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FEDERAL RESERVE BANK OF N E W YORK Fiscal Agent of the United States No. 6 4 8 2 1 [Circular February 4, 1970 -J OFFERING OF TWO SERIES OF TREASURY BILLS $1,800,000,000 of 90-Day Bills, Additional Amount, Series Dated November 13,1969, Due May 14,1970 (To Be Issued February 13, 1970) $1,200,000,000 of 181-Day Bills, Dated February 13, 1970, Due August 13, 1970 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice issued by the T reasury Department, released at 4 p.m. today: T he T reasury D epartm ent, by this public notice, invites tenders for tw o series of T reasury bills to the aggregate amount of $3,000,000,000, or thereabouts, for cash and in exchange for T reasury bills m aturing February 13, 1970, in the am ount of $2,999,807,000, as follows: 90-day bills (to m aturity date) to be issued February 13, 1970, in the am ount of $1,800,000,000, or there abouts, representing an additional am ount of bills dated N ovem ber 13, 1969, and to m ature May 14, 1970, originally issued in the am ount of $1,204,069,000, the additional and original bills to be freely inter changeable. 181-day bills, for $1,200,000,000, or thereabouts, to be dated F ebruary 13, 1970, and to m ature A ugust 13, 1970. T he bills of both series will be issued on a discount basis under competitive and noncom petitive bidding as hereinafter provided, and at m aturity their face am ount will be payable w ithout interest. T hey 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., E astern Standard time, Monday, F ebruary 9, 1970. Tenders will not be received at the T reasury D epartm ent, W ashington. Each tender m ust be for an even m ultiple of $1,000, and in the case of competitive tenders the price offered m ust be expressed on the basis of 100, w ith 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 forms and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions generally may subm it tenders for account of customers, provided the names of the custom ers are set forth in such tenders. O thers than banking institutions will not be perm itted to subm it tenders except for their own account. Tenders will be received w ithout deposit from incor porated banks and tru st companies and from responsible and recognized dealers in investm ent securities. T enders from others m ust be accompanied by paym ent of 2 percent of the face am ount of T reasury bills applied for, unless the tenders are accompanied by an express guaranty of paym ent by an incorporated bank or tru st company. Im m ediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcem ent will be made by the T reasury D epart m ent of the am ount and price range of accepted bids. Only those subm itting com petitive tenders will be advised of the acceptance or rejection thereof. T he Secretary of the T reasury expressly reserves the right to accept or reject any or all tenders, in whole o r 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 a t the average price (in three decimals) of accepted competitive bids for the respective issues. Settlem ent for accepted tenders in accordance w ith the bids m ust be made or completed at the Federal Reserve Bank on F ebruary 13, 1970, in cash or other immediately available funds or in a like face am ount of T reasury bills m aturing F ebruary 13, 1970. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be made for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. T he income derived from T reasury bills, w hether 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 T reasury bills does not have any special trea t ment, as such, under the Internal Revenue Code of 1954. The bills are subject to estate, inheritance, gift or other excise taxes, w hether Federal or State, but are exem pt from all taxa tion now or hereafter imposed on the principal or interest thereof by any State, or any of the possessions of the U nited States, or by any local taxing authority. F o r purposes of taxation the am ount of discount at which T reasury bills are originally sold by the United States is considered to be interest. U nder Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954, the am ount of discount a t which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherw ise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the ow ner of T reasury 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, w hether on original issue or on subsequent purchase, and the am ount actually received either upon sale or redemption at m aturity during the taxable year for which the retu rn is made, as ordinary gain or loss. T reasury D epartm ent Circular No. 418 (current revision) and this notice prescribe the term s of the T reasury 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, February 9 1970 at the Securities Departm ent 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 reasury Bills (W eekly).” Tenders may be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. Paym ent fo r the Treasury bills cannot be made by credit through the Treasury T a x and Loan Account. Settlem ent m ust be made in cash or other immediately available fu n d s or in maturing Treasury bills. Results of the last weekly offering of Treasury bills (91-day bills to be issued February 5, 1970, representing an additional amount of bills dated November 6, 1969, m aturing May 7, 1970; and 182-day bills dated February 5, 1970, m aturing August 6, 1970) are shown on the reverse side of this circular. A lfred H a y es, President. P lease n ote that th e cu rren t offering is fo r 90-day and 181-day T reasu ry b ills. RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED FEBRUARY 5, 1970) Range of Accepted Competitive Bids 91-Day Treasury Bills M aturing M ay 7,1970 182-Day Treasury Bills M aturing A ugust 6,1970 Price Approx. equiv. annual rate # Price Approx. equiv. annual rate H igh ....................................... 98.049 7.718% 96.101 7.712% L o w ......................................... 98.036 7.770% 96.096 7.722% A v e ra g e ................................... 98.040 7.754%! 96.098 7.718% 1 1 These rates are on a bank discount basis. The equivalentcoupon issue yields are 8.02 percent for the 91-day bills, and .14 percent for the 182-day bills. (7 percent of the amount of 91-day bills bid for at the low price was accepted.) (19 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills M aturing M ay 7,1970 Applied fo r District Boston ....................................... $ 41,424,000 182-Day Treasury Bills M aturing A ugust 6,1970 Applied for Accepted $ 29,892,000 $ 21,675,000 Accepted $ 11,455,000 New York ..................... ........... 2,002,880,000 1,167,148,000 1,971,004,000 936,772,000 P h ila d elp h ia................... .......... 47,249,000 31,160,000 27,803,000 16,285,000 Cleveland ....................... ......... 52,892,000 47,683,000 62,824,000 40,967,000 R ic h m o n d ....................... .......... 36,946,000 30,860,000 29,112,000 18,212,000 Atlanta ...................................... 54,622,000 36,247,000 60,833,000 23,575,000 .................................... 228,176,000 215,690,000 186,929,000 35,016,000 St. Louis ....................... ......... 61,622,000 49,871,000 50,314,000 34,864,000 Minneapolis ................... ......... 31,110,000 20,525,000 19,723,000 3,973,000 Kansas C i t y ................... ......... 41,592,000 39,756,000 37,312,000 29,912,000 Dallas .............................. ......... 35,345,000 21,785,000 31,538,000 18,038,000 San F ra n c is c o ............... ......... 190,059,000 109,819,000 149,205,000 32,429,000 T o ta l .............. ......... $2,823,917,000 Chicago $1,800,436,000a a Includes $498,823,000 noncompetitive tenders accepted at the average price of 98.040. b Includes $327,278,000 noncompetitive tenders accepted at the average price of 96.098. $2,648,272,000 $1,201,498,000b
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