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F ED ER AL RESERVE B A N K O F N E W YORK Fiscal Agent of the United States rCircular No. 6 5 9 5 * 1 L August 25, 1970 J OFFERING OF TWO SERIES OF TREASURY BILLS 1,800,000,000 of 91-Day Bills, Additional Amount, Series Dated June 4, 1970, Due December 3, 1970 (To Be Issued September 3, 1970) $1,400,000,000 of 182-Day Bills, Dated September 3, 1970, Due March 4, 1971 T o A ll Incorporated B anks and T ru st Com panies, and O thers Concerned, in the Second F ederal R eserve D istric t: T he following statem ent was made public today by the T reasu ry D epartm ent: The Treasury announced today that a new $15,000 denomination Treasury bill will be authorized for use effective September 1, 1970. The new denomination will bear the portrait of Lyman J. Gage, who served as Secretary of the Treasury from March 6, 1897 to January 31, 1902. The $15,000 denomination will be authorized for transactions in outstanding issues of Treasury bills bearing issue dates of March 5, 1970 or later and for all new issues of Treasury bills to be issued September 3, 1970 and thereafter. Tenders for Treasury bills will continue to be received in the minimum amount of $10,000, but effective with the auction on Monday, August 31, 1970 for the regular weekly bills to be issued September 3, tenders above the $10,000 minimum may be in multiples of $5,000. Follow ing is the tex t of the public notice offering the bills to be issued Septem ber 3, 1970: The Treasury Department, by this public notice, invites tenders announcement will be made by the Treasury Department of the for two series of Treasury bills to the aggregate amount of amount and price range of accepted bids. Only those submitting $3,200,000,000, or thereabouts, for cash and in exchange for Treas competitive tenders will be advised of the acceptance or rejection ury bills maturing September 3, 1970, in the amount of thereof. The Secretary of the Treasury expressly reserves the $3,102,590,000, as follows : 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 91-day bills (to maturity date) to be issued September 3, reservations, noncompetitive tenders for each issue for $200,000 or 1970, in the amount of $1,800,000,000, or thereabouts, rep less without stated price from any one bidder will be accepted in resenting an additional amount of bills dated June 4, full at the average price (in three decimals) of accepted competi 1970, and to mature December 3, 1970, originally issued tive bids for the respective issues. Settlement for accepted tenders in the amount of $1,306,400,000, the additional and in accordance with the bids must be made or completed at the original bills to be freely interchangeable. Federal Reserve Bank on September 3, 1970, in cash or other im 182-day bills, for $1,400,000,000, or thereabouts, to be dated mediately available funds or in a like face amount of Treasury bills maturing September 3, 1970. Cash and exchange tenders will receive September 3, 1970, and to mature March 4, 1971. equal treatment. Cash adjustments will be made for differences The bills of both series will be issued on a discount basis under between the par value of maturing bills accepted in exchange and competitive and noncompetitive bidding as hereinafter provided, the issue price of the new bills. and at maturity their face amount will be payable without interest. They will be issued in bearer form only, and in denominations of The income derived from Treasury bills, whether interest or $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (maturi 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 ty value). special treatment, Tenders will be received at Federal Reserve Banks and of Treasury bills does not have any 1954. The bills areas such, Internal Revenue subject Branches up to the closing hour, one-thirty p.m., Eastern Daylight under the inheritance, gift or Code of other excise Saving time, Monday, August 31, 1970. Tenders will not be received to estate, but are exempt from all taxationtaxes, whether Federal or State, at the Treasury Department, Washington. Each tender must be posed on the principal or interest thereof by now or hereafter im any State, or any of for an even multiple of $5,000, and in the case of competitive the possessions of the United States, or by any local taxing au tenders the price offered must be expressed on the basis of 100, thority. For purposes of taxation the amount of discount at which with not more than three decimals, e.g., 99.925. Fractions may not Treasury bills are originally sold by the United States is consid be used. It is urged that tenders be made on the printed forms and ered to be interest. Under Sections 454(b) and 1221(5) of the forwarded in the special envelopes which will be supplied by Internal Revenue Code of 1954, the amount of discount at which Federal Reserve Banks or Branches on application therefor. bills issued hereunder are sold is not considered to accrue until Banking institutions generally may submit tenders for account such bills are sold, redeemed or otherwise disposed of, and such of customers, provided the names of the customers are set forth bills are excluded from consideration as capital assets. Accord in such tenders. Others than banking institutions will not be per ingly, the owner of Treasury bills (other than life insurance com mitted to submit tenders except for their own account. Tenders panies) issued hereunder need include in his income tax return will be received without deposit from incorporated banks and trust only the difference between the price paid for such bills, whether companies and from responsible and recognized dealers in invest on original issue or on subsequent purchase, and the amount actually ment securities. Tenders from others must be accompanied by received either upon sale or redemption at maturity during the payment of 2 percent of the face amount of Treasury bills applied taxable year for which the return is made, as ordinary gain or loss. for, unless the tenders are accompanied by an express guaranty of Treasury Department Circular No. 418 (current revision) and payment by an incorporated bank or trust company. this notice prescribe the terms of the Treasury bills and govern Immediately after the closing hour, tenders will be opened at the conditions of their issue. Copies of the circular may be ob the Federal Reserve Banks and Branches, following which public tained from any Federal Reserve Bank or Branch. T h is B ank will receive tenders for both series up to 1 :30 p.m., E astern D aylight Saving time, M onday, A ugust 31, 1970, at the Securities D epartm ent of its H ead Office and at its Buffalo Branch. T ender form s for the respective series are enclosed. Please use the appropriate form s to subm it tenders and retu rn them in the enclosed envelope m arked “T en d er for T re a su ry Bills (W e e k ly ).” T enders may be subm itted by telegraph, subject to w ritten confirm ation; they m ay not be subm itted by telephone. Payment .for the Treasury bills cannot be made by credit through the Treas ury T ax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. R esults of the last weekly offering of T reasu ry bills (92-day bills to be issued A ugust 27, 1970, representing an additional am ount of bills dated M ay 28, 1970, m aturing N ovem ber 27, 1970; and 182-day bills dated A ugust 27, 1970, m aturing F eb ru ary 25, 1971) are shown on the reverse side of this circular. A lfred H a y es, President. ( over) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED AUGUST 27, 1970) Range of Accepted Competitive Bids 92-Day Treasury Bills Maturing Novem ber 27, 1970 Price 182 -Day Treasury Bills Maturing February 2 5,19 7 1 Approx. equiv. annual rate Price Approx. equiv. annual rate H igh ......................... ......................... 98.445 6.085% 96.818 6.294% Low 98.408 6.230% 96.787 6.355% 98.416 6.198% ! 96.796 6.338% ! ......................... ......................... A verage .................. ......................... 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 6.39 percent for the 92-day bills, ai 6.64 percent for the 182-day bills. (63 percent of the am ount of 182-day bills bid for at the low price was accepted.) (32 percent of the am ount of 92-day bills bid fo r at the low price was accepted.) T o ta l T en d ers A p p lie d fo r an d A ccepted (B y F e d e ra l R eserve D istricts) 92 -Day Treasury Bills M aturing Novem ber 27 , 1970 Accepted Applied for District Boston ..................... ................... $ 34,630,000 182 -Day Treasury Bills Maturing February 25 , 1971 $ 34,350,000 Applied for $ 19,630,000 Accepted $ 6,670,000 1,944,960,000 1,253,900,000 1,827,880,000 905,980,000 .......... ................... 41,910,000 26,910,000 20,330,000 9,460,000 Cleveland ................. ................... 45,520,000 45,020,000 24,980,000 24,930,000 Richm ond ................................... 47,860,000 47,520,000 49,680,000 33,680,000 A tlanta ...................... ................... 48,960,000 42,330,000 40,650,000 25,810,000 Chicago .................... ................... 211,330,000 147,570,000 330,710,000 264,390,000 St. L ouis .................. ................... 45,780,000 32,180,000 31,220,000 15,940,000 ........... .................. 37,770,000 32,770,000 41,010,000 29,110,000 K ansas C i t y .............. .................. 50,300,000 48,000,000 35,430,000 22,160,000 Dallas ......................... .................. 30,640,000 17,960,000 24,390,000 10,890,000 San Francisco ......... .................. 129,170,000 71,790,000 140,490,000 51,550,000 ... ................... $2,668,830,000 N ew Y o rk ............... ................... Philadelphia M inneapolis T otal $1,800,300,000 a $2,586,400,000 a Includes $368,850,000 noncompetitive tenders accepted at the average price of 98.416. b Includes $190,900,000 noncompetitive tenders accepted at the average price of 96.796. $1,400,570,000 b
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