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FEDERAL RESERVE BANK OF N EW YORK Fiscal Agent of the United States r C ircu la r N o . 6 4 3 7 T L N o v e m b e r 17, 1969 J Offering of Additional Amounts of April and June Tax Anticipation Treasury Bills To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice issued today by the Treasury Department: 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, as follows: 147-day bills (to maturity date) to be issued November 26, 1969, in the amount of $1,000,000,000, or thereabouts, representing an additional amount of bills dated Octo ber 14, 1969, and to mature April 22, 1970, originally issued in the amount of $2,006,704,000, the additional and original bills to be freely interchangeable. The bills will be accepted at face value in payment of in come taxes due on April 15, 1970. 208-day bills (to maturity date) to be issued November 26, 1969, in the amount of $1,500,000,000, or thereabouts, representing an additional amount of bills dated Octo ber 29, 1969, and to mature June 22, 1970, originally issued in the amount of $3,004,380,000, the additional and original bills to be freely interchangeable. The bills will be accepted at face value in payment of in come taxes due on June 15, 1970. The bills of both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided and at maturity, to the extent they are not presented in payment of income taxes, 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). Taxpayers desiring to apply these bills in payment of in come taxes may submit the bills to a Federal Reserve Bank or Branch or to the Office of the Treasurer of the United States, Washington, not more than fifteen days before the appropriate income tax payment date. In the case of bills submitted in payment of income taxes of a corporation they shall be accom panied by a duly completed Form 503 and the office receiving these items will effect the deposit on the date the taxes are due. In the case of bills submitted in payment of income taxes of all other taxpayers, the office receiving the bills will issue re ceipts therefor, the original of which the taxpayer shall submit on or before the date the taxes are due to the District Director of Internal Revenue for the District in which such taxes are payable. Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Standard time, Friday, November 21, 1969. Tenders will not be received at the Treasury Department, Washington. Each tender 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 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 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. All bidders are required to agree not to purchase or to sell, or to make any agreements with respect to the purchase or sale or other disposition of any bills of the issue for which they are bidding at a specific rate or price, until after one-thirty p.m., Eastern Standard time, Friday, November 21, 1969. 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 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 whole or in part, and his action in any such respect shall be final. Subject to these reservations, noncompetitive tenders for $200,000 or less for the 147-day bills and $200,000 or less for the 208-day bills, 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. Paj^ment of accepted tenders at the prices offered must be made or completed at the Federal Reserve Bank in cash or other immediately available funds on November 26, 1969, provided, however, any qualified depositary will be permitted to make payment by credit in its Treasury tax and loan account for Treasury bills allotted to it for itself and its customers up to any amount for which it shall be qualified in excess of existing deposits when so notified by the Federal Reserve Bank of its District. 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 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 Fed.eral Reserve Bank or Branch. This Bank will receive tenders up to 1 :30 p.m., Eastern Standard time, Friday, November 21, 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 T ax Anticipation Treasury Bills.” Tenders may be submitted by telegraph, subject to written con firmation; they may not be submitted by telephone. Settlement for accepted tenders must be made in cash or other immediately available funds on November 26, 1969, except that any qualified depositary may make payment by credit in its Treasury T ax and Loan Account for Treasury bills allotted to it for itself and its customers up to any amount for which it shall be qualified in excess of existing deposits. A lfred H a y e s, President.