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FE D E RA L RE SE R V E BANK O F NEW YORK F iscal A g e n t o f the U nited States r Circular N o. 3 8 5 7 1 M ay 26, 1952 J L PAYMENT OF JUNE TAXES Use of Tax Anticipation Bills Deposits in Treasury Tax and Loan Accounts To all Treasury Tax and Loan Depositaries, and Others Concerned, in the Second Federal Reserve D istrict: A t the request o f the Treasury Department, we transmit a copy of a letter dated May 20, 1952, from the Secretary o f the Treasury, outlining procedures to be followed in mak ing payment o f June 1952 taxes with Treasury Bills, Tax Anticipation Series, maturing June 15, 1952. The Treasury has informed us that it w ill instruct Collectors o f Internal Revenue to deposit with Federal Reserve Banks, during the period June 2 through July 3, 1952, all checks o f $10,000 or more submitted in payment o f individual or corporate income taxes, excess profits taxes, interest, or penalties, including deficiencies and payments o f estimated taxes. These instructions will enable banks qualified as Special Depositaries of Public Moneys to receive these remittances fo r deposit in their Treasury Tax and Loan Accounts. The Treasury will decide from time to time whether to make withdrawals from funds aris ing from June tax payments or from other funds accumulated in the Tax and Loan Accounts, basing its decision on the Department’s financing needs and the condition of the money market at the time. W e will prepare daily a special form o f cash letter, with an attached certificate form, for the June tax collections. Until further notice, the amount shown in the certificate will be for 100 per cent o f the amount o f those checks eligible for credit to Treasury Tax and Loan Accounts. Special depositaries, wishing to accept funds equal to the amount of the cash letter fo r deposit in their Treasury Tax and Loan Accounts, should execute and return the certifi cate attached to the cash letter, in accordance with the instructions contained in the letter. For reasons explained by the Secretary in his letter, the amount o f the certificate attached to the special cash letter will not include those checks of $10,000 or more drawn on funds that arose from .the redemption of the Tax Anticipation Series Treasury bills or unmatured Treasury Savings notes. However, in computing the amount to be deposited in Treasury Tax and Loan Accounts, we will include in the certificate attached to the special cash letter those checks o f a depositary presenting Treasury Bills, Tax Anticipation Series, due June 15, 1952, fo r cash redemption fo r its own account, if the depositary certifies that— (1) The bills were acquired by purchase prior to May 24, 1952 and were held continu ously until date of maturity, or (2) They were acquired on and after May 24, and payment o f the purchase price was not credited in a custom er’s deposit account on its books. Requests to apply the. Tax Anticipation bills to the payment o f taxes should be made on Form T X 3. A request by a bank or trust company to redeem Tax Anticipation bills, matur ing June 15, 1952, should be made on Form G. B. 553. Copies o f both form s are enclosed. Additional copies o f this circular and of the enclosed form s will be furnished upon request. A llan S proul, President. 4 THE SECRETARY OF THE TREASURY W ASHIN GTO N M ay 20, 1952 To Treasury T ax and Loan Depositaries, and Others Concerned: Treasury Bills, T a x A n ticipation Series, dated N ovem ber 27, 1951, m aturing June 15, 1952, are outstanding in the amount o f $1,248,825,000. These Treasury bills are acceptable in payment o f Federal incom e taxes due on their maturity date, and were issued to enable taxpayers to invest their accum u lated tax reserves in an interest-bearing security w hich will be received in payment o f Federal incom e taxes. In order to facilitate the use o f Treasury Bills, T a x A nticipation Series, by taxpayers in payment o f their incom e taxes, the Treasury has authorized Federal R eserve Banks and Branches, as fiscal agents of the U nited States, to accept such securities on o r before their m aturity date, from o r for account o f Federal taxpayers, and to issue receipts to Collectors o f Internal Revenue that such Treasury bills are held for the purpose o f applying the proceeds o f redemption to the payment o f incom e taxes o f the taxpayer named in the receipts. T w o copies o f each receipt will be delivered to the taxpayer concerned, w h o will attach one copy to his incom e tax return filed with the C ollector o f Internal Revenue. C ollectors o f Internal Revenue have been instructed (A & C M im eograph, Coll. N o. 6709, Supp. 2, dated Decem ber 27, 1 9 5 1 ) to accept tax returns to w hich are attached copies o f receipts addressed to them by Federal R eserve Banks and Branches that T reasu ry bills due June 15, 1952 are being held fo r application o f the proceeds o f redem p tion to the paym ent o f incom e taxes o f the taxpayer nam ed in the receipt. T h e Treasury does not look with favor upon efforts by banks w hich are special depositaries for T reasury tax and loan accounts to encourage their custom ers to sell to them their Treasury Bills, T a x A nticipation Series, m aturing June 15, 1952, and to accept paym ent fo r the Treasury bills by a deposit credit in their checking accounts, or to present T reasu ry Savings notes for cash redem ption, w ith the proceeds being deposited in their checking accounts, and to pay their taxes by checks drawn on the tax payers’ accounts with the banks. Depositaries follow in g this practice apparently d o so in expectation that under arrangements w hich have been in effect fo r quarterly tax payments since M arch, 1951, they m ay obtain a deposit in their T reasu ry tax and loan accounts for an am ount equal to the taxpayers’ checks ( fo r checks over $ 10,000 in am ou nt) drawn on their accounts with the banks, and in regular course they can present the Treasury bills to the T reasu ry for cash redem ption at maturity. These practices by depositaries will increase the am ount o f such bills o r Savings notes presented fo r cash redemption in advance o f the availability o f T reasu ry receipts from the incom e tax instalment due on June 15, 1952, and will make it m ore difficult for the Treasury and the Federal R eserve System to handle the large incom e tax collections during June in a m anner that will maintain stability in the m oney market. A ccord in gly, the Treasury will follow the same procedure as was adopted in connection with the M arch 15, 1952 incom e ta x instalment. Depositaries having T reasu ry tax and loan accounts are advised that to the extent they present Treasury bills m aturing June 15, 1952 fo r cash redem ption for their ow n account o r for the account o f their custom ers, o r if taxpayers present their bills or Treasury Savings notes fo r cash redem ption, and use the proceeds o f redem ption through deposit w ith and withdrawal from depositaries by checks in paym ent o f their June 15, 1952 incom e taxes, an equal am ount o f incom e tax checks o f $ 10,000 and over drawn on such banks in payment o f incom e taxes due June 15, 1952 will be withheld from deposit in their ta x and loan accounts. H ow ever, if a depositary presenting T reasu ry Bills, T a x A nticipation Series, due June 15, 1952, fo r cash redem ption fo r its ow n account, can certify that they were acquired by purchase p rior to M ay 24, 1952, and w ere held continuously until date o f m aturity, o r that they were acquired on and after M ay 24th, and paym ent o f the purchase price was not credited in a custom er's deposit account on its books, such bills will n ot be included in arriving at the am ount o f incom e tax checks o f $ 10,000 and over to be withheld from deposit in their tax and loan accounts. V e ry truly yours, J o h n W . Sn yd er S ecreta ry o f the T reasury G.B. SS3 (S U B M IT W I T H D U P L I C A T E W H I T E C O P Y ) REQUEST B Y A BANK OR TRUST COMPANY FOR REDEMPTION OF TREASURY BILLS, T A X ANTICIPATION SERIES, DUE JUNE 15, 1952 Date........................................................................... , 1952 F ederal R eserve B a n k of N e w Y o rk , Fiscal Agent of the United States, Federal Reserve P. 0 . Station, New York 45, N. Y . Attention: Government Bond Department— 2nd Floor The undersigned herewith presents and surrenders for redemption TREASUR Y BILLS, T A X AN TICIP ATIO N SERIES Dated November 27, 1951 Due June 15, 1952 1. For own account (certification below applies)............................................................................................ $........................................ 2. For own account— acquired on and after May 24, 1952 and payment of purchase price credited on our books in the deposit accounts of the customers shown on the reverse side of this form $........................... .*........... 3. For our customers as shown on reverse side of this fo r m ................................................................ . $........................................ Total amount............................ $........................................ Description of Bills Surrendered Denomination Pieces Face amount List serial numbers ( I f space is not sufficient, use back o f form .) $ 1,0 00 5,0 00 1 0 ,000 1 0 0,00 0 5 0 0,00 0 1,0 00,00 0 % Total C A U T IO N C E R T IF IC A T E As a protection to the sender, shipments of bills by mail should be registered and insured. The undersigned hereby certifies that the bills presented, as indi cated in item 1 above, are presented for cash redemption for its own account and were acquired by purchase prior to May 24, 1952 and were held continuously until date of maturity or that they were acquired on and after May 24 and payment of the purchase price was not credited in a customer’s deposit account on our books. PAYM ENT INSTRUCTIONS □ By check ^ By credit to reserve account (N a m e ) (For use of Federal Reserve Bank of New York) Received --------------------------(Street Address) Securities verified and recorded --------------------------(City, Zone No., and State) Payment prepared Payment checked - By. (Official Signature and Title Required) List of customers to which items 2 and 3 on the reverse side apply Am ount Name and address o f custom er (P lea se print or use typew riter) Total D E N O M IN A T IO N S A N D S E R I A L N U M B E R S O F B O N D S S U R R E N D E R E D G.B. 553 (DUPLICATE COPY FOR USE OF FEDERAL RESERVE BAN K OF NEW YORK) REQUEST BY A BANK OR TRUST COMPANY FOR REDEMPTION OF TREASURY BILLS, T A X ANTICIPATION SERIES, DUE JUNE 15, 1952 Date........................................................................... , 1952 F ederal R eserve B a n k op N e w Y o r k , Fiscal Agent of the United States, Federal Reserve P. 0 . Station, New York 45, N. Y . Attention: Government Bond Department— 2nd Floor The undersigned herewith presents and surrenders for redemption TREASUR Y BILLS, T A X AN TICIP A TIO N SERIES Dated November 27, 1951 Due June 15, 1952 1. For own account (certification below applies)............................................................................................ $........................................ 2. For own account— acquired on and after May 24, 1952 and payment of purchase price credited on our books in the deposit accounts of the customers shown on the reverse side of this form $........................................ 3. For our customers as shown on reverse side of this fo r m ......................................................................... $........................................ Total amount............................ $........................................ Description of Bills Surrendered Pieces Denomination $ Face amount List serial numbers (If space is not sufficient, use back of form.) 1,000 5,000 10,000 100,000 500,000 1,000,000 Total C A U T IO N CERTIFICATE As a protection to the sender, shipments of bills by mail should be registered and insured. The undersigned hereby certifies that the bills presented, as indi cated in item 1 above, are presented for cash redemption for its own account and were acquired by purchase prior to May 24, 1952 and were held continuously until date of maturity or that they were acquired on and after May 24 and payment of the purchase price was not credited in a customer’s deposit account on our books. P AYM ENT INSTRUCTIONS | By check ] By credit to reserve account (F o r use o f Federal R eserve Bank o f N ew Y o r k ) Received (Name) ----------------------------(Street Address) Securities verified and r e c o r d e d ----------------------------(City, Zone No., and State) Paym ent p r e p a re d ----------------------------Paym ent checked ----------------------------- By................................................................................................................... (Official Signature and Title Required) List o f custom ers to w h ich item s 2 and 3 on the reverse side app ly Am ount Name and address o f custom er (P lea se print or use typew riter) Total D E N O M IN A T IO N S A N D S E R I A L N U M B E R S O F B O N D S S U R R E N D E R E D (S U B M IT W IT H D U P L IC A T E W H IT E C O P Y ) TX3 REQUEST TO APPLY TREASURY BILLS, TA X ANTICIPATION SERIES, DUE JUNE 15, 1952, TO PAYMENT OF INCOME TAXES Date........................................................................... , 1952 F ederal R eserve B a n k o f N e w Y ork, Fiscal Agent of the United States, Federal Reserve P. 0 . Station, New York 45, N. Y . Attention: Government Bond Department— 2nd Floor The undersigned herewith presents and surrenders the following described TREASUR Y BILLS, T A X A N T IC IP A TION SER IES, dated November 27, 1951, due June 15, 1952, in payment of Federal income taxes due on June 15, 1952: Pieces $ List serial numbers (If space is not sufficient, use back of form.) Face amount Denomination 1,000 5,000 10,000 100,000 500,000 1,000,000 Total PAYM EN T INSTRUCTIONS Credit the total face amount of the bills described above on June 15, 1952 to the Collector of Internal Revenue at............................. CAU TIO N As a protection to the sender, ship ments of bearer securities by mail should be registered and insured. (S t r e e t A d d r e s s ) (C it y , P .O . N o ., a n d S ta te ) for account of taxpayer indicated below. Name of taxpayer...................................................................................................................................................... (Print same name that appears on tax return) Address of taxpayer................................................................................................................................................. (Street Address) (City, P.O. No., and State) Signature of taxpayer............................................................................................................................................... (Not required when application is submitted on behalf of the taxpayer by an agent.) Request submitted by.............................................................................................................................................. (Name of Agent) (Street Address) (City, P.O. No., and State) By................................................................................................................................ (Official signature required) (Title) (Space below for use o f Federal Reserve Bank o f New Y o rk ) Received Securities verified and recorded Receipt prepared Receipt verified (D U P L IC A T E C O P Y F O R U SE O F F E D E R A L R E S E R V E B A N K OF N E W YO R K ) TX3 REQUEST TO APPLY TREASURY BILLS, TA X ANTICIPATION SERIES, DUE JUNE 15, 1952, TO PAYMENT OF INCOME TAXES Date........................................................................... , 1952 F ederal R eserve B a n k o f N e w Y ork, Fiscal Agent of the United States, Federal Reserve P. O. Station, New York 45, N. Y . Attention: Government Bond Department— 2nd Floor The undersigned herewith presents and surrenders the following described TREASUR Y BILLS, T A X A N TIC IP A TION SERIES, dated November 27, 1951, due June 15, 1952, in payment of Federal income taxes due on June 15, 1952: Pieces Face amount Denomination $ List serial numbers (If space is not sufficient, use back of form.) 1,000 5,000 10,000 100,000 500,000 1,000,000 T o ta l P AYM EN T INSTRUCTIONS Credit the total face amount of the bills described above on June 15, 1952 to the Collector of Internal Revenue at............................. C A U T IO N As a protection to the sender, ship ments of bearer securities by mail should be registered and insured. (S tr e e t A d d r e s s ) (C it y , P .O . N o ., and S ta te ) for account of taxpayer indicated below. Name of taxpayer...................................................................................................................................................... (P r in t sam e nam e that appears on ta x r e tu r n ) Address of taxpayer................................................................................................................................................. (S t r e e t A d d r e s s ) ( C it y , P .O . N o ., a n d S ta te ) Signature of taxpayer............................................................................................................................................... ( N o t re q u ire d w hen ap p lication is subm itted o n b e h a lf o f the ta x p a y e r b y an a g e n t.) Request submitted by.............................................................................................................................................. (N a m e o f A g e n t ) (S tr e e t A d d r e s s ) (C ity , P .O . N o ., and S ta te ) By................................................................................................................................ (O fficia l sign atu re r e q u ir e d ) (T it le ) ( S p a c e b e lo w f o r u se o f F e d e ra l R e s e r v e B ank o f N ew Y o r k ) Received Securities verified and recorded Receipt prepared Receipt verified
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