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FEDERAL RESERVE BANK O F NEW YORK F isca l A g e n t o f the U n ite d S tates l C ir c u la r N o . 5 1 0 0 N o v e m b e r 1, 1961 ~[ J OFFERING OF TWO SERIES OF TREASURY BILLS $1,200,000,000 of 91-Day Bills, Additional Amount, Series Dated August 10, 1961, Due Feb. 8, 1962 (To Be Issued November 9, 1961) $500,000,000 of 182-Day Bills, Dated November 9, 1961, Due May 10, 1962 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Follow ing is the text of a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard tim e: T h e T reasu ry D epartm ent, by this pu blic n otice, invites tenders fo r tw o series o f T reasu ry bills to the aggregate amount o f $1,700,000,000, or thereabouts, fo r cash and in exch ange for T reasu ry bills m aturing N ovem ber 9, 1961, in the amount of $1,700,694,000, as f o llo w s : 91-day bills (to m aturity date) to be issued N ovem ber 9, 1961, in the am ount o f $1,200,000,000, or thereabouts, representing an addition al amount o f bills dated A u gust 10, 1961, and to mature February 8, 1962, origin a lly issued in the am ount o f $600,153,000, the addition al and o rigin a l bills to be freely interchangeable. 182-day bills, fo r $500,000,000, or thereabouts, to be dated N ovem ber 9, 1961, and to mature M ay 10, 1962. T h e bills o f both series w ill be issued on a discount basis under com petitive and n oncom petitive b idd in g as hereinafter provided, and at m aturity their face amount w ill be payable w ithout interest. T h ey w ill be issued in bearer form only, and in denom inations o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m aturity va lu e). T en ders w ill be received at Federal R eserve Banks and B ranches up to the clo sin g hour, on e-thirty o ’ clo ck p.m., E a st ern Standard time, M on day, N ovem ber 6, 1961. Ten ders w ill not be received at the T reasu ry D epartm ent, W ash ington. Each tender must be fo r an even m ultiple o f $1,000, and in the case o f com petitive tenders the price offered must be expressed on the basis o f 100, w ith not m ore than three decim als, e.g., 99.925. F raction s m ay not be used. It is urged that tenders be m ade on the printed form s and forw a rd ed in the special envelopes w hich w ill be supplied by Federal R eserve Banks o r Branches on application therefor. O thers than banking institutions w ill not be perm itted to subm it tenders except fo r their ow n account. T en ders w ill be received w ithout deposit from in corporated banks and trust com panies and from responsible and recogn ized dealers in in vestm ent securities. Tenders from others must be accom panied by paym ent o f 2 percent o f the face amount o f T reasu ry bills applied for, unless the tenders are accom panied by an express guaranty o f paym ent by an in corporated bank or trust com pany. Im m ediately after the closin g hour, tenders w ill be opened at the Federal R eserve Banks and B ranches, fo llo w in g w hich pu blic announcem ent w ill be made by the T reasu ry D epartm ent o f the am ount and price range o f accepted bids. T h ose sub m itting tenders w ill be advised o f the acceptance or rejection thereof. T h e Secretary o f the T reasu ry 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. Su bject to these reservations, noncom petitive tenders for $200,000 or less for the addition al bills dated A u gust 10, 1961 (91 days rem aining until m aturity date on February 8, 1962) and noncom petitive tenders fo r $100,000 or less for the 182-day bills w ithout stated price from any one bidder w ill be accepted in fu ll at the average price (in three decim als) o f accepted com petitive bids fo r the respective issues. Settlement fo r accepted tenders in a ccord a n ce with the bids must be made or com pleted at the Federal R eserve Bank on N ovem ber 9, 1961, in cash or other im m ediately available funds or in a like face am ount o f T reasu ry bills m aturing N ovem ber 9, 1961. Cash and exch ange tenders w ill receive equal treatment. Cash adjustm ents w ill be made fo r differences between the par value o f m aturing bills accepted in exch ange and the issue price o f the new bills. T he incom e derived from T reasu ry bills, w hether interest or gain from the sale or other disposition o f the bills, does not have any exem ption, as such, and loss from the sale or other disp osition o f T reasu ry bills does not have any special treat ment, as such, under the Internal Revenue C ode o f 1954. T he bills are subject to estate, inheritance, g ift or other excise taxes, whether Federal or State, but are exem pt from all ta x a tion n ow or hereafter im posed on the principal or interest th ereof by any State, or any o f the possessions o f the U nited States, or by any loca l ta x in g authority. F or purposes o f ta x a tion the am ount o f discount at w hich T reasu ry bills are o rigin a lly sold by the U nited States is con sidered to be interest. U nder Sections 454(b) and 1221(5) o f the Internal Revenue Code o f 1954 the am ount o f discount at w hich bills issued hereunder are sold is not con sidered to accru e until such bills are sold, redeem ed or otherw ise disposed of, and such bills are exclu d ed from con sidera tion as capital assets. A cco rd in g ly , the ow ner o f T reasu ry bills (oth er than life insurance co m panies) issued hereunder need include in his incom e ta x return only the difference between the price paid for such bills, whether on origin a l issue or on subsequent purchase, and the am ount actually received either upon sale or redem ption at m aturity during the taxable year for w hich the return is made, as ord inary gain or loss. T reasu ry D epartm ent C ircu lar N o. 418, R evised, and this notice, prescribe the terms o f the T reasu ry bills and govern the con dition s o f their issue. Copies o f the circu la r m ay be obtained from any Federal R eserve B ank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, November 6, 1961, 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 Tax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. R esu lts o f the last o ffe r in g o f T r e a s u r y b ills (9 1 -d a y b ills to be issu ed N o v e m b e r 2, 1961, re p re sen tin g an a d d ition a l am ou n t o f b ills dated A u g u s t 3, 1961, and m a tu rin g F e b ru a ry 1, 1962; and 182-day b ills dated N o v e m b e r 2, 1961, m a tu rin g M a y 3, 1962) are sh o w n on the re v e rse side o f this circu lar. A l f r e d H a y e s , President. ( over) R E S U L T S O F 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 N O V E M B E R 2, 1961) (T W O S E R IE S T O B E ISSU E D Range o f A ccepted Com petitive Bids 91-Day Treasury Bills Maturing February 1,1962 Price 182-Day Treasury Bills Maturing May 3, 1962 Approx. equiv. annual rate Price Approx. equiv. annual rate 98.686 2.599% ...................... ........ 99.428 2.263% L o w ........................ ........ Average ................ ........ 99.421 2.291% 98.677 2.617% 99.424 2.280%! 98.679 2.613%! High 1 O n a cou pon issue o f the same length and fo r the same am ount invested, the return on these b ills w ou ld provide yields o f 2.32 percent fo r the 91-day bills, and 2.68 percent fo r the 182-day bills. Interest rates on bills are quoted in terms o f bank discount, with the return related to the fa ce amount o f the bills payable at m aturity rather than the amount invested, and their length in actual num ber o f days related to a 360-day year. In contrast, yields on certificates, notes, and bonds are com puted in terms o f interest on the am ount invested, and relate the num ber o f days rem aining in an interest paym ent p eriod to the actual num ber o f days in the period, with sem iannual com pou n din g if m ore than one cou pon period is involved. (52 percent of the amount of 91-day bills bid for at the low price was accepted.) (52 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders A p p lied fo r and A ccepted (B y Federal Reserve Districts) 91-Day Treasury Bills Maturing February 1,1962 Accepted Applied for District Boston .......................... .......... $ 29,151,000 182-Day Treasury Bills Maturing May 3, 1962 $ 12,647,000 A pplied for $ 1,338,000 Accepted $ 1,313,000 New Y o r k .................... .......... 1,603,327,000 707,494,000 1,275,338,000 482,827,000 Philadelphia ................ .......... 24,528,000 9,378,000 8,914,000 1,796,000 .................... .......... 33,702,000 27,552,000 22,505,000 7,085,000 Richm ond .................... .......... 10,632,000 10,392,000 8,848,000 2,590,000 ........................ .......... 20,192,000 14,967,000 4,729,000 4,315,000 Chicago ........................ ........ 232,523,000 154,639,000 126,189,000 60,464,000 St. L o u i s ...................... ........ 29,313,000 19,033,000 9,879,000 5,779,000 Minneapolis ................ ........ 22,383,000 16,163,000 6,500,000 3,915,000 Kansas City ................ ........ 38,501,000 26,501,000 20,858,000 13,961,000 Dallas 16,350,000 16,150,000 4,437,000 4,437,000 96,240,000 85,320,000 40,321,000 11,801,000 Cleveland Atlanta .......................... ........ San Francisco ............ T ota l ............. ........ $2,156,842,000 $1,100,236,000a $1,529,856,000 a Includes $215,258,000 noncompetitive tenders accepted at the average price of 99.424. b Includes $56,198,000 noncompetitive tenders accepted at the average price of 98.679. $600,283,000b
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