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F E D E R A L R E S E R V E BANK O F N EW Y O R K Fiscal Agent of the United States r Circular No. 5 7 6 3 ~l L January 19, 1966 J Offering of $1,000,000,000 of Special 365-Day Treasury Bills Dated January 31, 1966 Due January 31, 1967 T o A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal R eserve D istrict: Following is the text of a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard time: T h e T reasu ry D epartm ent, by this public notice, invites tenders for $1,000,000,000, or thereabouts, o f 365-d ay T reasury bills, for cash and in exchange for T reasu ry bills m aturing January 31, 1966, in the am ount of $1,000,387,000, to be issued on a discount basis under com petitive and noncom petitive bidding, as hereinafter provided. T h e bills of this series will be dated January 31, 1966, and will mature January 31, 1967, when the face am ount will be payable w ithout interest. T h e y will be issued in bearer form only, and in denom inations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m aturity valu e). T enders will be received at Federal R eserve Banks and Branches up to the closing hour, one-thirty p.m ., Eastern Standard time, T u esday, January 25, 1966. T enders will not be received at the T reasury D epartm ent, W a sh in g to n . Each tender m ust be for an even m ultiple of $1,000, and in the case o f com petitive tenders the price offered m ust be expressed on the basis o f 100, with not m ore than three decim als, e.g., 99.925. Fractions m ay not be used. (N otw ith sta n d in g the fact that these bills w ill run for 365 days, the discount rate will be com puted on a bank discount basis of 360 days, as is currently the practice on all issues o f T reasury b ills.) It is urged that tenders be made on the printed form s and forw arded in the special envelopes which will be supplied by Federal Reserve B anks or Branches on application therefor. B anking institutions generally m ay subm it tenders for account of custom ers, provided the nam es of the custom ers are set forth in such tenders. O th ers than banking institutions will not be permitted to subm it tenders except for their own account. T en ders will be received without deposit from incorporated banks and trust com panies and from responsible and recognized dealers in investm ent securities. T en ders from others m ust be accom panied by paym ent of 2 percent o f the face am ount of T reasury bills applied for, unless the tenders are accom panied b y an express guaranty o f paym en t by an incorporated bank or trust com pany. Im m ediately after the closing hour, tenders will be opened at the Federal R eserve Banks and Branches, follow in g which public announcem ent will be m ade by the T reasu ry D epartm ent o f the am ount and price range o f accepted bids. T h o se sub m itting tenders will be advised o f the acceptance or rejection thereof. T h e Secretary of the T reasu ry expressly reserves the right to accept or reject any or all tenders, in w hole or in part, and his action in any such respect shall be final. S ubject to these reservations, noncom petitive tenders for $200,000 or less w ithout stated price from any one bidder w ill be accepted in full at the average price (in three decim als) o f accepted com petitive bids. S ettlem ent for accepted tenders in accordance w ith the bids m ust be m ade or com pleted at the Federal R eserve Bank on January 31, 1966, in cash or other im m ed i ately available funds or in a like face am ount of T reasu ry bills m aturing January 31, 1966. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents w ill be m ade for differences betw een the par value o f m aturing bills accepted in exchange and the issue price of the new bills. T h e incom e derived from T reasury bills, w hether interest or gain from the sale or other disposition o f the bills, does not have any exem ption, as such, and loss fro m the sale or other disposition of T reasu ry bills does not have any special treat m ent, as such, under the Internal R evenue Code of 1954. T h e bills are subject to estate, inheritance, gift or other excise taxes, w hether Federal or State, but are exem p t from all taxa tion now or hereafter im posed on the principal or interest thereof by any State, or any of the possessions of the U nited States, or by any local taxing authority. F or purposes of taxation the am ount of discount at w hich T reasury bills are originally sold by the U nited States is considered to be interest. U nder Sections 4 5 4 (b ) and 1 2 2 1 (5 ) of the Internal Revenue Code of 1954, the am ount of discount at w hich bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherw ise disposed of, and such bills are excluded from consideration as capital assets. A cco rd in g ly , the ow ner of T reasury bills (other than life insurance co m panies) issued hereunder need include in his incom e tax return only the difference betw een the price paid for such bills, whether on original issue or on subsequent purchase, and the am ount actually received either upon sale or redem ption at m aturity during the taxable year for w hich the return is m ade, as ordinary gain or loss. T re asu ry D ep artm en t Circular N o . 418 (current revision) and this notice prescribe the term s of the T reasu ry bills and govern the conditions of their issue. Copies o f the circular m ay be obtained from any Federal R eserve B ank or Branch. This Bank will receive tenders up to 1 :30 p.m., Eastern Standard time, Tuesday, January 25, 1966, at the Securities Department of its Head Office and at its Buffalo Branch. Please use the form on the reverse side of this circular to submit a tender, and return it in the enclosed yellow envelope marked “ Tender for Special Treasury Bills.” Tenders may be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. Paym ent for the Treasury bills cannot be made by credit through the Treasury Tax and Loan Account. Settlement must be made in cash or other immediately available funds or maturing Treasury bills. A lfred H ayes, President. No................................ TENDER FOR SPECIAL 365-DAY TREASURY BILLS Dated January 31, 1966 T o F ederal R eserve B a n k of N ew Y Due January 31, 1967 ork, Dated at ................................................................ Fiscal Agent of the United States. .......................................................... , 1 9 . . . . Pursuant to the provisions of Treasury Department Circular No. 418 (current revision) and to the provisions of the public notice issued by the Treasury Department and printed on the reverse side of this tender, the undersigned hereby offers to purchase the above-described Treasury bills in the amount indicated below, and agrees to make payment therefor at your Bank on or before the settlement date specified in the public notice at the price indicated b elow : COMPETITIVE TENDER f not bo*h Competitive and Noncompetitive tenders on one form $ ............................................................ (maturity value), or any lesser amount that may be awarded. P r ice : .....................................per 100. (Price must be expressed with not more than three decimal places, for example, 99.925) "1 NONCOMPETITIVE TENDER $ ............................................................ (maturity value). (N o t to exceed $200,000 for one bidder through all sources) A t the average price of accepted competitive bids. Subject to allotment, please issue, deliver, and accept payment for the bills as indicated below: Pieces Denomination $ M aturity value 1,000 □ 1. Deliver over the counter to the undersigned □ 2. Ship to the undersigned 5,000 □ 3. H old in safekeeping (for ac count o f member bank o n ly )* 10,000 □ 4. Allotment attached) 50,000 □ 5. Special instructions: transfer (see list Payment will be made as follow s: □ B y charge to our reserve account □ B y cash or check in immediately available funds □ By surrender of $ ................................. (maturity value) of maturing Treasury bills. Pay cash adjust ment, if any— 100,000 □ By check 500,000 □ By credit to our reserve account 1,000,000 (Paym ent cannot be made through Treasury T a x and Loan Account) will be accepted) Total * If this item is checked, the undersigned certifies that the allotted bills will be owned solely by the undersigned. N a m e of subscriber Insert this tender in yellow en velope m arked “ T ender fo r Special Treasury Bills’ (Please print) B y ................................... By (Official signature(s) required) T itle .............................................................................. . T itle ............ A d d ress (B an k s subm itting tenders for custom er account m ust indicate nam es below , or attach a list) (Name of customer) (Name of customer) IN S T R U C T IO N S : 1. N o tender for less than $1,000 w ill be considered, and each tender m ust be for an even multiple of $1,000 (m aturity valu e). 2. O th ers than banking institutions w ill not be perm itted to subm it tenders except for their ow n account. Banks subm itting tenders for custom er account m ay consolidate com petitive tenders at the same price and m ay consolidate non com petitive tenders, provided a list is attached show ing the nam e o f each bidder, the am ount bid for his account, and m ethod o f paym ent. F orm s for this purpose will be furnished on request. 3. I f the person m akin g the tender is a corporation, the tender should be signed by an officer of the corporation authorized to m ake the tender, and the signing of the tender by an officer of the corporation will 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 m em ber of the firm, w ho should sign in the form “ ......................................................................................................... a copartnership, by ........................................................................................................................ .. m em ber of the firm .” 4. T en d ers will be received w ithout deposit from incorporated banks and trust com panies and from responsible and recognized dealers in investm ent securities. T enders from others m ust be accom panied by paym ent o f 2 percent of the face am ount o f T reasu ry bills applied for, unless the tenders are accom panied by an express guaranty of paym ent by an incorporated bank or trust com pany. 5. If the language o f this tender is changed in any respect, which, in the opinion o f the Secretary of the T reasury, is material, the tender m ay be disregarded.
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