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FEDERAL RESERVE BANK OF 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
DA LLAS, TEXAS
75222
Circular No* 67-65
March 2b, 1967
To All Savings Bond Issuing Agents
in the Eleventh Federal Reserve District:
Financial Institutions and other qualified issuing agents for
Series E Savings Bonds have been called upon to help in making the new
^-l/2 year United States Savings Notes (Freedom Shares) available to eli
gible purchasers. Eligible purchasers are (l) individuals having regular
deductions made from their salaries or wages for the purchase of Series E
bonds, pursuant to payroll savings plans and (2) depositors having regular
monthly deductions from their accounts for the purchase of Series E bonds
under the bond-a-month plan.
Treasury Department Circulars, Public Debt Series Nos• 3-67 and
k— j which contain the regulations governing the issuance of the new notes
6
are enclosed. Regulations setting forth redemption procedures have not
been issued since the notes may not be cashed during the first year after
the issue date. If you determine that there is a need for you to provide
the issuing service and you wish to do so, the enclosed Application-Trust ^
Agreement, Form PD 3827 should be completed and returned promptly to the
office of this bank which serves your area.
Agents qualified to issue notes pursuant to Form PD 3827 may ob
tain unissued stock on a consignment basis, without the pledge of collater
al, Most savings bond issuing agents are now qualified on this basis. In
executing Form PD 3827 on behalf of an organization that has no seal, the
words "applicant has no seal" should be written in the appropriate space.
Should you desire to continue as a savings bond issuing agent but do not
wish to issue the Freedom Shares, you need not requalify. However, since
Treasury Circular No. 657 has been rescinded, savings bond issuing agents
that were qualified thereunder shall be subject to the terms and conditions
of Treasury Circular No. 4-67 and the agreement under which they were quali
fied.
In addition to the material described above pertaining to the
Freedom Shares, we have enclosed the Third Amendment to Treasury Circular*"
No. 653 which sets forth the terms of the ten year optional extension
period granted to Series E bonds with issue dates of June through November
1959* Table No. 50 of the amendment reflects the redemption values during,
the extended maturity period.
,
Additional copies of this circular and enclosures will be furnish
ed upon request.
Yours very truly,
Watrous H. Irons
President
Enclosures (5 )
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
OFFERING OF UNITED STATES SAVINGS NOTES
1967
D ep artm en t C irc u la r
Public D ebt S eries No. 3 -67
TREA SU RY DEPARTM ENT,
O ffic e o f t h e
S e c re ta ry ,
W a sh in g to n , F eb ru a ry 22, 1967.
F isc a l Service
TABLE OF CONTENTS
Section
342.0 OFFERING OF NOTES.
342.1 DEFINITION OF WORDS AND TERMS AS USED
IN THIS OFFER.
3422 DESCRIPTION OF NOTES.
(a) GENERAL.
(b) DENOMINATIONS AND PRICES.
(c) INSCRIPTION AND ISSUE.
(d) TERM.
(e) INVESTMENT YIELD (INTEREST).
342.3 PURCHASE—REGISTRATION.
(a) PURCHASE.
(b) REGISTRATION.
342.4 LIMITATIONS.
(a) ON DEDUCTIONS.
(b) ON HOLDINGS.
Section
342.5 TAXATION.
(a) GENERAL.
(b) FEDERAL INCOME TAX ON NOTES.
342.6 PAYMENT OR REDEMPTION.
(a) GENERAL.
(b) JUDGMENT CREDITORS.
342.7 GOVERNING REGULATIONS.
342.8 FISCAL AGENTS.
342.9 RESERVATIONS.
(a) ISSUE OF NOTES.
(b) TERMS OF OFFER.
TABLE OF REDEMPTION VALUES AND INVEST
MENT YIELDS.
A u t h o r i t y : D e p artm en t C ircular, P u b lic D ebt
Series No. 3-67, dated F e b ru a ry 22, 1967, and the
tab le in co rp o rated th erein (31 C F R P a r t 342), are
issued u n d er a u th o rity of Sections 18 and 20 of th e
Second L ib erty B ond A ct, as am ended (31 U .S.C .
753 an d 754bj.
Sec. 342.0. O ffering o f n o te s — T he S ecretary of
th e T reasu ry , u n d er the a u th o rity o f th e Second
L ib erty B ond A ct, as am ended, hereby offers for
sale U n ited S tates S avings N otes w hich m ay be
purchased only w ith th e sim ultaneous purchase of
Series E bonds u n d er p ay ro ll savings plans or
th ro u g h the bond-a-m onth plan. T h e investm ent
yield on the notes (h e rein after generally re ferred
to as “savings notes” o r “notes” ) w ill be ap p ro x i
m ately 4.74 percent p er annum , com pounded sem i
an n u ally , if h eld to m a tu rity . T h is offering of
notes, w hich sh all be effective M ay 1, 1967, will
co n tinue u n til term in ate d by the S e cretary o f th e
T reasu ry .
Sec. 342.1. D efin ition o f w ords and term s as used
in th is offer,-— (a) “ P ay ro ll savings p lan s” re fe r
to v o lu n tary system s m aintained by em ployers
w hereby th e ir officers and employees authorize reg u
la r deductions fro m th e ir salaries o r wages fo r th e
purchase o f U n ited S tates S avings B onds o f Series
E , referred to herein as “Series E bonds.”
(b) “T h e bond-a-m ontli p la n ” refers to the p lan
w hereby depositors m ain tain in g accounts w ith
financial in stitu tio n s au th o rize re g u la r m onthly
deductions from such accounts fo r th e purchase o f
Series E bonds.
(c) “P a rtic ip a n ts ” re fe r to individuals hav in g
re g u la r deductions m ade fro m th e ir salaries o r
wages fo r the purchase o f Series E bonds p u rsu a n t
to p ay ro ll savings plans, or depositors h av in g reg u
la r m onthly deductions m ade fro m th e ir accounts
fo r th e purchase of Series E bonds un d er the bonda-m onth plan.
Sec. 342.2. D escription o f notes.— (a) G en
eral.—S avings notes bear a facsim ile o f th e sig n a
tu re o f th e S ecretary o f th e T re asu ry an d of
the Seal o f th e D e p artm en t o f the T reasury .
T hey are issued only in registered form and are
nontransferable.
(b) D enom inations and 'prices.— S avings notes
are issued on a discount basis a t 81 p ercen t o f th e ir
face am ounts (m a tu rity values). T h e denom ina
tions and purchase prices a r e :
Denomination
(face amount)
Purchase
price
$25.00______________________________________________ $20. 25
50.0 0__________________________________________ 40.50
75.0 0__________________________________________ 60.75
100.00_____________________________________________ 81. 00
(c) In sc rip tio n and issue.—A t the tim e of issue
the authorized issuing agent w ill (1) inscribe on
th e face of each savings note th e nam e an d address
of th e owner, and th e nam e of th e beneficiary, if
any, o r th e nam es o f the coowners and the address
of th e first-nam ed coowner,1 (2) enter th e issue date
1 W hen placing a ta x p a y e r id e n tify in g num ber (an in d iv id u al’s
social security, acco u n t num ber) on a note, th e issu in g a g e n t should
place th e num ber on th e n o te in th e sam e p osition as on th e com
panion Series E bond.
fo r each $1.00 o f deductions fo r the purchase of
Series E bonds. I n ad d itio n , deductions fo r the
notes, un d er a p ay ro ll savings plan, shall n o t be
m ore th a n $20.25 p e r weekly pay period, o r $40.50
p er biweekly or sem im onthly pay period, or $81.00
p e r m onthly pay period, and un d er the bond-am onth p lan , shall not exceed $81.00 p er m onth. A
p artic ip a n t, upon discontinuing his p a rtic ip a tio n in
a p ay ro ll savings p lan o r the bond-a-m ontli plan, be
comes ineligible fo r fu rth e r purchases o f the notes
u n til such tim e as lie ag ain enrolls in a plan.
(b) On holdings.—T h e to tal face am ount o f sav
ings notes o riginally purchased by or issued to any
one person d u rin g any one calendar year, including
those registered in the nam e of th a t person as ow ner
and those registered in his nam e w ith another person
as coowner, th a t m ay be held by th a t person a t any
one tim e is lim ited to $1,350.
Sec. 342.5. T a xatio n.— (a) General.—F o r th e
purpose of determ ining taxes an d tax exem ptions,
the increm ent in value represented by the difference
between th e purchase price and tlie redem ption
value received fo r a savings note w ill be considered
as interest. T h e in terest is subject to all taxes im
posed u n d er th e In te rn a l Revenue Code o f 1954.
T he notes are subject to estate, inheritance, g ift, or
o th er excise taxes, w hether F ed eral o r S tate, b u t are
exem pt fro m all tax atio n now o r h e re a fte r im posed
on the p rin cip a l an d in terest th ereo f by any S tate,
o r any o f the possessions o f th e U n ited States, o r by
any local ta x in g au th o rity .
(b) F ederal incom e ta x on notes.—A n ow ner of
savings notes who is a cash basis ta x p a y e r m ay use
eith er o f tw o m ethods fo r re p o rtin g th e increase in
th e redem ption value of th e notes fo r F ed eral in
come ta x purposes, as fo llo w s:
(1) D e fer re p o rtin g of th e increase u n til th e
y ea r o f m atu rity , actual redem ption, or oth er
disposition, w hichever is earlier, or
(2) E lect to re p o rt th e increase fo r th e year
in w hich it accrues, in w hich case th e election
w ill ap p ly also to all Series E bonds th en owned
by him an d those th e re a fte r acquired, as well as
to an y o th er sim ilar obligations sold on a dis
count basis.
I f m ethod (1) is used, th e ta x p a y e r m ay change to
m ethod (2) w ith o u t o btaining perm ission from the
In te rn a l R evenue Service. H ow ever, once th e elec
tio n to use m ethod (2) is m ade, th e ta x p a y e r m ay
n o t change the m ethod o f re p o rtin g , unless he ob
tain s perm ission to do so fro m the In te rn a l Revenue
Service. In q u irie s requesting fu rth e r inform atio n
on F ed eral taxes should be addressed to th e D istrict
D irector, In te rn a l R evenue Service, o f th e ta x
p ay e r’s d istrict, o r the In te rn a l Revenue Service,
W ashington, D.C. 20224.
Sec. 342.6. P a ym en t or redem ption.— (a) G en
eral.—A t any tim e 1 y ear o r m ore a fte r th e issue
date, a savings note m ay be redeem ed upon presen
tatio n an d su rre n d er of th e note w ith a duly ex
ecuted request fo r paym ent to any F ed eral Reserve
iii the rig h t-h a n d portion of th e note 111 the space
pro v id ed fo r th a t purpose, and (3) im p rin t th e re
u nder, by use o f th e agent’s v alid atin g stam p for
the issue o f U n ited S tates S avings B onds, th e date
the no te is actually inscribed. A note shall be valid
only i f an au th o rized issuing agent receives paym ent
th e re fo r an d duly inscribes, dates, stam ps, and de
livers it.
(d ) T erm .—A savings note shall be dated as o f
th e first day of th e m onth in w hich p ay m en t o f the
pu rch ase p rice is received by an issuing agent.
T h is d ate is th e issue date and th e note w ill m atu re
and be payable a t its m a tu rity value 4 years and 6
m onths fro m such issue date. T h e note m ay n o t be
called fo r redem ption by th e S ecretary o f th e T re a s
u ry p rio r to m a tu rity , and is not redeem able d u rin g
th e first y ear fro m issue date. T h ereafter, th e note
m ay be redeem ed a t fixed redem ption values a t the
o p tion an d request of the owner.
(e) In v e stm e n t yie ld {in terest).—T h e invest
m ent yield on a savings note w ill be approxim ately
4.74 p ercent p e r annum , com pounded sem iannually,
if th e note is held to m atu rity , b u t th e yield will
be less if the note is redeem ed p rio r to m atu rity .
T h e in terest w ill be paid as p a r t of the redem ption
value* T h e note w ill increase in value 1 y ea r a fte r
issue d ate, an d a t the beginning o f each h alf-y ear
p erio d th e re a fte r u n til m a tu rity , a t w hich tim e in
te re st w ill cease. I f th e note is redeem ed before
m a tu rity , in terest w ill cease a t the end o f th e in
terest p erio d n e s t preceding the redem ption date,
except th a t if redeem ed on a d ate on w hich the
redem ption value o f th e note increases, interest will
cease on th a t date. (See table.)
Sec. 342.3. P urckase— registration.— (a) P u r
chase.— S avings notes m ay be purchased only w ith
the sim ultaneous purchase o f Series E bonds, as
pro v id ed in section 342.0. E m ployers m ay obtain
notes fo r p a rtic ip a n ts in payroll savings plans from
auth o rized issuing a g e n ts 3 o r from any F ed eral R e
serve B an k o r B ran ch, o r th e Office o f th e T re asu re r
of th e U n ited States, S ecurities D ivision, W ash in g
ton, D.C. 20220. P a rtic ip a n ts in the bond-a-m onth
p lan m ay obtain th e notes from authorized financial
in stitu tio n s. P ay m en ts fo r th e notes m ay be m ade
in th e sam e m an n er as paym ents fo r U n ited S tates
S avings Bonds. Issu in g agents will deliver the
notes a t th e tim e of purchase, o r by m ail a t th e risk
an d expense of the U n ited S tates, b u t only w ithin
the U n ited States, its territo rie s an d possessions,
the C om m onw ealth o f P u erto Rico an d th e C anal
Zone. N o m ail deliveries elsewhere w ill be made.
(b ) R eg istra tio n .—O n original issue a savings
note (1) is lim ited to re g istra tio n in th e nam e o f a
n a tu ra l person (w h ether ad u lt o r m in o r), alone or
w ith an o th er n a tu ra l person as coowner o r bene
ficiary, an d (2) m ust be identical in re g istra tio n to
the com panion S eries E bond purchased un d er the
p ay ro ll savings plan or th e boncl-a-month plan.
Sec. 342.4. L im ita tio n s.— (a) On deductions.—
D eductions fo r savings notes shall not exceed $1.08
3 G enerally, in co rp o rate d banks, t r u s t com panies and o th e r
agencies a s hav e been d u ly qualified as Issuing ag en ts of S eries E
bonds.
2
B an k or B ran ch , or th e Office of th e T re asu re r of
th e U n ited S tates, S ecurities D ivision, W ashington,
D.C. 20220, o r to any financial in stitu tio n w hich has
been designated as p a y in g agent by th e S ecretary
o f th e T reasu ry .
(b )
J u d g m e n t creditors.—P ay m en t o f a savings
note to the p u rch aser a t a sale u n d e r a levy o r to the
officer auth o rized to levy upon th e p ro p e rty of the
ow ner u n d er a p p ro p ria te process to satisfy a m oney
ju d g m en t w ill n o t be m ade u n til 1 y ear a fte r the
issue date o f th e note.
Sec. 342.7. G overning regulations.—S a v i n g s
notes are subject to th e regulations of th e T reasu ry
D ep artm en t, now o r h e re a fte r prescribed, govern
in g U n ited S tates S avings Bond,s, contained in D e
p artm e n t C ircu lar No. 530, cu rren t revision (31
C F R P a r t 315),3 except as otherw ise specifically
provided herein.
3 Copies may be obtained from any Federal Reserve Bank or
Branch, or the Bureau of the Public Debt, Division of Loans and
Currency Branch, 536 South Clark Street, Chicago, 111. 60605.
Sec. 342.8. F isca l agents.—F e d e r a 1 Reserve
B anks an d B ranches, as fiscal agents o f the U n ited
S tates, are authorized to p erfo rm such services as
m ay be requested o f them by th e S ecretary o f th e
T re asu ry in connection w ith th e issue, delivery,
redem ption, and p ay m en t o f savings notes.
Sec. 342.9. R eserva tio n s.— (a ) Issue o f notes.—
T he S ecretary o f th e T re asu ry reserves th e rig h t to
reject any app licatio n fo r purchase o f savings notes,
in w hole or m p a rt, an d to refuse to issue o r perm it
to be issued hereu n d er an y such notes in any case or
any class o r classes o f cases i f he deems such action
to be in th e public interest, and his action in any
such respect shall be final.
(b)
T erm s o f offer.—T h e S ecretary o f th e T re as
u ry m ay a t any tim e o r fro m tim e to tim e supple
m ent o r am end th e term s of th is offering o f notes, or
of any am endm ents or supplem ents thereto.
JO S E P H W. BARR,
A c tin g Secreta ry o f the T reasury.
UNITED STATES SAVINGS NOTES—REDEMPTION VALUES AND INVESTMENT YIELDS
Table shows: (1) redemption values, by denomination, during each successive half-year term of holding after first year 1
following the date of issue; (2) the approximate investm ent yield on the purchase price from issue date to the beginning of
each half-year period 2; and (3) the approximate investm ent yield on the current redemption value from the beginning of
each half-year period 2 to maturity. Yields are expressed in terms of rate percent per annum compounded semiannually.
Maturity value- ___________
Issue price
___
$25 .00
20.25
_______
$50 .00
40.50
$75 .00
60 .75
$100 .00
81.00
Approximate investment yield
(2) On purchase
price from issue
date to begin
(1) Redemption values during each half-year period after the
ning of each
first year (values increase on first day of period show n)1 half-year period2
Period after issue date
Percent
Percent
1 to 1Yi years. _
_
1 Yi to 2 years_____
2 to 2% years__
2 J ^ to 3 y e a r s _ _
3 to 3)4 years_____
3 to 4 years, _
4 to 4 Yi years_______
_______
___
______
______
.
_
_
__________
-- ___________
MATURITY VALUE
(4Yi years from issue date)_
_
$21.
21.
22.
22.
23.
23.
24.
07
53
03
56
14
74
36
25.00
$42.
43.
44.
45.
46.
47.
48.
14
06
06
12
28
48
72
50.00
$63.
64.
66.
67.
69.
71.
73.
21
59
09
68
42
22
08
75.00
$84.
86.
88.
90.
92.
94.
97.
28
12
12
24
56
96
44
100.00
4.
4.
4.
4.
4.
4.
4.
(3) On current
redemption value
from beginning
of each half-year
period to ma
turity 2 a n d 3
01
13
26
37
50
60
67
4.74
1 Savings notes are not redeemable before 1 year from issue date.
2 Except the first half-year.
3 4.74 percent for entire period from issuance to m aturity.
U. S. G O V E R N M E N T P R IN T IN G O F F I C E : 1967 O - 2 4 7 -8 0 0
4.
5.
5.
5.
5.
5.
5.
95
04
12
20
22
24
25
REGULATIONS GOVERNING AGENCIES FOR THE ISSUE OF
UNITED STATES SAVINGS BONDS OF SERIES E AND
UNITED STATES SAVINGS NOTES
1967
Department Circular
Public Debt Series No. 4-67
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,
Washington, February 24, 1967.
Fiscal Service
Bureau of the Public Debt
TABLE OF CONTENTS
Sec.
317*0 PURPOSE.
317.1 DEFINITIONS OF WORDS AND TERMS AS
USED IN THIS CIRCULAR.
317.2 PROCEDURE FOR QUALIFYING AS AN IS
SUING AGENT.
(a) GENERAL.
(b) BASIS ON WHICH STOCK MAY BE OB
TAINED.
(1) TRUST AGREEMENT.
(2) PLEDGE AGREEMENT.
(i) PLEDGE OF COLLATERAL.
(ii) SECURITY.
(3) PREPAYMENT OF STOCK.
Sec.
317.3
317.4
317.5
317.6
317.7
317.8
(c) ISSUING AGENTS OF BONDS QUALIFIED
UNDER TREASURY DEPARTMENT CIRCU
LAR NO. 657, AS AMENDED.
CERTIFICATE OF QUALIFICATION.
MODIFICATION OR TERMINATION OF QUAL
IFICATION.
(a) BY THE UNITED STATES.
(b) BY ISSUING AGENTS.
ISSUANCE OF BONDS AND NOTES.
ACCOUNTING.
FISCAL AGENTS.
RESERVATIONS.
D e p artm en t C irc u la r No. 657, dated A p ril 15, 1941, as am ended (31 C F R P a r t 317), is hereby
rescinded an d replaced by D e p artm en t C ircu lar, P u b lic D eb t S eries No. 4-67, as follow s:
A U T H O R I T Y : Secs. 317.0 through. 317.8 issued under Sections 18, 20 an d 22 o f th e Second
L ib erty B ond A ct, as am ended (40 S ta t. 1309, 48 S ta t. 383 an d 49 S ta t. 21, a ll as am ended; 31 U .S.C .
753, 754b and 757c).
Sec. 317.0. P urpo se.—These regulations p re
scribe th e procedures w hereby (a) banks, tru s t
com panies an d savings in stitu tio n s ch artered by or
in co rp o rated u n d er th e law s o f th e U n ited S tates
or those of any S ta te o r T e rrito ry of th e U nited
S tates o r th e C om m onw ealth of P u erto Rico, (b)
agencies of the U n ited S tates and of S ta te and
local governm ents, (c) em ployers o p eratin g p a y
roll savings p lans fo r the purchase of U n ited
S tates S avings Bonds, an d (d ) other entities, may
qu alify , and th e re a fte r act, as agents fo r the sale
and issue of U n ited S tates S avings B onds o f Series
E and U n ited S tates S avings Notes, issued p u r
su an t to T reasu ry D ep artm en t C irculars No, 653,
cu rre n t revision, and P u b lic D ebt Series No. 3-67
(31 C F R P a rts 316 and 342), respectively.
Sec. 317.1. D efinitions o f w ords and term s as
used in th is circular.— (a) “B onds” re fe r to
U n ited S tates S avings B onds o f Series E .
(b)
“F ed eral Reserve B an k ” refers to the F e d
eral R eserve B an k o f the F ed eral R eserve d istrict
in w hich th e issuing agent, o r th e ap p lica n t o rg a
nization, is located, and includes B ranches to the
ex ten t utilized by th e p a re n t B ank. I n th e con
tex t of these regulations, th e reference to th e F e d
1
eral R eserve B an k is in its capacity as fiscal agent
of th e U n ited States.
(c) “Issu in g ag e n t” refers to an organization
w hich has been issued a certificate of qualification
to sell and issue bonds an d notes, o r bonds only.
(d ) “ N otes” refers to U n ited S tates S avings
Notes.
(e) “O rg a n izatio n ” re fers to any en tity d e
scribed in Sec. 317.0 as eligible to qualify as an
issuing agent of the bonds and notes, or bonds only.
Sec. 317.2. Procedure fo r q u a lify in g as an
issuing a gent.— (a) Genera}.—A n organization d e
sirin g to qualify as an issuing agent shall obtain
from and file w ith the F ed eral R eserve B ank an
a p p ro p ria te application-agreem ent form . I f th e
organization desires to q u alify as an issuing agent
fo r bonds only, it shall, before subm ission, am end
th e form fu rn ish e d so th a t it refers only to bonds.
T h ro u g h use o f th e ap p ro p ria te form , the person
authorized to act on b eh alf of th e organization
w ill ce rtify th a t it is authorized by its governing
body, o r o th er body authorized to act in th e p rem
ises, to ap p ly fo r an d act as an issuing ag en t un d er
th e term s o f the agreem ent, these regulations and
the circulars offering th e bonds an d notes fo r sale,
(c)
Issu in g agents o f bonds qualified umder
T r e a s u r y D epa rtm ent C ircular N o. 657, as
am ended.—Issu in g agents of bonds qualified p rio r
to the rescission of T re asu ry D ep artm en t C ircu lar
No. 657, as am ended, who do not desire to q u alify
as issuing agents fo r the notes, m ay continue to act
w ithout requalification and by so d o i n g shall be
subject to th e term s and conditions of th is c irc u lar
an d the agreem ents u n d er w hich th ey qualified
in the sam e m anner and to the sam e ex ten t as
th o u g h they h ad requalified hereunder.
Sec. 317.3. C ertificate o f qualification.— U n til
such tim e as a certificate of qualification is issued
by th e F ed eral R eserve B ank, an o rganizatio n
shall not m ake any effort to o r p erfo rm any acts
as an issuing agent, or advertise in any m an n er
th a t it is authorized to p erfo rm such acts, o r th a t
it has applied fo r qualification as an issuing agent.
U pon ap p ro v al of th e application-agreem ent, the
F ed eral R eserve B an k w ill issue a certificate o f
qualification to th e organization. T h e o rg an iza
tio n w ill be notified if th e application-agreem ent
is n o t approved, o r a fte r qualification, a t any such
tim e as th e certificate o f qualification is m odified
o r term inated.
Sec. 317.4. M odification or term in a tion o f
qualification.— (a) B y the U nited S ta te s.— T h e
S ecretary of the T re asu ry , o r the F ed eral R eserve
B ank, m ay m odify o r term in ate th e qualification
of an issuing agent a t any tim e, upon notice to
th a t effect, an d m ay require the im m ediate su r
ren d er o f any p a r t o r all o f th e stocks of bonds
an d notes held by the agent fo r sale and not
th ereto fo re issued or sold, and any p a rt o r a ll of
the proceeds due on account of the stocks issued
o r sold. T h e S ecretary of the T re asu ry , or the
F ed eral R eserve B ank, m ay also regulate the
am ount o f stocks of bonds and notes w hich may
be obtained, in clu d in g tem p o rary increases over
the am ount o f stocks obtainable by th e issuing
agent regardless o f the basis of qualification, and
u n d er Section 317.2, p a ra g ra p h (b ), su b p ara
g ra p h s (2) or (3 ), w ith o u t req u irin g a pledge of
ad d itio n al collateral or ad d itio n al prepaym en t for
stocks.
(b)
B y issuing a gen t.—A n issuing agent w hich
has fully com plied w ith the term s o f its agreem ent
and th e regulations and instructions issued p u r
suant th ereto m ay a t any tim e request the F ed eral
R eserve B an k to m odify or term in ate its qualifi
cation.
Sec. 317.5 Issuance o f bonds and notes.— Issu
ing agents m ust com ply w ith all regulations and
instructions issued by th e T reasu ry D epartm en t or
the F ed eral R eserve B ank concerning th e sale, in
scription, d ating, validation and issue of the bonds
and notes, and disposition o f the reg istratio n
stubs. No issuing agent shall have a u th o rity to
sell bonds and notes o th er th a n as provided in th e
offering circulars and th e governing regulations.*
or, if ap p ro p ria te , bonds only, an d th a t applicable
F ed eral o r S ta te law p erm its o r does n o t p ro h ib it
the o rg an izatio n from so acting. T h e S ecretary
o f th e T reasu ry , e ith e r directly or th ro u g h th e F e d
eral R eserve B ank, m ay deny qualification to, or
specify th e basis of qualification of, any o rg an iza
tion.
(b ) Bases on w h ich stock m a y be obtained.
(1) T r u st agreem ent.—A n org an izatio n m ay
o b tain stocks on the basis of an ap p lica tio n -tru st
agreem ent. U n d e r th e term s o f such agreem ent,
th e stocks of bonds an d notes obtained, to g eth er
w ith th e proceeds of sale th erefro m , are a t all tim es
the p ro p e rty of the U n ited S tates, fo r w hich the
o rg an izatio n sh all be fu lly accountable.
(2) P led ge agreem ent.
(i) P ledge o f collateral.—A n org an izatio n m ay
o b tain stock on th e basis o f a pledge o f collateral.
U n d e r th e term s of th e application-pledge agree
m ent, co llateral is pledged a t th e cost p rice of th e
m axim um am ount o f stocks o f bonds a n d notes,
an d th e proceeds of sales th erefro m , fo r w hich th e
o rg an izatio n m ay be accountable a t any one tim e.
(ii) S e c u r ity .— S ecurity w hich m ay be required
u n d er th e ap p lication-pledge agreem ent shall con
sist o f eith er o r b oth o f th e fo llo w in g :
(A ) T h e am ount of insurance directly
available to th e U n ited S ta tes covering th e
proceeds o f th e issuing ag en t’s sales o f bonds
an d notes by reason o f th e ag en t’s coverage
b y an acceptable F ed eral o r S ta te insurance
co rp o ration o r f u n d ; fo r exam ple, in th e case
o f a m em ber bank o f th e F ed eral D eposit I n
surance C orporation, th e am ount o f security
w ould be $15,000 and w ould cover a p p ro x i
m ately $20,000 (face am ount) o f stocks of
bonds an d notes.
(B ) U n ited S tates T re a su ry bonds o r o th er
d irect obligations o f th e U n ited S tates, o r ob
ligatio n s unconditionally guaran teed as to
both p rin cip a l an d in terest by th e U n ited
S tates, in negotiable form , w hich w ill be ac
cepted a t face v a lu e ; an d U n ited S tates S av
ings B onds of any series registered in th e
nam e o f th e issuing agent? w hich w ill be ac
cepted a t issue price. S avings bonds m ust be
accom panied by an irrevocable pow er of a t
torney, executed on b eh a lf o f th e issuing
agent, au th o riz in g th e S ecretary o f th e T re as
u ry to request paym ent o f th e bonds. A ll ob
lig atio n s deposited p u rsu a n t hereto m ust be
delivered to th e F ed eral R eserve B an k before
stocks o f bonds an d notes m ay be obtained.
(3) P rep a ym en t o f sto ck.—A n organization
w hose p rim a ry function as an issuing agent will
relate to th e issue o f bonds an d notes bought un d er
its p ay ro ll savings plan, an d w hich is not qualified
u n d er su b p a ra g ra p h (1) or (2) of th is p a ra g ra p h ,
is required to execute an application-prepaym ent
agreem ent, u n d er the term s o f w hich all stocks
o f bonds an d notes obtained fo r its issue function
are p re p a id a t cost price.
•Treasury Departm ent Circulars No. 530, current revision (31
CFR P art 3 1 5 ), No. 653, current revision (31 CFR P art 316),
and Public Debt Series No. 3 -6 7 (31 CFR P art 342 ).
2
Sec. 317.6. A cco u n tin g .— Issu in g agents m ust
com ply w ith all regulations an d instructions issued
by th e T re asu ry D ep artm en t, governing the ac
counting fo r stocks of bonds and notes received as
issuing ag en t and th e proceeds o f sales thereof.
E ac h issuing agent, o th er th a n an agent qualified
on th e basis o f p rep ay m en t o f stock, shall open
and m ain tain , o r continue to m ain tain , fo r the
F ed eral R eserve B ank, a separate deposit account
fo r th e proceeds o f all sales o f bonds and notes to
be know n, as a p p ro p riate, as th e “ S avings B ond
an d N ote A ccount,” o r th e “ Series E bond ac
count.” A n issuing agent w hich is also a deposi
ta ry p u rsu a n t to T re asu ry D ep artm en t C ircular
No. 92, c u rren t revision (31 C F R P a r t 203), m ay
m ake p aym ent by cred it fo r the proceeds o f its
sales o f bonds an d notes up to any am ount for
w hich it shall be qualified u n d er th a t circ u lar in
excess o f existing deposits when so authorized by
th e F ed eral R eserve B ank.
Sec. 317.7. F iscal agents.—T h e F ed eral R e
serve B anks are authorized to p erfo rm such duties
and p re p are and issue such form s an d instructions
as m ay be necessary to fulfill the purposes and
requirem ents o f these regulations.
Sec. 317.8. R eservations.—T h e S ecretary o f the
T re asu ry m ay a t an y tim e o r from tim e to tim e,
revise, supplem ent, am end, or w ith d raw , in whole
o r in p a rt, the provisions o f these regulations, o r
of any revisions, supplem ents, o r am endm ents
thereto.
JOHN K. CARLOCK,
Fiscal Assistant Secretary.
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U. S. G OV ERN M ENT PRINTING O F F I C E : 1967 O - 248-080
@FedFRASER