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FE D ER A L R ESER V E BANK O F NEW YORK Fiscal Agent of the United States rCircular No. 6 5 8 1 ~1 L July 2 9 , 1970 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,800,000,000 of 91-Day Bills, Additional Amount, Series Dated May 7, 1970, Due November 5, 1970 (To Be Issued August 6, 1970) $1,300,000,000 of 182-Day Bills, Dated August 6, 1970, Due February 4, 1971 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve D istrict: Following is the text of a notice issued by the T reasury Department, released at 4 p.m. to d ay : 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 A ugust 6, 1970, in the am ount of $3,003,349,000, as follows: 91-day bills (to m aturity date) to be issued A ugust 6, 1970, in the am ount of $1,800,000,000, or thereabouts, repre senting an additional am ount of bills dated May 7, 1970, and to m ature November 5, 1970, originally issued in the am ount of $1,301,030,000, the additional and origi nal bills to be freely interchangeable. 182-day bills, for $1,300,000,000, or thereabouts, to be dated A ugust 6, 1970, and to m ature February 4, 1971. 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 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., Eastern Day light Saving time, Monday, A ugust 3, 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 competitive tenders the price offered m ust be expressed on the basis of 100, w ith 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 custom ers 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 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 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 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. T he 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 A ugust 6, 1970, in cash or other imm ediately available funds or in a like face am ount of T reasury bills m aturing A ugust 6, 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 exempt from all tax 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 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 (cu rren t revision) and this notice prescribe the term s of the T reasury bills and govern the conditions of their issue. Copies of th e 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 . , E a s t e r n Daylight Saving time, M onday, A ugust 3, 1970 at the Securities Departm ent of its Head Office and at its Buffalo Branch. Tender forms for the respective s e r i e s a r e enclosed. Please use the appropriate forms to submit tenders and return them in the enclosed envelope m a r k e d ‘‘Tender for Treasury Bills (W eekly).” T enders may be submitted by telegraph subject to w ritten confi™ S o n -th e y 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 m cash or other immediately available fu n d s or m maturing Treasury bills. P pqiiIr of the last weekly offering of T reasury bills (91-day bills to be issued July 30, 1970, representing an additional amount of bills dated April 30, 1970, m aturing October 29, 1970; and 182-day bills dated July 30, 1970, maturing January 28, 1971) are shown on the reverse side of this circular. /V L r iui-U n A Y E S j President. ( nvi?D RESULTS OF LAST W EEK LY O FFER IN G OF TREASURY BILLS (TW O SERIES TO BE ISSUED JULY 30, 1970) Range of Accepted Com petitive Bids 91-Day Treasury Bills M aturing October 29,1970 182-Day Treasury Bills M aturing January 28,1971 Price Approx. equiv. annual rate Price Approx. equiv. annual rate H igh .. 98.408 6.298% 96.767 6.395% Low . . . 98.387 6.381% 96.746 6.436% Average 98.396 6.345%! 96.750 6.429%! 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 6.54 percent for the 91-day bills, and 6.74 percent for the 182-day bills. (40 percent of the amount of 182-day bills bid for at the low price was accepted.) (58 percent of the amount of 91-day bills bid for at the low price was accepted.) T otal Tenders A pplied fo r and A ccepted (By F ederal Reserve Districts) 182-Day Treasury Bills M aturing January 28,1971 91-Day Treasury Bills M aturing October 29,1970 Boston ............................ ........... $ 34,170,000 Applied for Accepted, Applied fo r D istrict $ 23,560,000 $ 17,800,000 Accepted $ 7,600,000 New Y ork ..................... .......... 1,855,770,000 1,159,570,000 1,830,510,000 1,057,790,000 P h ila d e lp h ia ................... .......... 41,560,000 25,740,000 14,540,000 13,420,000 Cleveland .................................. 51,670,000 46,100,000 35,870,000 34,320,000 R ic h m o n d ....................... ......... 35,130,000 30,130,000 14,920,000 12,420,000 A tlanta ............................ ......... 46,740,000 30,730,000 43,600,000 18,870,000 .......................... ......... 299,990,000 270,810,000 164,470,000 63,530,000 St. L o u is .......................... ......... 51,260,000 49,450,000 26,690,000 17,340,000 Minneapolis ................... ......... 28,860,000 18,760,000 25,300,000 8,800,000 K ansas C i t y ................... ......... 44,550,000 44,250,000 31,340,000 24,520,000 Dallas .............................. ......... 31,730,000 18,730,000 31,320,000 17,520,000 141,410,000 83,710,000 228,230,000 24,070,000 Chicago San Francisco ............... T ota l ................... ........ $2,662,840,000 $1,801,540,000* $2,464,590,000 a Includes $390,230,000 noncompetitive tenders accepted at the average price of 98.396. b Includes $242,820,000 noncompetitive tenders accepted at the average price of 96.750. $1,300,200,000b