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FEDERAL RESERVE BANK OF NEW YORK Fiscal A g en t o f the U nited States r Circular No. 3 9 5 1 T L February 26, 1953 J P A Y M E N T OF M A R C H TAXES Use o f Tax A n ticipation Bills Deposits in Treasury T ax and Loan Accounts To all Treasury Tax and Loan Depositaries, and Others Concerned, in the Second Federal Reserve District : A t the request o f the T reasury Departm ent, we transm it a cop y o f a letter dated F ebru ary 24, 1953, fro m the F isca l A ssistant S ecretary o f the Treasury, outlining procedures to be follow ed in m aking paym ent o f M arch 1953 taxes with T rea su ry Bills, T ax A nticipation Series, m aturing M arch 18, 1953. The T reasury has announced that D irectors o f Internal Revenue have been instructed to deposit with F ed eral R eserve Banks, during the period M arch 2 through A p r il 10,1953, all checks o f $10,000 or m ore submitted in paym ent o f individual or corporate incom e taxes, excess profits taxes, inter est, or penalties, including deficiencies and paym ents o f estim ated taxes. The T reasury has also announced that banks qualified as S pecial D epositaries o f P ublic M oneys m ay receive these rem it tances fo r deposit in their T reasury T ax and L oan Accounts. W e w ill prepare daily a special fo rm o f cash letter, with an attached certificate form , fo r the M arch tax collections. U ntil further notice, the amount shown in the certificate w ill be fo r 100 per cent o f the amount o f those checks eligible fo r credit to T reasury T ax and L oan A ccounts. Special depositaries, w ishing to accept funds equal to the amount o f the cash letter fo r deposit in their T rea su ry T ax and L oan A ccounts, should execute and return the certificate attached to the cash letter, in accordance w ith the instructions contained in the letter. The T reasu ry w ill decide fro m time to time whether to make withdrawals from funds arising fro m the M arch tax payments or fro m other funds accum ulated in the T ax and L oan A ccounts, bas in g its decision on the D epartm ent’s financing needs and the condition o f the m oney m arket at the time. F o r reasons explained b y the F iscal A ssistant S ecretary in his letter, the amount o f the cer tificate attached to the special cash letter w ill not include those checks o f $10,000 o r m ore draw n on funds that arose from the redem ption o f the T ax A nticipation Series T reasury bills o r T reasury Savings notes. H ow ever, in com puting the amount to be deposited in T reasury T ax and Loan Accounts, we w ill include in the certificate attached to the special cash letter those checks o f a depositary presenting T reasury Bills, T ax A n ticipation Series, due M arch 18, 1953, fo r cash redem ption fo r its own account, if the depositary certifies that— (1 ) The bills w ere acquired b y purchase p rior to M arch 2, 1953 and were held continu ously until date o f maturity, or (2 ) T hey were acquired on and after M arch 2, and paym ent o f the purchase price was not credited in a cu stom er’ s deposit account on its books. Requests to ap ply the T ax A nticipation bills to the paym ent o f taxes should be m ade on F orm T X 1. A request by a bank o r trust com pany to redeem T ax A n ticipation bills, m aturing M arch 18, 1953, should be m ade on F orm T X 2. Copies o f both form s are enclosed. A dditional copies o f this circular and o f the enclosed form s w ill be furnished upon request. A llan S proul, P resident. (over) T R E A S U R Y \ \ ^ 5 y / F ISC A L D E P A R T M E N T SE R V IC E W A S H IN G TO N F isc a l A s s is ta n t S e cr e ta r y February 24, 1953 T o Treasury Tax and Loan Depositaries, and Others Concerned: Treasury Bills, T a x Anticipation Series, dated October 8 , 1952, maturing March 18, 1953, are outstanding in the amount of $2,501,890,000. These Treasury bills are acceptable in payment of Federal income taxes due March 15, 1953, and were issued to enable taxpayers to invest their accumulated tax reserves in an interest-bearing security which will be received in payment of Federal income taxes. In order to facilitate the use of Treasury Bills, T a x Anticipation Series, by taxpayers in payment of their income taxes, the Treasury has authorized Federal Reserve Banks and Branches, as fiscal agents o f the United States, to accept such securities on or before the income tax instalment date, from or for account o f Federal taxpayers, and to issue receipts to Directors of Internal Revenue showing that such Treasury bills are held for the purpose o f applying the proceeds o f redemption to the payment of income taxes o f the taxpayer named in the receipts. T w o copies o f each receipt will be delivered to the taxpayer concerned, who will attach one copy to his income tax return filed with the Director of Internal Revenue. Directors of Internal Revenue have been instructed (Internal Revenue Mimeograph N o. 122, Coll. N o. 24, dated February 2, 1953) to accept tax returns to which are attached copies of receipts addressed to them by Federal Reserve Banks and Branches that Treasury bills due March 18, 1953 are being held for application of the proceeds of redemption to the payment of income taxes due on March 15, 1953, of the taxpayer named in the receipt. The continuing policy o f the Treasury is not to look with favor upon efforts by banks which are special deposi taries for Treasury tax and loan accounts to encourage their customers to sell to them their Treasury Bills, Tax Anticipation Series, maturing March 18, 1953, and to accept payment for the Treasury bills by a deposit credit in their checking accounts, or to present Treasury Savings notes for cash redemption, with the proceeds being deposited in their checking accounts, and to pay their taxes by checks drawn on the taxpayers’ accounts with the banks. Depositaries following this practice apparently do so in expectation that under arrangements which have been in effect for quarterly tax payments since March, 1951, they may obtain a deposit in their Treasury tax and loan accounts for an amount equal to the taxpayers’ checks (fo r checks over $ 1 0 , 0 0 0 in amount) drawn on their accounts with the banks, and in regular course they can present the Treasury bills to the Treasury for cash redemption at maturity. These practices by depositaries will increase the amount o f such bills or Savings notes presented for cash redemption in advance of the availability of Treasury receipts from the income tax instalment due on March 15, 1953, and will make it more difficult for the Treasury and the Federal Reserve System to handle the large income tax col lections during March in a manner that will maintain stability in the money market. Accordingly, the Treasury will follow the same procedure as was adopted in connection with the March 15, 1952 and June 15, 1952 income tax instalments. Depositaries having Treasury tax and loan accounts are advised that to the extent they present Treasury bills maturing March 18, 1953 for cash redemption for their own account, or if tax payers present their Treasury Savings notes for cash redemption, and use the proceeds of redemption through deposit with and withdrawal from depositaries by checks in payment o f their March 15, 1953 income taxes, an equal amount of income tax checks of $10,000 and over drawn on such banks in payment o f income taxes due March 15, 1953 will be withheld from deposit in their tax and loan accounts. However, if a depositary presenting Treasury Bills, T a x Anticipation Series, due March 18, 1953, for cash redemption for its own account, can certify that they were acquired by purchase prior to March 2, 1953, and were held continuously until date of maturity, or that they were acquired on and after March 2nd, and payment of the pur chase price was not credited in a customer’s deposit account on its books, such bills will not be included in arriving at the amount of income tax checks of $ 1 0 , 0 0 0 and over to be withheld from deposit in their tax and loan accounts. Very truly yours, E. F. B a rtelt Fiscal Assistant Secretary of the Treasury RECEIPT F.R.B.N.Y. Transaction No. New York, N. Y. Date ................... To the Director of Internal Revenue, Treasury Bills, Tax Anticipation Series, aggregating $............................................... , face amount, maturing on the date shown below, have been presented to and are held by this Bank for redemption and application o f proceeds at maturity in payment of income taxes due on ...........................................by the taxpayer named herein, as follow s: TR E A SU R Y BILLS, T A X A N T IC IPA TIO N SERIES. M A T U R IN G .............. (Date) Serial Son. Denomination Name and Address o f Taxpayer Delivered by: F e d e ra l R eserve B a n k o f N ew Y o rk Fiscal Agent o f the United States ;per pro G overn m en t B on d D ep a rtm en t T A X P A Y E R N AM ED SHOULD A TTA C H T H IS COPY TO INCOME 1 T A X RETURN F IL E D W IT H D IR E C TO R OF IN TERN AL R EVEN U E ADDRESSED G.B. 549 RECEIPT F.R.B.N.Y. Transaction No. New York, N. Y. Date ................... To the Director of Internal Revenue, Treasury Bills, Tax Anticipation Series, aggregating $..............................................., face amojjjjt, maturing on the date shown below, have been presented to and are held by this Bank for redemption and application o f proceeds at maturity in payment o f income taxes due on .......................................... by the taxpayer named herein, as follow s: TR E A SU R Y BILLS, T A X A N T IC IPA TIO N SE RIES, MATURING Serial Nos. • (Date) Name and Address o f Taxpayer Denomination 'I $ Delivered b y : F e d e ra l R eserve B a n k o f N ew Y o rk Fiscal Agent o f the United States per pro G overnm ent B ond D epartm en t 2 T A X P A Y E R SHOULD R E T A IN TH IS COPY FOR H IS RECORDS 7 G.B. 549 RECEIPT F.R.B.N.Y. Transaction No. New York, N. Y. Date ................... To the Director of Internal Revenue, Treasury Bills, Tax Anticipation Series, aggregating $............................................... , face amount, maturing on the date shown below, have been presented to and are held by this Bank for redemption and application o f proceeds at maturity in payment of income taxes due o n .................................. by the taxpayer named herein, as follow s: TR E A SU R Y BILLS, T A X A N T IC IPA TIO N SERIES, M A T U R IN G ......................................................... (Date) Serial Nos. 3 Denomination j F Name and Address o f Taxpayer ederal R eserve Bank op New Y ork Fiscal Agent of the United States per pro G o v e r n m e n t B ond D TO B E R E T A IN E D B Y DEPO SITIN G BANK epartm ent G.B. 549 RECEIPT F.R.B.N.Y. Transaction No. New York, N. Y. Date .................. To the Director o f Internal Revenue, ., face amount, maturing on the Treasury Bills, Tax Anticipation Series, aggregating $. date shown below, have been presented to and are held by this Sank for redemption and application of proceeds at maturity in payment o f income taxes due o n ................................... TR E A SU R Y BILLS, T A X A N T IC IPA TIO N SERIES, Serial Nos. Denomination .. by the taxpayer named herein, as follow s: T U R IN G ......................................................... (Date) Name and 4ddress o f Taxpayer l R eserve B a n k of New Y ork 1 Agent of the United States >er pro G overn m en t B ond D epartm en t SE C U R ITY F IL E S DUE CUSTOMERS IN G .B . 549 RECEIPT F.R^B.N.Y. Transaction No. Netf York, N. Y. To the Director of Internal Revenue, Treasury Bills, Tax Anticipation Series, aggregating $. date shown below, have been presented to and are held by this face amount, maturing on the nk for redemption and application o f proceeds at maturity in payment of income taxes due on ................................... . by the taxpayer named herein, as follow s: TR E A SU R Y BILLS, T A X A N T IC IPA TIO N SERIES, TURING (Date) Serial Nog. Digitized 5 for FRASER Name and , Denomination hi ress o f Taxpayer Delivered by: F e | | :ra l R e s e r v e B a n k o p N e w Y o r k il Agent o f the United States pro G o v e r n m e n t B ond D e par tm e n t SE C U R ITY F IL E S DUE CUSTOMERS OUT (S U B M IT W IT H D U P L IC A T E W H IT E C O P Y ) TX 1 REQ U EST F O R RED EM PTIO N O F T R E A S U R Y BILLS, T A X A N T IC IP A T IO N SERIES, DUE M A R C H 18, 1953, AN D F O R A P P L IC A T IO N O F PROCEEDS T O P A Y M E N T OF INCOM E TA X E S Date........................................................................... , 1953 F ederal R e serve B an k of New Y ork, Fiscal A gent o f the United States, Federal Reserve P . O. Station, New Y ork 45, N. Y . A tten tion : Government B ond Department— 2nd F loor The undersigned herewith presents and surrenders the follow in g described T R E A S U R Y B IL L S , T A X A N T IC IP A TIO N S E R IE S , dated October 8 , 1952, due March 18, 1953, in paym ent o f taxes due on March 15, 1953: Pieces Face amount Denomination $ (If List serial numbers space is not sufficient, use back of form.) 1 ,0 0 0 5,000 1 0 ,0 0 0 1 0 0 ,0 0 0 500,000 1 ,0 0 0 , 0 0 0 Total P A Y M E N T IN STR U C T IO N S Credit the total face amount o f the bills described above on March 15, 1953 to the D irector o f Internal Revenue at— C A U T IO N A s a protection to the sender, ship ments o f bearer securities b y mail should be registered and insured. (Street Address) (City, Zone No., and State) fo r account o f taxpayer indicated below. Name o f taxpayer...................................................................................................................................................... (Print same name that appears on tax return) Address o f taxpayer................................................................................................................................................. (Street Address) (City, Zone No., and State) Signature o f taxpayer.............................................................................................................................................. (Not required when application is submitted on behalf of the taxpayer by an agent.) Request submitted b y.....................................................................................................................-........................ (Name of Agent) (Street Address) (City, Zone No., and State) B y ......................................................................................................................... ..... (Official signature required) (Title) ( S p a c e b e lo w fo 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 ) Eeceived Securities verified and recorded Eeceipt prepared Eeceipt 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 Y O R K ) TX 1 REQUEST FOR REDEMPTION OF TREASURY BILLS, T A X ANTICIPATION SERIES, DUE MARCH 18, 1953, AND FOR APPLICATION OF PROCEEDS TO PAYMENT OF INCOME TAXES Date....................................................................... F ederal R e serve B a n k of New Y 1953 ork, Fiscal A gen t o f the United States, Federal Reserve P . O. Station, New Y ork 45, N. Y . A tten tion : Government B ond Department— 2nd F loor The undersigned herewith presents and surrenders the follow in g described T R E A S U R Y B IL L S , T A X A N T IC IP A TIO N S E R IE S , dated October 8 , 1952, due March 18, 1953, in payment o f taxes due on March 15, 1953: Pieces F ace amount Denom ination L ist serial numbers ( I f space is not sufficient, use back o f form .) $ 1 ,0 0 0 5,000 1 0 ,0 0 0 1 0 0 ,0 0 0 500,000 1 ,0 0 0 , 0 0 0 Total P A Y M E N T IN STR U C T IO N S Credit the total face amount o f the bills described above on March 15, 1953 to the D irector o f Internal Revenue at— C AUTION A s a protection to the sender, ship ments o f bearer securities b y mail should be registered and insured. (Street Address) (City, Zone No., and State) fo r account o f taxpayer indicated below. Name o f taxpayer...................................................................................................................................................... (Print same name that appears on tax return) Address o f taxpayer................................................................................................................................................. (Street Address) (City, Zone No., and State) Signature o f taxpayer.......................................... .................. ................................................................................ (Not required when application is submitted on behalf of the taxpayer by an agent.) Request submitted b y .............................................................................................................................................. (Name of Agent) (Street Address) (City, Zone 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 R eceipt prepared R eceipt verified TX 2 (S U B M IT W IT H D U P L IC 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, TA X ANTICIPATION SERIES, DUE MARCH 18, 1953 Date........................................................................... , 1953 F ederal R eserve B an k of New Y ork, Fiscal Agent of the United States, Federal Reserve P. O. Station, New York 45, N. Y. A tten tion : Government B ond Department— 2nd F loor The undersigned herewith presents and surrenders f o r redem ption T R E A S U R Y B IL L S , T A X A N T IC IP A T IO N S E R IE S D ated October 8, 1952 D ue March 18, 1953 1. F o r own account (certification below a p p lie s )............................................................................................ ....$. 2. F o r ow n account (acquired on and after March 2, 1953 and payment o f purchase price credited on our books in the deposit accounts o f the customers shown on the reverse side o f this fo rm ) .......................................................................................................................................................... ... $. 3. F o r ou r customers as shown on reverse side o f this f o r m ......................................................................... ....$. Total am ount............................ ....$. D escription o f B ills Surrendered Pieces Face amount Denom ination L is t serial numbers ( I f space i t no* sufficient, u se back o f fo rm .) $ 1,000 5,000 10,000 100,000 500,000 1,000,000 Total CAUTION CERTIFICATE A s a protection to the sender, shipments o f bills b y mail should be registered and insured. The undersigned hereby certifies that the bills presented, as indi cated in item 1 above, are presented f o r cash redem ption fo r its own account and were acquired by purchase p rior to M arch 2, 1953 and were held continuously until date o f m aturity or that they were acquired on and after March 2 and paym ent o f the purchase price was not credited in a custom er’s deposit account on our books. P A Y M E N T IN STR U C T IO N S B y check □ B y credit to reserve account (For use of Federal Reserve Bank of New York) Received (Name of Bank) ----------------------------(Street Address) Securities verified and recorded ----------------------------Paym ent p re p a re d ----------------------------- (City, Zone No., and State) B y .................................................................................................................... (Official Signature and Title Required) List o f customers to which items 2 and 3 on the reverse side apply Amount Name and address of customer (P lea se print o r use typew riter) Total D E N O M IN A T IO N S A N D S E R IA 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 TX 2 (D U PLIC A TE COPY FO B U S E O F F E D E R A L R E S E R V E B A N K O F N E W Y O R K ) REQUEST B Y A BANK OR TRUST COMPANY FOR REDEMPTION OF TREASURY BILLS, TA X ANTICIPATION SERIES, DUE MARCH 18, 1953 Date..........................................................................., 1953 F ederal R eserve B a n k op N ew Y ork, Fiscal A gen t o f the U nited States, Federal Reserve P. O. Station, New York 45, N. Y. A tten tion : Government B ond Department— 2nd F loor The undersigned herewith presents and surrenders f o r redemption T R E A S U R Y B IL L S , T A X A N T IC IP A T IO N S E R IE S Dated October 8, 1952 Due March 18, 1953 1. F o r own account (certification below a p p lie s )............................................................................................ ....$. 2. F o r own account (acquired on and after M arch 2, 1953 and paym ent o f purchase price credited on our books in the deposit accounts o f the customers shown on the reverse side of this fo rm ) .......................................................................................................................................................... $. 3. F o r ou r customers as shown on reverse side o f this f o r m .............................................................................$. Total am ount................................$. Description o f B ills Surrendered Pieces Denom ination F ace amount L ist serial numbers ( I f space is not sufficient, use back o f form .) $ 1 ,0 0 0 5,000 1 0 0 ,0 0 0 500,000 1 ,0 0 0 , 0 0 0 Total C A U T IO N CERTIFICATE A s a protection to the sender, shipments o f bills b y mail should be registered and insured. The undersigned hereby certifies that the bills presented, as indi cated in item 1 above, are presented fo r cash redemption fo r its own account and were acquired by purchase prior to March 2, 1953 and were held continuously until date o f m aturity or that they were acquired on and after March 2 and paym ent o f the purchase price was not credited in a custom er’s deposit account on our books. P A Y M E N T IN STR U C T IO N S } B y check □ B y credit to reserve account (For use of Federal Reserve Bank of New York) Received (Name of Bank) ----------------------------(Street Address) Securities verified and recorded ----------------------------Paym ent p re p a re d ----------------------------Paym ent c h e e k e d ----------------------------- (City, Zone No., and State) B y .............................................................. ................. (Official Signature and Title Required) List o f customers to which items 2 and 3 on the reverse side apply Amount Name and address of customer (P lea se print o r tu * typew riter) -« TO 1 Otcil D E N O M IN A T IO N S A N D S E R IA 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