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federal Reser ve Ba n k 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 D A L L A S ,T E X A S 75222 Circular No. 73-285 November 5? 1973 To All Banking Institutions and Others Concerned in the Eleventh Federal Reserve District: Quoted below is the text of a statement issued by the Treasury Department today: TREASURY BILL AUCTIONS The Treasury plans to raise $1.2 billion of new cash by selling a short strip of bills totaling $1.1 billion and by raising $100 million through an addition to the amount of bills auctioned on Monday, November 12, 1973* The strip of bills will be auctioned on Friday, November 9> 1973? for payment on November lU, 1973. It will consist of $100 million additions to bills maturing each week from November 23, 1973} through January 31? 197**. This auction, combined with the addition of $100 million to the regular auction on Monday, November 12, will bring all weekly bill maturities to $U.3 billion. None of the bills may be paid for by credit to Treasury tax and loan accounts. This limited short-term financing is a by-product of the recent welcome improvement in the international payments posi tion of the United States. This improved payments position has been reflected in reduced holdings of Treasury debt by some foreign monetary authorities. A portion of this reduction, which is in itself desirable, may give rise to some redemptions of special U. S. Treasury securities held by those monetary authorities. In the absence of an ability to borrow directly from the Federal Reserve Banks (the authority for which expired on October 31 and has not yet been extended by the Congress), a limited addition to Treasury cash balances is now required to prudently prepare for this eventuality. enclosed. Copies of the official circular/tender for the strip offering are Additional copies are available upon request. Yours very truly, P. E. Coldwell President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) F e d e r a l R e s e r v e Ba n k o f D a lla s FISCAL AGENT OF THE UNITED STATES DALLAS, T EX A S 7 5 2 2 2 Circular No. 73-284 November 5, 1973 TREASURY OFFERS $1.1 BILLION STRIP OF WEEKLY BILLS To A ll Banking Institutions a n d Others Concerned in the Eleventh Federal Reserve District: Your attention is invited to the follo w ing statem ent giving details of a strip of outstanding Treasury bills: T he T reasury D epartm ent, by this public notice, invites tenders for additional am ounts of eleven series of T reasury bills to the aggregate am ount of $1,100,000,000, or thereabouts, for cash. T h e additional bills will be issued N ovem ber 14, 1973, will be in the am ounts and will be in addition to th e bills originally issued and m aturing as follows: Amount of Additional Issue Original Issue Dates $ 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 $1,100,000,000 M ay 24, 1973 M ay 31, 1973 Ju n e 7, 1973 Ju n e 14, 1973 Ju n e 21, 1973 Ju n e 28, 1973 Ju ly 5, 1973 Ju ly 12, 1973 Ju ly 19, 1973 Ju ly 26, 1973 Aug. 2, 1973 Maturity Dates Nov. 23, 1973 Nov. 29, 1973 Dec. 6, 1973 Dec. 13, 1973 Dec. 20, 1973 Dec. 27, 1973 Jan. 3, 1974 Jan. 10, 1974 Jan. 17, 1974 Jan. 24, 1974 Jan. 31, 1974 ' CUSIP Nos. 912793 912793 912793 912793 912793 912793 912793 912793 912793 912793 912793 Days from November 1 4 ,1 9 7 3 to Maturity Amount Currently Outstanding (in millions) 9 15 22 29 36 43 50 57 64 71 78 $4,202 4,205 4,210 4,192 4,203 4,204 4,202 4,204 4,203 4,201 4,212 SE7 SF4 SG2 SH0 S J6 SK3 SS6 ST4 SU1 SV9 SW7 A verage. .. _ . . . 43.1 T h e additional an d original bills will be freely interchangeable. E ach tender sub m itted m ust be in th e m inim um am ount of $ 110,000. T enders over $ 110,000 m ust be in m ultiples of $55,000. O ne-eleventh of th e am ount tendered will be applied to each of the above series of bills. T he bills offered hereunder will be issued on a discount basis under com petitive and noncom petitive bidding as hereinafter provided, and a t m a tu rity th e ir face am ount will be payable w ithout interest. T hey will be issued in bearer form only, and in denom inations of $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (m atu rity v alu e). T enders will be received a t F ederal R eserve B anks and Branches up to th e closing hour, one-thirty p.m., E astern Standard Tim e, Friday, N ovem ber 9, 1973, T enders will n o t be received a t th e T reasury D epartm ent, W ashington. In th e case of com petitive tenders th e price offered m ust be expressed on th e basis of 100, w ith not m ore th an th ree decimals, e.g., 99.925. F ractions m ay not be used. A single price m ust be subm itted for each tender. I t is urged th a t tenders be m ade on th e printed forms and forwarded in th e special envelopes which will be supplied by Federal R eserve B anks or Branches-on application therefor. B anking institutions generally m ay subm it tenders for account of customers provided th e nam es of th e customers are set forth in such tenders. O thers th an banking institutions will not be p erm itted to subm it tenders except for th e ir own acco u n t T enders will be received w ithout deposit from incorporated banks and tru st com panies and from responsible and recognized dealers in investm ent securities. T enders from others m ust be accom panied by p aym ent of 2 p ercent of th e face am ount of T reasury bills applied for, unless th e tenders are accom panied by an express guaranty of paym ent by a n incorporated bank or tru st company. All bidders are required to agree not to purchase or to sell, or to m ake any agreem ents w ith respect to th e purchase or sale or other disposition of any bills of these additional issues at a specific rate or price, u ntil a fter one-thirty p.m., E astern S tandard T im e, Friday, N ovem ber 9, 1973. Im m ediately after the closing hour, tenders will be opened a t th e Federal R eserve B anks and Branches, following which public announcem ent will be m ade by th e T reasury D ep artm en t of th e am ount and price range of accepted bids. Only those sub m itting com petitive tenders will be advised of th e acceptance or rejection thereof. T h e Secretary of th e T reasury expressly reserves the right to accept or reject any or all tenders, in whole or in p art, and his action in any such respect shall be final. Subject to these reservations, noncom petitive tenders for $220,000 or less (in am ounts as set forth in the second p aragaph) w ithout stated price from any one bidder will be accepted in full a t th e average price (in three decim als) of accepted com petitive bids. Settle m ent for accepted tenders in accordance w ith the bids m ust be m ade or com pleted a t th e F ed eral R eserve B ank in cash or other im m ediately available funds on N ovem ber 14, 1973. U nder Sections 454 (b ) and 1221 (5 ) of th e In tern al R evenue Code of 1954 th e am ount of discount a t which bills issued hereunder are sold is considered to accrue when th e bills are sold, redeem ed or otherwise disposed of, an d th e bills are excluded from consideration as capital assets. Accordingly, th e owner of T reasury bills (o th er th a n life insurance com panies) issued here under m ust include in his income tax return, as ordinary gain or loss, th e difference betw een th e price p aid for th e bills, w hether on original issue or on subsequent purchase, and the am ount actually received either upon sale or redem ption a t m a tu rity during the taxable year for which th e retu rn is m ade. Purchasers of a strip of the bills offered hereunder should, for tax purposes, take such bills onto th eir books on th e basis of th e ir purchase price prorated to each of th e eleven outstanding issues using as a basis for proration the closing m ark et prices for each of th e issues on N ovem ber 14, 1973. (F ed eral R eserve B anks will have available a list of these m arket prices, based on th e m ean betw een th e bid and asked quotations furnished by th e F ederal R eserve B ank of New Y ork.) T reasury D ep artm en t C ircular No. 418 (cu rren t revision) and this notice, prescribe the term s of the T reasury bills and govern th e conditions of th eir issue. Copies of th e circular m ay be obtained from any F ederal R eserve B ank or Branch. In accordance w ith the ab o v e announcem ent, tenders w ill be received a t this b a n k a n d its branches a t El Paso, Houston a n d San A ntonio, up to tw elv e-th irty p.m ., Centra! Standard Time, Friday, N ovem ber 9, 1973. Tenders m ay not be entered b y telephone. Yours very truly, P. E. Coldwell President TENDER FOR ADDITION TO TREASURY BILLS Maturing: 1973 — November 23, November 29, December 6, December 13, December 20, and December 27 1974 — January 3, January 10, January 17, January 24, and January 31 To: Federal Reserve Bank, Station K, Dallas, Texas 75222 or— The-------------------------------------------------------- Branch E l Paso 79999 Houston 77001 ___________________________ (D ate) San Antonio 78295 Pursuant to the provisions of Treasury Department Circular No. 418 (current revision) and to the provisions of the public announcement, as shown on reverse side, as 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 $220,000 (Minimum $110,000 — over that m ultiples o f $55,000, for each subscriber) N oncompetitive tenders for $220,000 or less (in multiples o f $55,000 over $110,000 minimum) without stated price from any one bidder w ill be accepted in fu ll a t th e average price (in three decimals) of accepted com petitive bids. COMPETITIVE TENDERS (m inimum $110,000 — over th at n ultiplea of $55.000, f or each subscriber) fc---k-----$---- I?----$----- Prices should be e x p r e s s e d on th e basis of 100, w ith not more than three decimal places, e.g., 9 9 .9 2 5 . Fractions m ust not be used. -@ - A single price must be submitted for each tender. T E N D E R S MAY NOT BE E N T E R E D BY T ELEPH O NE. T E N D E R S BY W IRE, IF RECEIVED BEFO RE THE CLOSING HOUR, A R E ACCEPTABLE. METHOD OF P A Y M E N T □ B y charge to our reserve account on paym ent date. □ By draft enclosed (effectual delivery of enclosed draft shall be on la test day which w ill permit presentm ent in order to obtain irrevocably collected funds on paym ent d ate). □ P aym ent to be made b y............................................................ Delivery Instructions: Treasury Bills allotted w ill be delivered in convenient denominations. Describe by issue, if more than one o f the follow ing methods o f delivery is desired. □ Hold in Custody — General Account □ Hold in Custody — Investment Account □ Hold in Custody — Trust Account □ Pledge to secure Treasury Tax and Loan Account W e certify that we, as well as our customers, i f any, listed hereon have agreed not to purchase or to sell, or to make any agreem ents with respect to the purchase or sale or other dis position of any bills o f these additional issues at a specific rate or price, until after one-thirty p.m., E astern Standard Time, Friday, November 9. 1973. (S u s b c rib e r’s f u ll n a m e o r c o rp o ra te t it le ) (A d d re s s ) B y. (A u th o riz e d o ffic ia l s ig n a tu re an d t it le ) □ Other___ _______________________________ ( F o r th e acco u n t o f, i f te n d e r is fo r a n o th e r su b scrib e r) (A d d re s s ) IM P O R T A N T 1. N o tender for less than $110,000 w ill be considered and each tender over $110,000 m u st be for an amount in m ultiples of $55,000 (m aturity value). 2. Tenders should be forwarded in an envelope clearly addressed to this bank or appropriate branch as Fiscal A gen t of the United States, w ith notation on the envelope reading “T E N D E R FOR T R E A S U R Y O F F E R IN G ”. Since envelopes received w ith this legend w ill not be opened until after the closing tim e specified in the public announcement, communi cations relating to other m atters should not be enclosed. Envelopes for submitting tenders m ay be requested from this bank or appropriate branch. 3 . A ny qualified or conditional tender w ill be rejected. 4. If a corporation m akes the tender the form should be signed by an officer of the corporation authorized to make the tender and the sign in g o f the form by an officer o f the corporation w ill 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 4t.......... ........... .................................... , 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 m ent securities w ill be disregarded, unless accompanied by a deposit of 2 per cent of the total amount (m aturity value) of the Treasury bills applied for, or unless the tenders are accompanied by an express guaranty of full payment by an incorporated bank or tru st company. 6. I f the language of th is form is changed in any respect, which, in the opinion of the Secretary of the Treasury, is material, the tender m ay be disregarded. (Se reverse for announcement)
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