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FEDERAL RESERVE BANK O F NEW YORK
Fiscal Agent of the United States
f" C ir c u la r N o . 4 9 1 6 T
L
J u ly 27,1960
J

O FFE R IN G OF T W O SERIES OF T R E A S U R Y BILLS
$1,000,000,000 o f 91-Day Bills, Additional Amount, Series Dated M ay 5, 1960, Due N ov. 3, 1960
(T o Be Issued August 4, 1960)
$400,000,000 o f 182-Day Bills, Dated August 4,1960, Due February 2,1961
To All Incorporated Banks and Trust Com
panies, and Others
Concerned, in the Second Federal Reserve District:
Following is the text of a notice issued by the Treasury Department, released for publication today at
4 p.m., Eastern Daylight Saving time :
The Treasury Department, by this public notice, invites
tenders for two series of Treasury bills to the aggregate amount
o f $1,400,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing August 4, 1960, in the amount o f
$1,400,536,000, as fo llo w s:
91-day bills (to maturity date) to be issued August 4, 1960,
in the amount o f $1,000,000,000, or thereabouts, repre­
senting an additional amount o f bills dated May 5,
1960, and to mature November 3, 1960, originally issued
in the amount o f $400,014,000, the additional and orig­
inal bills to be freely interchangeable.
182-day bills, for $400,000,000, or thereabouts, to be dated
August 4, 1960, and to mature February 2, 1961.
The 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. They w ill be issued in bearer form only, and
in denominations o f $1,000, $5,000, $10,000, $100,000, $5U0,00U
and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and
Branches up to the closing hour, one-thirty o ’clock p.m.,
Eastern Daylight Saving time, Monday, August 1, 1960. Tenders
will not be received at the Treasury Department, Washington.
Each tender must be for an even multiple o f $1,000, and in the
case of competitive tenders the price offered must be expressed
on the basis of 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 forms and forwarded in the special
envelopes which will be supplied by Federal Reserve Banks
or Branches on application therefor.
Others than banking institutions w ill not be permitted to
submit tenders except for their own account. Tenders will be
received without deposit from incorporated banks and trust
companies and from responsible and recognizcd dealers in in­
vestment securities. Tenders from others must be accompanied
by payment of 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 ing 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 w ill be advised o f the acceptance or rejection

thereof. The Secretary o f the Treasury expressly reserves the
right to accept or reject any or all tenders, in whole or in part,
and his action in any such respect shall be final. Subject to
these reservations, noncompetitive tenders for $200,000 or less
for the additional bills dated May 5, 1960, (91 days re­
maining until maturity date on November 3, 1960) and noncom­
petitive tenders for $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 decimals) o f accepted competitive bids
tor the respective issues. Settlement for accepted tenders in
accordance with the bids must be made or completed at the
Federal Reserve Bank on August 4, 1960, in cash or other
immediately available funds or in a like facc amount of
Treasury bills maturing August 4, 1960. 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
or 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 of 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, gift 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 of the possessions o f the United
States, or by any local taxing authority. For 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 454(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. 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 for 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 for which the return is made,
as ordinary gain or loss.
Treasury Department Circular No. 418, Revised, and this
notice, prescribe the terms of 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.

T his Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, M onday,
A u gust 1, 1960, at the Securities Department of 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 T ax and Loan Account.
funds or in maturing Treasury bills.

Settlement must be made in cash or other immediately available

Results of the last offering of Treasury bills (91-day bills to be issued July 28, 1960, representing an
additional amount of bills dated April 28, 1960, and maturing October 27, 1960; and 182-day bills dated
July 28, 1960, maturing January 26, 1961) are shown on the reverse side of this circular.




A

l f r e d

H

a y e s

,

President.

(ovkr)

RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED JULY 28, 1960)
Range of Accepted Competitive Bids

91-Day Treasury Bills
Maturing O ctober 27, 1960

182-Day Treasury Bills
Maturing January 26, 1961

Price

Approx. equiv.
annual rate

Price

Approx. equiv.
annual rate

99.399a

2.378%

98.644b

2.682%

L o w ........................... .........

99.388

2.421%

98.630

2.710%

.................. .........

99.392

2 .4 0 4 % 1

98.635

2.701 % J

......................... .........

H igh

Average

a Excepting one tender o f $500,000.

b Excepting one tender o f $400,000.

1
On a coupon issue o f the same length and for the same amount invested, the return on these bills would provide
yields o f 2.45 percent for the 91-day bills, and 2.78 percent for the 182-day bills. Interest rates on bills are quoted in
terms o f bank discount with the return related to the face amount o f the bills payable at maturity, rather than the
amount invested, and their length in actual number o f days related to a 360-day year. In contrast, yields on certificates,
notes, and bonds are computed in terms o f interest on the amount invested, and relate the number o f days remaining in
an interest payment period to the actual number o f days in the period, with semiannual compounding if more than one
coupon period is involved.

(34 percent of the amount of 91-days bills
bid for at the low price was accepted.)

(18 percent of the amount of 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 O ctober 27, 1960

District

Applied for

Boston ................ .......................

$

24,239,000

182-Day Treasury Bills
Maturing January 26, 1961

Accepted
$

13,863,000

Applied for
$

5,402,000

Accepted
$

4,917,000

N ew Y o r k ......... .......................

1,364,499,000

713,169,000

623,549,000

311,071,000

Philadelphia . . . .......................

25,653,000

10,439,000

13,100,000

8,075,000

......... .......................

26,292,000

20,252,000

17,837,000

10,886,000

Richmond ......... .......................

9,682,000

9,651,000

6,227,000

6,177,000

.............. .......................

18,413,000

15,241,000

3,036,000

2,207,000

Chicago .............. .......................

174,492,000

102,314,000

65,725,000

29,178,000

St. L o u i s ........... .......................

13,533,000

12,486,000

4,318,000

2,818,000

. . . .......................

10,297,000

7,297,000

3,981,000

1,481,000

Kansas City . . . .......................

30,975,000

23,675,000

9,846,000

3,889,000

................ .......................

9,935,000

9,935,000

2,044,000

1,983,000

61,858,000

33,280,000

17,467,000

788,345,000

$400,149,000d

Cleveland

Atlanta

Minneapolis

Dallas

San Francisco

.......................

83,018,000

Total

.......................

$1,791,028,000

$1,000,180,000c

$

c Includes $190,822,000 noncompetitive tenders accepted at the average price o f 99.392.
d Includes $39,243,000 noncompetitive tenders accepted at the average price o f 98.635.





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102