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FEDERAL RESERVE BANK O F NEW YORK f Cireular No. 4 1 5 4 1 L October 14,1954 J Fiscal Agent of the United States O ffering o f $ 1 ,5 0 0 ,0 0 0 ,0 0 0 o f 91-Day Treasury Bills Dated October 21 , 1954 Maturing January 20 , 1955 To all Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice published today: F O R R E L E A S E , M O R N IN G N E W S P A P E R S , Thursday, October 14, 1954. TREASURY DEPARTM ENT Washington The Treasury Department, by this public notice, invites tenders for $1,500,000,000, or thereabouts, of 91-day Treasury bills, for cash and in exchange for Treasury bills maturing October 21, 1954, in the amount of $1,500,473,000, to be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided. The bills of this series will be dated October 21, 1954, and will mature January 20, 1955, when the face amount will be payable without interest. They will be issued in bearer form only, and in denominations of $1,000, $5,000, $10,000, $100,000, $500,000, and $1,000,000 (maturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, two o’clock p.m., Eastern Standard time, Monday, October 18, 1954. Tenders will not be received at the Treasury Department, Washington. Each tender must be for an even multiple of $1,000, and 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. It is urged that tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Others than banking institutions will not be permitted to submit tenders except for their own account. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in invest ment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price range of accepted bids. Those submitting 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 $200,000 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 in accordance with the bids must be made or completed at the Federal Reserve Bank on October 21, 1954, in cash or other immediately available funds or in a like face amount of Treasury bills maturing October 21, 1954. Cash and exchange tenders will re ceive equal treatment. 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. The income derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, shall not have any exemption, as such, and loss from the sale or other disposition of Treasury bills shall not have any special treat ment, as such, under the Internal Revenue Code, or laws amendatory or supplementary thereto. The bills shall be subject to estate, inheritance, gift, or other excise taxes, whether Federal or State, but shall be exempt from all taxation now or here after imposed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority. For purposes of taxation the amount of discount at which Treasury bills are originally sold by the United States shall be considered to be interest. Under Sections 42 and 117(a)(1) of the Internal Revenue Code, as amended by Section 115 of the Revenue Act of 1941, the amount of discount at which bills issued hereunder are sold shall not be considered to accrue until such bills shall be sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued hereunder need in clude in his income tax return only the difference between the price paid for such bills, whether on original issue or on sub sequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made, as ordinary gain or loss. Treasury Department Circular No. 418, Revised, and this notice, prescribe the terms of the Treasury bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. This Bank will receive tenders up to 2 p.m., Eastern Standard time, Monday, October 18, 1954, at the Securi ties Department o f its Head Office and at its Buffalo Branch. Please use the form on the reverse side of this circular to submit a tender, and return it in an envelope marked “ Tender for Treasury Bills.” Tenders may be submitted by telegraph, subject to written confirmation; they may not 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. A l l a n S p r o u l , President. Results of last offering of Treasury bills (91-day bills dated October 14, 1954, maturing January 13, 1955) Total applied fo r ......... $2,137,283,000 Total accepted..............$1,500,189,000 (includes $200,465,000 entered on a noncompetitive basis and accepted in full at the average price shown below) Average price....... 99.756 Equivalent rate of discount approx. 0.966% per annum Range of accepted competitive bids: H igh ........................ 99.767 Equivalent rate of discount approx. 0.922% per annum Low ........................ 99.754 Equivalent rate of discount approx. 0.973% per annum (82 percent of the amount bid for at the low price was accepted) Federal Reserve District Total Applied fo r .... New Y o r k .................. .... Philadelphia ............. Cleveland .................... Richmond .................. Chicago ...................... St. Louis .................... Minneapolis ............. Kansas City .............. San Francisco .......... T otal ........................... .... $ 29,123,000 1,604,344,000 29,935,000 31.838,000 12,846,000 22,870,000 188,231,000 38,245,000 17,521,000 42,637,000 40,668,000 79,025,000 $2,137,283,000 Total Accepted $ 26,083,000 1,018,039,000 19,035,000 31,838,000 12.256,000 22,290.000 166,332,000 37,875,000 17,467,000 42,537,000 39,724,000 66,713,000 $1,500,189,000 ( over ) 32 E IM P O R T A N T — I f you desire to bid on a c o m p e titiv e basis, fill in rate per 100 and m aturity value in paragraph headed "C om petitive Bid.” I f you desire to bid on a n o n co m p etitiv e basis, fill in only the m aturity value in paragraph headed "N oncom petitive Bid.” DO N O T fill in b o th paragraphs on one fo r m . A separate tender must be used f o r each bid, except that banks subm itting bids on a com petitive basis f o r their ow n and their customers’ accounts may submit one tender f o r the total am ount bid at each price, provided a list is attached showing the name o f each bidder, the am ount bid f o r his account, and method o f payment. Forms f o r this purpose w ill be furnished upon request. No. T E N D E R F O R 91 -D A Y T R E A S U R Y BILLS M aturing January 20, 1955 D ated O ctober 21, 1954 To Dated at.. F ed era l R eserve B a n k o f N ew Y ork , Fiscal Agent o f the United States. COM PETITIVE BID N O N C O M PE TITIV E BID Pursuant to the provisions o f Treas ury Department Circular No. 418, Revised, and to the provisions o f the public no tice on October 14, 1954, as issued by the Treasury Department, the undersigned offers Pursuant to the provisions of Treasury De partment Circular No. 418, Revised, and to the provisions of the public notice on October 14, 1954, as issued by the Treasury Department, the undersigned offers a noncompetitive tender ............................................* for a total amount of for a total amount of (Rate per 100) $.......................................... ......... (maturity value) o f the Treasury bills therein described, or for any less amount that may be awarded, settlement therefor to be made at your Bank, on the date stated in the public notice, as indicated below : □ By surrender o f maturing Treasury bills (N ot to exceed $200,000) (maturity value) of the Treasury bills therein described, at the average price (in three deci mals) of accepted competitive bids, settlement therefor to be made at your Bank, on the date stated in the public notice, as indicated below: □ By surrender o f maturing Treasury bills amounting t o ...................... $------------------------------- amounting t o ...................... $ ____________________ □ □ By cash or other immediately available funds By cash or other immediately available funds *Price must be expressed on the basis o f 100, with not more than three decimal places, for example, 99.925. The Treasury bills for which tender is hereby made are to be dated October 21, 1954, and are to mature on January 20, 1955. This tender will be inserted in special envelope marked “ Tender fo r Treasury Bills” Name of Bidder ....... (Please print) By.. (Official signature required) (Title) Street Address. (City, Tow n or V illage, P. O. No., and State) If this tender is submitted by a bank for the account of a customer, indicate the customer’s name on line below: (N am e o f Customer) (City, Tow n or V illage, P . O. N o., and State) IM P O R T A N T IN STR U C T IO N S: 1. No tender for less than $1,000 will be considered, and each tender must be for an even multiple of $1,000 (maturity value). 2. If the person making the tender is a corporation, the tender should be signed by an officer of the corpora tion authorized to make the tender, and the signing of the tender by an officer of the corporation will be construed as a representation by him that he has been so authorized. If the tender is made by a partnership, it should be signed by a member of the firm, who should sign in the form “.............................................................................................. , a copartnership, by ............................................................. ................................................. . a member of the firm.” 3. Tenders will be received without deposit from incorporated banks and trust companies and from respon sible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. 4. If the language of this tender is changed in any respect, which, in the opinion of the Secretary of the Treasury, is material, the tender may be disregarded. ." Payment b y c r e d it th ro u g h T rea su ry T a x and L oan A c c o u n t w ill n o t b e p er m itte d . http://fraser.stlouisfed.org/ T E N T B — 12G8-a (OVER) Federal Reserve Bank of St. Louis