company obligations of the U.S. government with intermediate maturities
of not less than one year or more than ten years (the latter was changed
in 1976 - prior maximum maturities were seven years).
notes are issued in minimum denomination of $5,000 if maturity is less
than four years, and $1,000 if maturity is four years or more.
Definitive securities were also issued in denominations of $10,000,
$100,000, and $1,000,000. Interest
rates vary from issue to issue.
are now in book-entry form. Notes
authority for Treasury Notes is found in 31 U.S.C. 3102, 3121.
Governing regulations are found in Department Circular No. 300,
as revised (31 CFR, Part 306), Department Circulars, Public Debt Series
No. 2-86 (31 CFR, Pat 357), for notes issued in Treasury Direct, subject
to provisions of the individual offering circular for each issue.
the Treasury's program of regular issuance of its basic types of debt
issues (bills, notes, and bonds), the usual rotation has called for two-year
notes to be auctioned about one week before the end of every month; four-year
notes, about the last month of every quarter; and five-year notes, about
the middle of the second month of each quarter.
Three-year notes occasionally have been used in refunding packages
about the middle of a quarter and seven-year and ten-year notes offered
as options in quarterly refundings, dated midmonth.
In advance of such quarterly refundings, the Treasury has adopted
the practice of indicating its cash needs for the quarter and the types
of financing being considered, a practice which permits orderly market
adjustment and investment planning.
They are subject, to full federal taxation (income, capital gains,
estate, and gift taxes).
TAX EQUITY AND FISCAL RESPONSIBILITY ACT OF 1982 requires Treasury notes
World War II, the Treasury did not resort to note financing importantly,
relying largely on bills and certificates of indebtedness.
Beginning in 1949, the Treasury resumed important issuance of notes,
particularly as a means of lengthening maturity of the public debt into
the intermediate range, and meeting demand from commercial banks and other
institutional investors for spacing of maturities beyond the short-term