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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 I T E D S T A T E S Dallas, Texas, November 20, 1959 SPECIAL EXCHANGE OFFERING To all Banking Institutions and Others Concerned in the Eleventh Federal Reserve District: Enclosed is Treasury Department Circular No. 1034 covering an offering of 4 % percent Treasury Notes of Series A-1964, in exchange for a like face amount of United States Savings Bonds of Series F and G maturing in the calendar year 1960. D ESC RIP TIO N O F NOTES These notes will be an addition to the 4 % percent Treasury Notes of Series A-1964, dated July 20, 1959, maturing M ay 15, 1964. Interest will accrue to subscribers from December 15, 1959. The notes are available in coupon and registered form. They will be issued at a price of 9 9 % percent. SECURITIES EXC H A N G EA BLE Series F and G bonds maturing in 1960 are exchangeable for these notes. Exchanges will be made on the basis of equal face amounts and will be allotted in full. Holders of bonds aggregating less than even multiples of $1,000 maturity value (lowest denomination of notes available) may pay the difference in cash to make up the next higher $1,000 multiple. P A Y M E N T FOR N O TES Payment must be made on or before December 15, 1959, in like face amount of F and G bonds maturing from January 1 to December 1, 1960, inclusive, and by any authorized cash difference needed. The bonds and any cash required should accompany subscriptions. Subscribers will be charged interest from November 15, 1959, to December 15, 1959 ($4.00 per $1,000) on the notes and will be credited with the discount on the issue price ($2.50 per $1,000). Adjustments of interest on the F and G bonds are set out in the circular and on the reverse of the subscription form. Qualified depositaries are permitted to make payment by credit in Treasury Tax and Loan accounts for cash payments authorized or required. REQUESTS FOR P A Y M E N T O F B O N D S SURRENDERED Holders of bonds must sign the request on the back of the bond, with signature certified by bank officer or postmaster. In addition, if notes in bearer form, or registered notes in another name, are desired, requests for payment must be supplemented by specific instructions signed by the owner who signed the request for payment. SU BSC RIPTIO N FO RM S Six forms accompany this circular. Use separate form for each subscriber. If the supply of forms is not sufficient, list additional subscriptions, by name and amount, in a letter or on a schedule, and confirma tions will be prepared in this office. R EG ISTRA TIO N OF NOTES Registration requirements are not the same as those governing registration of savings bonds. See Part V of the official circular and illustrations on the back of the subscription form. D ELIVERY DATE Delivery will be made on December 15, 1959. If notes are desired in registered form, there may be some delay due to special printing arrangements required. In the interim, notes in bearer form will be available. C L O S IN G OF SUBSC RIPTIO N B O O K S Books will be open only on November 23 through November 30. Any subscription addressed to a Federal Reserve Bank or Branch, or to the Treasurer of the United States, and placed in the mail before midnight Monday, November 30, 1959, will be considered timely. Yours very truly, Watrous H. Irons President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) UNITED STATES OF A M E R IC A 4% PERCENT TREASURY NOTES OF SERIES A-1964 Dated July 20, 1959, with interest from December 15, 1959 Due M a y 15, 1964 Interest payable M a y 15 and November 15 ADDITIONAL ISSUE 1959 Department Circular No. 1034 TREASURY DEPARTM ENT Office of the Secretary Washington, November 19, 1959 Fiscal Service Bureau of the Public Debt I. OFFERING OF NOTES 1. The Secretary of the Treasury, pursuant to the authority of the Second Liberty Bond Act, as amended, invites subscriptions, at 9 9 % percent of their face value, for notes of the United States, desig nated 4 % percent Treasury Notes of Series A-1964, in exchange for a like face amount of United States Savings Bonds of Series F and G maturing in the calendar year 1960, which will be accepted at exchange values set forth in Section IV, PA Y M E N T . Holders of Series F and G bonds aggregating less than an even multiple of $1,000 maturity value (the lowest denomination of notes available) may exchange such bonds with payment of the difference in cash to make up the next higher $1,000 multiple. Interest on the notes will be adjusted as of December 15, 1959, and an adjustment in favor of subscribers representing the discount from the face value of the notes, will be made as set forth in Section IV, PA Y M E N T, hereof. The amount of the offering under this circular will be limited to the amount of securities, together with cash adjustments, tendered in exchange and accepted. The books will be open only on November 23 through November 30 for the receipt of subscriptions for this issue. II. DESCRIPTION OF NOTES 1. The notes now offered will be an addition to and will form a part of the 4 % percent Treasury Notes of Series A-1964 issued pursuant to Department Circular No. 1029, dated July 20, 1959, will be freely interchangeable therewith, and are identical in all respects therewith except that ( i ) interest on the notes to be issued under this circular will accrue to subscribers from December 15, 1959, and (ii) the notes will also be available registered as to principal and interest, subject to delivery of definitive registered notes as set forth in Paragraph 1 of Section VI, and provision will be made for the interchange of coupon and registered notes, and for the transfer of registered notes, under rules and regulations prescribed by the Secretary of the Treasury. Subject to the provisions for the accrual of interest from December 15, 1959, on the notes now offered, and to the provisions relating to their availability in registered form, the notes are described in the following quotation from Department Circular No. 1029: “ 1. The notes will be dated July 20, 1959, and will bear interest from that date at the rate of 4 % percent per annum, payable on a semiannual basis on November 15, 1959, and thereafter on M ay 15 and November 15 in each year until the principal amount becomes payable. They will mature M ay 15, 1964, and will not be subject to call for redemption prior to maturity. “2. The income derived from the notes is subject to all taxes imposed under the Internal Revenue Code of 1954. The notes are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exempt from all taxation now or hereafter imposed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority. “3. The notes will be acceptable to secure deposits of public moneys. They will not be acceptable in payment of taxes. “4. Bearer notes with interest coupons attached will be issued in denominations of $1,000, $5,000, $10,000, $100,000, $1,000,000, $100,000,000 and $500,000,000. “5. The notes will be subject to the general regulations of the Treasury Department, now or hereafter prescribed, governing United States notes.” III. SUBSCRIPTION A N D ALLOTMENT 1. Subscriptions will be received at the Federal Reserve Banks and Branches and at the Office of the Treasurer of the United States, Washington. Banking institutions generally, and paying agents eligible to process bonds under Treasury Department Circular No. 888, Revised, may submit exchange subscrip tions for account of customers, but only the Federal Reserve Banks and the Treasury Department are authorized to act as official agencies. 2. T he Secretary of the Treasury reserves the right to reject or reduce any subscription, and to allot less than the amount of notes applied for; and any action he may take in these respects shall be final, Subject to these reservations, all subscriptions will be allotted in full. Allotment notices will be sent out promptly upon allotment. IV. PAYMENT 1. Payment for the face amount of notes allotted hereunder must be made on or before December 15, 1959, or on later allotment, and may be made only in a like face amount of United States Savings Bonds of Series F and Series G maturing from January 1 to December 1, 1960, inclusive, and any cash difference necessary to make up an even $1,000 multiple, which bonds and cash should accompany the subscription, together with the net amount of any interest to be collected from the subscriber. The Series F and G bonds will be accepted in the exchange at amounts set forth hereunder for the respective months of maturity. These exchange values have been fixed to provide the holders of such bonds an investment yield approximately 1% more than otherwise would accrue from December 15, 1959, until their respective maturity dates, less an amount equal to the interest which will accrue on the 4 Z % Treasury notes during A the corresponding period. The effect of these adjustments will also provide for the 4 3 % Treasury notes A an investment yield of approximately 4.81 percent per annum from the respective maturity dates of the Series F and G bonds to M ay 15, 1964, the maturity date of such notes. All subscribers will be charged the interest from November 15, 1959, to December 15, 1959 ($4.00 per $1,000) on the notes allotted. Other adjustments with respect to bonds accepted in exchange will be made as set forth in the following tables which also show the net amounts to be paid to or collected from subscribers for each $100 (face amount) of bonds accepted in exchange. ( a ) Series F bonds. — The exchange values of Series F bonds, the differences between such values and the offering price of the 4 % % notes, the interest which will accrue on such notes and the total amounts to be collected from holders of Series F bonds per $100 (face amount) are as follows: Exchange values of F bonds per $ 1 0 0 (face amt.) January February March April M ay June July August September October November December 1960. 1960. 1960. 1960. 1960. 1960. 1960. 1960. 1960. 1960. 1960. 1960. Interest to be charged on notes per $ 1 0 0 (face amt.) of F bonds ^ o t a l am ounts TO BE COLLECTED F R O M SUBSCRIBERS per $ 1 0 0 (face amt.) of F bonds accepted (COLS. 2 plus 3) COL. 1 F bonds maturing on the first d a y of C harge for differences between $ 9 9 .7 5 (offering price per $ 1 0 0 of notes) and exchange values of bonds COL. 2 COL. 3 COL. 4 . $99.84 ___ ................. . 99.52 ___ ................. . 99.20 ___ ................. . 98.92 ___ ................. . 98.60 ___ ................. . . 98.28 ___ ................. . . 97.96 ___ ................. . . 97.68 ___ ................. . . 97.36 ___ ................. . . 97.04 ___ ................. . . 96.76 ___ ................. . . 96.44 ___ ................. . . . . $-0.09 0.23 0.55 0.83 1.15 1.47 1.79 2.07 2.39 2.71 2.99 3.31 ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ........... $0.40 ............. . . . . . . ........... 0.40 ............. ........... ........... 0.40 ............. ........... ........... 0.40 ............. ........... ........... 0.40 ............. ........... ........... 0.40 ............. ........... ........... 0.40 ............. ........... ........... 0.40 ............. ........... ........... 0.40 ............. ........... ........... 0.40 ............. ........... ........... 0.40 ............. ........... ........... 0.40 ............. ........... $0.31 0.63 0.95 1.23 1.55 1.87 2.19 2.47 2.79 3.11 3.39 3.71 1In addition, for each $100, or multiple or fraction thereof, between the face amount of Series F bonds submitted and the face amount of notes subscribed (to next higher multiple of $1,000) the subscriber must pay $100.15 ($99.75 issue price plus $.40 accrued interest). ( b ) Series G bonds. — The exchange values of Series G bonds, the differences between such values and the offering price of the 4 3 % notes, the accrued interest to be credited on the G bonds, the interest A which will accrue on the notes and the total amounts to be paid to or collected from holders of Series G bonds per $100 (face amount) are as follows:* 2 3 M o fa l am ounts per $ 1 0 0 (face amt.) of G bonds accepted C harge for differ ences between $ 9 9 .7 5 (offering price per $ 100 of notes) and exchange values of bonds Interest to be credited on G bonds per $ 1 0 0 (face amt.) COL. 1 COL. 2 COL. 3 January . . . . . . $99.94 February . .. . . 99.83 March ......... . . 99.72 April ........... . . 99.62 M ay ............. .. 99.51 J u n e ............. . . 99.41 July ............. . . 99.30 August ......... . . 99.19 September . . . . 99.08 October . . . . . . 98.98 November . . . . 98.87 December . . . . 98.77 $-0.19 -0.08 0.03 0.13 0.24 0.34 0.45 0.56 0.67 0.77 0.88 0.98 $1.15 0.94 0.73 0.52 0.31 0.10 G bonds m aturing Exchange values in 1 9 6 0 on the of G bonds per first d a y of $ 10 0 (face amt.) 3 0.94 0.73 0.52 0.31 0.10 Interest to be charged on notes per $ 1 0 0 (face amt.) of G bonds COL. 4 $0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 -TO BE P A ID TO SUBSCRIBERS (Cols. 3 M in u s 2 and 4) COL. S $0.94 0.62 0.30 — — _ — — — — — — TO BE COLLECTED FRO M SUBSCRIBERS (Cols. 2 and 4 m inus 3) COL. 6 $ — — _____ 0.01 0.33 0.64 0.95 0.02 0.34 0.65 0.97 1.28 1In addition, for each $100, or multiple thereof, between the face amount of Series G bonds submitted and the face amount o f notes subscribed (to next higher multiple of $1,000) the subscriber must pay $100.15 ($99.75 issue price plus $.40 accrued interest). “The net amount to be paid to subscribers will be paid following acceptance of the bonds by the agency through which the exchange is made. “ Interest will be paid to January 1, 1960, on bonds maturing July 1, 1960, in regular course on January 1, 1960, by checks mailed by the Treasury Department. As these checks will include unearned interest for the period from December 15, 1959, to January 1, 1960, each subscriber who tenders these bonds will be required to make an interest refund of $0.10 per $100 (face amount). The above amount in Col. 6 of $0.95 includes such refund. 2. Any qualified depositary will be permitted to make payment by credit in its Treasury Tax and Loan Account for any cash payments authorized or required to be made under this circular for notes allotted to it for itself and its customers up to any amount for which it shall be qualified in excess of exist ing deposits, when so notified by the Federal Reserve Bank of its District. 3. Series F and G bonds tendered in exchange must bear appropriate requests for payment in accordance with the provisions of Treasury Department Circular No. 530, Eighth Revision, as amended, or the special endorsements provided for in Treasury Department Circular No. 888, Revised. In any case in which notes in bearer form, or registered notes in another name, are desired, requests for payment must be supplemented by specific instructions signed by the owner who signed the request for payment. An owner’s instructions for bearer or registered notes may be recorded on the surrendered bonds by typing or otherwise recording on the back thereof, or by changing the existing request for payment form to conform to one of the two following forms: (a ) I am the owner of this bond and hereby request exchange for 4 % % Treasury Notes of Series A-1964 in bearer form to be delivered to (insert name and address of person to whom delivery is to be m ade). (b ) I am the owner of this bond and hereby request exchange for 4 % % Treasury Notes of Series A-1964 registered in the name of (insert exact registration desired — see Section V, REGIS T R A T IO N OF N O T E S). V. REGISTRATION OF NOTES 1. Treasury notes may be registered only as authorized in Treasury Department Circular No. 300, Revised, as supplemented. Registration in the name of one person payable on death to another is not authorized. Registered Treasury notes may be transferred to a purchaser only upon proper assignment. Treasury notes registered in the form “A or B ” may be transferred only upon assignment by or on behalf of both, except that if one of them is deceased, an assignment by or on behalf of the survivor will be accepted. Treasury notes are not redeemable before maturity at the option of the owners, but they may be sold in the market at prevailing prices. VI. GENERAL PROVISIONS 1. As fiscal agents of the United States, Federal Reserve Banks are authorized and requested to receive subscriptions, to make allotments on the basis and up to the amounts indicated by the Secretary of the Treasury to the Federal Reserve Banks of the respective Districts, to issue allotment notices, to receive payment for notes allotted, to make delivery of notes on full-paid subscriptions allotted, and they may issue interim receipts pending delivery of the definitive notes. Registered notes are expected to be available for delivery by December 15, 1959. However, should they not be printed by that date subscribers may upon specific request obtain an interim receipt pending delivery of the definitive notes. 2. The Secretary of the Treasury may at any time, or from time to time, prescribe supplemental or amendatory rules and regulations governing the offering, which will be communicated promptly to the Federal Reserve Banks. JULIAN B. BAIRD, Acting Secretary of the Treasury.
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