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FE D E R A L R ESER V E BANK O F NEW YORK Fiscal Agent of the U nited States N o. 6 6 6 5 ~ 1 Decem ber 2 8 , 1970 -J [Circular OFFERING OF TWO SERIES OF TREASURY BILLS $2,000,000,000 of 91-Day Bills, Additional Amount, Series Dated October 8,1970, Due April 8,1971 (To Be Issued January 7,1971) $1,400,000,000 of 182-Day Bills, Dated January 7,1971, Due July 8,1971 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: F ollow ing is th e te x t o f a notice issued by th e 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 $3,400,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing January 7, 1971, in the amount of $3,413,800,000, as follows: 91-day bills (to maturity date) to be issued January 7, 1971, in the amount of $2,000,000,000, or thereabouts, representing an additional amount of bills dated Octo ber 8, 1970, and to mature April 8, 1971, (C U SIP No. 912793 KC9), originally issued in the amount of $1,402,025,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,400,000,000, or thereabouts, to be dated January 7, 1971, and to mature July 8, 1971 (C U SIP No. 912793 KX3). 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, $15,000, $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 Stand ard time, Monday, January 4, 1971. _Tenders will not be received at the Treasury Department, Washington. Each tender must be fo r a minimum of $10,000. Tenders over $10,000 must be in mul tiples of $5,000. 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 per mitted 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 invest ment 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 Department 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 competi tive 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 January 7, 1971, in cash or other im mediately available funds or in a like face amount of Treasury bills maturing January 7, 1971. Cash and exchange tenders will re ceive equal treatment. Cash adjustments will be made for differ ences between the par value of maturing bills accepted in exchange and the issue price of the new bills. Under Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954, the amount of discount at which bills issued here under are sold is considered to accrue when the bills are sold, re deemed or otherwise disposed of, and the bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued hereunder must include in his income tax return, as ordinary gain or loss, the difference between the price paid for the 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. 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 ob tained from any Federal Reserve Bank or Branch. T h is B ank will receive ten d ers fo r both series up to 1 :30 p.m ., E a ste rn S ta n d a rd tim e, M onday, Ja n u a ry 4, 1971, a t the S ecurities D ep artm en t o f its H e a d Office and at its Buffalo B ranch. T e n d e r form s fo r the respective series are enclosed. P lease use th e ap p ro p riate form s to subm it tenders and re tu rn them in the enclosed envelope m arked “ T ender fo r T re a su ry Bills (W e e k ly ).” T en d ers not req u irin g a deposit m ay be subm itted by telegraph, subject to w ritten confirm ation; no ten d ers m ay be subm itted by telephone. Payment for the Treasury bills cannot be made by credit through the Treasury Tax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. T h e results of the bidding fo r th e previous offering of T re a su ry bills, to be issued Decem ber 31, 1970, w ere not available at the tim e of p rin tin g this circular and will be sent to you tom orrow . A l fr e d H a y es, President.