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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 ' A rC lar N 4822 1 ircu o. - I December la, ISM' J OFFERING OF TWO SERIES OF TREASURY BILLS $1,200,000,000 o f 91-Day Bills, Additional Amount, Series Dated Sept. 17, 1959, Due March 17,1960 (To Be Issued December 17, 1959) $500,000,000 o f 182-Day Bills, Dated December 17, 1959, Due June 16, 1960 To A ll Incorporated Banks and Trust Companies, and O thers Concerned, in th e Second Federal Resen>e D istrict: Following is the text o f a notice issued by the Treasury Department, released for publication i morning in newspapers, Thursday. December 10. 1959 : irsoaoers. Thursday, 10, 1959 T he Treasury Department, by this public notice, invites tenders f o r tw o series o f Treasury bills to the aggregate amount o f $1,700,000,000, o r thereabouts, fo r cash and in exchange for Treasury bills maturing December 17, 1959, in the amount o f $1,700,381,000, as fo llo w s : 91-day bills ( t o maturity date) to be issued December 17, 1959, in the amount o f $1,200,000,000, or thereabouts, representing an additional amount o f bills dated Sep tember 17, 1959, and to mature M arch 17, 1960, originally issued in the amount o f $399,911,000, the additional and original bills to be freely interchangeable. 182-day bills, fo r $500,000,000, or thereabouts, to be dated December 17, 1959, and to mature June 16, 1960. T he bills o f both series will 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. Th 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 value). Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o ’clock p.m., Eastern Standard time, M onday, December 14, 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 w ill be supplied by Federal Reserve Banks or Branches on application therefor. Others than banking institutions w ill not be permitted to submit tenders except fo r their ow n 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 will 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. 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 o r reject any or all tenders, in w hole or in part, and his action in any such respect shall be filial. Subject to these reservations, noncompetitive tenders fo r $200,000 o r less fo r the additional bills dated September. 17, 1959, (91 days re maining until maturity date on M arch 17, 1960) and noncom petitive tenders fo r $100,000 or less for the 182-day bills without stated price from any one bidder will be accepted in full at the average price (in three decim als) o f accepted com petitive 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 December 17, 1959, in cash or other immediately available funds o f in a like face amount o f Treasury bills maturing December 17, 1959. Cash and exchange tenders will receive equal treatment. Cash adjustments will 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 deriyed from Treasury bills, whether interest o r gain from the sale o r 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 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 Urnted States, or by any local taxing authority. F or purposes o f taxa tion the amount o f discount- a t which T reasu ry 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 o f , 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 income ta x 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 w hich 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 m ay be obtained from any Federal Reserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m ., Eastern Standard time, M onday, December 14, 1959, at the Securities Department o f its H ead 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 fo r 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-dav bills to be issued December 10; 1959, representing an additional amount of bills dated September 10, 1959, and maturing March 10, 1960; and 182-day bills dated December 10, 1959, maturing June 9, 1960) are shown on the reverse side of this circular. A lfred H ayes, President. (o v e b ) RESULTS OF LAST OFFERING OF TREASURY RILLS (TWO SERIES ISSUED DECEMBER 10, 1959) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing March 10, 1960 182-Day Treasury Bills Maturing June 9, 1960 A pprox. equiv. annual rate A p p ro x . equiv. annual rate 97.502 4 .9 4 1 % 4 .6 5 2 % H i g h ................................ ............. P rice 4 .6 0 5 % 9 7.478 4 .9 8 9 % 4 .6 3 8 % 1 P rice 97.488 4 .9 6 9 % 1 9 8 .8 3 6 * L ow ................................ . A v e r a g e ......................... ............ 98.828 * E xcepting three tenders totaling $5,290,000. 1 A verage rate on a coupon issue equivalent yield basis is 4.77%. fo r the 91-day bills and 5.18% fo r the 182-day bills. Interest rates on bills are quoted on the basis o f bank discount, with their length in actual number o f days related to a 360-day year. In contrast, yields on certificates, notes, and bonds are computed cm the basis o f interest on the investment, with the number o f days remaining in a semiannual interest payment period related to the actual number o f days in the period, and with semiannual com pounding if more than one coupon period is involved. (8 9 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (2 percent o f the amount o f 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing March 10, 1960 A pplied for District Boston ........................... ............. $ 28 ,9 4 3 ,0 0 0 Accepted Applied for Accepted $ 11,501,000 $ 11,501,000 8 39,226,000 697 ,1 2 6 ,0 0 0 3 69,646,000 9 ,288,000 2 ,2 8 8 ,0 0 0 33,759,000 27 ,1 7 1 ,0 0 0 2 7,17 1,000 18,545,000 3 6,406,000 C leveland...................... 26,343,000 14,158,000 1,510,874,000 N ew Y o r k .................................. $ 182-Day Treasury Bills Maturing June 9, 1960 7,104,000 2 ,024,000 A tla n ta ...... .................. ............. 32,162,000 25,961,000 3,443,000 3 ,033,000 Chicago ...................................... 182,415,000 83,060,000 72,842,000 35,447,000 St. Louis ...................... ............. 23,870,000 22,370,000 5,426,000 4 ,926,000 12,564,000 11,564,000 2,2 7 4 ,0 0 0 1,774,000 Kansas City ............................ 42,462,000 34,962,000 6 ,942,000 5,842,00 D a lla s ........................................... 2 0 ,703,000 20,703,000 4 ,428,000 4 ,428,000 77,260,000 69,873,000 40,954,000 32,004,000 M inneapolis................. - -?v • San F ra n cisco ............. ............. vadl i T o t a l............ $ 2 ,017,240,000 $ 1 ,2 0 0 ,5 2 4 ,0 0 0 b v .i'i b Includes $254,818,000 noncompetitive tenders accepted at the average price o f 98.828. c Includes $52,993,000 noncompetitive tenders accepted at the average price o f 97.488. 1**73; $888 ,499 ,00 0 $ 5 0 0 ,0 8 4 ,0 0 0 1