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FED ER AL RESERVE BANK O F NEW YORK Fiscal Agent of the United States I” Circular No. 7 5 4 5 1 January 7, 1975 J L OFFERING OF TWO SERIES OF TREASURY BILLS $2,600,000,000 of 91-Day Bills, Additional Amount, Series Dated October 17, 1974, Due April 17, 1975 (To Be Issued January 16, 1975) $2,200,000,000 of 182-Day Bills, Dated January 16, 1975, Due July 17, 1975 T o A l l Incorporated B a n k s and T r u s t Com panies, and O th ers Concerned, in the S eco n d F ederal R eserve D istric t: Following is the text of a notice issued by the Treasury Department, released at 4 p.m. today: T h e T re a su ry D epartm ent, by this public notice, invites tenders for tw o series of T re a su ry bills to the ag g reg a te am ount of $4,800,000,000, o r thereabouts, to be issued Ja n u a ry 16, 1975, as fo llo w s: 91-day bills (to m atu rity date) in the am o u n t of $2,600,000,000, o r thereabouts, representing an additional a m ount of bills dated O ctober 17, 1974, and to m atu re A p ril 17, 1975 ( C U S I P N o. 912793 W E 2 ) , originally issued in the am ount of $2,003,495,000, the additional and original bills to be freely interchangeable. 182-day bills, fo r $ 2 ,200 ,000 ,000 , or thereabouts, to be dated J a n u a ry 16, 1975, and to m ature Ju ly 17, 1975 ( C U S I P N o. 912793 X E 1 ). T h e bills w ill be issued fo r cash and in exchange fo r T re a su ry bills m atu rin g J a n u a ry 16, 1975, o utstanding in the am ount of $4,604,645,000, of w hich G overnm ent accounts and F e d e ral R eserve B anks, fo r them selves and as agents of foreign and intern atio n al m onetary authorities, presently hold $2,583,060,000. T hese accounts m ay exchange bills they hold for the bills now being offered a t the average prices of accepted tenders. T he bills of both series will be issued on a discount basis under com petitive and noncom petitive bidding as h erein after provided, and a t m a tu rity th eir face am ount w ill be payable w ithout interest. T h ey will be issued in b e a re r form in denom inations of $10,000, $15,000, $50,000, $100,000, $500,000 and $1,000,000 (m a tu rity value) and in book-entry form to designated bidders. T en d ers will be received a t F ed eral R eserve B anks and B ranches up to the closing hour, o n e -th irty p.m., E a s te rn S ta n d a rd time, M onday, Ja n u a ry 13, 1975. T en d ers will not be re ceived a t the T re a su ry D epartm ent, W ash in g to n . E ach tender m ust be for a m inim um of $10,000. T en d ers over $10,000 m ust be in m u l tiples of $5,000. In the case of com petitive tenders the price offered m ust be expressed on the basis of 100 , w ith not m ore th an three decim als, e.g., 99.925. F ra c tio n s m ay not be used. It is urg ed th a t tenders be m ade on the prin ted form s and fo rw a rd ed in the special envelopes w hich will be supplied by F e d e ral R eserve B anks or B ranches on application therefor. B anking institutions and d ealers w ho m ake p rim a ry m ark e ts in G overnm ent securities and re p o rt daily to the F ed eral R eserve B ank of N ew Y o rk th eir positions w ith respect to G overnm ent securities and b o rro w in g s th ereo n m ay subm it ten d ers fo r account of custom ers, provided the nam es of the custom ers are set fo rth in such tenders. O th e rs will not be perm itted to subm it tenders except for th eir ow n account. T en d ers will be received w ithout deposit from incorporated banks and tru s t com panies and from responsible and recognized dealers in investm ent securities. T enders from others m ust be accom panied by paym ent of 2 percent of the face am ount of T re a su ry bills applied for, unless the tenders are accom panied by an ex p ress g u a ran ty of paym ent by an incorporated bank o r tru s t com pany. Im m ediately a fte r the closing hour, tenders will be opened a t the F e d e ral R eserve B anks and B ranches, follow ing w hich public announcem ent will be m ade by the T re a su ry D epartm ent of the a m ount and price range of accepted bids. O nly those subm itting com petitive tenders will be advised of the acceptance o r rejection thereof. T he S e c retary of the T re a su ry e xpressly reserves the rig h t to accept o r re je c t any o r all tenders, in w hole or in part, and his action in any such respect shall be final. S u b ject to these reservations, noncom petitive tenders fo r each issue fo r $ 200,000 or less w ithout stated price from any one bidder will be accepted in full a t the average price (in three decim als) of accepted com peti tive bids for the respective issues. S ettlem ent for accepted tenders in accordance w ith the bids m ust be m ade o r com pleted a t the F ed eral R eserve B ank on Ja n u a ry 16, 1975, in cash or o th er im m ediately available funds o r in a like face am ount of T rea su ry bills m atu rin g Ja n u a ry 16, 1975. C ash and exchange tenders will receive equal treatm en t. C ash ad ju stm en ts w ill be m ade for d iffer ences betw een the p a r value of m atu rin g bills accepted in exchange and the issue price of the new bills. U n d e r Sections 4 5 4 (b ) and 1221(5) of the In tern a l Revenue Code of 1954, the am ount of discount a t w hich bills issued h e re under are sold is considered to accrue w hen the bills are sold, redeem ed o r otherw ise disposed of, and the bills are excluded from consideration as capital assets. A ccordingly, the ow ner of T re a su ry bills (o th e r th an life insurance com panies) issued hereunder m ust include in his income ta x retu rn , as ord in ary gain o r loss, the difference betw een the price paid for the bills, w h eth er on original issue o r on subsequent purchase, and the am ount actually received e ith e r upon sale or redem ption a t m atu rity du rin g the taxable year fo r w hich the re tu rn is made. T re a su ry D e p artm en t C ircu la r N o. 418 (c u rre n t revision) and this notice prescribe the term s of the T re a su ry bills and govern the conditions of th eir issue. Copies of the circ u la r m ay be obtained from any F ed eral R eserve B ank o r B ranch. T h i c -R ank will r e c e iv e tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, January 13, 1975 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 m the enclosed envelope marked “Tender for Treasury Bills.” Tenders not requiring a deposit may be subnutted by telegraph, subject to written con firmation; no tenders may be submitted by telephone. Payment for the Treasury Mis cannot be made by credit through the Treasury Tax and Loan Account. Settlement must be made m cash or other immediately available funds or m maturing Treasury bills. Results of the last weekly offering of Treasury bills (91-day bills to be issued January 9, 1975, representing an additional amount of bills dated October 10, 1974, maturing April 10, 1975; and 182-day bills dated January 9, 1975, maturing July 10, 1975) are shown on the reverse side of this circular. A lfred H a y e s, President. ( over ) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED JANUARY 9. 1975) Range of Accepted Competitive Bids 91 -Day rreasury Bills Maturing April 10, 1975 P rice High .......................... ................ Low ............................ ................ Average ..................... ................ 98.331 98.298 98.307 182-Day Treasury Bills Maturing July 10, 1975 A pprox. equiv. annual rate Price A pprox. equiv. annual rate 96.648a 96.612 96.622 6.603% 6 .733% 6.698%! 6.630% 6.702% 6.682% 1 a E x ce p tin g one tender of $540,000. 1 T hese ra te s are on a bank discount basis. T he equivalent coupon issue yields a re 6.91% for the 91-day bills, and 7.01% for the 182-day bills. (81 percent of the amount of 91-day bills bid for at the low price was accepted.) (65 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 District) 91 -Day Treasury Bills Maturing April 10, 1975 D istrict A p p lied for Boston ....................... ........... New York .................. ........... Philadelphia .......................... Cleveland .................... ........... Richmond .................. ........... Atlanta ........................ ........... Chicago ...................... ........... St. Louis .................... ........... Minneapolis ................ ........... Kansas City ................. ........... Dallas .......................... ........... San Francisco ............. ........... T otal ........................ ........... $ 39,350,000 3,560,545,000 36,345,000 77,235,000 46,325,000 50,475,000 219,935,000 60,330,000 12,620,000 46,000,000 39,760,000 249,935,000 $4,438,855,000 182-Day Treasury Bills Maturing July 10, 1975 A ccepted A pplied fo r $ 29,255,000 2,146,395,000 35,990,000 58,875,000 37,880,000 49,345,000 112,365,000 33,630,000 10,620,000 43,625,000 29,310,000 113,490,000 $ $2,700,780,000b $4,412,060,000 25,355,000 3,486,890,000 35,205,000 74,455,000 60,355,000 45,040,000 252,760,000 86,740,000 10,455,000 39,230,000 29,435,000 266,140,000 A ccepted $ 14.555.000 1.964,570,000 14,775,000 33,795,000 32,355,000 29,055,000 36,710,000 32,890,000 4,195,000 30,130,000 19,125,000 88,080,000 $2,300,235,000 b Includes $515,905,000 noncom petitive tenders accepted a t the average price. c Includes $310,325,000 noncom petitive tenders accepted a t the average price. N o t e : In p rin tin g the resu lts of the w eekly auction of T re a s u ry bills to be issued Ja n u a ry 2, 1975 (on the reverse side of our C ircu la r No. 7540, dated D ecem ber 31, 1974), the percentage indicated as the ap proxim ate equivalent annual rate for the “H ig h ” com petitive bid price (98.232) for the 91-day bills m atu rin g A pril 3, 1975 w as incorrect. T he percentage should have been shown as 6.994%.
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