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FEDERAL RESERVE BANK O F D ALLAS F IS C A L AO E N T O P TH K U N ITK D STATES Dallas, Texas, December 22, 1965 TREASURY CASH FINANCING T o A ll B a n k in g In stitu tio n s a n d O th e rs C o n c e rn e d in th e E le ve n th F e d e ra l R e se rv e District: There is quoted below a press statement issued by the Treasury Department today in regard to current financing: T re a su ry A n n o u n c e s F in a n c in g P la n s The Treasury today announced the auction of an additional $1 billion of tax anticipation bills due June 22, 1966, which may be used at face value in payment of taxes due June 15, 1966. The auction will be on December 29, 1965, for payment January 5, 1966, and commercial banks will be permitted to pay for the bills through crediting of tax and loan accounts. This additional issue will increase the June 1966 tax anticipation bills to $4.5 billion. At the same time the Treasury said it plans to raise additional cash by a $100 million increase in the $1.2 billion regular weekly three-month bill issue, starting with the auction on January 3 and probably running through a full 13-week cycle. The Treasury also indicated that it plans to make another cash offering in January of about $1.5 billion in the short-term area. These borrowings will cover the bulk of the Treasury’s cash need for the second half of the current fiscal year, estimated at about $5 billion. This borrowing program along with the pay-off of March and June tax anticipation bills will result in a net reduction in the marketable debt between now and the end of the fiscal year. Tender forms for the 168-day tax anticipation Treasury Bills, dated October 11, 1965, and due June 22, 1966, accompany this announcement. Tenders will be received at this bank and its branches at El Paso, Houston and San Antonio, up to twelve-thirty p.m., Central Standard Time, Wednesday^ December 29, 1965. 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) 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 Dallas, Texas, December 22, 1965 TREASURY BILLS — TAX ANTICIPATION SERIES (Additional Issue) 168 DAYS TO MATURITY Dated October 11, 1965 $ 1,000,000,000 Maturing June 22, 1966 A c c e p ta b le at face v a lu e in p a y m e n t o f inco m e ta x e s d u e J u n e 15 , 1 9 6 6 To A ll B a n k in g Institutions a n d O th e rs C o n ce rn e d in the Eleventh Fed e ra l R e se rve District: Y o u r attention is invite d to the fo llo w in g statem ent g iv in g d e ta ils o f a n e w issu e o f T re a su ry bills: The Treasury Department, by this public notice, invites tenders for $1,000,000,000, or thereabouts, of 168-day Treasury bills (to maturity date), to be issued January 5, 1966, on a discount basis under competitive and noncompetitive bidding as hereinafter provided. The bills of this series will be designated Tax Anticipation Series and represent an additional amount of bills dated October 11, 1965, to mature June 22, 1966, originally issued in the amount of $1,002,548,000 (an additional $2,513,229,000 was issued November 24, 1965). The additional and original bills will be freely interchangeable. They will be accepted at face value in payment of income taxes due on June 15, 1966, and to the extent they are not presented for this pur pose the face amount of these bills will be payable without interest at maturity. Taxpayers desiring to apply these bills in pay ment of June 15, 1966, income taxes have the privilege of surrendering them to any Federal Reserve Bank or Branch or to the Office of the Treasurer of the United States, Washington, not more than fifteen days before June 15, 1966, and receiving receipts therefor showing the face amount of the bills so surrendered. These receipts may be submitted in lieu of the bills on or before June 15, 1966, to the District Director of Internal Revenue for the District in which such taxes are payable. The bills will be issued in bearer form only, and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (ma turity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Standard Time, Wednesday, December 29, 1965. Tenders will not be received at the Treasury Department, Washington. Each tender must be for an even multiple o f $1,000, and in the case of competitive tenders the price offered must be ex pressed on the basis of 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions generally may submit tenders for account of customers provided the names of the customers are set forth in such tenders. Others than banking institutions will not be permitted to submit tenders except for their own account. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of Treas ury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. All bidders are required to agree not to purchase or to sell, or to make any agreements with respect to the purchase or sale or other disposition of any bills of this additional issue at a specific rate or price, until after one-thirty p.m., Eastern Standard Time, Wednesday, December 29, 1965. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price range of accepted bids. Those sub mitting tenders will be advised of the acceptance or rejection thereof. The 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 reser vations, noncompetitive tenders for $200,000 or less without stated price from any one bidder will be accepted in full at the average price (in three decimals) o f accepted competitive bids. Payment of accepted tenders at the prices offered must be made or completed at the Federal Reserve Bank in cash or other immediately available funds on January 5, 1966, provided, how ever, any qualified depositary will be permitted to make payment by credit in its Treasury tax and loan account for Treasury bills allotted to it for itself and its customers up to any amount for which it shall be qualified in excess of existing deposits when so notified by the Federal Reserve Bank of its District. The income derived from Treasury bills, whether interest or gain from the sale or other disposition o f the bills, does not have any exemption, as such, and loss from the sale or other disposition of Treasury bills does not have any special treatment, as such, under the Internal Revenue Code of 1954. The bills 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. For purposes of taxation the amount of discount at which Treasury bills are originally sold by the United States is considered to be interest. Under Sections 454 (b ) and 1221 (5 ) of the Internal Revenue Code of 1954 the amount of discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner o f Treasury bills (other than life insurance companies) issued hereunder need include in his income tax return only the difference between the price paid for such bills, whether on original issue or on subsequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made, as ordinary gain or loss. Treasury Department Circular No. 418 (current revision) and this notice, prescribe the terms o f the Treasury bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. P a y m e n t for this issu e o f T re a su ry b ills m ust b e m a d e or com pleted at this b a n k or a p p ro p ria te b ra n ch in ca sh or ether im m e d ia te ly a v a ila b le fu n d s on J a n u a r y 5, 1966, p ro v id e d , h o w e ve r, a n y q u a lified d e p o sita ry w ill be p e r m itted to m a k e p a y m e n t b y credit in its T re a su ry T a x a n d Loan A c c o u n t fo r T re a su ry b ills allotted to it fo r itself a n d its cu stom ers (up to the a m o u n t for w h ic h it s h a ll be q u a lifie d in e xce ss o f e x istin g deposits). P le a se note the req uired a g re e m e n t not to p u rc h a se o r sell this a d d itio n a l iss u e a t a specific rate or price p rio r to o n e -th irty p.m., E astern S ta n d a rd Time, W e d n e s d a y , D e c e m b e r 29, 1965. In a c c o rd a n c e w ith the a b o v e a n n o u n ce m e n t, tenders w ill b e received at this b a n k a n d its b ra n c h e s a t El P a so , H o u sto n a n d S a n A n to n io , u p to tw e lve -th irty p.m., C entral S ta n d a rd Time, W e d n e s d a y , D e c e m b e r 29, 1965. Tenders m a y not b e entered b y te lep h one. Y o u rs ve ry truly, W a t ro u s H. Iro n s President (See reverse for tender form ) This issue o f Treasury bills will be accepted at face value in payment o f income taxes due on June 15,1966 TENDER FOR ADDITIONAL ISSUE OF TREASURY BILLS T A X ANTICIPATION SERIES 168 DAYS TO MATURITY Dated October 11, 1965 Maturing June 22, 1966 T o : Federal Reserve Bank, Station K, Dallas, Texas 75222 or — The______________________________________ Branch El Paso 79999 Houston 77001 (Date) San Antonio 78206 Pursuant to the provisions o f Treasury Department Circular No. 418 (current revision) and to the provisions o f 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 fo r the amount allotted, on or before the issue date, by the method and at the rate indicated. NONCOMPETITIVE TENDER $_____________________________ NOT TO EXCEED $200,000 Noncompetitive tenders for $200,000 or less from any one bidder, without stated price, will be accepted in full at the average price (in three decimals) of accepted competitive bids. COMPETITIVE TENDERS < « $ (a) ( * ________ ------- @ Prices should be ex pressed on the basis of 100, with not more than three decimal places, e. g., 99.925. Fractions must not be nsed. . . . -$ ______ (^ T E N D E R S MAY NOT BE ENTERED BY TELEPHONE. TENDERS BY WIRE, IF RECEIVED BEFORE THE CLOSING HOUR, ARE ACCEPTABLE. METHOD OF PAYMENT Denominations Desired Number of Pieces Maturity Value _..<® $ ('i;) a 5,000 □ By charge to our Treasury Tax and Loan Account 1,000 $ $ _-<a> $ □ Payment to be made by. $ (Name of Bank) 10,000 ¥50,000 $- □ By charge to our reserve account on payment date. □ By draft enclosed (effectual delivery of enclosed draft shall be on latest day which will permit presentment in order to obtain irrevocably collected funds on payment date). $ 100,000 $. $ _ @ 500,000 $■ ,000,000 ........... ............................. W e certify that w e. as well as our custom ers, 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 disposi tion o f any bills o f this additional issue at a specific rate or price, until after one-thirty p.m., Eastern Standard Time, W ednesday, D ecem ber 29, 1965. * Delivery Instructions: (Subscriber’s full name or corporate title) □ Hold in Custody Account — Member banks fo r own account only (Address) By— □ Pledge to Secure Treasury Tax and Loan Account (Authorized official signature and title) (For the account of, if tender is for another subscriber) □ Ship to_______________________________ (Address) IMPORTANT 1. No tender for less than $1,000 will be considered and each tender must be for an amount in multiples of $1,000 (maturity value). 2. Tenders should be forwarded in an envelope clearly addressed to this bank or appropriate branch as Fiscal Agent of the United States, with notation on the envelope reading “ TENDER FOR TREASURY BILLS” . Since envelopes received with this legend will not be opened until after the closing time specified in the public announcement, communications relating to other matters should not be enclosed. Envelopes for submitting tenders may be requested from this bank or appropriate branch. 3. Any qualified or conditional tender will be rejected. 4. If a corporation makes the tender the form should be signed by an officer of the corporation authorized to make the tender and the signing of the form by an officer of the corporation will be construed as a representation by him that he has been so authorized. If the tender is made by a partnership it should be signed by a member of the firm, who should sign in the form “ .................................................... , 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 ment securities will be disregarded, unless accompanied by a deposit of 2 percent of the total amount (maturity 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 trust company. 6. If the language of this form is changed in any respect, which, in the opinion of the Secretary of the Treasury, is material, the tender may be disregarded. (See reverse for announcement)