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F e d er a l Rese r v e Ba n k DALLAS. TEXAS of D allas 75222 A m e ric a n R e v o lu tio n B ic en ten n ia l Circular No. 76-58 A p ril 12, 1976 PROGRESS REPORT ON THE BOOK-ENTRY PROCEDURE FOR U . S . TREASURY AND FEDERAL AGENCY SECURITIES TO ALL BANKS AND OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE DISTRICT: A s a n n o u n c e d in p r e v i o u s c i r c u l a r s w e h a v e i s s u e d , t h e jo i n t F e d e r a l R e s e r v e /U .S . T r e a s u r y b o o k -e n try p ro g ra m has m ade c o n s id e ra b le p r o g r e s s s i n c e its i n a u g u r a t i o n in J a n u a r y 1968. T h e p u r p o s e o f t h i s p r o g r a m is to r e d u c e th e u s e of d e f i n i t i v e s e c u r i t i e s to t h e f u ll e s t p o s s i b l e e x t e n t in c o n n e c tio n w ith th e iss u a n c e , c u s to d y , a n d tr a n s f e r of m a rk e ta b le T r e a s u r y a n d A gency o b lig atio n s. T h e b o o k - e n t r y p r o c e d u r e o f f e r s s u b s t a n t i a l b e n e f i ts to i n v e s t o r s , th e f in a n c ia l c o m m u n it y , a n d t h e T r e a s u r y . It r e d u c e s t h e b u r d e n o f p a p e r w o r k c r e a t e d b y th e m o u n tin g v o lu m e of p u b l i c d e b t t r a n s a c t i o n s ; it p r o t e c t s a g a i n s t lo s s , t h e f t , a n d c o u n t e r f e i t i n g ; a n d it s u b s t a n t i a l l y r e d u c e s th e c o s t of i s s u i n g , s t o r i n g , a n d deliverin g T re a s u ry sec u ritie s. At th e e n d of F e b r u a r y 1976, a total o f $299.1 b i l l i o n , r e p r e s e n t i n g 79 p e r c e n t of m a r k e t a b l e T r e a s u r y s e c u r i t i e s o u t s t a n d i n g , w a s in b o o k - e n t r y fo rm . In a d d i t i o n , a t t h e s a m e d a t e , t h e p r o g r a m a l s o i n c l u d e d $ 4 6 .7 b illio n of e l i g i b l e F e d e r a l A g e n c y o b l i g a t i o n s , r e p r e s e n t i n g o v e r 63 p e r c e n t of th e o u t s t a n d i n g d e b t of t h o s e A g e n c i e s . On t h e t a b l e t h a t is p r i n t e d on o n e of th e fo llo w in g p a g e s , t h e r e is s h o w n th e r e s p e c t i v e b o o k - e n t r y to ta ls a t e a c h y e a r - e n d fro m 1968 t h r o u g h 1975, a n d a l s o a t t h e e n d of J a n u a r y a n d F e b r u a r y 1976. With n e a r l y 80 p e r c e n t of t h e m a r k e t a b l e T r e a s u r y d e b t now in b o o k e n t r y fo rm , it is a p p a r e n t t h a t t h i s p r o g r a m wi l l , in tim e , s e r v e all s e c t o r s of th e i n v e s t i n g p u b l i c , a n d m a k e it u n n e c e s s a r y to i s s u e d e f i n i t i v e s e c u r i t i e s e i t h e r on o r i g i n a l i s s u e s , o r in c o n n e c tio n w ith s e c o n d a r y m a r k e t t r a n s a c t i o n s . In t h e lig h t of t h i s p r o g r e s s , t h e D e p a r tm e n t of t h e T r e a s u r y h a s r e c e n t l y i s s u e d a p r e s s r e l e a s e , w h ic h is p r i n t e d on o n e o f t h e fo llo w in g p a g e s , a s a s ta t e m e n t of its e x p ec tatio n s for th e fu tu re c o u rs e of b o o k - e n try . In a n e f f o r t to a c c e l e r a t e th e e x p a n s i o n of t h e b o o k - e n t r y s y s t e m , th e F e d e r a l R e s e r v e B a n k s a r e r e q u e s t i n g all c o m m e rc ia l b a n k s a n d o t h e r f in a n c ia l i n s t i t u t i o n s in t h e i r r e s p e c t i v e D i s t r i c t s to e f f e c t th e c o n v e r s i o n of e l i g i b l e T r e a s u r y a n d A g e n c y s e c u r i t i e s in to b o o k - e n t r y f o r m , t h r o u g h m e m b e r b a n k s , a s r a p i d l y a s f e a s i b l e . In t h i s c o n n e c t i o n , w e a r e a w a r e t h a t th e law s of s o m e s t a t e s o r local g o v e r n m e n t s , a n d c e r t a i n r e g u l a t i o n s o f a d m i n i s t r a t i v e o r s u p e r v i s o r y This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - agencies, currently prevent the full application of the book-entry procedure. In order that we may be of maximum assistance in eliminating any remaining obsta cles to the full use of the program, we would appreciate being advised of any circumstances of which you may be aware where legislative or other action is required to overcome such difficulties. Your communications in this regard should be addressed to C. T. Pat Powell, Manager of the Head Office Securities Department, at (214) 651-6384. Our joint efforts should make it possible to realize further the benefits of the book-entry system by reducing the remaining definitive Treasury and Agency securities outstanding, and thereby move forward toward a true certifi cate!ess system. Sincerely yours, T. W. Plant First Vice President MARCH 1976 MARKETABLE UNITED STATES TREASURY SECURITIES AND PORTION IN BOOK-ENTRY FORM 1968 TO DATE End of Period 1/ Marketables (billions) 2/ Book-Entry Holdings System Total __ %_ (billions) 3/ Definitive Outstanding (billicns) 1968 $ 236.8 $ 36.5 15.4 $ 200.3 1969 235.9 38.2 16.2 197.7 1970 247.7 121.3 48.9 126.4 1971 262.0 152.6 58.2 109.4 1972 269.5 160.2 59.4 109.3 1973 270.2 176.6 65.4 93.6 1974 281.3 201.4 71.6 79.9 1975 363.2 285.1 78.5 78.1 Jan 1976 Feb 1976 369.3 378.8 292.6 299.1 79.8 79.0 76.7 79.7 MARKETABLE GOVERNMENT AGENCY SECURITIES AND PORTION IN BOOK-ENTRY FORM 1974 1975 Jan 1976 Feb 1976 I7 2/ 3/ £/ 71.9 74.4 74.2 73.4 1/ 23.2 40.5 45.2 46.7 32.3 54.4 60.9 63.6 Source: Monthly Statement of the Public Debt; excludes Federal Financing Bank for July 1974 et seq. Source: Treasury Department and FRB New York. Includes both bearer and registered securities. Source: Daily Quotation Sheets. 48.7 33.9 29.0 26.7 The Department of the TREASURY WASHINGTON, O.C. 20220 TELEPHONE 964-2041 $ C ontact: H . J , H in tg e n E x t e n s io n 2427 M arch 31, 1976 FOR IMMEDIATE RELEASE FORMATION OF A TREASURY-FEDERAL RESERVE TASK FORCE ESTABLISHED TO EXPAND THE BOOK-ENTRY PROGRAM OF ISSUING GOVERNMENT SECURITIES S e c r e t a r y of th e T r e a s u r y W illiam E . S im o n t o d a y a n n o u n c e d th e fo rm a tio n o f a T r e a s u r y - F e d e r a l R e s e r v e T a s k F o r c e , e s t a b l i s h e d to e x p a n d the b o o k -e n tr y program of is s u in g G overnm ent s e c u r i t i e s . The S ecreta ry com m e n te d th a t th e e x p a n s i o n o f t h e b o o k - e n t r y p r o g r a m o v e r the p a s t e ig h t y e a r s h a s b e e n m o st g r a t i f y in g . At th e e n d of F e b r u a r y 1976, th e am ount of U n ite d S t a te s T r e a s u r y b i l l s , n o t e s , a n d b o n d s in b o o k - e n t r y form r e a c h e d a l e v e l of $299 .1 b i l l i o n or 79% of th e total m a r k e t a b le d e b t . In itia te d i n 1968, th e b o o k - e n t r y p r o c e d u r e e lim in a t e s the i s s u a n c e o f e n g r a v e d T r e a s u r y s e c u r i t i e s in f a v o r o f b o o k - e n t r i e s m a in ta in e d at F e d e r a l R e s e r v e B a n k s for th e a c c o u n t s of c o m m e r c ia l b a n k s w h i c h a r e m e m b e r s of the F e d e r a l R e s e r v e S y s t e m . T h e b o o k - e n t r y p r o c e d u r e is c u r r e n t l y a v a i la b l e to b o th i n d i v i d u a l s and i n s t i t u t i o n s a c t in g t h r o u g h s u c h m em b e r b a n k s . T h e b o o k - e n t r y p r o c e d u r e o f f e r s s u b s t a n t i a l b e n e f i t s to i n v e s t o r s , the f in a n c ia l c o m m u n it y , a n d th e T r e a s u r y . It r e d u c e s th e b u r d e n of p a p e r w o r k c r e a t e d b y the m o u n tin g v o lu m e o f p u b l i c d e b t t r a n s a c t io n s ; it p r o t e c t s a g a i n s t l o s s , th e ft , a n d c o u n t e r f e it i n g ; a n d it s u b s t a n t i a l l y r e d u c e s the c o s t o f i s s u i n g , s t o r i n g , and d e liv e r in g T r e a su r y se c u r itie s . T h e T r e a s u r y - F e d e r a l R e s e r v e T a s k F o r c e w i l l d e s i g n a n d adopt an e x p a n d e d b o o k - e n t r y s y s t e m w it h the u ltim a te o b j e c t i v e of c o m p le t e l y e lim in a t in g the u s e of d e f i n i t i v e s e c u r i t i e s in n e w p u b li c d e b t b o r r o w i n g s . D u r in g the c o u r s e o f th is e f f o r t , th e v i e w s an d co m m e n ts o f th e f in a n c ia l c o m m u n ity a n d o th e r i n t e r e s t e d p a r t i e s w i l l b e s o l i c i t e d . oOo WS-756
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