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F ED E R A L R ES ER V E BANK O F NEW YORK Fiscal Agent of the United States TCircular No. 6 5 0 8 1 March 18, 1970 J L OFFERING OF TWO SERIES OF TREASURY BILLS $1,800,000,000 of 91-Day Bills, Additional Amount, Series Dated December 26, 1969, Due June 25, 1970 (To Be Issued March 26, 1970) $1,300,000,000 of 182-Day Bills, Dated March 26, 1970, Due September 24, 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: T he 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 March 26, 1970, in the am ount of $3,010,463,000, as follows: 91-day bills (to m aturity date) to be issued M arch 26, 1970, in the am ount of $1,800,000,000, or thereabouts, representing an additional am ount of bills dated De cember 26, 1969, and to m ature June 25, 1970, originally issued in the am ount of $1,209,135,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,300,000,000, or thereabouts, to be dated M arch 26, 1970, and to m ature September 24, 1970. The bills of both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at m aturity their face am ount will be payable w ithout interest. They will be issued in bearer form only, and in denominations of $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m aturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Standard time, Monday, March 23, 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 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. 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 investment 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 trust 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 ment 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, noncom petitive 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 26, 1970, in cash or other immediately available funds or in a like face am ount of T reasury bills m aturing March 26, 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. 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 tre a 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. 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 redem ption 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 23, 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 eek ly ).” Tenders may be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. P ay ment for the Treasury bills cannot be made by credit through the Treasury T ax 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 M arch 19, 1970, representing an additional amount of bills dated December 18, 1969, m aturing June 18, 1970; and 182-day bills dated M arch 19, 1970, m aturing September 17, 1970) are shown on the reverse side of this circular. A lfred H ay es, President. ( over) Tenders must be for $10,000 or m ultiples thereof. RESULTS OF LAST W EEK LY O FFER IN G OF TREASURY BILLS (TW O SERIES TO BE ISSUED MARCH 19, 1970) Range of A ccepted Com petitive Bids 91-Day Treasury Bills M aturing June 18,1970 182-Day i reasury Bills M aturing September 17,1970 Price Approx. equiv. annual rate Price Approx. equiv. annual rate ............... ......................... 98.285 6.785% 96.613 6.700% ................ ......................... 98.268 6.852% 96.598 6.729% A verage ......... ......................... 98.272 6.836% 1 96.609 6.707% 1 H ig h Low 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 7.05 percent for the 91-day bills, an 7.04 percent for the 182-day bills. (61 percent of the am ount of 91-day bills bid for at the low price was accepted.) (44 percent of the am ount 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 June 18,1970 Applied, for District Boston ........................ ..................... $ 43,360,000 182-Day Treasury Bills Maturing September 17,1970 Accepted $ 31,970,000 Applied for $ 18,610,000 Accepted $ 6,390,000 New Y o r k ............... .................... 2,104,520,000 1,239,990,000 2,072,730,000 1,016,350,000 Philadelphia ........... .................. 40,600,000 24,140,000 18,360,000 7,900,000 ............... ................... 41,500,000 38,930,000 42,870,000 36,690,000 Richmond ................. ................... 20,620,000 15,120,000 11,670,000 8,670,000 ...................... .................... 53,330,000 30,920,000 43,910,000 15,410,000 Chicago ...................... .................. 325,050,000 211,680,000 146,760,000 39,930,000 St. L o u i s .................... .................... 64,210,000 45,710,000 38,350,000 24,750,000 ........... .................. 38,810,000 16,570,000 21,940,000 4,570,000 Kansas City ........... .................... 37,480,000 30,700,000 20,480,000 19,510,000 ................... 32,500,000 17,700,000 27,440,000 14,190,000 San F ra n c is c o .......... ................... 247,190,000 97,480,000 244,610,000 106,920,000 T OTAL .......... ................... $3,049,170,000 Cleveland Atlanta Minneapolis $l,800,910,000a $2,707,730,000 a In clu d es $366,250,000 noncom p etitiv e ten d ers accepted a t the av erag e price of 98.272. b Includes $177,420,000 n oncom petitive ten d ers accepted at the av erag e price of 96.609. $ 1,301,280,000b