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FEDERAL RESERVE BANK OF N EW YORK Fiscal Agent of the United States r Circular No. 6 0 7 '4 ~ 1 L December 11, 1967 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,500,000,000 of 91-Day Bills, Additional Amount, Series Dated September 21,1967, Due March 21,1968 (To Be Issued December 21, 1967) $1,000,000,000 of 182-Day Bills, Dated December 21, 1967, Due June 20, 1968 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: The following statement was made public today by the Treasury Department: The Treasury announced today that its next regular weekly bill auction will be held on Friday, December 15, rather than on the following Monday. The auction is being advanced to assure ample time between that date and the payment date during the pre-holiday season. Payment for and delivery of the bills will be on the normal day, Thursday, December 21. The Treasury added that for the subsequent two weekly bill auctions the announcements inviting tenders will be made on Monday, December 18, and Friday, December 22, and the auctions will be held on Friday the 22nd and the 29th. The payment and delivery day for these issues will be Thursday as usual. Following is the text of the public notice offering the bills to be auctioned Friday, December 15: T he Treasury Department, by this public notice, invites tenders for tw o series of Treasury bills to the aggregate amount of $2,500,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing D ecem ber 21, 1967, in the amount of $2,400,015,000, as follow s: 91-day bills (to maturity date) to be issued D ecem ber 21, 1967, in the amount of $1,500,000,000, or thereabouts, representing an additional amount of bills dated S ep tember 21, 1967, and to mature M arch 21, 1968, origi nally issued in the amount of $1,000,249,000, the addi tional and original bills to be freely interchangeable. 182-day bills, for $1,000,000,000, or thereabouts, to be dated Decem ber 21, 1967, and to mature June 20, 1968. The bills of both series will be issued on a discount basis under competitive and noncom petitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. T h ey will be issued in bearer form only, and in denominations o f $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (maturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Stand ard time, Friday, D ecem ber 15, 1967. Tenders will not be received at the Treasury Department, W ashington. Each tender must be for an even multiple of $1,000, and in the case o f com petitive tenders the price offered must be expressed on the basis of 100, with not m ore than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed form s and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions generally may submit tenders for account o f customers, provided the names o f the customers are set forth in such tenders. Others than banking institutions will not be permitted to submit tenders except for their ow n account. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent o f the face amount o f Treasury bills applied for, unless the tenders are accompanied by an express guaranty o f payment by an incorporated bank or trust company. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, follow in g which public announcement will be made by the Treasury Department of the amount and price range of accepted bids. Those sub mitting tenders will be advised of the acceptance or rejection thereof. The Secretary of the Treasury 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, noncompetitive tenders for each issue for $200,000 or less without stated price from any one bidder will be accepted in full at the average price (in three decim als) o f accepted competitive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or com pleted at the Federal Reserve Bank on Decem ber 21, 1967, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing Decem ber 21, 1967. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value of maturing bills accepted in exchange and the issue price o f the new bills. T h e incom e derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, does not have any exemption, as such, and loss from the sale or other disposition of Treasury bills does not have any special treat ment, as such, under the Internal Revenue Code o f 1954. The bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exempt from all taxa tion now or hereafter imposed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority. For purposes o f taxation the amount of discount at which Treasury bills are originally sold by the United States is considered to be interest. Under Sections 454(b) and 1221(5) of the Internal Revenue Code o f 1954, the amount o f discount at which bills issued here under are sold is not considered to accrue until such bills are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. A ccordingly, the owner o f Treasury bills (other than life insurance com 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 amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made, as ordi nary gain or loss. Treasury Department Circular No. 418 (current revision) and this notice prescribe the terms o f the Treasury bills and govern the conditions o f their issue. Copies o f the circular may be obtained from any Federal Reserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Friday, December 15, 1967, at the Securities Department of its Head Office and at its Buffalo Branch. Tender forms for the respective series are enclosed. Please use the appropriate forms to submit tenders and return them in an envelope marked “ Tender for 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 T ax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. This circular was printed before the results of the bidding for Treasury bills to be issued December 14, 1967 were available; those results will be announced after release by the Treasury Department. A lfr e d H ayes, Closing date for receipt of tenders is Friday, December 15. President.
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