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FED ERAL RESERVE BANK O F N EW YO R K Fiscal Agent o f the United States r C ir c u la r N o. 5 1 1 0 1 L N o v e m b e r 22, 1 9 6 1 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,100,000,000 o f 91-Day Bills, Additional Amount, Series Dated Aug. 31,1961, Due March 1,1962 (To Be Issued November 30, 1961) $600,000,000 o f 182-Day Bills, Dated November 3Q, 1961, Due May 31, 1962 To A ll Incorporated Banks and Trust Companies, and O thers Concerned, in the Second Federal R eserv e D istrict: Following is the text of a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard time: The Treasury Department, by this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o f $1,700,000,000, or thereabouts, fo r cash and in exchange for Treasury bills maturing Novem ber 30, 1961, in the amount of $1,700,688,000, as fo llo w s : 91-day bills (to maturity date) to be issued Novem ber 30, 1961, in the amount o f $1,100,000,000, or thereabouts, representing an additional amount o f bills dated August 31, 1961, and to mature M arch 1, 1962, originally issued in the amount o f $600,386,000, the additional and original bills to be freely interchangeable. 182-day bills, fo r $600,000,000, or thereabouts, to be dated Novem ber 30, 1961, and to mature M ay 31, 1962. 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, $500,000 and $1,000,000 (maturity valu e). Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o ’clock p.m., Eastern Standard time, M onday, Novem ber 27, 1961. 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 or Branches on application therefor. Others than banking institutions w ill not be perniitted to submit tenders except fo r their own 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 by an incorporated bank or trust company. Immediately after the closing hour, tenders w ill be opened at the Federal Reserve Banks and Branches, follow in g which public announcement w ill 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. The 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. Subject to these reservations, noncompetitive tenders fo r $200,000 or less for the additional bills dated August 31, 1961 (91 days remain ing until maturity date on M arch 1, 1962) and noncom petitive tenders for $100,000 or less fo r 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 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 Novem ber 30, 1961, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing Novem ber 30, 1961. Cash and exchange tenders w ill receive equal treatment. Gash adjustments will be made fo r 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 o f Treasury bills does not have any special treat ment, as such, under the Internal Revenue Code o f 1954. T he bills are subject to estate, inheritance, g ift 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 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 bills 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 tax 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, ag. ordinary gain o r loss. .......*.......... - - - ..... DPOfmr.nM 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 or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday^ November 27, 1961, at the Securities Department of its Head Office and at its Buffalo Branch. Tender forms£or tfye 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 ................ ...... o;ir-h:: _ t’rr maturing Treasury bills. Results o f the last offering o f Treasury bills (91-day bills to be issued November 24, 1961, representing an additional amount o f bills dated August 24, 1961, and maturing February 23, 1962; and 181-day bills dated November 24, 1961, maturing May 24, 1962) are shown on the reverse side o f this circular. A lfred H a y e s , i: ; President. ( over) R E S U L T S OF L A S T O F F E R IN G OF T R E A S U R Y B IL L S (T W O S E R IE S T O B E IS SU E D ; ' ?; N O V E M B E R 2 4 ,1 9 6 1 } Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing February 23, 1962 181-Day Treasury Bills Maturing May 24,1962 * A p p rox. equiv. annual rate P rice High .— .................................... 99.363a 2.520% L o w ............................ ............ 99.354 2.556% ' Average ................... ................ 99.359 2.537% 1 A p p rox. equiv. annual rate P rice - 98.630 2.725% 98.623 2.739% 98.626 2 .734% 1 a Excepting one tender o f $300,000. 1 O n a coupon issue o f the same length and for the same amount invested, the return on these bills w ould provide yields o f 2.59 percent fo r the 91-day bills, and 2.81 percent fo r the 181-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 com pounding if more than one coupon period is involved. (46 percent o f the amount of 91-day bills bid for at the low price was accepted.) (73 percent of the amount of 181-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 February 23, 1962 D istrict Applied f o r Boston ........... ...................... $ 38,236,000 181-Day Maturing May 24, 1962 Treasury Bills A pplied f o r A ccepted A ccep ted $ 36,236,000 New Y o r k ........................... 1,438,702,000 708,602,000 Philadelphia ..... ................... 27,237,000 Cleveland........................... .. $ 13,495,000 $ 2,995,000 1,026,284,000 464,111,000 12,237,000 8,182,000 2,232,000 38,757,000 38,757,000 24,830,000 10,465,000 Richmond .......................... . 15,890,000 15,890,000 3,295,000 3,270,000 Atlanta........ ..................... 23,430,000 21,330,000 4,090,000 3,990,000 Chicago ............ . 219,038,000 142,279,000 92,378,000 62,473,000 St. L o u is ....... ...................... 24,788,000 20,788,000 8,022,000 6,122,000 Minneapolis,..... ........... 24,784,000 22,014,000 6,771,000 Kansas City ........................ 29,823,000 29,823,000 21,599,000 20,049,000 Dallas............ ..................... 22,537,000 18,537,000 5,868,000 5,368,000 San Francisco......... ............ 42,646,000 33,646,000 24,315,000 15,350,000 $1,945,868,000 $1,100,139,000b $1,239,129,000 $600,596,000' T otal...................... *» Includes $226,745,000 noncompetitive tenders accepted at the average price of 99.359. c Includes $55,354,000 noncompetitive tenders accepted at the average price of 98.626. . 4,171,000 At F e d e r a l R e s e r v e Ba n k o f N ew 5112 Y o r k N E W Y O R K 4 5 , N.Y. r e c t o r 2-5 7 0 0 November 22 , 19 6 1 THE FEDERAL RESERVE ACT As Amended Through O ctober 1, 1961 To A l l Member Banks o f th e Second F ed era l Reserve D i s t r i c t : Under sepa ra te c o v e r , we are sending you a copy o f a r e v is e d e d it io n o f th e F ed era l Reserve Act in which are in c o r p o ra te d a l l amend ments t o th e Act through O ctober 1, 19 6 1, w ith an Appendix co n ta in in g p r o v is io n s o f o th e r s ta tu te s a f f e c t i n g th e F e d e ra l Reserve System. This r e v is e d e d it io n was com piled under th e d ir e c t io n o f the Board o f Governors o f the F ed era l Reserve System in th e B oard’ s Legal D iv is io n and supersedes the e d it io n p u b lish ed in 19 5 6 . Amendments t o th e F ed era l Reserve Act are p u b lish ed in the B oa rd 's F ed era l Reserve B u lle t in , th ereb y e n a b lin g you t o m aintain your copy o f the Act on a cu rren t b a s is . A d d itio n a l c o p ie s o f th e O ctober 1, 19 6 1 e d it io n o f the F ed era l Reserve Act are a v a ila b le from t h is Bank at $1.25 each. Requests f o r a d d it io n a l c o p ie s should be addressed t o our P u b lic a tio n s S e c tio n and should be accompanied by a check payable t o F ed era l Reserve Bank o f New York or a u th o r iz a tio n t o charge your b a n k 's re s e r v e a ccou n t. ALFRED HAYES, P r e s id e n t.
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