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FEDERAL RESERVE BANK O F NEW YORK Fiscal Agent of the United States r Circular N o. 4 8 5 8 1 I February 25, 1960 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,100,000,000 of 91-Day Bills, Additional Amount, Series Dated Dec. 3, 1959, Due June 2, 1960 (T o Be Issued March 3, 1960) $400,000,000 o f 182-Day Bills, Dated March 3,1960, Due September 1, 1960 T o A ll In corpora ted Banks and T ru st Companies, and Others Concerned, in the Second Federal R eserv e D istrict: Follow ing is the text o f a notice issued by the Treasury Department, released for publication in morning newspapers, Thursday, February 25, 1960: T h e T r e a s u ry D ep a rtm en t, b y this pu blic n otice, invites tenders fo r tw o series o f T rea su ry bills t o the a ggreg ate am ou nt o f $1,500,000,000, o r th ereabou ts, f o r cash and in ex ch a n g e for T r e a s u ry bills m a tu rin g M a rch 3, 1960, in the a m ou n t o f $1,501,180,000, as f o llo w s : 9 1 -d a y bills ( t o m aturity da te) to be issu ed M a rch 3, 1960, in the a m ou n t o f $1,100,000,000, o r th ereabouts, rep re sen tin g an a dd ition al a m ou n t o f bills dated D e ce m b e r 3, 1959, and t o m atu re June 2, 1960, o rig in a lly issued in the a m ou n t o f $400,513,000, the a dd ition al and origin a l bills to b e fre e ly in terch angeable. 182-day bills, fo r $400,000,000, o r th ereabouts, to be dated M a rch 3, 1960, and to m ature S ep tem ber 1, 1960. T h e bills o f b o th series w ill b e issued on a d iscou n t basis u nder co m p e titiv e and n o n com p etitiv e b id d in g as h ereinafter p r o vid ed , and at m atu rity their face am ou nt w ill be pa ya b le w ith ou t interest. T h e y w ill be issued in bearer fo r m o n ly , and in d e 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 b e receiv ed at F ed eral R e serv e B anks and B ran ch es up to the clo s in g h our, on e-th irty o ’ c lo c k p.m ., E astern Standard tim e, M o n d a y , F eb ru a ry 29, 1960. T e n d e rs w ill n ot b e receiv ed at the T r e a s u ry D epartm en t, W a s h in g to n . E a ch ten der m u st be fo r an even m u ltiple o f $1,000, and in th e case o f com p etitive tenders the p rice offered m ust be exp ressed on the b asis o f 100, w ith n ot m ore than th ree decim als, e.g., 99.925. F ra ctio n s m ay n o t be used. It is u rged that tenders be m ade on the printed fo rm s and fo rw a rd ed in th e special en velopes w hich w ill be supplied b y Federal R e serv e B anks or B ra n ch es on a pp lica tion th erefor. O th e rs than b a n k in g in stitu tions w ill n ot be perm itted to subm it ten ders e x ce p t fo r th eir o w n a ccou n t. T en d ers w ill be received w ith o u t d ep o sit fro m in corp ora ted banks and trust c o m panies and fro m resp on sib le and re co g n iz e d dealers in investm ent securities. T e n d e rs fr o m oth ers m ust 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 fa ce a m ou n t o f T rea su ry bills applied fo r, unless the tenders are a ccom p a n ied b y an exp ress gu aranty o f p a ym en t b y an in co rp o ra ted bank o r trust com p a n y . Im m ed ia tely a fter the clo s in g h ou r, ten ders w ill b e op e n ed at the F ed era l R e se rve Banks 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 epa rtm en t o f the a m ou n t and price ran ge o f a ccep ted bids. T h o s e subm itting ten ders w ill b e advised o f the a ccep ta n ce o r reje ctio n th ereof. T h e S ecreta ry o f the T r e a s u ry ex p ressly reserves th e righ t to a cce p t or reject a n y o r all tenders, in w h o le o r in part, and his a ction in a n y such resp ect shall be final. S u b ject to th ese reserva tions, n on com p etitiv e tenders fo r $200,000 o r less f o r the add i tional bills dated D e ce m b e r 3, 1959, (91 d a ys rem a in in g u ntil m a turity date on June 2, 1960) and n o n co m p e titiv e ten d e rs fo r $100,000 o r less fo r the 182-day bills w ith ou t stated p rice fro m an y on e b id d er w ill b e a ccep ted in fu ll at th e a vera ge p rice (in three d ecim a ls) o f a ccep ted com p etitiv e bids f o r th e respective issues. Settlem 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 F ed eral R e serv e Bank on M a rch 3, 1960, in cash o r oth er im m ed iately availa b le fu n ds o r in a like fa ce a m ou n t o f T rea su ry bills m a tu rin g M a rch 3, 1960. Cash and e x ch a n g e ten ders w ill receiv e equal treatm ent. Cash a dju stm en ts w ill be m ade fo r d ifferen ces betw een th e par value o f m atu rin g bills a ccep ted in e x ch a n g e and the issue price o f the n ew bills. T h e in co m e derived fr o m T rea su ry b ills, w h eth er in terest o r gain fr o m the sale o r oth er d isp osition o f the bills, d oes n o t have any exem ption , as such, and loss fr o m the sale o r oth e r d isp osi tion o f T rea su ry bills d oes n ot have a n y sp ecia l treatm ent, as such, under th e In tern al R even u e C o d e o f 1954. T h e bills are su b ject to estate, inheritance, g ift o r oth er excise taxes, w hether F ed eral o r State, but are ex em p t fr o m all taxation n o w o r h ere after im p osed on the prin cip a l o r in terest th ereof b y a n y State, or a n y o f the p ossession s o f the U n ited States, o r b y a n y loca l ta x in g authority. F o r p u rp oses o f ta xation th e a m ou n t o f dis cou n t at w h ich T rea su ry bills are origin a lly s o ld b y th e U nited States is con sid ered to 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 hich bills issued hereun der are s o ld is n o t co n sid ered to a ccru e u ntil such bills are sold, red eem ed o r oth erw ise dis p o sed of, and such bills are ex clu d ed fro m con sid era tio n as capital assets. A c c o r d in g ly , th e o w n e r o f T rea su ry bills (o th e r than life in su rance co m p a n ie s ) issued hereun der need in clu d e in his in com e tax return o n ly the differen ce betw een the p rice paid fo r such bills, w h eth er on origin al issue or on subsequen t pur chase, and the a m ou n t actu a lly receiv ed eith er u p on sale o r red em ption at m aturity du rin g the ta xab le 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, p rescrib e the term s o f the T rea su ry bills and g o v e r n the con d ition s o f their issue. C op ies o f the circu la r m a y be obtain ed fro m a n y F ed eral R eserve B ank o r B ran ch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, February 29, 1960, at the Securities Department o f its Head Office and at its Buffalo Branch. Tender form s 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 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 o f the last offering o f Treasury bills (91-day bills to be issued February 25, 1960, representing an addi tional amount o f bills dated November 27, 1959, and maturing May 26, 1960; and 182-day bills dated February 25, 1960, maturing August 25, 1960) are shown on the reverse side o f this circular. A lfred H ayes, President. (o v e b ) RESULTS OF LAST OFFERING OF TREASURY BILLS (TW O SERIES ISSUED FEBRUARY 25, 1960) Range o f Accepted Competitive Bids 91-Day Treasury Bills Maturing M ay 26, 1960 Approx. equiv. annual rate Price A pprox. equiv. annual rate 98.969a 4.079% 97.791b 4.369% ....................... ........ 98.936 4.209% 97.770 4.411% ................. ........ 98.946 4 .16 8% 1 97.778 4.39 6% 1 Price High ....................... ........ L ow 182-Day Treasury Bills Maturing August 25, 1960 Average a E x ce p tin g on e ten der o f $200,000. b E x c e p tin g o n e ten der o f $1,000. 1 A v e r a g e rate on a c o u p o n issue eq u iv a len t yield basis is 4.28% fo r the 91 -d a y b ills a n d 4 .5 7 % fo r th e 182-day bills. In terest rates o n bills are q u oted on the basis o f bank discou n t, w ith their len gth in actual n u m ber o f days related to a 360-day yea r. In con tra st, yield s on certificates, n otes, and b on d s are com p u ted on the basis o f interest on the investm ent, w ith the n u m ber o f d a ys rem ain in g in a sem iannual interest pa ym en t period related to the actual n u m ber o f days in the period, and w ith sem iannual c o m p o u n d in g if m ore than on e co u p o n period is in volved. (1 8 percent o f the amount o f 91-day bills bid fo r at the low price was accepted.) (15 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 M ay 26, 1960 A pplied for District Boston ............................ $ 23,299,000 182-Day Treasury Bills Maturing A ugust 25, 1960 Accepted $ 13,299,000 Applied for $ 6,192,000 Accepted $ 6,192,000 New Y ork ..................... 1,518,226,000 889,122,000 617,303,000 Philadelphia ................... 22,535,000 10,535,000 8,548,000 3,418,000 Cleveland ........................ . . 21,798,000 21,798,000 35,012,000 25,662,000 Richmond 15,958,000 15,958,000 1,634,000 1,634,000 Atlanta 28,932,000 28,286,000 4,881,000 4,796,000 Chicago 156,747,000 95,787,000 70,255,000 26,335,000 St. Louis ........................ 18,203,000 16,703,000 3,728,000 3,728,000 Minneapolis ................... 10,727,000 10,645,000 3,983,000 2,428,000 Kansas C i t y ................... 33,428,000 30,968,000 7,427,000 7,327,000 Dallas .............................. 11,787,000 11,787,000 3,423,000 3,423,000 San Francisco ............... 61,444,000 55,944,000 24,291,000 20,741,000 T o t a l ............. $1,923,084,000 $1,200,832,000° $786,677,000 c In clu d e s $189,465,000 n o n co m p e titiv e ten ders a ccep ted at the a vera ge p r ice o f 98.946. d In clu d e s $42,047,000 n o n co m p e titiv e ten ders a cce p te d at the a vera ge p rice o f 97.778. 294,603,000 $400,287,000d At U858 FE D E R A L RE SE R V E BANK O F N E W YORK February 29, 1960. To A ll Banking In stitution s in the Second Federal R eserve D is tr ic t: W e are pleased to announce that M illb u r n -S h o r t H ills B a n k , Millburn, New Jersey, a newly organized bank, has been admitted to membership in the Federal Reserve System, effective February 27, 1960, and has officially opened fo r business on that day. The capital o f the bank is $250,000, and its surplus, $150,000. Officers o f the bank a r e : F r a n c is W illia m R. S tey ert B . F io r e President Executive Vice President I s r a e l S p ic e r Vice President F ran k S ch en k el Cashier The A.B.A. transit number and check routing symbol o f the new bank is 55-732 212 A lfred H ayes, President.
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