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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 C ir cu la r N o. 4 7 2 3 A p r i l 2, 1 9 5 9 O FFER IN G O F T W O SERIES OF T R E A S U R Y BILLS $1,200,000,000 o f 91-Day Bills, Additional Am ount, Series Dated Jan. 8, 1959, Due July 9, 1959 (T o B e Issued A p ril 9, 1959) $400,000,000 o f 182-Day Bills, Dated A pril 9, 1959, Due O ctober 8, 1959 T o all Incorporated Banks and Trust Companies, and O thers Concerned, in the Second Federal R eserve D istrict: Following is the text o f a notice issued by the Treasury Department, released for publication in morning newspapers, Thursday, April 2, 1959: T h e Treasury Department, by this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o f $1,600,000,000, or thereabouts, fo r cash and in exchange fo r Treasury bills maturing A pril 9, 1959, in the amount o f $1,599,337,000, as fo llo w s : 91-day bills (to maturity date) fo r $1,200,000,000, or there abouts, representing an additional amount o f bills dated January 8, 1959, and to mature July 9, 1959, and to be freely interchangeable therewith. 182-day bills, f o r $400,000,000, or thereabouts, to be dated A p ril 9, 1959, and to mature O ctober 8, 1959. The bills o f both series w ill be issued on a discount basis under com petitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. T h ey w ill be issued in bearer form only, and in denominations o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m aturity valu e). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o ’clock p.m., Eastern Standard time, Monday, A pril 6, 1959. Tenders will not be received at the Treasury Department, W ashington. Each tender must be f o r an even multiple o f $1,000, and in the case o f com petitive tenders the price offered must be expressed on the basis o f 100, with not m ore than three decimals, e.g., 99.925. Fractions m ay not be used. It is urged that tenders be made on the printed form s and forw arded in the special envelopes which w ill be supplied by Federal Reserve Banks or Branches on application therefor. Others than banking institutions will not be permitted to submit tenders except fo r their own account. Tenders w ill be received without deposit fro m incorporated banks and trust companies and from responsible and recognized dealers in in vestment securities. Tenders from others must be accompanied by payment o f 2 percent o f the face amount o f Treasury bills applied for, unless the tenders are accompanied by an express guaranty o f payment by an incorporated bank or trust company. Immediately after the closing hour, tenders w ill be opened at the Federal Reserve Banks and Branches, follow in g which public announcement will be made by the Treasury Department o f the amount and price range o f accepted bids. T h ose sub mitting tenders w ill be advised o f the acceptance or rejection thereof. T he Secretary o f the Treasury expressly reserves the right to accept or reject any or all tenders, in w hole or in part, and his action in any such respect shall be final. Subject to these reservations, noncompetitive tenders fo r $200,000 or less fo r the additional bills dated January 8, 1959 (91 days re maining until maturity date on July 9, 1959) and noncom petitive tenders fo r $50,000 or less fo r the 182-day bills without stated price from any one bidder w ill be accepted in full at the average price (in three decim als) o f accepted competitive bids fo r the respective issues. Settlement fo r accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on A pril 9, 1959, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing A pril 9, 1959. Cash and exchange tenders w ill receive equal treatment. Cash adjustments w ill be made for differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. The income derived from Treasury bills, whether interest o r gain from the sale or other disposition o f the bills, does not have any exemption, as such, and loss from the sale or other disposition o f Treasury bills does not have any special treat ment, as such, under the Internal Revenue Code o f 1954. The bills are subject to estate, inheritance, g ift or other excise taxes, whether Federal or State, but are exempt fro m all taxa tion n ow or hereafter imposed on the principal or interest thereof by any State, or any o f the possessions o f the United States, or by any local taxing authority. F o r purposes o f taxa tion the amount o f discount at which Treasury bills are originally sold by the United States is considered to be interest. Under Sections 4 5 4 (b ) and 1221(5) o f the Internal Revenue Code o f 1954 the amount o f discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. A ccordingly, the ow ner o f Treasury bills (other than life insurance com panies) issued hereunder need include in his incom e tax return only the difference between the price paid fo r such 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 fo r which the return is made, as ordinary gain or loss. Treasury Department Circular N o. 418, Revised, and this notice, prescribe the terms o f the Treasury bills and govern the conditions o f their issue. Copies o f the circular may be obtained from any Federal Reserve Bank or Branch. The $1,200,000,000, or thereabouts, o f 91-day bills maturing July 9, 1959, offered by the above notice, are in addition to $400,038,000 o f bills dated and issued January 8 , 1959, and maturing July 9, 1959. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, April 6, 1959, at the Securities Department o f its Head Office and at its Buffalo Branch. Tender forms for the respective series are enclosed. Please use the appropriate forms to submit tenders and return them 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. Results o f the last offerin g o f T reasu ry bills (9 1 -d a y bills to be issued A pril 2, 1959, representing an addi tional amount o f bills dated January 2, 1959, and m aturing July 2, 1959; and 182-day bills dated A pril 2, 1959, maturing O ctober 1, 1959) are show n on the reverse side o f this circular. A lfred H a y e s , President. ( over) RESULTS OF LAST O FFER IN G OF TREASU R Y BILLS (TWO SERIES ISSUED A P R IL 2, 1959) R ange o f A ccepted C om petitive Bids 182-Day Treasury Bills Maturing October 1, 1959 91-D ay Treasury Bills Maturing July 2, 1959 Approx. equiv. annual rate Price Approx. equiv. annual rate H ig h ........................................ 99.292 2.801 % 98.398b 3.169% Low ......... ............................. 99.265 2.908% 98.354 3.256% Average .... ............................. 99.282 2.841% 98.364 3.236% Price b Excepting two tenders totaling $200,000. a Excepting one tender of $100,000. (16 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (1 percent o f the amount o f 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (B y Federal Reserve Districts) 91-Day Treasury Bills Maturing July 2, 1959 Applied fo r District Boston ..................... .............. $ 27,824,000 Applied fo r Accepted 17,824,000 $ 13,457,000 $ 13,457,000 Accepted $ 182-D ay Treasury Bills Maturing October 1, 1959 New Y o r k .............. .............. 1,251,852,000 801,602,000 492,307,000 239,487,000 Philadelphia .......... .............. 27,304,000 17,304,000 10,341,000 5,341,000 C leveland................ .............. 35,307,000 35,307,000 44,119,000 39,119,000 Richmond .............. .............. 7,682,000 7,682,000 1,638,000 1,638,000 Atlanta .................. .............. 20,668,000 20,668,000 2,482,000 2,432,000 Chicago .................. .............. 207,962,000 161,562,000 92,805,000 67,875,000 St. Louis ................ .............. 14,156,000 14,156,000 1,557,000 1,557,000 M inneapolis............ .............. 11,590,000 11,590,000 2,085,000 1,285,000 Kansas City .......... .............. 34,334,000 34,334,000 4,170,000 2,570,000 D a llas....................... .............. 12,324,000 12,324,000 1,601,000 1,601,000 San F ran cisco........ .............. 65,767,000 65,767,000 30,245,000 23,795,000 T o ta ls ...... .............. $1,716,770,000 $1,200,120,000c c Includes $182,713,000 noncompetitive tenders accepted at the average price of 99.282. d Includes $16,293,000 noncompetitive tenders accepted at the average price of 98.364. $696,807,000 $400,157,000 d