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FEDERAL RESERVE BANK OF NEW YORK Fiscal A gent of the United States 'C ircu lar No. 6685"! . February 5, 1971 J OFFERING OF TWO SERIES OF TREASURY BILLS $2,000,000,000 of 91-Day Bills, Additional Amount, Series Dated November 19, 1970, Due May 20, 1971 (To be Issued February 18, 1971) $1,400,000,000 of 182-Day Bills, Dated February 18, 1971, Due August 19, 1971 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 Department, released at 4 p.m. today: 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 February 18, 1971, in the amount of $3,399,780,000, as follow s: 91-day bills (to maturity date) to be issued February 18, 1971, in the amount of $2,000,000,000, or thereabouts, representing an additional amount o f bills dated Novem ber 19, 1970, and to mature May 20, 1971 (C U S IP No. 912793 K J4), originally issued in the amount of $1,403,485,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,400,000,000, or thereabouts, to be dated February 18, 1971, and to mature August 19, 1971 (C U S IP No. 912793 LE 4). 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, Thursday, February 11, 1971. Tenders will not be received at the Treasury Department, Washington. Each tender must be for 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 February 18, 1971, in cash or other im mediately available funds or in a like face amount of Treasury bills maturing February 18, 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 o f the circular may be ob tained from any Federal Reserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Thursday, February 11, 1971, at the Securities Department 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 Treasury Bills (W eekly).” Tenders not requiring a deposit may be submitted by telegraph, subject to written confirmation; no tenders may be submitted by telephone. Payment for the Treasury hills 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. The bidding for the previous offering of Treasury bills, to be issued February 11, 1971, will take place Monday, February 8 ; the results of that bidding will be announced after release by the Treasury Department. A lfred H ayes , President. C lo sin g date fo r receipt o f ten ders is Thursday, F eb ru a ry 1 1 .
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