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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States J" Circular No. 6 8 5 1 L. December 2, 1971 T J Offering of $2,000,000,000 of 191-Day Tax Anticipation Treasury Bills Dated December 13, 1971, Due June 21, 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 today by the Treasury Department: The Treasury Departm ent, b y this p u b lic notice, invites tenders for $2,000,000,000, or thereabouts, of 191-day Treasury bills, to b e issued on a discount basis under com petitive and non com petitive bidd in g as hereinafter provided. The bills o f this series w ill be dated D ecem ber 13, 1971, and w ill mature June 21, 1972 (C U S IP No. 912793 N S 1 ). T h ey w ill be accepted at face value in paym ent o f in com e taxes clue on June 15, 1972, and to the extent they are not presented for this purpose the f^ce amount o f these bills w ill b e payable w ithout interest at maturity. Taxpayers desiring to apply these bills in paym ent of June 15, 1972 incom e taxes m ay submit the bills to a Federal Reserve Bank or Branch or to the Office o f the Treasurer o f the United States, W ashington, not more than fifteen days before that date. In the case o f bills subm itted in paym ent o f incom e taxes o f a corp o ration they shall be accom panied b y a duly com pleted Form 503 and the office receiving these items w ill effect the deposit on June 15, 1972. In the case o f bills subm itted in paym ent o f incom e taxes o f all other taxpayers, the office receiving the bills w ill issue receipts therefor, the original o f w hich the taxpayer shall subm it on or before June 15, 1972, to the District Director o f Internal Revenue for the District in w hich such taxes are payable. T he bills will b e issued in bearer form only, and in denominations o f $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (m aturity va lu e). Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m ., Eastern Standard time, W ednesday, D ecem ber 8, 1971. Tenders w ill not be received at the Treasury D epartm ent, W ashington. E ach tender must be for a minimum o f $10,000. Tenders over $10,000 must be in multiples o f $5,000. In the case o f com petitive tenders the price offered must be expressed on the basis o f 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be m ade on the printed forms and for w arded in the special envelopes w hich w ill be supplied b y Federal Reserve Banks or Branches on application therefor. Banking institutions generally m ay submit tenders for account o f customers, provided the names o f the customers are set forth in such tenders. Others than banking institutions w ill not be perm itted to submit tenders except for their ow n account. Tenders w ill b e received without deposit from incorporated banks and trust com panies and from responsible and recogn ized dealers in investment securities. Tenders from others must b e accom - panied b y paym ent o f 2 percent o f the face amount o f Treasury bills applied for, unless the tenders are accom panied b y an ex press guaranty o f paym ent b y an incorporated bank or trust com pany. A ll bidders are required to agree not to purchase or to sell, or to make any agreements with respect to the purchase or sale or other disposition o f any bills o f this issue at a specific rate or price, until after one-thirty p.m ., Eastern Standard time, W ednesday, D ecem ber 8, 1971. Im m ediately after the closing hour, tenders w ill be open ed at the Federal Reserve Banks and Branches, follow in g which p u blic announcem ent w ill be made b y the Treasury D epartm ent o f the amount and price range o f accepted bids. O nly those submitting com petitive tenders w ill be advised o f the acceptance or rejection thereof. The Secretary o f the Treasury expressly re serves the right to accept or reject any or all tenders in w hole or in part, and his action in any such respect shall be final. Subject to these reservations, noncom petitive tenders for $300,000 or less without stated price from any one bidder w ill be accepted in full at the average price (in three decim als) o f accepted co m petitive bids. Settlement for a ccepted tenders in accordance with the bids must be made or com pleted at the Federal Reserve Bank in cash or other im m ediately available funds on D ecem ber 13, 1971. Any qualified depositary will be perm itted to make settlement by credit in its Treasury Tax and Loan A ccou n t for not more than 50 percent o f the amount o f Treasury bills allotted to it for itself and its customers. Under Sections 4 5 4 (b ) and 1 2 2 1 (5 ) o f the Internal Revenue C ode o f 1954, the amount o f discount at w hich bills issued here under are sold is considered to accrue w hen the bills are sold, redeem ed or otherwise disposed of, and the bills are exclu ded from consideration as capital assets. A ccordin gly, the ow ner o f Treas ury bills (oth er than life insurance com panies) issued hereunder must include in his incom e tax return, as ordinary gain or loss, the difference betw een the price paid for the bills, w hether on original issue or on subsequent purchase, and the amount actually received either upon sale or redem ption at maturity during the taxable year for which the return is made. Treasury D epartm ent Circular No. 418 (current revision) and this notice prescribe the terms o f the Treasury bills and govern the conditions o f their issue. C opies o f the circular m ay be obtained from any Federal Reserve Bank or Branch. This Bank will receive tenders up to 1:30 p.m., Eastern Standard time, Wednesday, December 8, 1971, at the Securities Department of its Head Office and at its Buffalo Branch. Please use the form on the reverse side of this circular to submit a tender, and return it in the enclosed envelope marked “Tender for Tax Anticipation Treasury Bills.” Tenders not requiring a deposit may be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. Settlement for accepted tenders must be made in cash or other immedi ately available funds on December 13, 1971, except that any qualified depositary may make settlement by credit in its Treasury Tax and Loan Account for not more than 50 percent of the amount of Treasury bills allotted to it for itself and its customers. A lfred H ayes, President. number and denomination of pieces desired and the delivery and payment instructions. TE N D E R F O R 191-DAY T A X AN T IC IP A TIO N TREASURY BILLS Dated December 13,1971 To Due June 21,1972 Dated a t ..................................................... F e d e ra l R eserve B an k o f N e w Y ork , Fiscal Agent of the United States. ........................................................... , 19.. Pursuant to the provisions of Treasury Department Circular No. 418 (current revision) and to the provi sions of the public notice issued by the Treasury Department inviting tenders for the above-described Treasury bills, the undersigned hereby offers to purchase such Treasury bills in the amount indicated below, and agrees to make payment therefor at your Bank on or before the issue date at the price indicated below: COMPETITIVE TENDER I D o not fill in both Competitive and] [jV oncompetitive tenders on one formj NONCOMPETITIVE TENDER (maturity value), or any lesser amount that may be awarded. $ ...................................................... ( maturity value). P r ic e :............................ ... per 100. at the average price of accepted competitive bids. ( Not to exceed $300,000 for one bidder through all sources) ( Price must be expressed with not more than three decimal places, for example, 99.925) W e hereby agree not to buy or to sell, or to make any agreements with respect to the purchase or sale or other disposition of any bills of this issue at a specific rate or price, until after one-thirty p.m., Eastern Standard time, W ednesday, D ecem ber 8, 1971. Subject to allotment, please issue, deliver, and accept payment for the bills as indicated below: Pieces D enom ination $ •Maturity value 10,000 □ 1. D eliver over the counter to the undersigned □ 2. Ship to the undersigned 15,000 □ 3. H old in safekeeping (fo r ac count o f m em ber bank o n ly )" 50,000 □ 4. H old as ury Tax □ 5. Special instructions: collateral for Treas and Loan A ccou n t0 Payment w ill be made as follow s: □ By charge to our reserve account □ B y cash or check in immediately available funds on delivery □ B y credit in Treasury Tax and Loan A ccou n t ( not m ore than 5 0 % o f purchase p rice) for w hich A dv ice o f Deposit (b e lo w ) is subm itted here with. 100,000 500,000 1,000,000 ( N o changes in delivery instructions will be accepted) Totals * The undersigned ce rtifies that the allotted bills will be owned solely by the undersigned. ( Name of subscriber — please print or type) Insert this tender in special envelope marked “Tender for Tax Anticipation Treasury Bills” (Address — please print or type) (Tel. No.) ( Signature of subscriber or authorized signature) (Title of authorized signer) (Banks subm itting tenders for custom er account must indicate name on line b elow , or attach a list) (Name of customer) (Name of customer) IN ST R U C T IO N S : 1. N o tender for less than $10,000 w ill b e considered and each tender must b e for an even multiple o f $5,000 (m aturity va lu e). 2. Others than banking institutions will not be permitted to submit tenders except for their own account. Banks subm itting tenders for custom er account may consolidate com petitive tenders at the same price and may consolidate non com petitive tenders, provided a list is attached show ing the name o f each bidder, the amount b id for his account, and method o f paym ent. Forms for this purpose w ill be furnished on request. 3. If the person m aking the tender is a corporation, the tender should be signed b y an officer o f the corporation authorized to make the tender, and the signing of the tender b y an officer o f the corporation w ill be construed as a repre sentation b y h\m that he has been so authorized. If the tender is made b y a partnership, it should be signed b y a m em ber o f the firm, w h o should sign in the form “ .................................................................... ^ ............................................... a copartnership, by ............................................................................................................... a m em ber o f the firm.” 4. Tenders will b e received w ithout deposit from incorporated banks and trust com panies and from responsible and recogn ized dealers in investment securities. Tenders from others must be accom panied by paym ent of 2 percent o f the face amount o f Treasury bills applied for, unless the tenders are accom panied by an express guaranty o f paym ent b y an incorporated bank or trust com pany. All checks must be drawn to the order of the Federal Reserve Bank o f N ew York; checks endorsed to this Bank w ill not be accepted. 5. If the language o f this tender is changed in any respect, w hich, in the opinion o f the Secretary o f the Treasury, is material, the tender m ay b e disregarded. Advice of Deposit in Treasury Tax and Loan Account To F e d e ra l R eserve B an k o f N e w Y ork , Fiscal Agent of the United States. W e will deposit on December 13, 1971 to your credit in the Treasury Tax and Loan Account on our books, to be held subject to withdrawal on demand, an amount not exceeding 50% of the purchase price of the bills allotted to us on our tender for 191-day tax anticipation Treasury bills, dated December 13, 1971, due June 21, 1972. (Name of Depositary) By ... (Authorized signature(s) required) Address ( City and State)
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