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FED ER A L RESER VE BANK O F NEW YORK Fiscal A gen t of the United States J" Circular No. 7 3 7 9*1 L April 24, 1974 J OFFERING OF TWO SERIES OF TREASURY BILLS $2,500,000,000 of 91-Day Bills, Additional Amount, Series Dated January 31, 1974, Due August 1, 1974 (To Be Issued May 2, 1974) $1,800,000,000 of 182-Day Bills, Dated May 2, 1974, Due October 31, 1974 T o A ll Incorporated Banks and Trust Companies, and O thers Concerned, in the Second Federal R eserv e D istrict: The following statement was made public yesterday by the Treasury Department: In future Treasury bill auctions, beginning with the auction of A pril 29, maturing bills held by Government accounts and by Federal Reserve Banks, for themselves and as agents for foreign monetary authorities, may be exchanged for the new issues at the average prices of competitive bids. The amount o f bills held by those accounts will be included in the announcements of auctions. Following is the text of the public notice offering the bills to be auctioned April 29: The Treasury Department, by this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount of $4,300,000,000, or thereabouts, to be issued M ay 2, 1974, as fo llo w s : 91-day bills (to maturity date) in the amount of $2,500,000,000, or thereabouts, representing an additional amount o f bills dated January 31, 1974, and to mature August 1, 1974 (C U S I P N o. 912793 U H 7 ), originally issued in the amount of $1,803,345,000, the additional and original bills to be freely interchangeable. received without deposit from incorporated banks and trust com panies and from responsible and recognized dealers in investment 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. T he bills o f both series w ill be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount w ill be payable without interest. T hey 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 (m aturity va lu e). Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, follow ing which public announcement will be made by the Treasury Department o f 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 decim als) o f 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 M ay 2, 1974, in cash or other immedi ately available funds or in a like face amount of Treasury bills maturing M ay 2, 1974. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Daylight Saving time, M onday, A pril 29, 1974. Tenders will not be received at the Treasury Department, W ashington. Each 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 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 forw arded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Under Sections 4 5 4 (b ) and 1221(5) o f 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. A ccordingly, the owner of Treasury bills (other than life insurance com panies) 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. Banking institutions generally may submit tenders for account o f customers provided the names o f the customers are set forth in such tenders. Others than banking institutions will not be permitted to submit tenders except for their own account. Tenders will be Treasury Department Circular N o. 418 (current revision) and this notice prescribe the terms o f the Treasury bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. 182-day bills, for $1,800,000,000, or thereabouts, to be dated M ay 2, 1974, and to mature O ctober 31, 1974 (C U S I P N o. 912793 U W 4 ). The bills will be issued for cash and in exchange for Treasury bills maturing M ay 2, 1974, which are outstanding in the amount o f $4,307,940,000. Federal Reserve Banks, for themselves and as agents o f foreign monetary authorities, and Government accounts hold $2,278,910,000, which may be exchanged for the bills now being offered at the average prices of accepted tenders. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday, April 29, 1974, 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.” 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. Results of the last weekly offering of Treasury bills (91-day bills to be issued April 25, 1974, representing an additional amount of bills dated January 24, 1974, maturing July 25, 1974; and 182-day bills dated April 25, 1974, maturing October 24, 1974) are shown on the reverse side o f this circular. A lfred H ayes, President. ( over ) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED APRIL 25, 1974) Range of Accepted Competitive Bids 182 -Day Treasury Bills Maturing October 24,1974 p i-D a y Treasury Bills Maturing July 25,19 74 P rice High ................................................ Low ................................................... A v e ra g e ............................................ A pprox. equiv. annual rate 98.043a 97.976 98.014 7.742% 8.007% 7.857% ! Price A pprox. equiv. annual rate 95.983 95.887 95.958 7.946% 8.136% 7.995% ! a E xcepting one tender of $100,000. 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 8.13% for the 91-day bills, and 8.45% for the 182-day bills. (27 percent of the amount of 91-day bills bid for at the low price was accepted.) (100 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) 9 i-D a y Treasury Bills Maturing July 25,19 74 District $ 45,400,000 Applied for Accepted Applied for Boston ....................................... 182 -Day Treasury Bills Maturing October 24,1974 $ 35,400,000 $ 23,800,000 Accepted $ 13,800,000 New Y ork .................... ............ 2,834,135,000 1,987,835,000 2,424,280,000 1,517,260,000 Philadelphia .................. ............ 32,270,000 32,270,000 11,705,000 11,705,000 Cleveland ....................... ............ 43,995,000 43,995,000 21,480,000 21,480,000 Richmond ................................... 40,960,000 37,960,000 25,530,000 21,530,000 Atlanta ........................... ............ 27,610,000 27,310,000 21,955,000 21,855,000 ...................................... 170,495,000 139,495,000 108,080,000 67,080,000 St. Louis ................................... 41,190,000 40,190,000 30,875,000 29,865,000 Minneapolis .................. ............ 5,405,000 5,405,000 3,980,000 3,980,000 Kansas City .................. ............ 32,820,000 32,820,000 24,565,000 23,965,000 Dallas ............................. ............ 32,205,000 27,175,000 23,045,000 19,045,000 San Francisco .............. ............ 127,220,000 90,220,000 98,770,000 48,770,000 ........................... $3,433,705,000 Chicago T otal $2,500,075,000** b Includes $436,390,000 noncompetitive tenders accepted at the average price, c Includes $242,395,000 noncompetitive tenders accepted at the average price. $2,818,065,000 $1,800,335,000'
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