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FE D E R A L R E S E R V E B ANK O F N E W YORK
Fiscal Agent of the United States
{
Circular No. 5186
M ay 2, 1962
]
OFFERING OF TW O SERIES OF TREASURY BILLS
$1,200,000,000 of 91-Day Bills, Additional Amount, Series Dated February 8, 1962, Due August 9, 1962
(To Be Issued May 10,1962)
$600,000,000 of 182-Day Bills, Dated May 10, 1962, Due November 8, 1962
To A ll Incorporated, Banks and Trust Companies, and Others
Concerned, in the Second Federal Reserve District:
Following is the text of a notice issued by the Treasury Department, released for publication today at
4 p.m., Eastern Daylight Saving time:
T h e T reasu ry D epartm ent, by this public notice, invites
tenders for two series of Treasury bills to the aggregate amount
of $1,800,000,000, or thereabouts, for cash and in exchange for
T reasury bills m aturing M a y 10, 1962, in the am ount of
$1,700,422,000, as fo llo w s :
91-day bills (to maturity date) to be issued M ay 10, 1962,
in the am ount of $1,200,000,000, or thereabouts, repre
senting an additional am ount o f bills dated February 8,
1962, and to m ature A u g u st 9, 1962, originally issued in
the am ount of $600,080,000, the additional and original
bills to be freely interchangeable.
182-days bills, for $600,000,000, or thereabouts, to be dated
M a y 10, 1962, and to mature N o vem b er 8, 1962.
T h e bills o f both series will be issued on a discount basis
under com petitive and noncom petitive bidding as hereinafter
provided, and at maturity their face amount will be payable
without interest. T h e y will be issued in bearer form only, and
in denom inations o f $1,000, $5,000, $10,000, $50,000, $100,000,
$500,000 and $1,000,000 (maturity value).
T en ders will be received at Federal R eserve Banks and
Branches up to the closing hour, one-thirty p.m ., Eastern D a y
light Saving tim e, M on d ay, M a y 7, 1962. T en d ers will
not be received at the T reasury D epartm ent, W a sh in g to n .
E ach tender m ust be for an even m ultiple of $1,000, and in the
case of competitive tenders the price offered must be expressed
on the basis of 100, with not m ore than three decim als, e.g.,
99.925. Fractions m ay not be used. It is urged that tenders
be made on the printed form s and forw arded in the special
envelopes w hich will be supplied b y Federal R eserve Banks
or Branches on application therefor.
B anking institutions generally m ay subm it tenders for ac
count of custom ers, provided the nam es of the custom ers are
set forth in such tenders. O th ers than banking institutions will
not be permitted to submit tenders except for their own account.
T en ders will be received w ithout deposit from incorporated
banks and trust companies and from responsible and recognized
dealers in investm ent securities. T en ders from others m ust be
accom panied by paym ent of 2 percent of the face amount of
T reasu ry bills applied for, unless the tenders are accom panied
by an express guaranty of paym ent by an incorporated bank
or trust com pany.
Im m ediately after the closing hour, tenders will be opened
at the Federal R eserve Banks and Branches, follow ing which
public announcement will be made by the Treasury Department
of the am ount and price range of accepted bids. T h o se sub
m itting tenders will be advised of the acceptance or rejection
thereof. T h e Secretary of the T reasu ry e xp ressly 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, noncom petitive tenders for $200,000 or less
for the additional bills dated February 8, 1962 (91 days re
maining until maturity date on A ugust 9, 1962) and noncompeti
tive tenders for $100,000 or less for the 182-day bills without stated
price from any one bidder will be accepted in full at the average
price (in three decim als) of accepted com petitive bids for the
respective issues. Settlement for accepted tenders in accordance
with the bids m ust be m ade or com pleted at the Federal
R eserve Bank on M a y 10, 1962, in cash or other im m ediately
available funds or in a like face am ount of T re asu ry bills
m aturing M a y 10, 1962. Cash and exchange tenders w ill re
ceive equal treatm ent. Cash adjustm ents will be m ade for
differences betw een the par value of m aturing bills accepted
in exchange and the issue price of the new bills.
The income derived from Treasury bills, whether interest
or gain from the sale or other disposition of the bills, does not
have any exem ption, as such, and loss from the sale or other
disposition of T reasu ry bills does not have any special treat
m ent, as such, under the Internal Revenue C ode of 1954. T h e
bills are subject to estate, inheritance, gift or other excise
taxes, w hether Federal or State, but are exem pt from all taxa
tion now or hereafter im posed on the principal or interest
thereof by any State, or any o f the possessions o f the United
States, or b y any local taxing authority. F or purposes of ta xa
tion the am ount o f discount at which T reasu ry bills are
originally sold b y the U nited States is considered to be interest.
U n d er Sections 4 5 4 (b ) and 122 1 (5 ) of the Internal Revenue
Code of 1954 the am ount of discount at w hich bills issued
hereunder are sold is not considered to accrue until such bills
are sold, redeem ed or otherw ise disposed of, and such bills are
excluded from consideration as capital assets. A cco rd in gly ,
the ow ner o f T reasury bills (other than life insurance co m
panies) issued hereunder need include in his incom e tax return
on ly the difference betw een the price paid for such bills,
w hether on original 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 m ade,
as ordinary gain or loss.
T reasu ry D epartm ent Circular N o . 418 (current revision)
and this notice prescribe the term s o f the T reasury bills and
go vern the conditions o f their issue. Copies of the circular m ay
be obtained from any Federal Reserve B ank or Branch.
This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday,
May 7, 1962, 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.
Results of the last offering of Treasury bills (91-day bills to be issued May 3, 1962, representing an
additional amount o f bills dated February 1, 1962, and maturing August 2, 1962; and 182-day bills dated
May 3, 1962, maturing November 1, 1962) are shown on the reverse side of this circular.
A
lfred
H
a yes,
President.
( over)
RESULTS OF LAST OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED
M AY 3, 1962)
Range of Accepted Competitive Bids
91-Day Treasury Bills
Maturing August 2,1962
High ..................................
Low ....................................
Average ............................
182-Day Treasury Bills
Maturing November 1,1962
Price
Approx. equiv.
annual rate
99.310*
99.303
99.305
2.730%
2.757%
2.748%x
Price
Approx. equiv.
annual rate
98.570
98.560
98.562
2.829%
2.848%
2.845%1
a Excepting two tenders totaling $1,800,000.
1 On a coupon issue of the same length and for the same amount invested, the return on these bills would provide
yields o f 2.81 percent for the 91-day bills, and 2.93 percent for the 182-day bills. Interest rates on bills are quoted in
terms o f bank discount, with the return related to the face amount of the bills payable at maturity rather than the
amount invested, and their length in actual number of 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 of days remaining in
an interest payment period to the actual number o f days in the period, with semiannual compounding if more than one
coupon period is involved.
(19 percent of the amount of 91-day bills
bid for at the low price was accepted.)
(80 percent of the amount of 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 August 2,1962
A pplied for
District
Boston .......................... ........
$
29,773,000
182-Day Treasury Bills
Maturing November 1.1962
Applied for
Accepted
$
23,763,000
$
3,008,000
Accepted
$
2,108,000
New Y o r k .................... ........
1,732,485,000
786,915,000
1,110,672,000
496,236,000
Philadelphia.................. ........
30,221,000
14,940,000
8,664,000
3,661,000
Cleveland ...................... ........
34,887,000
30,837,000
27,783,000
19,248,000
.................... ........
14,556,000
12,006,000
7,547,000
2,547,000
Atlanta .......................... ........
14,927,000
13,612,000
3,772,000
3,772,000
........................ ........
228,147,000
128,680,000
109,417,000
28,242,000
St. Louis ...................... ........
29,137,000
23,327,000
5,543,000
3,543,000
Minneapolis .................. ........
24,286,000
17,856,000
7,026,000
2,426,000
Kansas C it y .................. ........
33,099,000
28,249,000
7,290,000
6,340,000
Dallas ............................ ........
17,986,000
13,026,000
8,094,000
2,944,000
San F ran cisco.............. ........
132,719,000
107,929,000
58,081,000
28,981,000
T o t a l.............. ........
$2,322,223,000
$1,356,897,000
$600,048,000°
Richmond
Chicago
$1,201,140,000b
b Includes $195,303,000 noncompetitive tenders accepted at the average price o f 99.305.
0 Includes $46,501,000 noncompetitive tenders accepted at the average price o f 98.562.
@FedFRASER