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F E D E R A L R E S E R V E BAN K O F NEW YORK Fiscai Agent of the United States r Circular No. 5 8 0 1 *1 L April 20, 1966 J Offering of $1,000,000,000 of Special 365-Day Treasury Bills Dated April 30, 1966 Due April 30, 1967 T o A ll Incorporated Banks and Trust Companies, and Others Covccrned 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 tim e: T h e Treasury D epartm ent, by this public notice, invites tenders for $1,000,000,000, or thereabouts, of 365-d ay T reasury bills, for cash and in exchange for T reasu ry bills m aturing A p ril 30, 1966, in the am ount of $1,001,162,000, to be issued on a discount basis under competitive and noncom petitive bidding, as hereinafter provided. T h e bills of this series will be dated A pril 30, 1966, and will mature A pril 30, 1967, w hen 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 en ders will be received at Federal R eserve Banks and Branches up to the closing hour, one-thirty p.m ., Eastern D a yligh t Saving time, T uesday, A pril 26, 1966. T enders will not be received at the T reasury D epartm ent, W a sh in g to n . E ach tender m ust be for an even multiple of $1,000, and in the case of com petitive tenders the price offered m ust be expressed on the basis of 100, with not m ore than three decimals, e.g., 99.925. Fractions m ay not be used. (N otw ith sta n d in g the fact that these bills will run for 365 days, the discount rate will be computed on a bank discount basis of 360 days, as is currently the practice on all issues of T reasu ry bills.) It is urged that tenders be made on the printed form s and forw arded in the special envelopes which will be supplied b y Federal Reserve Banks or Branches on application therefor. B anking institutions generally m ay submit tenders for account o f 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 enders will be received w ithout 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 of the face am ount of 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. Im m ediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, follow in g which public announcem ent will be made by the T reasury D epartm ent of the am ount and price range of accepted bids. T h ose sub m itting tenders will be advised of 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. Subject to these reservations, noncom petitive tenders for $200,000 or less without stated price from any one bidder w ill be accepted in full at the average price (in three decim als) of accepted co m petitive bids. Settlem ent for accepted tenders in accordance with the bids m ust be made or com pleted at the Federal Reserve Bank on M ay 2, 1966, in cash or other im m ediately available funds or in a like face am ount of T reasu ry bills m aturing A pril 30, 1966. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents w ill be m ade for differences between the par value of m aturing bills accepted in exchange and the issue price of the new bills. T h e income 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 from the sale or other disposition of T reasury bills does not have any special treat m ent, as such, under the Internal Revenue Code o f 1954. T h e bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exem pt 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 authorit 3r. 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 nd er Sections 4 5 4 (b ) and 1 22 1 (5 ) of the Internal Revenue Code of 1954, the am ount of discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeem ed or otherwise disposed of, and such bills are excluded from consideration as capital assets. A cco rd in gly , the ow ner of T reasu ry bills (other than life insurance co m panies) issued hereunder need include in his incom e tax return only the difference between 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 reasury D ep artm ent 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 of the circular m a y be obtained from any Federal Reserve Bank or Branch. This Bank will receive tenders up to 1 :30 p.m., Eastern Daylight Saving time, Tuesday, April 26, 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. Payment 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 in maturing Treasury bills. A lfred H ayes , President. ( ov e r ) No. TENDER FOR SPECIAL 365-DAY TREASURY BILLS Dated April 30, 1966 To F e d er a l R eserve B a n k of N ew Due April 30, 1967 Dated at ........................................................ .......................................................... , 1 9 . . . . Y ork, Fiscal Agent of the United States. 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 below : COMPETITIVE TENDER f I not b° th C om petitiveand "I Noncom petitive tenders on one form J $ ............................................................ (maturity value), or any lesser amount that may be awarded. P r i c e :.................................... per 100. (Price must be expressed with not more than three decimal places, for example, 99.925) 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 $ Maturity value 1,000 5,000 10,000 50,000 □ 1. Deliver over the counter to the undersigned □ 2. Ship to the undersigned □ 3. H old in safekeeping (for ac count o f member bank o n ly )* □ 4. Allotment attached) □ 5. Special instructions: transfer (see list Payment will be made as fo llo w s: O By 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 /A T» changes in delivery instructions will be accepted) Total (Paym ent cannot be made through Treasury T a x and Loan Account) 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 velop e m arked “ T ender for Special Treasury Bills'’ (Please print) B y ................................... By (Official signature(s) required) T itle ............................... T itle ............ A dd 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 o f $1,000 (m aturity value). 2. O th ers than banking institutions w ill not be perm itted to subm it tenders except for their ow n account. B anks 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 of each bidder, the am ount bid for his account, and m eth od o f paym ent. F orm s for this purpose will be furnished on request. 3. I f the person m aking 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 b y an officer of the corporation w ill 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 ...................................................................................................................... . a m em ber of the firm .” 4. T en ders will be received w ithout deposit from incorporated banks and trust companies 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 of this tender is changed in any respect, which, in the opinion o f the Secretary o f the T reasury, is material, the tender m ay be disregarded.
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