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FEDERAL RESERVE BANK OF N E W YORK Fiscal Agent of the United States r C ircu la r N o . 6 4 4 7 ~1 U D e c e m b e r 3, 1969 j OFFERING OF TWO SERIES OF TREASURY BILLS $1,800,000,000 o f 91-Day Bills, Additional Amount, Series Dated Sept. 11, 1969, Due March 12, 1970 (To Be Issued December 11, 1969) $1,200,000,000 of 182-Day Bills, Dated December 11, 1969, Due June 11, 1970 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice issued by the Treasury Department, released at 4 p.m. today: The Treasury Department, by this public notice, invites tenders for tw o series of Treasury bills to the aggregate amount of $3,000,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing D ecem ber 11, 1969, in the amount of $2,900,826,000, as follow s: 91-day bills (to maturity date) to be issued Decem ber 11, 1969, in the amount of $1,800,000,000, or thereabouts, representing an additional amount of bills dated Sep tember 11, 1969, and to mature M arch 12, 1970, origi nally issued in the amount o f $1,201,360,000, the addi tional and original bills to be freely interchangeable. 182-day bills, for $1,200,000,000, or thereabouts, to be dated D ecem ber 11, 1969, and to mature June 11, 1970. 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. Th 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 Standard time, M onday, D ecem ber 8, 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 more 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 of 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 of 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 ing which public announcement will be made by the Treasury Departm ent o f the amount and price range of accepted bids. Th ose sub mitting tenders will be advised o f the acceptance or rejection thereof. The Secretary o f 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, noncom petitive tenders for each issue for $200,000 or less without stated price from any one bidder w ill 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 com pleted at the Federal Reserve Bank on D ecem ber 11, 1969, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing D ecem ber 11, 1969. 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. The incom e derived from Treasury bills, whether interest or gain from the sale or other disposition o f the bills, does not have any exemption, as such, and loss from the sale or other disposition o f 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 exem pt from all taxa tion now or hereafter im posed on the principal or interest thereof by any State, or any o f the possessions o f the U nited States, or by any local taxing authority. For purposes o f taxation the amount o f 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 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 ccordin gly, the owner of 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 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, December 8, 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 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 of Treasury bills (91-day bills to be issued December 4, 1969, representing an additional amount of bills dated September 4, 1969, maturing March 5, 1970; and 182-day bills dated December 4, 1969, maturing June 4, 1970) are shown on the reverse side of this circular. A lfred H a y e s, President. ( over) RESULTS OF L A ST W E E K L Y O FFE R IN G OF T R E A S U R Y BILLS (T W O SERIES T O BE ISSUED D E C E M B E R 4, 1969) Range of A ccepted Com petitive Bids 91-Day Treasury Bills 182-Day Treasury Bills Maturing March 5 ,1 9 7 0 Maturing June 4 ,1 9 7 0 Price Approx. equiv. annual rate Price Approx. equiv. annual rate 98.132 7.390% 96.182a 7.552% ............. 98.109 7.481% 96.132 7.651% ............. 98.116 7.453% ! 96.151 7.613% ! ............. a Excepting one tender o f $200,000. 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 7.70 percent for the 91-day bills, and 8.03 percent for the 182-day bills. (72 percent of the amount of 91-day bills bid for at the low price was accepted.) (17 percent of the amount of 182-day bills bid for at the low price was accepted.) T otal Tenders A p p lied fo r and A ccepted (B y Federal Reserve Districts) 91-Day Treasury Bills 182-Day Treasury Bills Maturing March 5 ,1 9 7 0 Maturing June 4 ,1 9 7 0 Accepted Applied for District ........... $ 42,424,000 $ 32,424,000 Applied for $ 8,956,000 $ 8,956,000 ........... 2,113,535,000 1,190,895,000 1,615,234,000 794,539,000 ........... 39,637,000 24,627,000 24,155,000 14,154,000 ........... 33,816,000 32,966,000 41,554,000 40,104,000 ........... 26,531,000 26,521,000 31,483,000 31,483,000 ........... 42,208,000 28,183,000 40,569,000 27,283,000 ........... 262,303,000 248,223,000 140,433,000 107,433,000 ........... 44,969,000 39,369,000 32,799,000 29,769,000 ........... 30,742,000 26,102,000 20,259,000 16,599,000 ........... 32,762,000 32,762,000 28,281,000 27,278,000 ........... 28,142,000 18,862,000 25,414,000 15,584,000 170,737,000 99,397,000 142,531,000 86,868,000 ........... $2,867,806,000 $1,800,33 l,000b $2,151,668,000 b Includes $346,417,000 noncompetitive tenders accepted at the average price of 98.116. c Includes $259,909,000 noncompetitive tenders accepted at the average price of 96.151. Accepted $ 1,200,050,000c