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FE D ER A L R ESER V E BANK O F NEW YORK Fiscal Agent of the United States 'Circular No. 6 5 4 1 ' * May 13, 1970 OFFERING OF TWO SERIES OF TREASURY BILLS $1,800,000,000 of 91-Day Bills, Additional Amount, Series Dated February 19, 1970, Due August 20, 1970 (To Be Issued May 21, 1970) $1,300,000,000 of 182-Day Bills, Dated May 21, 1970, Due November 19, 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 Treasury Departm ent, 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 21, 1970, in the am ount of $3,002,992,000, as follows: 91-day bills (to m aturity date) to be issued May 21, 1970, in the am ount of $1,800,000,000, or thereabouts, representing an additional am ount of bills dated F ebruary 19, 1970, and to m ature A ugust 20, 1970, originally issued in the am ount of $1,197,585,000, the additional and original bills to be freely inter changeable. 182-day bills, for $1,300,000,000, or thereabouts, to be dated May 21, 1970, and to m ature N ovember 19, 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). T enders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., E astern D aylight Saving time, Monday, May 18, 1970. T enders will not be received at the T reasury D epartm ent, W ashington. Each tender m ust be for an even m ultiple 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. F ractions 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. 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. 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 the am ount and price range of accepted bids. O nly those subm itting com petitive tenders will be advised of the acceptance or rejection thereof. T he Secretary of the T reas ury expressly reserves the rig h t 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 o r less w ithout stated price from any one bidder will be accepted in full at the average price (in three decimals) of accepted com petitive bids for the respective issues. Settlem ent for accepted tenders in accord ance with the bids m ust be m ade or com pleted at the Federal Reserve Bank on May 21, 1970, in cash or other immediately available funds or in a like face am ount of T reasury bills m aturing May 21, 1970. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be m ade for differences between the par value of m aturing bills accepted in exchange and the issue price of the new bills. The income derived from T reasu ry bills, w hether interest or gain from the sale or other disposition of the bills, does n ot have any exemption, as such, and loss from th e sale or other disposition of T reasury bills does n ot have any special tre a t m ent, as such, under the In tern al Revenue Code of 1954. T he 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 In ternal 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 o r otherw ise disposed of, and such bills are excluded from consideration as capital assets. A ccordingly, the ow ner of T reasu ry bills (o th er 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 p u r chase, and the am ount actually received either upon sale or redem ption at m atu rity during th e taxable year for w hich the retu rn is made, as ordinary gain or loss. T reasury D epartm ent Circular No. 418 (cu rren t revision) and this notice prescribe the term s of the T reasu ry bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. T his Bank will receive tenders for both series up to 1 :30 p.m., E astern Daylight Saving time, Monday, M ay 18, 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 maturina Treasury bills. * Results of the last weekly offering of T reasury bills (91-day bills to be issued M ay 14, 1970, representing an additional amount of bills dated February 13, 1970, m aturing August 13, 1970; and 182-day bills dated M ay 14, 1970, m aturing November 12, 1970) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST W EEK LY O FFER IN G OF TREASURY BILLS (TW O SERIES TO BE ISSUED MAY 14, 1970) Range of Accepted Com petitive Bids 91-Day Treasury Bills M aturing A ugust 13,1970 H igh ....................... ............. L o w ........... ........... ........... Average ................. ............. 182-Day Treasury Bills M aturing N ovem ber 12,1970 Price Approx. equiv. annual rate 98.292a 6 .7 5 7 % 96.514b 6.895% 98.203 7.109% 96.314 7.291% 98.232 6.994% 1 96.359 7.202%* Price a Excepting one tender of $850,000. Approx. equiv. annual rate b Excepting one tender of $10,000. 1 These rates are on a bank discount basis. The equivalentcoupon issue yields are 7.22 percent for the 91-day bills, and 7.58 percent for the 182-day bills. (21 percent of the amount of 91-day bills bid for at the low price was accepted.) (69 percent of the amount of 182-day bills bid for at the low price was accepted.) T otal Tenders A pplied for and Accepted (By F ederal Reserve Districts) 91-Day Treasury Bills M aturing A ugust 13,1970 Boston ............................ ......... $ 32,530,000 $ 22,530,000 Accepted Applied fo r Accepted Applied for District 182-Day Treasury Bills M aturing N ovem ber 12,1970 $ 23,160,000 $ 11,160,000 New York ...................... ......... P h ila d e lp h ia ................... . . . 2,181,360,000 1,258,360,000 1,962,180,000 895,680,000 42,760,000 27,760,000 11,770,000 11,770,000 Cleveland ........................ ......... 38,400,000 37,550,000 50,830,000 27,730,000 R ic h m o n d ........................ ......... 29,760,000 21,680,000 21,520,000 13,020,000 Atlanta ............................ ......... 44,270,000 30,870,000 34,520,000 21,120,000 C h icag o ............................ .......... 200,630,000 160,730,000 184,790,000 132,290,000 St. Louis ........................ ........ 38,950,000 35,350,000 24,910,000 21,290,000 M in n e a p o lis................... ......... 22,310,000 12,520,000 13,650,000 6,450,000 ......... 35,580,000 30,030,000 23,480,000 20,260,000 D a l l a s .............................. ........ 28,750,000 18,250,000 26,940,000 17,640,000 169,760,000 144,840,000 218,050,000 121,750,000 Kansas City San Francisco ............. T ota l .............. ......... $2,865,060,000 $1,800,470,000c c Includes $386,920,000 noncompetitive tenders accepted at the average price of 98.232. d Includes $219,680,000 noncompetitive tenders accepted at the average price of 96.359. $2,595,800,000 $1,300,160,000d
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