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FEDER AL RESERVE BANK OF NEW YORK Fiscal A gent of the United States ■'Circular No. 7 5 0 4 T U Novem ber 15, 1974 J Treasury Offers $1 Billion Strip of Weekly Bills T o All Incorporated Banks and Trust Com panies, and Others C on cern ed, in th e Second Federal R eserve D istrict: The following notice was issued yesterday by the Treasury Department: The Treasury Department, b y this public notice, invites tenders for additional amounts of five series o f Treasury bills to the aggregate amount of $1,000,000,000, or thereabouts, for cash. The addi tional bills will be issued D ecem ber 4, 1974, will be in the amounts, and will be in addition to the bills originally issued and maturing, as follow s: A m ou nt o f additional issue $ 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 Original issue dates 1974 June June June July July 13 20 27 5 11 M aturity D ates D ecem ber 12, 1974 D ecem ber 19, 1974 D ecem ber 26, 1974 January 2, 1975 January 9, 1975 CU SIP Nos. 912793 912793 912793 912793 912793 $1,000,000,000 VC7 VD5 VE3 VP8 VQ6 D ays from D ec. 4, 1974 to maturity 8 15 22 29 36 A m ount currently outstanding ( in m illions) $4,514 4,404 4,401 4,510 4,435 ( A verage) 22 The additional and original bills will be freely interchangeable. Each tender submitted must be in the minimum amount of $50,000. Tenders over $50,000 must be in multiples of $25,000. One-fifth of the apnount tendered will be applied to each of the above series of bills. The bills offered hereunder will be issued on a discount basis under com petitive and noncom peti tive bidding as hereinafter provided, and at maturity their face amount will be payable without inter est. 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 (maturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Standard time, Thursday, N ovem ber 21, 1974. Tenders will not be received at the Treasury Department, Washington. In the case of com petitive 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. A single price must be submitted for each tender. 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. Banking institutions and dealers w ho make primary markets in Government securities and report daily to the Federal Reserve Bank o f N ew York their positions with respect to Government securities and borrowings thereon may submit tenders for account 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 for their ow n account. Tenders will be received without deposit from incorporated banks and trust com panies and from responsible and recognized dealers in investment securities. Tenders from others must be accom panied by payment o f 2 percent of the face amount of Treasury bills applied for, unless the tenders are accom panied by an express guaranty o f payment by an incorporated bank or trust company. ( o v e r ) 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 of the amount and price range o f 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 w hole or in part, and his action in any such respect shall be final. Subject to these reservations, noncom petitive tenders for $250,000 or less ( in amounts as set forth in the second paragraph) 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. Settlement for accepted tenders in accordance with the bids must be made or com pleted at the Federal Reserve Bank in cash or other immediately available funds on D ecem ber 4, 1974. Under Sections 4 5 4 (b ) and 1221(5) of the Internal Revenue C ode o f 1954, the amount o f discount at which bills issued hereunder are sold is considered to accrue when the bills are sold, redeem ed or otherwise disposed of, and the bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other 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 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. Purchasers o f a strip o f the bills offered hereunder should, for tax purposes, take such bills onto their books on the basis of their purchase price prorated to each o f the five outstanding issues using as a basis for proration the closing market prices for each of the issues on D ecem ber 4, 1974. (Federal Reserve Banks will have available a list of these market prices, based on the mean between the bid and asked quotations fur nished b y the Federal Reserve Bank o f N ew York.) Treasury Department Circular No. 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. This Bank will receive tenders up to 1:30 p.m., Eastern Standard time, Thursday, November 21, 1974, at the Securities Department of its Head Office and at its Buffalo Branch. Please use the enclosed tender form to submit a tender, and return it 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 strip of bills cannot be made by credit through the Treasury Tax and Loan Account. Settlement must be made in cash or other immediately available funds. A lfred H a y e s , President.
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