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F E D E R A L R ES E R V E B A N K O F N E W Y OR K Fiscal Agent of the United States J"Circular No. 6 5 8 5 1 L August 4 ,1 9 7 0 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,800,000,000 of 91-Day Bills, Additional Amount, Series Dated May 14, 1970, Due November 12, 1970 (To Be Issued August 13, 1970) $1,300,000,000 of 182-Day Bills, Dated August 13, 1970, Due February 11, 1971 , To A ll Incorporated Banks and Trust Companies and Others Concerned, in the Second Federal Reserve District: Follow ing is the te x t o f a notice issued by the T re a su ry D epartm ent, released a t 4 p.m . to d a y : The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $3,100,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing August 13, 1970, in the amount of $3,002,694,000, as follows: 91-day bills (to maturity date) to be issued August 13, 1970, in the amount of $1,800,000,000, or thereabouts, repre senting an additional amount of bills dated May 14, 1970, and to mature November 12, 1970, originally issued in the amount of $1,301,580,000, the additional and origi nal bills to be freely interchangeable. 182-day bills, for $1,300,000,000, or thereabouts, to be dated August 13, 1970, and to mature February 11, 1971. The bills of both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount will be payable without 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 (maturity 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, August 10, 1970. Tenders will not be received at the Treasury Department, Washington. Each tender must 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. Others than banking institutions will not be permitted to submit tenders except for their own account. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment 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 announcement will be made by the Treasury Depart ment of the amount and price range of accepted bids. Only those submitting competitive tenders will be advised of the acceptance or rejection thereof. The Secretary of the Treasury 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 without 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. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on August 13, 1970, in cash or other immediately available funds or in a like face amount of Treasury bills maturing August 13, 1970. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences be tween the par value of maturing bills accepted in exchange and the issue price of the new bills. The income derived from Treasury 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 Treasury bills does not have any special treat ment, as such, under the Internal Revenue Code of 1954. The bills are subject to estate, inheritance, gift or other excise taxes, whether 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 amount of discount at which Treasury bills are originally sold by the United States is considered to be interest. Under Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954, the amount 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 Treasury 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, whether on original issue or on subsequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made, as ordinary gain or loss. Treasury Department Circular No. 418 (current revision) and this notice prescribe the terms of the Treasury bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. T his B ank will receive ten d ers fo r both series up to 1 :30 p.m ., E a ste rn D aylight S aving tim e, M onday, A u g u st 10, 1970, a t th e Securities D epartm ent of its H ead Office an d a t its Buffalo B ranch. T en d er form s fo r the respective series are enclosed. P lease use the ap p ro p riate form s to subm it tenders and re tu rn them in th e enclosed envelope m arked “T e n d e r fo r T re a su ry Bills (W e e k ly ).” T en d e rs m ay be subm itted by telegraph, subject to w ritte n con firm atio n ; they m ay not be subm itted by telephone. P aym en t fo r the Treasury bills cannot be made by credit through the Treasury T ax and Loan Account. S ettlem ent m ust be made in cash or other im m ediately available fu n ds or in maturing Treasury bills. R esults of the last weekly offering of T re a su ry bills (91-day bills to be issued A u g u st 6, 1970, rep resen tin g an additional am ount of bills dated M ay 7, 1970, m aturing N ovem ber 5, 1970; and 182-day bills dated A u g u st 6 1970 m aturin g F e b ru a ry 4, 1971) are shown on the reverse side of this circular. ’ ’ A lfr e d H ayes , President. ( over) R E SU L T S O F L A ST W E E K L Y O F F E R IN G O F T R E A S U R Y B IL L S (T W O S E R IE S TO B E ISSU E D A U G U ST 6, 1970) R an g e o f A ccep ted C om p etitiv e B ids 91-Day Treasury Bills M aturing N ovem ber 5,1970 182-Day Treasury Bills M aturing February 4,1971 Price Approx. equiv. annual rate P rice Approx. equiv. annual rate H ig h ......................... 98.396 6.345% 96.749 6.431% L ow ...................... ......................... 98.370 6.448% 96.690 6.547% ................ ......................... 98.379 6.413% ! 96.716 6.496% ! A verage 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 6.61 percent for the 91-day bills, and 6.81 percent for the 182-day bills. (63 percent of the am ount of 182-day bills bid fo r a t the low price was accepted.) (68 p ercent o f th e am ount of 91-day bills bid fo r a t th e low price was accepted.) T o ta l T e n d e rs A p p lie d fo r a n d A ccepted (B y F e d e ra l R eserve D istricts) 91-Day Treasury Bills M aturing N ovem ber 5,1970 B oston Accepted Applied for District .................... .................. $ 31,500,000 182-Day Treasury Bills M aturing February 4,1971 $ 21,500,000 A p p lied $ for 18,080,000 A ccepted $ 8,080,000 N ew Y o r k .............. .................. 2,002,800,000 1,301,040,000 1,602,070,000 948,220,000 P h ila d e lp h ia ........... .................... 48,090,000 23,090,000 11,340,000 11,340,000 G ev elan d ................ .................. 43,890,000 43,190,000 23,190,000 23,190,000 R ic h m o n d ................ .................. 18,900,000 16,900,000 18,920,000 17,920,000 A tlan ta .................... .................. 56,660,000 47,990,000 53,360,000 42,540,000 .................. .................. 143,250,000 132,050,000 123,900,000 106,770,000 St. L o u i s .................. .................. 47,030,000 42,340,000 25,560,000 23,360,000 M in n e a p o lis ........... .................. 26,750,000 26,750,000 26,270,000 26,270,000 K ansas C i t y ........... .................. 37,300,000 33,150,000 29,410,000 26,410,000 D allas ....................... .................. 30,390,000 20,390,000 28,830,000 19,460,000 .................. 134,350,000 91,810,000 95,520,000 46,490,000 T o t a l .... .................. $2,620,910,000 Chicago San F rancisco $1,800,200,000* a Includes $347,110,000 noncompetitive tenders accepted at the average price of 98.379. t> Includes $211,690,000 noncompetitive tenders accepted at the average price of 96.716. $2,056,450,000 $1,300,050,000b