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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States r Circular No. 6 7 8 4~1 August 17, 1971 J L OFFERING OF TWO SERIES OF TREASURY RILLS !,300,000,000 of 92-Day Rills, Additional Amount, Series Dated May 27,1971, Due November 26,1971 (To Re Issued August 26, 1971) 11,600,000,000 of 182-Day Rills, Dated August 26,1971, Due February 24,1972 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 $3,900,000,000, or thereabouts, for cash and in exchange for Treas ury bills maturing August 26, 1971, in the amount of $3,703,460,000, as follows: 92-day bills (to maturity date) to be issued August 26, 1971, in the amount of $2,300,000,000, or thereabouts, represent ing an additional amount of bills dated May 27, 1971, and to mature November 26, 1971 (CUSIP No. 912793 LT1), originally issued in the amount of $1,400,165,000, the addi tional and original bills to be freely interchangeable. 182-day bills, for $1,600,000,000, or thereabouts, to be dated August 26, 1971, and to mature February 24, 1972 (CUSIP No. 912793 MP8). 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 Daylight Saving time, Monday, August 23, 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. It is urged that tenders be made on the printed forms and forwarded in the special enve lopes 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 August 26, 1971, in cash or other im mediately available funds or in a like face amount of Treasury bills maturing August 26, 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 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 dif ference 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 Daylight Saving time, Mondav, August 23, 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 e e k ly ).” Tenders not requiring a deposit may be submitted by telegraph, subject to written confirmation: no tenders mav be submitted bv 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. Results of the last weekly offeriner of Treasury bills (91-day bills to be issued August 19, 1971, representing an addi tional amount of bills dated May 20. 1971. maturing November 18. 1971 : and 182-day bills dated August 19. 1971, matur ing February 17, 1972) are shown on the reverse side of this circular. A lfred H ayes, President. Please note that the Treasury bills maturing N ovem ber 26, 1971 w ill be 92-day bills. ( over) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (T W O SERIES TO BE ISSUED AUGUST 19, 1971) Range o f Accepted Com petitive Bids 91 -D ay Treasury Bills 182-Day Treasury Bills Maturing November 18, 1971 Maturing February 17,1972 Price High ...................................... .............. Approx. equiv. annual rate Price Approx. equiv. annual rate 98.804a 4.731% 97.424 5.095% Low ......................................... .............. 98.726 5.040% 97.336 5.269% A v e r a g e ................................. .............. 98.756 4 .9 2 1 % 1 97.370 5.202% 1 3 Excepting two tenders totaling $2,335,000. 1 These rates are on a bank discount basis. The equivalent 5.43% for the 182-day bills. coupon (95 percent of the amount of 91-day bills bid for at the low price was accepted.) $ are 5.07% for the 91-day bills (B y Federal Reserve Districts) 91 -Day Treasury Bills 182-Day Treasury Bills Maturing November 18, 1971 Maturing February 17 , 1972 Applied for B oston ................................ ......... yields (33 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders A pplied for and Accepted District issue 24,400,000 Accepted $ 14,235,000 Accepted Applied for $ 13,770,000 $ 3,770,000 New Y o rk ........................... ......... 2,649,110,000 1,873,110,000 2,317,515,000 1,383,315,000 Philadelphia ..................... ......... 36,065,000 21,065,000 5,635,000 5,635,000 Cleveland .......................... ......... 32,785,000 31,785,000 25,735,000 9,835,000 R ich m on d .......................... ......... 11,250,000 11,250,000 4,670,000 4,070,000 Atlanta .............................. ......... 31,665,000 27,665,000 23,025,000 14,025,000 ............................ ......... 221,005,000 152,005,000 171,960,000 60,610,000 St. Louis .......................... ......... 36,010,000 31,060,000 26,465,000 19,865,000 Minneapolis ...................... ......... 30,440,000 25,440,000 33,290,000 24,290,000 Kansas City ...................... ......... 25,385,000 25,385,000 12,690,000 12,290,000 Dallas ................................ ......... 37,570,000 19,570,000 30,235,000 8,235,000 131,720,000 67,470,000 212,650,000 54,330,000 Chicago San Francisco ................. T otal ........................ $3,267,405,000 $2,300,040,000 b $2,877,640,000 b Includes $240,080,000 noncompetitive tenders accepted at the average price of 98.756. c Includes $124,903,000 noncompetitive tenders accepted at the average price o f 97.370. $1,600,270,000*
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