) to be issued January 2, 1968, in the am ount of $500,000,000, or thereabouts, representing an additional am ount of bills dated Septem ber 30, 1967, and to mature Septem ber 30, 1968, originally issued in the am ount of $1,000,206,000, the additional and original bills to be freely interchangeable. 366-D A Y B IL L S for $1,000,000,000, or thereabouts, to be dated D ecem ber 31, 1967, and to mature D ecem ber 31, 1968. T h e bills of both series w ill be issued on a discount basis under com petitive and noncom petitive bidding as hereinafter provided, and at m aturity their face amount, w ill be payable without interest. T h ey w ill 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 aturity v a lu e ). Tenders will be received at Federal R eserve Banks and Branches up to th e closing hour, one-thirty p.m., Eastern Standard T im e, Tuesday, D ecem ber 26, 1967. T enders w ill not be received at the Treasury 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 decim als, e.g., 99.925. Fractions m ay not be used. (N otw ithstanding the fact that the one-year bills will run for 366-days, the discount rate w ill be com puted on a bank discount basis of 360-days, as is currently the practice on all issues of Treasury b ills.) It is urged that tenders be m ade on the printed forms and forwarded in th e special envelop es which will be supplied by Federal R eserve Banks or Branches on application therefor. Banking institutions generally m ay subm it tenders for account of custom ers provided the nam es of th e custom ers are set forth in such tenders. Others than banking institutions w ill not be perm itted to subm it tenders except for their own account. Tenders will be received without deposit from incorporated banks and trust com panies and from responsible and recognized dealers in investm ent securities. Tenders from others must be accom panied by paym ent of 2 percent of the face am ount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of paym ent by an incorporated bank or trust com pany. Im m ediately after the closing hour, tenders will be opened at the Federal R eserve Banks and Branches, following which public announcem ent will be m ade by the Treasury D epartm ent of the am ount and price range of accepted bids. T hose subm itting tenders will be advised of the acceptance or rejection thereof. T h e 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, 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 decim als) of accepted com petitive bids for the respective issues. Settlem ent for accepted tenders in accordance with the bids m ust be m ade or com pleted at the Federal R eserve B ank on January 2, 1968, in cash or other im m ediately available funds or in a like face am ount of Treasury bills maturing D ecem ber 31, 1967. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents w ill be m ade for differences betw een the par value of maturing b ills accepted in exchange and the issue price of the new bills. T h e incom e derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, does not have any exem ption, as such, and loss from the sale or other disposition of Treasury bills does not have any special treatm ent, as such, under the internal R evenue Code of 1954. T he bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exem pt from all taxation now or hereafter im posed on the principal or interest thereof by any State, or any of the possessions of the U nited States, or by any local taxing authority. For purposes of taxation the am ount of discount at which Treasury bills are originally sold by the U nited States is considered to be interest. Under Sections 454 (b ) and 1221 ( 5 ) of the Internal R evenue Code of 1954 the am ount of discount at which bills issued hereunder are sold is not considered 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 Treasury bills (other than life insurance com panies) issued hereunder need include in his incom e tax return only the difference betw een the price paid for such bills, whether on original issue or on subsequent purchase, and the amount actually received either upon sale or redem ption at m aturity during the taxable year for which th e return is made, as ordinary gain or loss. Treasury Departm ent Circular No. 418 (current revision ) and th is notice, prescribe th e term s of the Treasury bills and govern the conditions of their issue. Copies of the circular m ay be obtained from any Federal R eserve B ank or Branch. In a cco rd ance with the a b o v e a n n o u n c e m e n t, te n de rs will b e received a t this b a n k a n d its b ra n c h e s a t El Paso, Houston a n d San Antonio, up to twelve-thirty p.m., Central S ta n d a rd Time, Tuesday, Decem ber 26, 1967. Tenders m ay not b e entered by te le pho ne . Yours very truly, Watrous H. Irons President (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 366 DAYS TO MATURITY Maturing December 31,1968 Dated Decem ber 3 1 ,1 9 6 7 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or — The_______________________________ Branch E l Paso 79999 Houston 77001 San A n to n io 78206 (D ate) P ursuant to the provisions o f T reasury D epartm ent C ircu lar No. 418 (c u rre n t revision) and the provisions o f the public announcement issued by the Treasury D epartm ent, the undersigned offers to purchase T reasury b ills in the amount shown below, and agrees to pay fo r the am ount allotted , on o r before the issue date, by the method and a t the ra te indicated. .NOT TO EXCEED $200,000 NONCOM PETITIVE T E N D E R $. N oncom petitive tenders fo r $200,000 or less from any one bidder, w ith o u t stated price, w ill be accepted in fu ll at the average price (in three decim als) of accepted com petitive bids. ( ^ Prices should be ex pressed on the basis of 100, w ith not more than () a COMPETITIVE T E N D E R S $ $ th re e d e cim a l places, e. g., 99.925. Fractions $ .... @ $- . ................. m ust not be used. T EN D ER S M A Y N O T BE E N T E R E D B Y T E LE P H O N E . TEN D ER S BY W IR E , IF R E C E IV E D BEFO RE T H E C LO SING HO UR, A R E A C C E P T A B LE . Paym ent fo r th is issue o f b ills cannot be made by cre d it to T reasury Tax and Loan Account. D enom inations Desired of M a tu rity V alue Pieces $ $ <> $ 3 5,000 $10,000 <> $ 5 M E TH O D OF P A Y M E N T 1,000 $- 50,000 $- □ By maturing bills held by______________________________ □ Payment to be made by___________ (fib $ 100,000 8. □ (fib $ 500,000 $- Charge our reserve account on payment date Q D raft enclosed ( E f f e c t u a l d e liv e r y o f e n e lo .e d d r a f t shall be on la te st day w hich will p e rm it p re sen t m e n t in o rd e r to o b ta in irrevocably collected fu nds on p a y m e n t date) -(fib $1 ,000,000 D elivery Instructions: (S u b sc rib e r’s fu ll nam e o r c o rp o ra te title ) □ Hold in Custody Account— Member banks for own account only □ Pledge to secure Treasury Tax and Loan Account □ (A ddress) By. (A uth orized official s ig n a tu re a nd title ) Ship to_________________________ (F o r th e a cc o u n t of, if te n d e r is fo r a n o th e r sub scriber) (A ddress) IM P O R T A N T 1. No tender fo r less than $1,000 w ill be considered and each tender m ust be fo r an am ount in m ultiples o f $1,000 (m a tu rity value). 2. Tenders should be forw arded in an envelope clea rly addressed to this bank or appropriate branch as Fiscal A gent o f the U nited States, w ith notation on the envelope reading “ T E N D E R FOR T R E A S U R Y B IL L S ” . Since envelopes received w ith this legend w ill not be opened u n til a fte r the closing tim e specified in the public announcement, comm unications re la tin g to other m atters should not be enclosed. Envelopes fo r su b m ittin g tenders may be obtained fro m th is bank or appropriate branch. 3. A ny qualified o r conditional tender w ill be rejected. 4. I f a corporation makes the tender, the fo rm should besigned by an officer o f the corporation authorized to make the tender and the signing of the fo rm by an officer of the corporation w ill be construed as a representation by him th a t he has been so authorized. I f the tender is made by a partnership i t should be signed by a member o f the firm , who should sign in the fo rm ................................................... , a copartnership, by.................................................................. , a member o f the firm ” . 5. Tenders fro m those other than incorporated banks and tru s t companies or responsible and recognized dealers in invest m ent securities w ill be disregarded, unless accompanied by a deposit o f 2 percent o f the to ta l amount (m a tu rity value) o f the T reasury b ills applied fo r, or unless the tenders are accompanied by an express gua ran ty of fu ll paym ent by an incorporated bank or tru s t company. 6. I f the language o f th is fo rm is changed in any respect, which, in the opinion o f the Secretary o f the T reasury is m aterial, the tender may be disregarded. (See reverse fo r announcement)