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FE D E R A L R E S E R V E BANK O F N EW YORK Fiscal Agent of the United States f Circular No. 6 3 3 8 "I L May 21, 1969 J OFFERING OF TWO SERIES OF TREASURY BILLS $500,000,000 of 271-Day Bills, Additional Amount, Series Dated Feb. 28, 1969, Due Feb. 28, 1970 (To Be Issued June 2, 1969) $1,000,000,000 of 365-Day Bills, Dated May 31, 1969, Due May 31, 1970 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve D istrict: Following is the text of a notice issued by the Treasury Department, released at 4 p.m. today: T he Treasury Department, by this public notice, invites tenders for tw o scries of Treasury bills to the aggregate amount o f $1,500,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing M ay 31, 1969, in the amount of $1,703,200,000, as follow s: 271-day bills (to maturity date) to be issued June 2, 1969, in the amount of $500,000,000, or thereabouts, representing an additional amount of bills dated Febru ary 28, 1969, and to mature February 28, 1970, origi nally issued in the amount o f $1,000,376,000, the addi tional and original bills to be freely interchangeable. 365-day bills, for $1,000,000,000, or thereabouts, to be dated M ay 31, 1969, and to mature M ay 31, 1970. T h e bills o f 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. 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 D ay light Saving time, Tuesday, M ay 27, 1969. Tenders will not be received at the Treasury Department, W ashington. Each tender must be for an even multiple o f $1,000, and in the case of competitive tenders the price offered must be expressed on the basis o f 100, with not m ore than three decimals, e.g., 99.925. Fractions may not be used. (N otwithstanding the fact that the one-year bills will run for 365 days, the discount rate will be computed on a bank discount basis o f 360 days, as is currently the practice on all issues o f Treasury bills.) 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. Ten ders from others must be accom panied by payment o f 2 percent o f 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 com pany. 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 o f the amount and price range o f accepted bids. T h ose sub mitting tenders will be advised of the acceptance or rejection thereof. The Secretary o f 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, noncom petitive 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 com petitive 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 June 2, 1969, in cash or other immediately available funds or in a like face amount of Treasury bills maturing M ay 31, 1969. 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 taxa tion now or hereafter im posed on the principal or interest thereof by any State, or any of the possessions o f 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) o f the Internal Revenue Code o f 1954, the amount o f 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. 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 ordinary gain or loss. Treasury Departm ent 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 Daylight Saving time, Tuesday, May 27, 1969, 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 the enclosed 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 a y e s , President.