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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States [ Circular No. 7 0 2 8 October 31,1972 } OFFERING OF TWO SERIES OF TREASURY BILLS $2,400,000,000 of 91-Day Bills, Additional Amount, Series Dated August 10,1972, Due February 8, 1973 (To Be Issued November 9, 1972) $1,900,000,000 of 182-Day Bills, Dated November 9, 1972, Due May 10, 1973 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve D istrict: 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 $4,300,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing November 9, 1972, in the amount of $4,099,425,000, as follows: companies and from responsible and recognized dealers in mvestment 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. 91-day bills (to maturity date) to be issued November 9, 1972, in the amount of $2,400,000,000, or thereabouts, representing an additional amount of bills dated August 10, 1972, and to mature February 8, 1973 (C U S IP No. 912793 Q E 9), originally issued in the amount of $1,800,830,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,900,000,000, or thereabouts, to be dated November 9, 1972, and to mature May 10, 1973 (C U S IP No. 912793 QT6 ). 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 o f 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 November 9, 1972, in cash or other im mediately available funds or in a like face amount of Treasury bills maturing November 9, 1972. 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. 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 (matu rity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Stand ard time, Monday, November 6, 1972. 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 o f 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 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, redeemed 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 Standard time, Monday, November 6, 1972, at the Securities Department o f 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 m arked “ Tender for Treasury Bills (W eek ly).” Tenders not requiring a deposit may be submitted by telegraph, subject to written confirmation; 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 of the last weekly offering of Treasury bills (91-day bills to be issued November 2, 1972, representing an additional amount of bills dated August 3, 1972, maturing February 1, 1973; and 182-day bills dated November 2, 1972, maturing May 3, 1973) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED NOVEMBER 2, 1972) Range of Accepted Competitive Bids 91-D ay Treasury Bills Maturing February 1 ,1 9 7 3 Price 182-Day Treasury Bills Maturing M ay 3 ,1 9 7 3 A pprox. equiv. annual rate P rice A pprox. equiv. annual rate .......................... ................ 98.802 4.739% 97.410a 5.123% Low ............................ ................ 98.789 4.791% 97.393 5.157% A v e ra g e ...................... ................ 98.795 4.767%1 97.401 5.141%! High a Excepting one tender of $800,000. 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 4.89 percent for the 91-day bills, and 5.35 per cent for the 182-day bills. (19 percent of the amount of 91-day bills bid for at the low price was accepted.) (29 percent of the amount of 182-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 February 1, 1973 Boston .......................... ........ Accepted A pplied fo r D istrict $ 32,355,000 182-Day Treasury Bills Maturing M ay 3 ,1 9 7 3 $ 16,545,000 Applied fo r $ 18,555,000 Accepted $ 3,555,000 New York .................... ........ 3,163,480,000 1,963,570,000 3,020,465,000 1,673,935,000 Philadelphia.................. ........ 51,325,000 11,325,000 24,790,000 4,690,000 Cleveland ...................... ........ 20,875,000 20,630,000 72,370,000 23,820,000 R ich m on d...................... ........ 52,795,000 22,125,000 49,910,000 15,410,000 Atlanta .......................... ........ 20,240,000 12,430,000 16,125,000 10,125,000 C h ica go.......................... ........ 341,070,000 152,040,000 391,110,000 114,210,000 St. Louis ...................... ........ 41,445,000 34,445,000 32,670,000 17,705,000 Minneapolis .................. ........ 35,115,000 18,195,000 31,305,000 9,305,000 Kansas C i t y .................... ........ 38,230,000 18,020,000 22,600,000 11,065,000 Dallas ............................ ........ 42,575,000 13,335,000 31,555,000 8,305,000 196,100,000 117,430,000 151,445,000 8,345,000 $3,862,900,000 $1,900,470,000' San Francisco ................ T o ta l ................. ........ $4,035,605,000 $2,400,090,000b b Includes $176,750,000 noncompetitive tenders accepted at the average price of 98.795. c Includes $90,255,000 noncompetitive tenders accepted at the average price of 97.401.