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F E D E R A L R E S E R V E BA NK
O F N E W YORK
Circular No. 7939
August 20, 1976
UPDATE ON BOOK-ENTRY PROCEDURE
Treasury Plans To Phase Out Definitive
Treasury Bills in New Borrowings
To A ll Banking Institutions, and Others Concerned,
in the Second Federal Reserve District:
In our Circular No. 7858. dated April 20, 1976, we reported on the progress of the Federal Reserve/U.S. Treasury book-entry program over the past eight years, and indicated that the Treasury
expects eventually to eliminate the issuance of any definitive securities in connection with new public
debt borrowings.
At the end of June 1976 almost 82 percent of marketable Treasury securities outstanding was in bookentry form. In addition, as of the same date, the program also included $54 billion of eligible Federal
Agency obligations, representing nearly 69 percent of the outstanding debt of those Agencies. Printed on
the reverse side is a table showing the progress of the program from 1968 through June 1976.
In light of this progress, the Departm ent of the Treasury has announced (in the enclosed press release)
that, with one exception, during the latter part of 1976 the Treasury will begin issuing 52-week Treasury
bills in book-entry form only. Definitive securities will continue to be made available for a short period of
time to institutional investors that are prevented, either by law or by regulation, from holding securities in
book-entry form; such definitive securities will be available only in $100,000 denom inations. In addition
r etT C d,Ur!n 8 thC firSt ninC m° nths of 1977’ the Treasury Plans to commence sim ilar offerings of
,
26-week and 13-week bills in book-entry form only.
In this connection, the Treasury also proposes to establish direct book-entry accounts for anv
subscribers who elect not to deal through commercial banks. This service, although limited will be
provided at no cost to the subscribers, who may present tenders and payments either through a Federal
Reserve Bank or directly to the Departm ent of the Treasury in W ashington, D.C. Further information
emrTon'ly” 'b a s is '™ 06 "
hC made aVa' lable p r'0r ,0 the ini,ial offerin8 of 52-week bills on a "book-
The success of the expanded book-entry program will depend largely upon the extent to which
ho decs of outstanding Treasury tssues in definitive form continue to convert such holdings into bookentry securities through member banks of the Federal Reserve System. Accordingly, we again invite you
to discuss With us any difficulties you may be encountering, due to legal or other impedim ents, in your
efforts to make full use of the book-entry procedure. Any comments or inquiries in this regard should be
addressed, * t this Bank, to Carol W. Barrett, Secretary of the Federal Reserve System Subcommittee on
Fiscal Agency Operations (Tel. No. 212-791-6068).
comm ittee on
PAUL A. VOLCKER,
President.
(Over)
(
M arketable United States Treasury Securities in Book-Entry Form
__________________________ 1968 to Date__________________________
C o lla r
D
a m o u n ts in billions)
Book-Entry holdings 2
Amount
Percent
New York
Federal Reserve Bank
Definitive
outstanding 3
$ 36.5
38.2
121.3
152.6
160.2
176.6
201.4
285.1
309.2
312.8
320.4
15.4
16.2
48.9
58.2
59.4
65.4
71.6
78.5
80.0
80.6
81.6
$ 21.0
21.2
96.6
124.6
129.2
135.6
151.5
194.5
209.8
209.7
214.5
$200.3
197.7
126.4
109.4
109.3
93.6
79.9
78.1
77.2
75.2
72.2
System total
End o f
period
Marketables*
1968
1969
1970
1971
1972
1973
1974
1975
1976 (April)
1976 (May)
1976 (June)
$236.8
235.9
247.7
262.0
269.5
270.2
281.3
363.2
386.4
388.0
392.6
Marketable Government Agency Securities in Book-Entry Form
_________________________ 1974 to Date_________________________
lD o lla r
a m o u n ts in b illio n s )
Book-Entry holdings
System total
End o f
period
Marketables ^
1974
1975
1976 (April)
1976 (May)
1976 (June)
1 Source:
$ 71.9
74.4
75.3
75.9
78.6
M o n th ly S ta te m e n t o f th e
Amount
Percent
$ 23.2
40.5
50.7
52.0
54.0
Public Debt;
T re a s u ry D e p a r tm e n t a n d th is B a n k .
.? I n c l u d e s b o t h b e a r e r a n d r e g i s t e r e d s e c u r i t i e s .
4 Source:
D e a le r q u o ta tio n sh e e ts.
New’ York
Federal Reserve Bank
32.3
54.4
67.3
68.5
68.7
s e c u r i tie s t o r J u ly 1 9 7 4 a n d s u b s e q u e n t p e r io d s .
2 Source:
2
e x c lu d e s
Federal Financing
$ 8.4
16.1
23.7
23.8
24.6
B ank
Definitiv
outstandii
$ 48.7
33.9
24.6
23.9
24.6
The Department
ofthe TREASURY
WASHINGTON, O.C. 20220
TELEPHONE 964-2041
4.
FOR
IMMEDIATE
• :iL "'
RELEASE
August
ENGRAVED
TREASURY
SECURITIES
GIVING
18,
WAY
1976
TO
BOOK-ENTRY
The Treasury Department
today reported
that
securities
now represent
81.6 percent,
or $ 3 2 0 . 4
of
the
marketable
public
debt.
Treasury
i s s u e s , 86 p e r c e n t
°f the T r e a s u r y n o t e s ,
and
are
in
book-entry
In
pansion
a
form,
progress
of
the
Of
report
on
outstanding
marketable
the T r e a s u r y bills,
78 p e r c e n t
p e r c e n t of the T r e a s u r y b o n d s
of
66
rather
book-entry
the
book-entry
billion,
than
the
In
engraved
program
system,
as
to
certificates.
accelerate
announced
by
ex-
Secretary
E * S ^m o n on M a r c h
31, T r e a s u r y n o w p r o p o s e s
that
the
j c t iyes of a c e r t i f i c a t e l e s s
system
for m a r k e t a b l e
Treasury
s e c u r i t i e s be a c c o m p l i s h e d
in two p h a s e s ,
with
the first
phase directed
at T r e a s u r y b i l l s .
**
°f
-week
to r
a
in
tentatively
C * 7? ’
bills
small
number
° r
{ o r l l l l l t
ior
a
limited
by
of
that
institutional
re8ulation
and
beginning
that
in
the
investors,
fro®
holding
of
slnilar
the
securities
$100,000
offerings
book- entry form
months
of b 9 7 7 -
prevented
of
only,
would
Book-entry
in
denomination
26-week
follow
bills
for
F e d e r a r » W
d be a v a l l a b l e
through member banks
F ederal R e s e r v e Sys t e m and the D e p a r t m e n t
of the
could
latter
one ex c e ption,
will
issue
form.
The
exception
is
Pu ^chase bllls
p e r i o d of time.
d u r i i e ” r h ^ k f . i l l 8 ’. ln
8t "
*
the
he
planned
t h C T r e a s u r y» w i t h
only
in b o o k - e n t r y
of
Treasury.
Tenders
for b o o k - e n t r y bills
to be
i s s u e d by T r e a s u r y
be s u b m i t t e d e i t h e r d i r e c t l y or
through a Federal
m a i n t I i n e d nw i t h o u ^ leh the
some ! ^
at^n^
on
on
aCCOunts
Jher8s e r v i c e s
e
t h e s er:-ce:
would
the
be
established
and
ther£ W ° p r
T r e a s u r y w o u l d Uld o v i d e .
WS - 1 0 3 4
(O v e r )
It
will
is
have
recognized
a
securities,
and
the
and
Federal
and
will
financial
formation
be
the
Reserve
of
Banks
to
details
on
the
interest
plan
the
to
to
plan
and
The
book-entry
Reserve
members
of
the
procedure
Banks
for
Federal
the
was
a
this
of
System.
in
public
public
with
was
in
the
reaction.
proposal
1968
commercial
It
plan
Treasury
Treasury
their
initiated
accounts
Reserve
the
investors
on
this
of
general
obtain
Dates and locations
for open h e a r i n g s
w i l l be a n n o u n c e d
in the n e a r
future.
Federal
the
undertake
acquaint
of
marketing
Accordingly,
further
of
implementation
effect
community.
program
operational
that
far-reaching
later
by
the
bank
extended
to i n c l u d e
individuals
and
institutions.
The book-entry
system
reduces
the b u r d e n of p a p e r w o r k
created by the m o u n t i n g volume
of p u b l i c d e b t
transactions;
it p r o t e c t s
against
loss,
theft,
and
counterfeiting;
issuing,
storing
and
and
it
substantially
delivering
o
0
o
Treasury
reduces
the
securities.
cost
of
@FedFRASER