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FEDERAL RESERVE BANK OF N EW YORK Fiscal Agent of the United States Circular No. 6 0 8 8 January 3, 1968 OFFERING OF TW O SERIES OF TREASURY BILLS L,500,000,000 of 91-Day Bills, Additional Amount, Series Dated October 13, 1967, Due April 11, 1968 (To Be Issued January 11,1968) $1,000,000,000 of 182-Day Bills, Dated January 11,1968, Due July 11,1968 To All Incorporated Banks and Trust Companies, and Others Conoerned, in the Second Federal Beserve District: Following is the text o f a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard time: The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $2,500,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing January 11, 1968, in the amount of $2,501,746,000, as follows: 91-day bills (to maturity date) to be issued January 11, 1968, in the amount of $1,500,000,000, or thereabouts, representing an additional amount of bills dated Octo ber 13, 1967, and to mature April 11, 1968, originally issued in the amount of $1,000,840,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,000,000,000, or thereabouts, to be dated January 11, 1968, and to mature July 11, 1968. The bills of both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. They will be issued in bearer form only, and in denominations of $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 Standard time, Monday, January 8, 1968. lenders will not be received at the Treasury Department, Washington. Each ten der must be for an even multiple of $1,000, and in the case of competitive tenders the price offered must be expressed on the basis of 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed forms 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 of customers, provided the names of the customers are set forth in such tenders. Others than banking institutions will not be permitted to submit tenders except for their own account. Tenders will be received without deposit from incor porated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Depart ment of the amount and price range of accepted bids. Those submitting tenders will be advised of the acceptance or rejec tion thereof. The Secretary of the Treasury expressly reserves the right to accept or reject any or all tenders, in whole 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 decimals) of accepted competitive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on January 11, 1968, in cash or other immediately available funds or in a like face amount of Treasury bills maturing January 11, 1968. Cash and exchange tenders will receive equal treatment. Cash adjust ments will be made for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. The income 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 of 1954. The bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exempt from all tax ation 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 of 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 of 1954, the amount of discount at which bills issued hereunder 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. Accordingly, the owner of Treasury bills (other than life insurance com panies) issued hereunder need include in his income 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 ordinary gain or loss. Treasury Department Circular No. 418 (current revision) and this notice prescribe the terms of the Treasury bills and govern the conditions of their issue. Copies of 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, Monday, January 8, 1968, at the Securities Department of its Head Office and at its Buffalo Branch. Tender forms for the respec tive 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 Tax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. Results of the last weekly offering o f Treasury bills (91-day bills to be issued January 4, 1968, representing an additional amount of bills dated October 5, 1967, maturing April 4, 1968; and 183-day bills dated January 4, 1968, maturing July 5, 1968) are shown on the reverse side of this circular. A lfred H ayes, President. (o v e r ) RESULTS OF LAST W EEKLY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED JANUARY 4, 1968) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing April 4,1968 183-Day Treasury Bills Maturing July 5,1968 _ Price Price Approx. equiv. annual rate .................................... 98.722 5.056% 97.168 5.571% Low ...................................... 98.700 5.143% 97.146 5.614% Average 98.710 5.103%! 97.157 5.593%* High .............................. Approx. equiv. annual rate 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 5.26 percent for the 91-day bills, and 5.85 percent for the 183-day bills. (40 percent of the amount of 91-day bills bid for at the low price was accepted.) (1 percent of the amount of 183-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing April 4,1968 District Boston Applied for ........................ .......... $ 19,126,000 183-Day Treasury Bills Maturing July 5,1968 Accepted, $ 9,126,000 Applied for $ 14,321,000 Accepted $ 4,321,000 New York .................. .......... 1,690,735,000 1,084,135,000 1,477,372,000 759,519,000 Philadelphia................ .......... 32,682,000 20,682,000 18,992,000 7,789,000 Cleveland .................... .......... 33,461,000 22,461,000 56,346,000 25,156,000 R ich m on d .................... .......... 9,651,000 9,651,000 4,112,000 3,812,000 Atlanta ........................ .......... 41,489,000 33,129,000 26,922,000 13,772,000 ...................... .......... 261,894,000 125,934,000 248,191,000 118,189,000 St. Louis .................... .......... 37,359,000 30,359,000 33,973,000 13,923,000 17,319,000 15,704,000 4,704,000 11,793,000 Chicago Minneapolis ................ .......... 23,119,000 Kansas C i t y ................ .......... 26,214,000 22,214,000 15,808,000 Dallas .......................... .......... 12,021,000 12,021,000 11,212,000 11,212,000 188,041,000 113,241,000 129,263,000 25,894,000 San Francisco .............. T otal ................ .......... $2,375,792,000 $1,500,272,000* $2,052,216,000 a Includes $215,043,000 noncompetitive tenders accepted at the average price of 98.710. b Includes $125,505,000 noncompetitive tenders accepted at the average price of 97.157. $ 1,000,084,000b
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