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FED ERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States f Circular N o. 5 0 0 8 1 L M arch 15.1961 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,100,000,000 of 92-Day Bills, Additional Amount, Series Dated Dec. 22,1960, Due June 23, 1961 (To Be Issued March 23,1961) $500,000,000 of 182-Day Bills, Dated March 23,1961, Due September 21, 1961 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: F ollow in g is the text o f a notice issued by the T reasu ry Departm ent, released fo r publication today at 4 p.m. Eastern Standard tim e: T h e T r e a s u ry D ep a rtm en t, b y this p u b lic n otice, invites ten ders fo r tw o series o f T rea su ry bills t o the a g g re g a te am ou nt o f $1,600,000,000, o r th erea b ou ts, fo r cash and in e x ch a n g e for T re a su ry bills m atu rin g M a rch 23, 1961, in the a m ou n t o f $1,601,661,000, as fo llo w s : 9 2 -d a y bills ( t o m aturity da te) to be issued M arch 23, 1961, in the a m ou n t o f $1,100,000,000, or th ereabouts, rep re sen tin g an addition al am ou nt o f bills dated D ecem b er 22, 1960, and to m ature June 23, 1961, o rigin a lly issued in the a m ou n t o f $500,151,000, th e addition al and original bills t o be fre e ly interchangeable. 1 8 2 -d ay b ills, fo r $500,000,000, o r th ereabouts, to be dated M a rch 23, 1961, and to m ature S ep tem ber 21, 1961. T h e bills o f b o th series w ill be 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 erein a fter p r o vided, and at m atu rity th eir fa c e a m ou n t w ill b e pa ya b le w ith ou t in terest. T h e y w ill be issued in b ea rer fo r m on ly, and in de n o m 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 be re ceiv ed at F ed eral R e serv e Banks and B ra n ch e s up to the c lo 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 , M a rch 20, 1961. T e n d e rs w ill n ot be receiv ed at the T re a su ry D epartm en t, W a s h in g to n . E ach tender m u st be fo r an even m u ltiple o f $1,000, and in the case o f com p etitive ten ders the price offered m u st be exp ressed on the basis o f 100, w ith n o t m o r e than th ree decim als, e.g., 99.925. F ra ctio n s m a y n o t b e used. It is u rg ed that tenders b e m ade on the printed fo rm s and fo rw a rd ed in the special en velop es w hich w ill be supplied b y Federal R eserve B anks or B ran ch es on app lica tion th erefor. O th e rs than b a n k in g institutions w ill n ot be perm itted to subm it ten ders e x ce p t fo r their o w n a ccou n t. T en d ers w ill be receiv ed w ith ou t d ep o sit fr o m in corp ora ted banks and trust c o m pan ies and fr o m resp o n sib le and re co g n iz e d dealers in in vestm ent securities. T e n d e rs fro m oth ers m u st be a ccom p a n ied b y p a y m en t o f 2 p e rce n t o f the fa ce a m ou n t o f T r e a s u ry bills applied for, unless the ten ders 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 ba n k o r trust com p a n y . Im m ed ia tely after the clo s in g h our, ten ders w ill be op e n ed at the F ed eral R e se rve B anks and B ra n ch es, fo llo w in g w h ich public a n n ou n cem en t w ill be m ade b y the T r e a s u ry D ep a rtm en t o f the a m ou n t and p rice ran ge o f a ccep ted b ids. T h o s e subm itting ten ders w ill b e advised o f th e a ccep ta n ce o r re je ctio n th ereof. T h e S ecreta ry o f th e T rea su ry ex p ressly reserves the rig h t to a ccep t o r r e je c t a n y o r all ten ders, 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 je ct to th ese reser vations, n on com p etitiv e ten ders fo r $200,000 or less fo r the add i tional bills dated D ecem b er 22, 1960, (92 d a ys rem ain in g until m aturity date on June 23, 1961) and n on com p etitiv e tenders fo r $100,000 o r less fo r the 182-day bills w ith ou t stated p r ice fro m an y o n e b id d er w ill be a ccep ted in full at the a vera ge p rice (in th ree decim a ls) o f a ccep ted co m p e titiv e bids fo r th e respective issues. S ettlem ent fo r a ccep ted ten ders in a ccord a n ce w ith the bids m ust be m ade o r com p le te d at the F ed era l R e se rv e B ank o n M arch 23, 1961, in cash o r oth er im m ediately available funds o r in a like face a m ou n t o f T rea su ry bills m a tu rin g M a rch 23, 1961. Cash and e x ch a n g e ten ders w ill receiv e equal treatm ent. Cash adju stm en ts w ill be m ade fo r d ifferen ces b etw een th e par value o f m a tu rin g bills a ccep ted in ex ch a n g e and the issue price o f th e n ew bills. T h e in com e derived fr o m T r e a s u ry bills, w h eth er interest o r gain fr o m the sale o r oth er d isp osition o f the bills, d o e s n o t have a n y ex em p tion , 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 o t have a n y special treatm ent, as such, under the In tern al R even u e C o d e o f 1954. T h e bills are su b ject to estate, in heritance, g ift o r o th e r e x cis e taxes, w hether F ed eral o r State, but are exem p t fr o m all ta xation n o w o r h ere after im p osed on the principal o r in terest th ereof b y a n y State, o r any o f the p ossession s o f the U n ited States, o r b y a n y loca l taxing authority. F o r pu rp oses o f taxation the a m ou n t o f dis cou n t at w hich T rea su ry bills are o rig in a lly sold b y the U n ited States is co n sid e re d 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 the a m ou n t o f dis cou n t at w h ich bills issued hereun der are s o ld is n ot co n sid e re d to a ccru e until su ch bills are sold, red eem ed o r oth erw ise dis posed o f, and such bills are exclu d ed fro m con sidera tion as capital assets. A c c o r d in g ly , the o w n e r o f T r e a s u ry bills (o th e r than life insurance co m p a n ie s ) issued h ereun der need in clu d e in his in co m e tax return o n ly the differen ce betw een the price paid fo r such bills, w h eth er on origin al issue or on su b seq u en t p u r chase, and th e a m ou n t actu ally receiv ed either upon sale o r red em p tion at m aturity du rin g the ta x ab le yea r for w hich the return is m ade, as ord in a ry gain o r loss. T rea su ry D epartm 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 a n d g o v e rn the co n d itio n s o f their issue. C op ies o f th e circu la r m a y be obtain ed fro m a n y F ed era l R e serv e B ank o r B ranch. T h is Bank will receive tenders fo r both series up to 1 :30 p.m., Eastern Standard time, M on d ay, M arch 20, 1961, at the Securities Departm ent o f its H ead O ffice and at its B uffalo Branch. T en d er form s fo r the respective series are enclosed. Please use the appropriate form s to submit tenders and return them in an envelope marked “ T en d er fo r Treasury Bills.” T en d ers may be submitted b y telegraph, subject to written con firm ation ; 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 offerin g o f T reasu ry bills (9 1 -d a y bills to be issued M arch 16, 1961, representing an additional amount o f bills dated D ecem ber 15, 1960, and m aturing June 15, 1961; and 182-day bills dated M arch 16, 1961, maturing Septem ber 14, 1961) are shown on the reverse side o f this circular. A lfred H ayes, President. Please note that the Treasury hills maturing June 23, 1961, will he 92-day kills. (over) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED MARCH 16, 1961) Range of Accepted Competitive Bids 91 -D ay Treasury Bills Maturing June 15,1961 182-Day Treasury Bills Maturing Septem ber 14,1961 Price Approx. equiv. annual rate ......................... ......... 99.411 2.330% 98.768a 2.4 37% L o w ............................ ......... 99.398 2.382% 98.738 2 .4 9 6 % .................. ......... 99.405 2.352%* 98.759 2 .4 5 5 % 1 H igh A verage Price Approx. equiv. annual rate a E x ce p tin g tw o ten ders to ta lin g $1,274,000. 1 O n a co u p o n issue o f th e sam e len gth and for the sam e a m ou n t in vested, the return on these bills w ou ld provide y ie ld s o f 2.40 p ercen t fo r the 91-day b ills, and 2.52 p ercen t fo r the 182-day bills. In terest rates on bills are qu oted in term s o f bank d iscou n t, w ith the return related to the fa ce a m ou n t o f the bills pa ya b le at m aturity rather than the a m o u n t in vested, and their len g th in actual n u m ber o f d a ys rela ted t o a 360-day year. In con tra st, yield s on certificates, n otes, and b o n d s are co m p u te d in term s o f interest on the a m ou n t in vested, and rela te the n um ber o f d a ys rem ain in g in an in terest p a y m en t p eriod to the actual n u m ber o f days in th e p eriod , w ith sem iannual c o m p o u n d in g if m o re than on e c o u p o n p e r io d is in v olv ed . (6 3 percent o f the amount o f 91-d ay bills bid fo r at the low price was accepted.) (8 7 percent o f the amount o f 182-day bills bid fo r at the low price was accepted.) Total Tenders Applied fo r and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing June 15,1961 Applied for District B oston .............................. $ 31,340,000 182-Day Treasury Bills Maturing Septem ber 14,1961 Accepted $ 15,353,000 Applied for $ 3,309,000 Accepted $ 2,134,000 N ew Y o r k ....................... 1,405,909,000 698,145,000 665,601,000 393,211,000 .................. 26,301,000 9,876,000 8,107,000 3,107,000 Cleveland ......................... 31,925,000 29,866,000 12,527,000 12,327,000 R ich m on d ....................... 17,214,000 11,114,000 1,743,000 1,743,000 Atlanta ........................... 30,978,000 26,376,000 4,003,000 3,803,000 C hicago ............................ 202,226,000 143,809,000 65,656,000 33,851,000 St. L ou is ......................... 25,209,000 22,609,000 5,224,000 4,942,000 .................. 18,647,000 13,997,000 4,947,000 3,965,000 Kansas C i t y ..................... 45,604,000 45,604,000 12,358,000 12,358,000 D a l l a s ................................ 17,425,000 17,375,000 5,375,000 4,675,000 San F r a n c i s c o ................ 78,057,000 66,007,000 23,888,000 23,888,000 .............. $1,930,835,000 Philadelphia M inneapolis T otal $1,100,131,000b $812,738,000 b In clu d e s $240,249,000 n o n co m p e titiv e ten ders a ccep ted at the a vera ge price o f 99.405. c In clu d e s $51,007,000 n on com p etitiv e ten ders a ccep ted at the a vera ge price o f 98.759. $500,004,000"