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FEDERAL RESERVE BANK OF N EW YORK Fiscal Agent of the United States r Circular No. 7 4 2 1 L July 16, 1974 ~l J OFFERING OF TWO SERIES OF TREASURY BILLS !,600,000,000 of 91-Day Bills, Additional Amount, Series Dated April 25, 1974, Due October 24, 1974 (To Be Issued July 25, 1974) $1,900,000,000 of 182-Day Bills, Dated July 25,1974, Due January 23, 1975 T o A ll Incorporated Banks and T rust Companies, and Others Concerned, in the Second Federal R eserv e D istrict: F ollow in g is the text o f a notice issued by the T reasu ry Departm ent, released at 4 p.m. to d a y : T h e Treasury Department, by this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o f $4,500,000,000, or thereabouts, to be issued July 25, 1974, as f o llo w s : 91-day bills (to maturity date) in the amount o f $2,600,000,000, or thereabouts, representing an additional amount o f bills dated A pril 25, 1974, and to mature O ctober 24, 1974 (C U S I P N o. 912793 U V 6 ) , originally issued in the amount o f $1,801,490,000 (an additional $100,065,000 was issued on June 5, 1974), the additional and original bills to be freely interchangeable. 182-day bills, fo r $1,900,000,000, or thereabouts, to be dated July 25, 1974, and to mature January 23, 1975 (C U S I P N o. 912793 V S 2 ). o f customers provided the names o f the customers are set forth in such tenders. Others will not be permitted to submit tenders except fo r their ow n account. Tenders w ill be receiveu without deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment o f 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 payment by an incorporated bank or trust company. T he bills o f 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 o f $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (m atu rity valu e). Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, follow in g which public announcement will be made by the Treasury Department o f the amount and price range o f accepted bids. O nly those submitting competitive tenders will be advised o f the acceptance or rejection thereof. The 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 reserva tions, noncompetitive tenders fo r each issue fo r $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 com petitive bids fo r the respective issues. Settlement fo r accepted tenders in accord ance with the bids must be made or com pleted at the Federal Reserve Bank on July 25, 1974, in cash o r other immediately available funds or in a like face amount o f Treasury bills maturing July 25, 1974. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made fo r differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Daylight Saving time, M onday, July 22, 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 o f competitive tenders the price offered must be expressed on the basis o f 100, with not more than three decimals, e.g., 99.925. Fractions m ay not be used. It is urged that tenders be made on the printed form s and forw arded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. 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, redeemed or otherwise disposed o f, and the bills are excluded from consideration as capital assets. A ccordin gly, the ow ner o f Treasury bills (oth er 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 fo r 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 fo r which the return is made. Banking institutions and dealers w ho make primary markets in Government securities and report daily to the Federal Reserve Bank o f N ew Y o rk their positions with respect to Government securities and borrow ings thereon may submit tenders fo r account Treasury Department Circular N o. 418 (current revision) and this notice prescribe the terms o f the Treasury bills and govern the conditions o f their issue. Copies o f the circular may be obtained from any Federal Reserve Bank or Branch. T he bills w ill be issued fo r cash and in exchange for Treasury bills maturing July 25, 1974, outstanding in the amount o f $4,298,755,000, o f which Government accounts and Federal Reserve Banks', fo r themselves and as agents o f foreign and international monetary authorities, presently hold $2,558,910,000. These accounts may exchange bills they hold fo r the bills now being offered at the average prices o f accepted tenders. T his Bank will receive tenders fo r both series up to 1:30 p.m., Eastern Daylight Saving time, M onday, July 22 1974, at the Securities Department o f its H ead Office and at its B uffalo Branch. T ender form s fo r the respective series are enclosed. Please use the appropriate form s to submit tenders and return them in the enclosed envelope marked “ T en d er fo r Treasury B ills.” Tenders not requiring a deposit may be submitted by telegraph, subject to written con firm ation ; no tenders may be submitted b y 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 o f Treasury bills (91-d ay bills to be issued July 18, 1974, representing an additional amount of bills dated April 18, 1974, maturing October 17, 1 9 7 4 ; and 182-day bills dated July 18, 1974, maturing January 16, 1975) are shown on the reverse side o f this circular. A lfred H ayes, President. ( over) RESULTS OF LAST W EEK LY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED JULY 18, 1974) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing October 17,1974 182-Day Treasury Bills Maturing January 16,1975 Approx. equiv. annual rate Price Price Approx. equiv. annual rate .................................................. 98.083 7.58 4 % 9 6.078a 7.7 5 8 % Low .......................... .................. 98.042 7 .7 4 6 % 95.982 7 .9 4 8% A v e r a g e ........................... .................. 98.053 7 .7 0 2 % ! 96.018 7 .8 7 6 % ! H ig h a E xcepting one tender o f $70,000. 1 These rates are on a bank discount basis. 182-day bills. T h e equivalent coupon issue yields are 7.96% fo r the 91-day bills, and 8.32% fo r the (65 percent o f the amount o f 91-day bills (3 3 percent o f the amount o f 182-day bills bid fo r at the low price was accepted.) bid fo r at the low price was accepted.) Total Tenders Applied for and Accepted (B y Federal Reserve District) 91-Day Treasury Bills Maturing October 17, 1974 Applied for District B oston ........................... ............ $ 69,800,000 182-Day Treasury Bills Maturing January 16,1975 Accepted $ 58,485,000 Applied for $ 39,560,000 Accepted $ 19,560,000 N ew Y o r k ..................... ........... 3,246,700,000 1,988,535,000 2,481,020,000 1,376,620,000 P h ila d e lp h ia .................. ........... 37,490,000 37,145,000 22,815,000 22,815,000 ....................... ............ 80,585,000 77,755,000 56,025,000 56,025,000 R ic h m o n d ....................... ........... 99,940,000 61,965,000 51,750,000 43,950,000 Atlanta ........................... ........... 62,365,000 37,970,000 42,895,000 42,895,000 ......................... ........... 207,285,000 108,955,000 219,470,000 103,950,000 St. L ouis ....................... ........... 55,465,000 33,465,000 49,670,000 43,670,000 M inneapolis .................. ........... 23,775,000 21,775,000 17,940,000 17,930,000 Kansas C i t y .................. ........... 57,055,000 45,745,000 49,770,000 49,770,000 Dallas .............................. ............ 36,625,000 19,585,000 35,830,000 25,805,000 228,920,000 109,105,000 200,130,000 97,130,000 Cleveland C hicago San F rancisco .............. T otal .............. ........... $4,206,005,000 $2,600,485,000b b Includes $469,780,000 noncompetitive tenders accepted at the average price, c Includes $413,850,000 noncompetitive tenders accepted at the average price. $3,266,875,000 $1,900,120,000c