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F E D E R A L R E S E R V E BA N K O F N E W Y O RK Fiscal Agent of the United States [ D^^be^3o,4i8959 ] OFFERING OF TWO SERIES OF TREASURY BILLS $1,200,000,000 o f 91-Day Bills, Additional Amount, Series Dated Oct. 8, 1959, Due April 7, 1960 (T o Be Issued January 7, 1960) $400,000,000 of 182-Day Bills, Dated January 7, 1960, Due July 7, 1960 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text o f a notice issued by the Treasury Department, released for publication in morning newspapers, Wednesday, December 30, 1959: T h e T r e a s u ry D ep a rtm en t, b y this p u b lic n otice, invites tenders f o r t w o series o f T rea su ry bills t o th e a g g reg a te am ount o f $1,600,000,000, o r th ereabou ts, f o r cash and in ex ch a n g e for T re a su ry bills m atu rin g January 7, 1960, in the am ou nt o f $1,600,007,000, as fo llo w s : 91-day bills (to m aturity da te) to be issued January 7, 1960, in the am ou nt o f $1,200,000,000, o r thereabouts, rep resen tin g an addition al a m ou n t o f bills dated O c to b e r 8, 1959, and t o m ature A p ril 7, 1960, o rigin a lly issued in the a m ou n t o f $405,104,000, the addition al and original bills to be fre e ly in terch angeable. 182-day bills, f o r $400,000,000, o r thereabouts, to be dated January 7, 1960, and t o m ature July 7, 1960. T h e bills o f b o th series w ill be issued o n a d iscou n t basis under co m p etitive and n o n com p etitiv e b id d in g as h ereinafter p r o vided, and at m atu rity their fa ce a m ou n t w ill be p ayable w ith ou t interest. T h e y w ill b e issued in b ea rer fo r m on ly , and in de n om in ation s o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m a tu rity v a lu e ). T e n d e rs w ill be receiv ed at F ed eral R es e rv e B anks and B ran ches up to the clo s in g h ou r, on e-th irty o ’c lo c k p.m ., E astern Standard tim e, M o n d a y , January 4, 1960. T en d ers w ill not be received at the T re a su ry D epartm en t, W a s h in g to n . E ach tender m ust be f o r an even m u ltiple o f $1,000, and in th e case o f com p etitive ten ders th e p rice offered m ust be ex p ressed on the basis o f 100, w ith n o t m ore than th ree decim a ls, e.g., 99.925. F ra ctio n s m ay n o t be used. It is u rg ed that ten ders be m ade on th e printed fo rm s and fo rw a rd e d in th e special en velopes w hich w ill be supplied b y F ed eral R es e rv e B anks o r B ra n ch es on a pp lication th erefor. O th e rs than b ank in g in stitu tions w ill n ot be perm itted to subm it tenders e x ce p t fo r their o w n a ccou n t. T e n d e rs w ill be received w ith ou t d ep o sit fr o m in corp ora ted banks and trust c o m panies and fro m resp on sib le and recog n ized dealers in investm ent securities. T e n d e rs fr o m oth ers m u st b e a ccom p a n ied b y p a y m en t o f 2 p ercen t o f th e face a m ou n t o f T rea su ry bills applied for, unless the tenders are a ccom p a n ied b y an exp ress guaranty o f paym ent b y an in co rp o ra ted bank o r trust com p a n y . Im m edia tely after the clo s in g h our, ten ders w ill be o p en ed at the F ed era l R e se rve B anks and B ran ches, fo llo w in g w h ich pu blic a n n ou n cem en t w ill be m ade b y the T rea su ry D ep a rtm en t o f the am ou n t and price ran ge o f a ccep ted bids. T h o s e subm itting ten ders w ill be advised o f the a ccep ta n ce o r re je ctio n th ereof. T h e S ecreta ry o f the T rea su ry e x p ressly reserves th e righ t to a ccep t or reject a n y o r a ll tenders, in w h o le o r in part, and his ai-tion in a n y such resp ect shall be final. S u b ject to these reserva tions, n on com p etitiv e ten ders for $200,000 o r less fo r the add i tional bills dated O c t o b e r 8, 1959, (91 days rem ain in g until m a turity date on A p ril 7, 1960) and n on com p etitiv e tenders for $100,000 o r less fo r the 182-day bills w ith ou t stated p rice fro m a n y on e b id d er w ill b e a ccep ted in fu ll at the a verage p rice (in three decim a ls) o f a ccep ted com p etitive bids fo r the respective issues. S ettlem ent f o r a ccep ted tenders in a ccord a n ce w ith the bids m u st be m ade o r com p leted at the Federal R e se rv e B ank on January 7, 1960, in cash o r oth er im m ediately available fu n ds o r in a like face a m ou n t o f T rea su ry bills m atu rin g January 7, 1960. C ash and ex ch a n g e tenders w ill receive equal treatm ent. Cash a dju stm en ts w ill be m ade fo r d ifferen ces betw een the par valu e o f m atu rin g bills a ccep ted in ex ch a n g e a n d th e issue price o f the n ew bills. T h e in com e derived fro m T r e a s u ry b ills, w h eth er interest o r gain fro m the sale o r oth er d isp osition o f the bills, d o e s n o t have any exem p tion , as such, and loss fr o m th e sale o r oth er d isp osi tion o f T rea su ry bills d oes n ot have a n y special treatm ent, as such, under the Internal R even u e C o d e o f 1954. T h e bills are su b ject to estate, inheritance, g ift or oth er e x cis e taxes, w hether F ed eral o r State, but are exem p t fro m all taxation n o w o r h ere a fter im p osed on the principal o r interest th ereof b y a n y State, o r a n y o f the p ossession s o f the U n ited States, o r b y a n y local ta x in g authority. F o r pu rp oses o f taxation the a m ou n t o f dis co u n t at w h ich T rea su ry bills are o rigin a lly sold b y th e U n ited States is con sid ered t o be interest. U n d er S ection s 4 5 4 (b ) and 1221(5) o f the In tern al R even u e C o d e o f 1954 th e a m ou n t o f dis co u n t at w h ich bills issued h ereun der are sold is n o t co n sid ered to a ccru e until such bills are sold, red eem ed o r oth erw ise dis posed o f, and such bills are exclu d ed fro m con sid era tio n as capital assets. A c c o r d in g ly , the ow n er o f T rea su ry bills (o th e r than life in su rance com p a n ies) issued hereun der need in clu d e in his in com e ta x return o n ly the differen ce betw een th e price paid f o r such bills, w h eth er on origin al issue o r on subsequen t pu r ch ase, and the a m ou n t actu ally receiv ed either u p on sale o r redem ption at m aturity d u rin g the taxable yea r fo r w h ich the return is m ade, as ord in a ry gain o r loss. T rea su ry D epa rtm en t C ircu lar N o . 418, R evised , and this n otice, prescrib e th e term s o f the T r e a s u ry bills and g o v e rn the con d ition s o f their issue. C op ies o f the circular m a y be obtain ed fr o m a n y F ed eral R e s e rv e B ank o r B ranch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, January 4, 1960, 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 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 confirmation; they may not be submitted by telephone. Payment f o r the Treasury bills cannot be made by credit through the Treasury T ax 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 December 31, 1959, representing an addi tional amount of bills dated October 1, 1959, and maturing March 31, 1960; and 182-day bills dated December 31, 1959, maturing June 30, 1960) are shown on the reverse side of this circular. A lfred H a y e s , President. (o v e k ) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES ISSUED DECEMBER 31, 1959) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing M arch 31,1960 A pprox. equiv. annual rate Price Approx. equiv. annual rate 98.865a 4.490% 97.532 4.882% 98.854 4.534% 97.474 4.996% 98.858 4.516% 1 97.502 4.942%* Price ........ High ........................ ........ L ow A v e r a g e ................... 182-Day Treasury Bills Maturing June 30,1960 a E xcepting one tender o f $500,000. 1 A vera ge rate on a coupon issue equivalent yield basis is 4.64% fo r the 91-day bills and 5.15% 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 on 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 i f m ore than one coupon period is involved. (1 0 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (79 percent o f the amount o f 182-day bills bid for at the low price was accepted.) Total Tenders A p p lied for and A ccepted (B y Federal Reserve Districts) 91-Day Treasury Bills Maturing M arch 31,1960 Applied for District Boston ............................ $ 28,674,000 182-Day Treasury Bills Maturing June 30,1960 Accepted $ 18,045,000 A pplied for $ 7,634,000 Accepted $ 7,634,000 1,601,777,000 782,260,000 579,501,000 372,581,000 ................. 28,763,000 28,763,000 5,925,000 925,000 Cleveland ....................... 42,052,000 32,592,000 31,428,000 31,428,000 Richmond ..................... 17,875,000 9,975,000 1,470,000 1,470,000 Atlanta .......................... 15,868,000 13,118,000 6,092,000 6,092,000 Chicago .......................... 175,499,000 87,249,000 60,773,000 37,563,000 St. Louis ....................... 20,828,000 17,303,000 4,564,000 4,564,000 Minneapolis ................... 9,888,000 8,588,000 1,587,000 1,587,000 Kansas C i t y ................... 37,249,000 26,944,000 4,996,000 4,996,000 Dallas .............................. 26,134,000 21,134,000 4,349,000 4,349,000 San Francisco ............... 59,643,000 54,108,000 26,840,000 26,840,000 ............. $2,064,250,000 New Y ork ..................... Philadelphia Totals $1,100,079,000” b Includes $211,925,000 noncompetitive tenders accepted at the average price o f 98.858. c Includes $41,134,000 noncompetitive tenders accepted at the average price of 97.502. $735,159,000 $500,029,000-
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