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FED ER A L RESERVE BANK O F NEW YORK Fiscal Agent of the United States Pcircular No. 8544~1 _ March 23, 1979 _ Offering o f $3,340,000,000 of 364-Day Treasury Bills Dated April 3,1979 Due April 1,1980 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice issued yesterday by the Treasury Department: The Department of the Treasury, by this public notice, invites tenders for approximately $3,340 million of 364-day Treasury bills to be dated April 3, 1979, and to mature April 1, 1980 (CUSIP No. 912793 3F1). This issue will not provide new cash for the Treasury as the maturing issue is outstanding in the amount of $3,346 million. Payment for the full par amount of the bills applied for must accom pany all tenders submitted for bills to be maintained on the book-entry records o f the Department of the Treasury. A cash adjustment will be made on all accepted tenders for the difference between the par payment submitted and the actual issue price as determined in the auction. Without assurance, before the auction date of March 28, o f Congres sional action on legislation to raise the temporary debt ceiling, the Treasury will postpone this auction. No deposit need accompany tenders from incorporated banks and trust companies and from responsible and recognized dealers in invest ment securities for bills to be maintained on the book-entry records of Federal Reserve Banks and Branches. A deposit o f 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. The bills will be issued for cash and in exchange for Treasury bills maturing April 3, 1979. The public holds $1,666 million of the maturing issue and $1,680 million is held by Federal Reserve Banks for themselves and as agents of foreign and international monetary authorities. Tenders from Federal Reserve Banks for themselves and as agents o f foreign and international monetary authorities will be accepted at the weighted average price of accepted competitive tenders. Additional amounts of the bills may be issued to Federal Reserve Banks, as agents of foreign and in ternational monetary authorities, to the extent that the aggregate amount of tenders for such accounts exceeds the aggregate amount of maturing bills held by them. 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. This series of bills will be issued entirely in book-entry form in a minimum amount of $10,000 and in any higher $5,000 multiple, on the records either of the Federal Reserve Banks and Branches, or of the Department o f 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, March 28, 1979. Form PD 4632-1 should be used to submit tenders for bills to be maintained on the book-entry records o f 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 o f competitive tenders, the price offered must be expressed on the basis o f 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 in and borrowings on such securities may sub mit tenders for account of customers, if the names of the customers and the amount for each customer are furnished. Others are only permitted to submit tenders for their own account. Public accouncement will be made by the Department of the Treasury of the amount and price range of accepted bids. Competitive bidders will be advised o f the acceptance or rejection of their tenders. The Secretary o f the Treasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and the Secretary’s action shall be final. Sub ject to these reservations, noncompetitive tenders for $500,000 or less without stated price from any one bidder will be accepted in full at the weighted average price (in three decimals) of accepted competitive bids. Settlement for accepted tenders for bills to be maintained on the bookentry records o f Federal Reserve Banks and Branches must be made or completed at the Federal Reserve Bank or Branch on April 3, 1979, in cash or other immediately available funds or in Treasury bills maturing April 3, 1979. Cash adjustments will be made for differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. Under Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954 the amount o f discount at which these bills 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 of these bills (other than life insurance companies) must include in his or her Federal income tax return, as ordinary gain or loss, the dif ference 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. Department o f 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 o f their issue. Copies o f 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 Standard time, Wednesday, March 28, 1979, at the Securities Department o f this Bank’ s Head Office, at our Buffalo Branch , or at the Bureau o f 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 Treasury and Agency Issues Division o f this Bank. Tenders not requiring a deposit may be submitted by telegraph, subject to written confirmation; no tenders may be submitted by telephone. Payment for 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. Pa u l A. V olcker, President.
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