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FED ERAL RESERVE BANK O F NEW YO RK Fiscal Agent o f the United States L C ir cu la r N o. 4 8 7 7 A p r il 21, 1960 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,000,000,000 o f 91-Day Bills, Additional Amount, Series Dated Jan. 28, 1960, Due July 28,1960 (To Be Issued April 28, 1960) $400,000,000 o f 182-Day Bills, Dated April 28, 1960, Due October 27, 1960 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal R eserve D istrict: Following is the text o f a notice issued by the Treasury Department, released for publication in morning newspapers, Thursday, April 21, 1960: The Treasury Department, b y this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o f $1,400,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing A pril 28, 1960, in the amount o f $1,400,406,000, as fo llo w s : 91-day bills (to maturity date) to be issued A pril 28, 1960, in the amount o f $1,000,000,000, or thereabouts, repre senting an additional amount o f bills dated January 28, 1960, and to mature July 28, 1960, originally issued in the amount o f $400,475,000, the additional and original bills to be freely interchangeable. 182-day bills, fo r $400,000,000, or thereabouts, to be dated A pril 28, 1960, and to mature O ctober 27, 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 w ill 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 will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o ’clock p.m., Eastern Daylight Saving time, M onday, A pril 25, 1960. 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 o r 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 b y 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 will be advised o f the acceptance or rejection thereof. T he Secretary o f the Treasury expressly reserves the right to accept or reject any or all tenders, in w hole or in part, and his action in any such respect shall be final. S ubject to these reservations, noncompetitive tenders fo r $200,000 o r less fo r the additional bills dated January 28, 1960, (91 days re maining until maturity date on July 28, 1960) and noncom petitive tenders for $100,000 or less for the 182-day bills without stated price from any one bidder w ill be accepted in full at the average price (in three decim als) o f accepted competitive bids fo r the respective issues. Settlement fo r accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on A pril 28, 1960, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing A pril 28, 1960. Cash and exchange tenders will receive equal treatment. Cash adjustments will 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 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 o r 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 United States, or by any local taxing authority. F or purposes o f taxa tion the amount o f discount at which Treasury billa 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 owner 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 or on subsequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year fo r which 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 o r Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern D ayligh t Saving time, Monday, April 25, 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 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 fo r 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 o f the last offering o f Treasury bills (9 1 -day bills to be issued April 21, 1960, representing an additional amount o f bills dated January 21, 1960, and maturing July 21, 1960; and 182-day bills dated April 21, 1960, maturing October 20, 1960) are shown on the reverse side o f this circular. A lfred H ayes, President. ( over ) R E SU L TS OF L A S T O F F E R IN G O F T R E A S U R Y B IL L S (T W O S E R IE S ISSU E D A P R IL 21, 1960) Range o f A ccepted C om petitive Bids 182-D ay Treasury Bills Maturing October 20, 1960 91-Day Treasury Bills Maturing July 21, 1960 Approx. equiv. annual rate Approx. equiv. annual rate Price High ............................................ 99.177 3.256% 3.685% L o w .............................................. 99.156 3.339% 3.723% Average ...................................... 99.164 3.306% 3.705% 1 a E xcepting one tender o f $50,000. 1 A verage rate on a coupon issue equivalent yield basis is 3.38% for bills. Interest rates on bills are quoted on the basis o f bank discount, with to a 360-day year. In contrast, yields on certificates, notes, and bonds are investment, with the number o f days remaining in a semiannual interest o f days in the period, and with semiannual compounding if m ore than one (30 percent o f the amount o f 91-day bills bid for at the low price was accepted) the 91-day bills and 3.83% fo r the their length in actual number o f days computed on the basis o f interest payment period related to the actual coupon period is involved. 182-day related on the number (61 percent o f the amount o f 182-day bills bid for at the low price was accepted) T ota l Tenders A pplied for and A ccepted (B y Federal R eserve Districts) 91-Day Treasury Bills Maturing July 21, 1960 Applied, for District Boston ........................... ........ $ 31,130,000 182-Day Treasury Bills Maturing O ctober 20, 1960 Applied fo r Accepted $ 19,138,000 $ 4,677,000 Accepted $ 4,577,000 New Y o r k ..................... ........ 1,231,709,000 635,262,000 559,323,000 300,878,000 Philadelphia ................ ........ 29,539,000 14,539,000 8,310,000 2,580,000 Cleveland....................... ........ 39,956,000 30,609,000 13,652,000 8,052,000 Richmond ..................... ........ 14,853,000 12,287,000 5,109,000 4,809,000 A tlan ta........................... ........ 23,181,000 21,031,000 6,130,000 4,199,000 Chicago ......................... ........ 208,748,000 123,578,000 92,179,000 29,419,000 St. Louis ....................... ........ 28,040,000 21,173,000 3,203,000 3,203,000 M inneapolis.................. ........ 10,766,000 9,376,000 3,125,000 1,625,000 Kansas City ................ ........ 37,000,000 33,290,000 10,075,000 5,860,000 D allas............................. ........ 20,371,000 20,271,000 5,401,000 5,401,000 San F ra n cisco.............. 79,034,000 59,477,000 37,629,000 29,518,000 $748,813,000 $400,121,000 Total ............ ........ $1,754,327,000 $1,000,031,000b b Includes $251,481,000 noncompetitive tenders accepted at the average price o f 99.164. c Includes $48,621,000 noncompetitive tenders accepted at the average price o f 98.127.
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