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F E D E R A L R E S E R V E BANK O F N E W YORK Fiscal Agent of the United States r C ircular No. 4 7 1 0 "1 L F ebruary 26, 1959 J O F F E R IN G O F T W O S E R IE S O F T R E A S U R Y B IL L S $1,500,000,000 o f 9 1-D a y Bills, D ated M arch 5, 1959, M aturing June 4 , 1959 $400,000,000 o f 182-D ay Bills, D ated M arch 5, 1959, M aturing September 3, 1959 T o all Incorporated B anks and Trust Com panies, and O thers Concerned, in the Second Federal R eserve D istrict: F ollow in g is the text o f a notice issued by the Treasury Department, released fo r publication in m orning newspapers, Thursday, February 26, 1959: T h e T re a su ry D epartm ent, b y this pu blic notice, invites tenders f o r tw o series o f T reasu ry bills to the a ggregate amount o f $1,900,000,000, o r thereabouts, for cash and in exch a n ge for T re a su ry bills m aturing M a rch 5, 1959, in the am ount o f $1,799,836,000, as fo llo w s : 91 -d a y b ills, fo r $1,500,000,000, or thereabouts, to be dated M a rch 5, 1959, and to mature June 4, 1959. 182-day b ills, fo r $400,000,000, o r thereabouts, to be dated M a rch 5, 1959, and to mature Septem ber 3, 1959. T h e bills o f both series w ill be issued on a discou nt basis under com petitive and noncom petitive bid d in g as h ereinafter provided , and at m aturity their face am ount w ill be payable w ith ou t interest. T h e y w ill be issued in bearer form on ly, and in den om in ation s o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m atu rity va lu e). T en ders w ill be received at Federal R eserve Banks and B ranches up to the clo s in g hour, on e-thirty o ’ c lo ck p.m., E astern Standard tim e, M on day, M arch 2, 1959. T en ders w ill n ot be received a t the T reasu ry D epartm ent, W a sh in gton . E a ch ten der must be fo r an even m ultiple o f $1,000, and in the ca se o f com petitive tenders the price offered m ust be expressed on the basis o f 100, w ith n ot m ore than three decim als, e.g., 99.925. F raction s m a y not be used. It is urged that tenders be made on the printed form s and forw a rd ed in the special envelopes w hich w ill be supplied b y F ed era l R eserve Banks o r B ran ches o n a pp lica tion therefor. O thers than banking institutions w ill not be perm itted to subm it tenders excep t fo r their ow n a ccou nt. T en ders w ill be receiv ed w ith ou t deposit from in corporated banks and trust com panies and fro m responsible and recogn ized dealers in in vestm ent securities. T en ders from others must be accom panied b y paym ent o f 2 percent o f the face am ount o f T reasu ry bills a pp lied for, unless the tenders are accom panied b y an express gu aranty o f paym ent by an in corporated bank o r trust com pany. Im m ediately after the clo s in g hour, tenders w ill be opened at the F ed era l R eserve Banks and B ranches, fo llo w in g w hich pu blic announcem ent w ill be made b y the T reasu ry Departm ent o f the am ount and price range o f accepted bids. T h ose su b m itting tenders w ill be advised o f the acceptance or rejection th ereof. T h e Secretary o f the T reasu ry exp ressly reserves the righ t to accept o r reject any or all tenders, in w h ole o r in part, and his action in any such respect shall be final. S u b ject to these reservations, n on com petitive tenders fo r $200,000 o r less fo r the 91-day bills and noncom petitive tenders fo r $50,000 o r less fo r the 182-day bills w ithout stated price from any one b idder w ill be a ccepted in fu ll at the a vera ge p rice (in three decimals)_ o f a ccepted com petitive bids fo r the respective issues. Settlem ent fo r a ccepted tenders in a ccord a n ce w ith the bids m ust be m ade o r com pleted at the F ed era l R eserve Bank on M a rch 5, 1959, in cash or oth er im m ediately availa b le funds or in a like fa ce am ount o f T reasu ry bills m aturing M arch 5, 1959. Cash and exch a n ge tenders w ill receive equal treatment. Cash adjustm ents w ill be made fo r differences betw een the par valu e o f m aturing bills accepted in exch a n ge and the issue price o f the new bills. T h e incom e derived from T reasu ry bills, w hether interest o r gain from the sale or oth er disposition o f the b ills, does not have any exem ption, as such, and loss from the sale o r oth er d isp osition o f T rea su ry bills does not have any special treat ment, as such, under the Internal R evenue C ode o f 1954. T he bills are subject to estate, inheritance, g ift or oth er excise taxes, w hether F ed eral o r State, but are exem pt from a ll ta x a tion n ow or hereafter im posed on the principal o r interest th ereof b y any State, o r any o f the possessions o f the U nited States, o r b y any lo ca l ta x in g authority. F o r purposes o f ta x a tion the am ount o f discou n t at w h ich T reasu ry bills are o rig in a lly sold b y the U n ited States is con sid ered to be interest. U n der S ections 4 5 4(b) and 1221(5) o f the Internal Revenue C ode o f 1954 the am ount o f discou n t at w h ich bills issued hereunder are sold is n ot con sidered to a ccru e u ntil such bills are sold, redeem ed or otherw ise disposed o f, and such bills are exclu d ed from con sidera tion as capital assets. A ccord in g ly , the ow n er o f T reasu ry bills (oth er than life insurance co m pan ies) issued h ereunder need include in his incom e ta x return on ly the difference betw een the price paid fo r such bills, whether on origin a l issue or on subsequent purchase, and the am ount actu ally received either upon sale o r redem ption at m aturity du rin g the taxable yea r fo r w hich the return is made, as ord in a ry gain o r loss. T rea su ry D epartm ent C ircu lar N o. 418, R evised, and this notice, prescribe the terms o f the T rea su ry bills and govern the con ditions o f their issue. Copies o f the circu la r m ay be obtained from any F ed eral Reserve Bank o r Branch. T his Bank will receive tenders fo r both series up to 1 :30 p.m., Eastern Standard time, M onday, M arch 2, 1959, at the Securities Department o f its H ead Office and at its Buffalo Branch. Tender form s for the respective series are enclosed. Please use the appropriate form s to submit tenders and return them in an envelope marked “ Tender for Treasury Bills.” Tenders may be submitted by telegraph, subject to written confirm ation; they may not 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. Results of the last offering of Treasury bills (91-day bills dated February 26, 1959, maturing May 28, 1959, and 182-day bills dated February 26, 1959, maturing August 27, 1959) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF L A ST O F F E R IN G OF T R E A S U R Y BILLS (T W O SERIES D A T E D F E B R U A R Y 26, 1959) Range o f A ccepted Com petitive Bids 91-Day Treasury Bills Maturing M ay 28, 1959 182-Day Treasury Bills Maturing August 27, 1959 P r ice A p p ro x . equiv. annual rate P rice A p p ro x . equiv. annual rate ........ 99.366 2.508% 98.5083 2.951% L ow ........................... ........ 99.340 2.611% 98.483 3.001% Average 99.346 2.589% 98.494 2.978% H igh ................... ........ aE xcepting two tenders totaling $120,000. (79 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (33 percent o f the amount o f 182-day bills bid fo r at the low price was accepted.) T otal Tenders A p p lied fo r and A ccepted (B y Federal Reserve Districts) 91-Day Treasury Bills Maturing M ay 28, 1959 D istrict B oston Applied for ............................ ......... N ew Y o rk ..................... ........ $ 29,876,000 1,710,137,000 182-Day Treasury Bills Maturing August 27, 1959 A ccep t cd $ 19,540,000 A pplied fo r $ 2,361,000 A ccep ted $ 2,076,000 946,047,000 594,411,000 271,393,000 ................. ........ 25,988,000 10,957,000 6,317,000 1,317,000 Cleveland ....................... ........ 37,554,000 32,554,000 18,608,000 13,508,000 R ichm ond ..................... ........ 16,048,000 12,148,000 2 ,002,000 530,000 Atlanta ........................... ........ 19,305,000 16,221,000 5,865,000 5,865,000 ......................... ........ 203,038,000 163,868,000 74,183,000 59,983,000 St. Louis ....................... ......... 29,170,000 23,170,000 3,576,000 3,526,000 Minneapolis ................... ........ 11,348,000 9,843,000 6,011,000 2,911,000 Kansas C i t y ................... ........ 40,113,000 39,987,000 10,488,000 10,455,000 16,499,000 16,499,000 2,323,000 2,323,000 118,360,000 109,260,000 33,131,000 26,121,000 Philadelphia C hicago Dallas .............................. ........ San F r a n c is c o ............... Totals ............. ........ $2,257,436,000 $1,400,094,000b b Includes $197,738,000 noncompetitive tenders accepted at the average price o f 99.346. c Includes $29,964,000 noncompetitive tenders accepted at the average price of 98.494. $759,276,000 $400,008,000c