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F ederal Reserve Ban k

DALLAS. TEXAS

of

Da lla s

75222

Circular No. 6 9 -I38
June 3, 1969

USDA OFFERS $700 MILLION
IN SHORT-TERM SPECIAL SERIES
CERTIFICATES OF INTEREST

To Banking Institutions and Others Concerned
in the Eleventh Federal Reserve District:

There is quoted below a press statement issued on June 2, 19&9, by
the United States Department of Agriculture in regard to an offering of
Special Series Certificates of Interest:
The U. S. Department of Agriculture today announced that
the Commodity Credit Corporation will offer to banking institu­
tions, dealers in investment securities, and other interested
persons the opportunity to participate in financing approximately
$700 million of price support loans on agricultural commodities,
by purchasing a Special Series of Certificates of Interest in a
pool of such loans.
Special Series Certificates of Interest, which are non­
interest bearing, will be offered for sale at discount on an
auction basis — both for competitive and noncompetitive bids
as is done for Treasury bills.
The Certificates, in bearer
form, will be issued June 23, and will mature on August 1, 1969
(39 days).
Bids in writing for Special Series Certificates of Interest
must be received at the head office of any Federal Reserve Bank
(not branch) before 1:30 p.m., (EDT), on Tuesday, June 17, 1 9 6 9 *
The Invitation for Bids covering Special Series Certificates of
Interest will be available through Federal Reserve Banks about
June U. Those submitting successful bids will be advised by
the Federal Reserve Banks. Bids will be accepted in multiples
of $5,000.
Commodity Credit Corporation, a wholly owned agency and
instrumentality of the United States with the Department of
Agriculture, has statutory authority (15 U.S.C. 71^b(i) and
713a-U) to borrow up to $1^.5 billion, has reserved an amount

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

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of its uncommitted borrowing authority sufficient to redeem
outstanding Special Series Certificates of Interest, and has
arranged to borrow from the Secretary of the Treasury of the
United States any portion of such uncommitted amount of its
borrowing authority whenever needed to redeem such Certificates.
Certificates of Interest contain a contractual obligation by
Commodity Credit Corporation to redeem such Certificates and
this obligation is also a contractual obligation of the United
States .

Certificates are eligible as security for advances at
Federal Reserve Banks and as collateral for Treasury Tax and
Loan accounts.
Proceeds from the sale of these Certificates will be paid
into the United States Treasury to be applied as payments on
Commodity Credit Corporation notes held by the Treasury.
On or after maturity on August 1, 19&9?
Certificates
will be redeemed at any Federal Reserve Bank or branch.
The official invitation for bids and tender form for the new securities
is enclosed.
As indicated in the announcement, tenders are to be submitted
only to the head office of this bank and will be received up to twelvethirty P.M., Central Daylight Saving Time, Tuesday, June 17, 1 9 & 9 •

Federal Reserve Bank of Dallas
Fiscal Agent for Commodity Credit Corporation

Enclosure

FEDERAL. RESERVE BANK O F DALLAS
FISCAL. A G EN T O F T H E COMM ODITY C R E D IT C O R P O R A T IO N

DALLAS, TEXAS 75222
June 3, 1969

INVITATION FOR BIDS O N
COMMODITY CREDIT CORPORATION CERTIFICATES OF INTEREST
SPECIAL SERIES
To All 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 leven th F e d e ra l R eserv e District:
Y our a t te n t io n is in v ite d to t h e f o llo w in g s t a t e m e n t g iv in g d e t a il s o f a n is s u e o f C ertificates o f In terest:
Commodity Credit Corporation (hereinafter referred to as “CCC” ), an agency and instrumentality of the U nited States
within the Department of Agriculture, hereby invites bids for the purchase of a special series of non-interest bearing nego­
tiable Certificates of Interest in an approximate amount of $700,000,000. These Certificates evidence participation in the
financing, and an interest in a pool, of outstanding CCC price support loans on agricultural commodities. The Certificates will
be sold on a discount basis and w ill be issued in denominations of $5,000, $10,000, $100,000, and $1,000,000. Denomina­
tional exchanges may be made only at the Federal Reserve Bank of New York. The Certificates have a maturity date of
August 1, 1969, and will be redeemed by CCC on or after the maturity date on presentation at any Federal Reserve Bank
or branch thereof. The Certificates are eligible as security for advances at Federal Reserve Banks and as collateral for Treasury
Tax and Loan accounts.
Bids will be received at the head office of any Federal Reserve Bank up to 1:30 P.M., E.D.T., Tuesday, June 17, 1969.
Bids must be in writing in multiples of $5,000 and the price offered must be expressed on the basis of 100, with not more than
three decimals, e.g., 99.925. Fractions may not be used. It is urged that bids be made on the printed forms, and forwarded
in the special envelopes, to be furnished by Federal Reserve Banks on application therefor.
Banking institutions generally may submit bids for accounts of customers provided the names of the customers are set
forth in such bids. Others may only submit bids for their own account. Bids will be received without deposit from incorpo­
rated banks and trust companies and from responsible and recognized dealers in investment securities. Bids from others must
be accompanied by a deposit of 2 percent of the face amount of the Certificates bid for, unless such bids are accompanied
by an express guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, CCC w ill open and evaluate the bids, and will then publicly announce the amount
and price range of accepted bids. CCC expressly reserves the right to accept or reject any or all bids, in whole or in part, and
any such action shall be final. Subject to this reservation, noncompetitive bids from any one bidder for $200,000 or less with­
out stated price will be accepted in full at the average price (in three decimals) of accepted com petitive bids. Those sub­
mitting successful bids will be so advised by the Federal Reserve Bank to which the bid was submitted, and settlem ent there­
for must be made at such Bank on June 23, 1969, in U. S. dollars, either in cash or other immediately available funds. Pay­
ment cannot be made by credit through the Treasury Tax and Loan account.
CCC has statutory authority to borrow up to $14.5 billion and reserves an amount of its uncommitted borrowing
authority sufficient to redeem outstanding special series Certificates of Interest. CCC has an arrangement to borrow from the
Secretary of the Treasury of the United States any portion of the uncommitted amount of its borrowing authority whenever
needed to redeem such Certificates, which arrangement is confirmed in the following quoted letter:

“ THE SECRETARY OF THE TREASURY
WASHINGTON
Dear Mr. Palmby:

M ay 29, 1969

Reference is made to the request that an arrangement be made between Commodity Credit Corporation
and the Secretary of the Treasury to borrow any portion of the uncommitted amount of Commodity Credit
Corporation’s borrowing authority whenever it is needed to redeem outstanding Special Series Certificates of
Interest.
The Commodity Credit Corporation has statutory authority (15 U.S.C. 714b (i) and 713a-4) to borrow
up to $14.5 billion, provided the approval of the Secretary of the Treasury is obtained. I am advised that the
unused balance of Commodity Credit Corporation’s authorized borrowing authority presently exceeds $.9 billion.
I understand that the Commodity Credit Corporation has reserved $700 million of this unused balance to be
used only for the redemption of Special Series Certificates at maturity on August 1, 1969. Accordingly, on the
records of the Treasury Department, we are reserving $700 million of your total unused borrowing authority for
the purpose of redeeming outstanding Special
Series Certificates of Interest.
I understand that in the opinion of the General Counsel ofthe Department of Agriculture these Certifi­
cates contain a contractual obligation by the Commodity Credit Corporation to redeem such Certificates and that
this obligation is also a contractual obligation of the United States
Sincerely yours,
T he Honorable
Clarence D. Palmby
President
Commodity Credit Corporation
Department of Agriculture
Washington, D . C. 20250”

I s I David M. Kennedy

In a c c o r d a n c e w ith th e a b o v e a n n o u n c e m e n t , t e n d e r s will b e re c e iv e d a t th is b a n k u p to tw e lv e - th ir ty p .m .,
C e n tral D a y lig h t S a v in g Time, T u e s d a y , J u n e 17, 1 969. T e n d e rs m a y n o t b e e n t e r e d b y t e le p h o n e .

Yours very truly,
P. E. Coldwell
President
(See reverse for tender form)

TENDER FOR COMMODITY CREDIT CORPORATION CERTIFICATES OF INTEREST
SPECIAL SERIES

39 DAYS TO MATURITY
Maturing August 1,1969

Dated June 23, 1969
To: Federal Reserve Bank, Station K, Dallas, Texas 75222

(D ate)

P ursuant to the provisions of the invitation for bids printed on the reverse hereof, the undersigned offers to pur­
chase Certificates of Interest in the amount shown below, and agrees to pay fo r the amount allotted, on or before the issue
date, by the method and a t the rate indicated.

.NOT TO EXCEED $200,000

NONCOMPETITIVE TENDER $.

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.
Prices should be ex­
-------? ------------------------------------ pressed on the basis of
-@ ­
$
100, with not more than
COMPETITIVE TENDERS
th re e d e c im a l places
____ <_______________________
j$
e. g., 99.925. Fractions
(a ).
must not be used.
TENDERS MAY NOT BE ENTERED BY TELEPHONE. TENDERS BY WIRE, IF RECEIVED BEFORE THE
CLOSING HOUR, ARE ACCEPTABLE.
Num ber of
Pieces

Payment for this issue of Certificates cannot be
made by credit to T reasury Tax and Loan
Account.

Denominations Desired
M aturity Value

<> $
a
5,000
<> $ 10,000
a
(3 $ 100,000
>
© $i ,000,000

?
$
$

METHOD OF PAYMENT

□
□

Delivery Instructions:
□

Ship to_________________________

(Effectual delivery of enclosed
d ra ft shall be on latest day which will perm it present­
m ent in order to obtain irrevocably collected funds on
paym ent date)

Pledge to secure Treasury Tax and
Loan Account

□

Draft enclosed

Hold in Custody Account—Member
banks for own account only

□

Charge our reserve account on payment
date

□

$

Payment to be made by______________

(Subscriber’s full name or corporate title)
(Address)

By.

(Authorized official signature and title)
(For the account of, if tender is for another subscriber)
(Address)

IM PO RTANT

1. No tender fo r less than $5,000 will be considered and each tender m ust be for an amount in multiples of $5,000
(m aturity value).
2. Tenders should be forwarded in an envelope clearly addressed to this bank as Fiscal Agent of the Commodity Credit
Corporation, with notation on the envelope reading “TEN D ER FOR CERTIFICA TES OF IN T E R E ST ”. Since enve­
lopes received with this legend will not be opened until after the closing time specified in the public announcement, com­
munications relating to other m atters should not be enclosed.
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 th at 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 tru st 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 (m aturity value)
of the Certificates applied for, or unless the tenders are accompanied by an express guaranty of full payment by an
incorporated bank or tru st company.

(See reverse for announcement)