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F E D E R A L R E S E R V E B A N K O F N E W Y O RK Fiscal Agent of the United States C ir c u la r N o. 4 7 6 9 A u g u s t 6, 1959 O FFER IN G OF T W O SERIES O F T R E A S U R Y BILLS $1,200,000,000 o f 91-Day Bills, Additional Am ount, Series Dated May 14,1 95 9 , Due N ov. 12, 1959 (To Be Issued August 13, 1959) $400,000,000 o f 182-Day Bills, Dated August 13, 1959, Due February 11, 1960 To A ll Incorporated Banks and Trust Companies, and Others 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, August 6, 1959: The Treasury Department, b y this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o f $1,600,000,000, o r thereabouts, fo r cash and in exchange for Treasury bills maturing August 13, 1959, in the amount o f $1,400,927,000, as follo w s: 91-day bills (to maturity date) to be issued August 13, 1959, in the amount o f $1,200,000,000, or thereabouts, representing an additional amount o f bills dated M ay 14, 1959, and to mature Novem ber 12, 1959, originally issued in the amount o f $400,206,000, the additional and original bills to be freely interchangeable. 182-day bills, fo r $400,000,000, or thereabouts, to be dated A ugust 13, 1959, and to mature February 11, 1960. T he bills o f both series w ill be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. They will be issued in bearer fo rm only, and in denominations o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m aturity value). Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o ’clock p.m., Eastern D aylight Saving time, M onday, August 10, 1959. Tenders will not be received at the Treasury Department, W ashington. Each tender must be fo r an even multiple o f $1,000, and 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. It is urged that tenders be made on the printed form s and forw arded in the special envelopes which will be supplied by Federal Reserve Banks o r Branches on application therefor. O thers than banking institutions will not be permitted to submit tenders except fo r their own account. Tenders will be received without deposit from 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 w ill be made by the Treasury Department o f the amount and price range o f accepted bids. Those sub mitting tenders will be advised o f the acceptance or rejection thereof. T h e 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 f o r $200,000 or less for the additional bills dated M ay 14, 1959, (91 days remain ing until maturity date on November 12, 1959) and noncom petitive tenders fo r $100,000 or less f o r the 182-day bills without stated price from any one bidder will be accepted in fu ll at the average price (in three decim als) o f accepted competitive bids for the respective issues. Settlement fo r accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on August 13, 1959, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing August 13, 1959. Cash and exchange tenders will receive equal treatment. Cash adjustments w ill be made fo r differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. T he 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 fro m 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 from all taxa tion now 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. U nder 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 o f, and such bills are excluded from consideration as capital assets. Accordingly, the owner o f Treasury bills (other than life insurance com panies) issued hereunder need include in his income tax return only the difference between the price paid fo r such bills, whether on original issue o r 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. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday, August 10, 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 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 to be issued August 6, 1959, representing an additional amount of bills dated May 7, 1959, and maturing November 5, 1959; and 182-day bills dated August 6, 1959, matur ing February 4, 1960) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES ISSUED AUGUST 6, 1959) Range o f A ccepted C om petitive Bids 91-Day Treasury Bills Maturing November 5, 1959 182-Day Treasury Bills Maturing February 4, 1960 Approx. equiv. annual rate Price Price Approx. equiv. annual rate H ig h ............................ ........... 99.247 2.979% 98.128 1 3.703% L ow ............................ ........... 99.226 3.062% 98.106 3.746% A v era g e...................... ........... 99.231 3.043% 98.111 3.737% a Excepting tw o tenders totaling $61,000. (96 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (68 percent o f the amount o f 182-day bills bid for at the low price was accepted.) T ota l Tenders Applied for and A ccepted (B y Federal R eserve Districts) 91-Day Treasury Bills Maturing November 5, 1959 District Applied for Boston ............................ Accepted $ N ew Y o r k ..................... 13,453,000 182-Day Treasury Bills Maturing February 4, 1960 Applied for $ 3,161,000 Accepted $ 2,494,000 679,954,000 748,040,000 280,820,000 Philadelphia ................. ....... 26,654,000 11,654,000 10,754,000 5,754,000 Cleveland............................... 25,210,000 24,910,000 27,235,000 5,724,000 Richmond ...................... 11,203,000 11,203,000 872,000 872,000 A tlan ta............................ 29,974,000 27,874,000 4,392,000 3,442,000 Chicago .......................... 178,833,000 113,193,000 84,845,000 47,715,000 St. L o u is ........................ 22,431,000 22,431,000 5,136,000 3,936,000 M inneapolis................... 12,617,000 12,609,000 3,370,000 2,306,000 Kansas City ................. 32,154,000 22,154,000 10,508,000 9,087,000 D allas.............................. 14,714,000 13,714,000 4,600,000 4,600,000 San F ran cisco............... 56,948,000 46,944,000 52,982,000 33,644,000 T o ta ls ............. $1,815,235,000 $1,000,093,000b b Includes $204,934,000 noncompetitive tenders accepted at the average price o f 99.231. « Includes $46,018,000 noncompetitive tenders accepted at the average price of 98.111. $955,895,000 $400,394,000 <