The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
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.