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FE D E R A L R ES E R V E BANK O F NEW YO RK Fiscal Agent of the United States Circular No. 6 5 3 8 [ May 6, 1970 ] OFFERING OF TWO SERIES OF TREASURY BILLS $1,800,000,000 of 91-Day Bills, Additional Amount, Series Dated February 13,1970, Due August 13,1970 (To Be Issued May 14,1970) $1,300,000,000 of 182-Day Bills, Dated May 14, 1970, Due November 12, 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 T reasury Department, released at 4 p.m. to d ay : 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 May 14, 1970, in the am ount of $2,993,940,000, as follows: 91-day bills (to m aturity date) to be issued M ay 14, 1970, in the am ount of $1,800,000,000, or thereabouts, representing an additional am ount of bills dated February 13, 1970, and to m ature A ugust 13, 1970, originally issued in the am ount of $1,200,664,000, the additional and original bills to be freely inter changeable. 182-day bills, for $1,300,000,000, or thereabouts, to be dated May 14, 1970, and to m ature November 12, 1970. T he bills of both series will be issued on a discount basis under com petitive 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 denom inations 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., E astern D aylight Saving time, M onday, M ay 11, 1970. T enders 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 com petitive tenders the price offered m ust be ex pressed 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 th at tenders be m ade on the printed form s and forw arded 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 custom ers, provided the nam es 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. T enders 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, follow ing which public announcem ent will be m ade by the T reasury D ep art m ent of th e am ount and price range of accepted bids. Only those subm itting com petitive tenders will be advised of the acceptance o r rejection thereof. T he Secretary of the T reas ury 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 accord ance w ith the bids m ust be m ade or completed at the Federal R eserve Bank on May 14, 1970, in cash or other immediately available funds or in a like face am ount of T reasury bills m aturing M ay 14, 1970. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be made for differences between 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 m ent, as such, under the In tern al 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 ta x a 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 U nited States is considered to be inter est. U nder Sections 454(b) and 1221(5) of the Internal Rev enue 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 otherw ise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of T reasu ry bills (other than life insurance com panies) issued hereunder need include in his in come tax return only the difference between the price paid for such bills, w hether on original issue or on subsequent pur chase, 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 Daylight Saving time, Monday, May 11, 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 w ritten confirmation; they may not be submitted by telephone. Paym ent fo r the Treasury bills cannot be made by credit through the Treas ury 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 May 7, 1970, representing an additional amount of bills dated F ebruary 5, 1970, m aturing A ugust 6, 1970; and 182-day bills dated May 7, 1970, m aturing November 5, 1970) are shown on the reverse side of this circular. A lfred H a yes, President. ( over) RESULTS OF LAST W EEK LY O FFER IN G OF TREASURY BILLS (TW O SERIES TO BE ISSUED MAY 7, 1970) R ange of A ccepted C om petitive Bids 91-Day Treasury Bills M aturing A u g u st 6,1970 182-Day Treasury Bills M aturing N ovem ber 5,1970 A p p ro x . equiv. A p p ro x . equiv. annual rate P rice annual rate H igh ........................ ............. 98.243a 6.951% 96.294b 7.331% L o w .......................... ............. 98.168 7.247% 96.188 7.540% ................. ............. 98.184 7.184% 1 96.212 7.493%* Average P rice a Excepting two tenders totaling $660,000. b Excepting one tender of $590,000. 1 These rates are on a bank discount basis. The equivalentcoupon issue yields are 7.42 percent for the 91-day bills, and 7.90 percent for the 182-day bills. (96 percent of the amount of 91-day bills bid for at the low price was accepted.) (56 percent of the amount of 182-day bills bid for at the low price was accepted.) T otal T enders A pplied for and A ccepted (By F ed eral Reserve D istricts) 91-Day Treasury Bills M aturing A ugust 6,1970 Boston .......................... ......... $ 33,040,000 Applied fo r Accepted Applied fo r District 182-Day Treasury Bills M aturing Novem ber 5,1970 $ 33,040,000 $ 18,720,000 Accepted $ 18,720,000 New Y o r k ...................... ......... 2,222,220,000 1,275,740,000 2,287,590,000 1,070,410,000 Philadelphia......... ......... 38,550,000 23,550,000 11,880,000 11,880,000 Cleveland ........... ........ 37,250,000 37,250,000 46,020,000 28,130,000 R i c h m o n d ...................... ......... 34,220,000 24,220,000 11,270,000 11,270,000 A tlanta ............................ ......... C h ic a g o .......................... ........... 40,500,000 33,800,000 48,640,000 37,310,000 189,670,000 134,550,000 174,342,000 33,342,000 St. Louis ........................ ......... 48,270,000 43,970,000 26,280,000 19,910,000 M in n eap o lis.................... ........ 14,090,000 5,090,000 11,190,000 5,490,000 K ansas C i t y ................... ......... 35,410,000 32,310,000 24,800,000 21,710,000 28,780,000 20,780,000 28,980,000 15,540,000 135,750,000 155,700,000 26,700,000 Dallas .............................. ......... San Francisco ............... T otal .............. ......... 146,790,000 $2,868,790,000 $1,800,050,000° c Includes $376,990,000 noncompetitive tenders accepted at the average price of 98.184. d Includes $211,942,000 noncompetitive tenders accepted a t the average price of 96.212. $2,845,412,000 $1,300,412,000d
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