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FE D E RAL R E SE R V E BANK O F N E W YORK
Fiscal Agent of the United States
r Circular No. 6 6 9 9 1
March 17, 1971

OFFERING OF TWO SERIES OF TREASURY BILLS
$500,000,000 of 275-Day Bills, Additional Amount, Series Dated December 31, 1970, Due December 31, 1971
(To Be Issued March 31, 1971)
$1,200,000,000 of 366-Day Bills, Dated March 31, 1971, Due March 31, 1972
To A ll 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
$1,700,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing March 31, 1971, in the amount of
$1,701,620,000, as follow s:
275-day bills (to maturity date) to be issued March 31,
1971, in the amount of $500,000,000, or thereabouts,
representing an additional amount of bills dated De­
cember 31, 1970, and to mature December 31, 1971
(C U S IP No. 912793 K V 7 ), originally issued in the
amount of $1,201,185,000, the additional and original bills
to be freely interchangeable.
366-day bills, for $1,200,000,000, or thereabouts, to be dated
March 31, 1971, and to mature March 31, 1972 (C U S IP
No. 912793 L Z 7).
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, March 25, 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 multiples
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. (Notwithstanding the fact
that the one-year bills will run for 366 days, the discount rate will
be computed on a bank discount basis of 360 days, as is currently
the practice on all issues of Treasury bills.) 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 March 31, 1971, in cash or other im­
mediately available funds or in a like face amount of Treasury
bills maturing March 31, 1971. Cash and exchange tenders will
receive equal treatment. Cash adjustments will be made for dif­
ferences between the par value of maturing bills accepted in ex­
change 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 hereunder
are sold is considered to accrue when the bills are sold, redeemed
or otherwise disposed of, and the bills are excluded from considera­
tion 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.

This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Thursday, March 25,
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 (M onthly).” 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 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.




A

lfred

H

ayes,

President.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102