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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States r Circular No. 6 8 5 5 U December 7, 1971 ~1 J OFFERING OF TWO SERIES OF TREASURY BILLS $2,300,000,000 of 91-Day Bills, Additional Amount, Series Dated September 16,1971, Due March 16,1972 (T o Be Issued December 16, 1971) $1,600,000,000 of 182-Day Bills, Dated December 16,1971, Due June 15,1972 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: T h e Treasury Department, b y this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o f $3,900,000,000, o r thereabouts, fo r cash and in exchange fo r Treasury bills maturing D ecem ber 16, 1971, in the amount o f $3,700,460,000, as f o llo w s : companies and from responsible and recognized dealers in invest ment securities. Tenders fro m others must be accom panied by payment o f 2 percent o f the fa ce amount o f Treasury bills applied fo r, unless the tenders are accompanied by an express guaranty o f payment by an incorporated bank or trust company. 91-day bills ( t o maturity date) to be issued Decem ber 16, 1971, in the amount o f $2,300,000,000, or thereabouts, representing an additional amount o f bills dated Septem ber 16, 1971, and to mature M arch 16, 1972 (C U S I P N o. 912793 M S 2 ), originally issued in the amount o f $1,600,960,000, the additional and original bills to be freely interchangeable. Imm ediately after the closing hour, tenders w ill be opened at the Federal Reserve Banks and Branches, follow in g which public announcement w ill be made by the Treasury Department 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. T h e Secretary o f the Treasury expressly reserves 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 fo r each issue fo r $200,000 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 com peti tive bids f o r the respective issues. Settlement f o r accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on D ecem ber 16, 1971, in cash o r other im mediately available funds or in a like face amount o f Treasury bills maturing D ecem ber 16, 1971. Cash and exchange tenders w ill receive equal treatment. Cash adjustments w ill be made fo r differ ences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. 182-day bills, fo r $1,600,000,000, or thereabouts, to be dated Decem ber 16, 1971, and to mature June 15, 1972 (C U S I P N o. 912793 N F 9 ). T he bills o f both series w ill be issued on a discount basis under competitive and noncom petitive bidding as hereinafter provided, and at maturity their face amount w ill be payable without interest. They w ill be issued in bearer fo rm only, and in denominations o f $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (maturity value). Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m.. Eastern Standard time, M onday, D ecem ber 13, 1971. Tenders w ill not be received at the Treasury Department, W ashington. Each tender must be fo r a minimum o f $10,000. Tenders over $10,000 must be in mul tiples 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 m ore than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed form s and forw arded in the special envelopes which w ill be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions generally may submit tenders fo r 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 per mitted to submit tenders except fo r their own account. Tenders w ill be received without deposit from incorporated banks and trust U nder Sections 4 5 4 (b ) and 1221(5) o f the Internal Revenue Code o f 1954, the amount o f discount at which bills issued here under are sold is considered to accrue when the bills are sold, re deemed or otherwise disposed o f, and the bills are excluded fro m consideration as capital assets. A ccordin gly, the ow ner o f Treasu ry 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 between the price paid fo r the bills, whether on original issue or on subsequent purchase, and the amount actually received either upon sale or redemption at m aturity during the taxable year fo r which the return is made. Treasury Department Circular N o. 418 (current revision) and this notice prescribe the terms o f the Treasu ry bills and govern the conditions o f their issue. Copies o f the circular m ay be ob tained fro m any Federal Reserve Bank o r Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, December 13, 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 con firmation; no tenders may be submitted by telephone. Payment fo r 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 o f the last weekly offering of Treasury Bills (91-day bills to be issued December 9, 1971, representing an additional amount of bills dated September 9, 1971, maturing March 9, 1972; and 182-day bills dated December 9, 1971, maturing June 8, 1972) are shown on the reverse side of this circular. A lfr ed H ayes, President. (o v e r ) RESULTS OF LAST W EEKLY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED DECEMBER 9, 1971) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing March 9,1972 182-Day Treasury Bills Maturing June 8,1972 Price Approx. equiv. annual rate Price Approx. equiv. annual rate High ... 98.976 4.051% 97.884 4.185% L o w ..... 98.960 4.114% 97.854 4.245% Average 98.966 4.091%* 97.873 4.207%" 1 These rates are on a bank discount basis. T he equivalent coupon issue yields are 4.20 percent fo r the 91-day bills, and 4.37 percent f o r the 182-day bills. (16 percent of the amount of 182-day bills bid for at the low price was accepted.) (87 per cent of the amount o f 91-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing March 9,1972 Applied, for District Boston ............................ ......... $ 22,105,000 182-Day Treasury Bills Maturing June 8,1972 Accepted $ 12,105,000 Applied for $ 12,160,000 Accepted $ 2,160,000 New York ....... ........................ 2,981,530,000 1,876,885,000 2,362,985,000 1,267,425,000 Philadelphia.............................. 31,455,000 16,455,000 5,860,000 5,660,000 39,330,000 39,080,000 23,945,000 13,245,000 9,040,000 9,040,000 3,795,000 3,795,000 32,085,000 21,585,000 26,480,000 11,440,000 Chicago ............... ...-................ 230,070,000 158,770,000 222,675,000 152,835,000 St. Louis ...... — ....-............... — 63,175,000 52,785,000 50,700,000 25,700,000 Minneapolis .............................. 26,635,000 18,455,000 22,860,000 12,860,000 Kansas C it y ...............-............. 34,385,000 28,240,000 23,160,000 14,360,000 33,795,000 13,795,000 31,895,000 11,895,000 118,305,000 53,245,000 118,000,000 79,320,000 San Francisco .......................... T otal .......................................... $3,621,910,000 $2,300,440,000* $2,904,515,000 a Includes $212,445,000 noncompetitive tenders accepted at the average price of 98.966. b Includes $97,860,000 noncompetitive tenders accepted at the average price of 97.873. $1,600,695,000b
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