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FED ERAL RESERVE BANK OF N E W YO RK Fiscal Agent of the United States Circular No. 8447*! November 3, 1978 [ Offering of $3,587,000,000 of 364-Day Treasury Bills Dated November 14, 1978 Due November 13, 1979 7o At/incorporatedBanAx and Trust Companies, and OtAers Concerned, in fAe .Second Federal Reserve District. Following is the text of a notice issued yesterday by the Treasury Department: The Department of the Treasury, by this pubiic notice, invites tenders for $3,587 million, or thereabouts, of 364-day Treasury bills to be dated November 14. 1978, and to mature November 13, 1979 (CUS1P No. 912793 Z82). 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 maturing November 14. 1978. This issue will not provide new money for the Treasury as the maturing issue is outstanding in the amount of $3,587 million, of which $1,878 million is held by the public and $1,709 million is held by Government accounts and the Federal Reserve Banks for themselves and as agents of foreign and international monetary authorities. Additional amounts of the bills may be issued to Federal Reserve Banks as agents of foreign and international monetary authorities. Tenders from Government accounts and the Federal Reserve Banks for themselves and as agents of foreign and international monetary 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 maturity their par amount will be payable without interest. Except for definitive bills in the $100,000 denomination, which will be available only to investors who are able to show that 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 Department of the Treasury. Tenders will be received at Federal Reserve Banks and Branches and at the Bureau of the Public Debt, Washington, D.C. 20226, up to 1:30 p.m., Eastern Standard time, Wednesday, November 8, 1978. Form PD 4632-1 should be used to submit tenders for bills to be maintained on the book-entry records of the Department of the Treasury. Each tender must be for a minimum of $10,000. Tenders over $10,000 must be in multiples of $5,000. In the case of competitive 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. Banking institutions and dealers who make primary markets in Government securities and report daily to the Federal Reserve Bank of New York their positions with respect to Government securities and borrowings thereon may submit tenders for account o f customers, provided the names of the customers are set forth in such tenders. Others will not be permitted to submit tenders except for their own account. Payment for the full par amount o f the bills applied for must accompany all tenders submitted for bills to be maintained on the book-entry records of the Department of the Treasury. A cash adjustment will be made for the difference between the par payment submitted and the actual issue price as determined 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 maintained 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 amount of the bills applied for must accompany tenders for such bills from others, unless an express guaranty of payment by an incorporated bank or trust company accompanies the tenders. Public announcement will be made by the Department of the Treasury of the amount and price range of accepted bids. 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 wl)ole 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 maintained on the records of Federal Reserve Banks and Branches must be made or completed at the Federal Reserve Bank or Branch on November 14, 1978, in cash or other immediately available funds or in Treasury bills maturing November 14, 1978. Cash adjustments will be made for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. Under Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954 the amount 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 assets. Accordingly, the owner o f bills (other than life insurance companies) issued hereunder must 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 amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made. Department of the Treasury Circulars, Public Debt Series— Nos. 26-76 and 27-76, and this notice, prescribe the terms of these Treasury bills and govern the conditions of their issue. Copies of the circulars and tender fbrms 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 Standard time, Wednesday, November 8, 1978, at the Securities Department of this Bank's Head Office, at our Buffalo Branch, or at the Bureau of the Pubiic 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 ybr tAe Treasury At7/s cannot Ae mat/e Ay cret/tt tArougA tAe Treasury Tax ant/ Loan Account. -Sett/ement must Ae mat/e tn casA or ofAer tmmetA'ate/y avat/aA/e ^unt/s or tn maturing Treasury At7/s. PAUL A. VOLCKER, Prestt/ent.
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