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F E D E R A L R E S ER V E BANK O F NEW YORK Fiscal Agent of the United States r Circular I No. 6 5 0 4 1 March 11, 1970 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,800,000,000 of 91-Day Bills, Additional Amount, Series Dated December 18,1969, Due June 18, 1970 (To Be Issued March 19, 1970) $1,300,000,000 of 182-Day Bills, Dated March 19, 1970, Due September 17, 1970 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: ! olio wing is the text of a notice issued by the Treasury Department, released at 4 p.m. today: The T reasury D epartm ent, by this public notice, invites tenders for two series of T reasury bills to the aggregate am ount of $3,100,000,000, or thereabouts, for cash and in exchange for T reasury bills m aturing M arch 19, 1970, in the am ount of $3,002,144,000, as follows: 91-day bills (to m aturity date) to be issued March 19, 1970, in the am ount of $1,800,000,000, or thereabouts, representing an additional am ount of bills dated De cember 18, 1969, and to m ature June 18, 1970, originally issued in the am ount of $1,200,879,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,300,000,000, or thereabouts, to be dated M arch 19, 1970, and to m ature September 17, 1970. The 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 without interest. They will be issued in bearer form only, and in denom inations of $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m aturity value). T enders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Standard time, Monday, M arch 16, 1970. Tenders will not be received at the T reasury D epartm ent, W ashington. Each tender m ust be for an even multiple of $10,000, and in the case of competitive tenders the price offered m ust 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. O thers than banking institutions will not be perm itted to submit tenders except for their own account. T enders will be received w ithout deposit from incorporated banks and trust companies and from responsible and recognized dealers in investm ent securities. Tenders 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. Immediately 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 competitive tenders will be advised of the acceptance or rejection thereof. The Secretary of the T reasury 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 w ithout 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. Settlem ent for accepted tenders in accordance with the bids m ust be made or completed at the Federal Reserve Bank on M arch 19, 1970, in cash or other immediately available funds or in a like face am ount of T reasury bills m aturing M arch 19, 1970. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be made for differences be tween the par value of m aturing bills accepted in exchange and the issue price of the new bills. The income derived from T reasury 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 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 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 am ount of discount at which T reasury bills are originally sold by the U nited 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 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 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 return 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, March 16, 1970, at the Securities Department of its Head Office and at its Buffalo Branch. Tender forms for the respective series are enclosed; because tenders must now be for $10,000 or multiples thereof, as described above, the enclosed tender forms, which were printed in advance of notice of this change, should be filled out accordingly. Please use the appropriate forms to submit tenders and return them in the enclosed envelope marked “Tender for Treasury Bills (W eekly).” Tenders may be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. Pay ment for the Treasury bills cannot be made by credit through the Treasury Tax and Loan Account. Settlem ent 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 March 12, 1970, representing an additional amount of bills dated December 11, 1969, m aturing June 11, 1970; and 182-day bills dated March 12, 1970, m aturing September 10, 1970) are shown on the reverse side of this circular. A lfred H a y es. President. ( over) Tenders must be for $10,000 or m ultiples thereof. RESULTS OF LAST W EEK LY O FFERIN G OF TREASURY BILLS (TW O SERIES TO BE ISSUED MARCH 12, 1970) Range of Accepted Com petitive Bids 91-Day Treasury Bills Maturing June 11, 1970 182-Day Treasury Bills Maturing Septem ber 10, 1970 Price Approx. equiv. annual rate Price ............... ......................... 98.267 6.856% 96.608 6.709% Low ............... ......................... 98.256 6.899% 96.594 6.737% Average ......... ........................ 98.262 6.876% 1 96.598 6.729%! H ig h Approx. equiv. annual rate 1 T hese races are on a bank d iscount basis. T h e equivalent coupon issue yields are 7.09 p erc en t for the 91-day bills, an 7.06 percent for the 182-day bills. (4 percent of the amount of 91-day bills bid for at the low price was accepted.) (23 percent of the amount of 182-day bills bid for at the low price was accepted.) T otal T enders A pplied for and Accepted (By F ederal Reserve D istricts) 91-Day Treasury Bills M aturing June 11, 1970 Accepted Applied, for District B o s to n ....................... ....................... $ 33,320,000 182-Day Treasury Bills M aturing Septem ber 10, 1970 $ 22,960,000 Applied for $ 20,080,000 Accepted $ 6,420,000 New Y o r k ............. .................... 2,173,870,000 1,277,440,000 1,961,310,000 769,050,000 Philadelphia ......... .................... 49,980,000 29,480,000 21,860,000 9,850,000 ............. ................... 51,220,000 41,710,000 50,090,000 26,600,000 Richmond ............. ................... 17,490,000 17,490,000 19,010,000 8,910,000 ...................... ....................... 49,590,000 33,170,000 41,350,000 17,340,000 Chicago .................... ................... 269,090,000 183,330,000 158,450,000 27,220,000 St. L o u i s .................. ....................... 61,310,000 36,630,000 43,770,000 18,470,000 .......... ................... 28,580,000 9,580,000 22,930,000 4,930,000 Kansas City .............................. 32,230,000 27,490,000 22,180,000 18,730,000 Dallas ..................... ....................... 32,460,000 18,460,000 25,820,000 12,320,000 San F ra n c is c o .......... ....................... 187,660,000 102,920,000 445,160,000 381,710,000 .......... ................... $2,986,800,000 $1,800,660,000" $2,832,010,000 Cleveland A tlanta Minneapolis T otal a In clu d es $363,690,000 n o ncom petitive ten d ers accepted a t the average price of 98.262. k In clu d es $199,120,000 n o ncom petitive ten d ers accepted a t th e av erag e price of 96.598. $1,301,550,000b