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FED ER A L RESERVE BANK O F N EW YORK Fiscal Agent of the United States P C ircular No. 8372~1 June 16,1978 Offering of $2,750,000,000 of 364-Day Treasury Bills Dated June 27, 1978 Due June 26, 1979 T o A l l I n c o r p o r a te d B a n k s a n d T r u s t C o m p a n ie s, a n d O th e r s C o n c e rn e d , in th e S e c o n d F e d e r a l R e s e r v e D is tr ic t: Following is the text of a notice issued yesterday by the Treasury Department: The D epartm ent of the Treasury, by this public notice, invites tenders for $2,750 million, or thereabouts, of 364-day Treasury bills to be dated June 27, 1978, and to m ature June 26, 1979 (CUSIP No. 912793 V94). The bills, with a limited exception, will be available in book-entry form only, and will be issued for cash and in exchange for Treasury bills m aturing June 27, 1978. The issue will provide $497 million new money for the Treasury as the m aturing issue is outstanding in the am ount of $2,253 million, of which $1,070 million is held by the public and $1,183 million is held by Govern m ent accounts and the Federal Reserve Banks for themselves and as agents of foreign and international m onetary authorities. A dditional am ounts of the bills may be issued to Federal Reserve Banks as agents of foreign and international m onetary authorities. Tenders from Governm ent accounts and the Federal Reserve Banks for themselves and as agents of foreign and international m onetary authorities will be accepted at the average price of accepted tenders. The bills will be issued on a discount basis under competitive and non competitive bidding, and at m aturity their par am ount will be payable without interest. Except for definitive bills in the $100,000 denom ination, which will be available only to investors who are able to show th at they are required by law or regulation to hold securities in physical form, this series of bills will be issued entirely in book-entry form on the records either of the Federal Reserve Banks and Branches, or of the D epartm ent of the Treasury. Tenders will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, W ashington, D.C. 20226, up to 1:30 p.m., E astern Daylight Saving time, W ednesday, June 21, 1978. Form PD 4632-1 should be used to subm it tenders for bills to be m aintained on the book-entry records of the D epartm ent of the Treasury. Each tender m ust be for a m inim um of $10,000. Tenders over $10,000 m ust be in m ultiples of $5,000. In the case of competitive tenders, the price offered m ust be expressed on the basis of 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. B a n k in g in s titu tio n s a n d d e a le rs w ho m ak e p rim a ry m a rk e ts in G overnm ent securities and report daily to the Federal Reserve Bank of New York their positions with respect to Governm ent securities and b o rro w in g s th e re o n m ay s u b m it te n d e rs fo r a c c o u n t o f c u sto m e rs, provided the names of the customers are set forth in such tenders. Others will not be perm itted to subm it tenders except for their own account. Payment for the full par amount of the bills applied for must accompany all tenders submitted for bills to be maintained on the book-entry records of the D epartm ent of the Treasury. A cash adjustm ent will be m ade for the difference between the par paym ent subm itted and the actual issue price as determ ined in the auction. No deposit need accompany tenders from incorporated banks and trust companies and from responsible and recognized dealers in investment securities, for bills to be m aintained on the book-entry records of Federal Reserve Banks and Branches, or for definitive bills, where authorized. A deposit of 2 percent of the par am ount of the bills applied for m ust accompany tenders for such bills from others, unless an express guaranty of payment by an incorporated bank or trust company accompanies the tenders. Public announcem ent will be m ade by the D epartm ent of the Treasury of the am ount and price range of accepted bids. Those subm itting 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 $500,000 or less without stated price from any one bidder will be accepted in full at the average price (in three decimals) of accepted competitive bids. Settlement for accepted tenders for bills to be m aintained on the records of Federal Reserve Banks and Branches m ust be m ade or completed at the Federal Reserve Bank or Branch on June 27, 1978, in cash or other immediately available funds or in Treasury mils m aturing June 27, 1978. Cash adjustm ents will be made for differences between the par value of m aturing bills accepted in exchange and the issue price of the new bills. U nder Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954 the am ount of discount at which bills issued hereunder 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 a ssets. A ccordingly, th e ow ner o f b ills (o th e r th a n life in su ra n c e companies) issued hereunder m ust include in his Federal income tax return, as ordinary gain or loss, the difference between the price paid for the bills, whether on original issue or on a subsequent purchase, and the am ount actually received either upon sale or redem ption at m aturity during the taxable year for which the return is made. D epartm ent of the Treasury Circulars, Public Debt Series— Nos. 26-76 and 27-76, and this notice, prescribe the term s of these Treasury bills and govern the conditions of their issue. Copies of the circulars and tender forms may be obtained from any Federal Reserve Bank or Branch, or from the Bureau of the Public Debt. Tenders will be received up to 1:30 p.m., Eastern Daylight Saving time, Wednesday, June 21, 1978 at the Securities Department of this Bank’s Head Office, at our Buffalo Branch, or at the Bureau of the Public Debt. The enclosed form should be used for submitting tenders through a financial institution. Forms for submitting tenders directly to the Treasury are available from the Government Bond Division of this Bank. Tenders not requiring a deposit may be sub mitted by telegraph, subject to written confirmation; no tenders may be submitted by 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. PAUL A. VOLCKER, President.
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