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F E D E R A L R E S E R V E BA N K O F N EW Y O R K
Fiscal Agent of the United States
{"Circular No. 5 2 0 2 1
July 11. 1962
J
L
OFFERING OF TWO SERIES OF TREASURY BILLS
$1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated April 19,1962, Due October 18, 1962
(To Be Issued July 19, 1962)
$700,000,000 of 182-Day Bills, Dated July 19, 1962, Due January 17, 1963
To A ll 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 Daylight Saving tim e:
The Treasury Department, by this public notice, invites
tenders for two series o f Treasury bills to the aggregate amount
o f $2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing July 19, 1962, in the amount of
$1,801,436,000, as fo llo w s :
91-day bills (to maturity date) to be issued July 19, 1962,
in the amount o f $1,300,000,000, or thereabouts, repre
senting an additional amount of bills dated April 19,
1962, and to mature October 18, 1962, originally issued
in the amount o f $600,309,000, the additional and orig
inal bills to be freely interchangeable.
182-day bills, for $700,000,000, or thereabouts, to be dated
July 19, 1962, and to mature January 17, 1963.
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 will be issued in bearer form only, and
in denominations o f $1,000, $5,000, $10,000, $50,000, $100,000,
$500,000 and $1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and
Branches up to the closing hour, one-thirty p.m., Eastern D ay
light Saving time, Monday, July 16, 1962. Tenders will
not be received at the Treasury Department, Washington.
Each tender must be for 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 forms and forwarded in the special
envelopes which will be supplied by Federal Reserve Banks
or Branches on application therefor.
Banking institutions generally may submit tenders for ac
count of customers, provided the names of the customers are
set forth in such tenders. Others than banking institutions will
not be permitted to submit tenders except for their own account.
Tenders will be received without deposit from incorporated
banks and trust companies and from responsible and recognized
dealers in investment securities. Tenders from others must be
accompanied by payment o f 2 percent of the face amount of
Treasury bills applied for, unless the tenders are accompanied
by an express guaranty of payment by 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
of 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 whole or in part,
and his action in any such respect shall be final. Subject to
these reservations, noncompetitive tenders for $200,000 or less
for the additional bills dated April 19, 1962 (91 days remain
ing until maturity date on October 18, 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 decimals) of accepted competitive bids for the
respective issues. Settlement for accepted tenders in accordance
with the bids must be made or completed at the Federal
Reserve Bank on July 19, 1962, in cash or other immediately
available funds or in a like face amount of Treasury bills
maturing July 19, 1962. Cash and exchange tenders will re
ceive equal treatment. Cash adjustments w ill 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 or other disposition of 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, gift 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. For purposes o f taxa
tion the amount of discount at which Treasury bills are
originally sold by the United States is considered to be interest.
Under Sections 454(b) and 1221(5) of 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 of, and such bills are
excluded from consideration as capital assets. Accordingly,
the owner of Treasury bills (other than life insurance com
panies) issued hereunder need include in his income tax return
only the difference between the price paid for 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 for which the return is made,
as ordinary gain or loss.
Treasury Department Circular No. 418 (current revision)
and this notice prescribe the terms of the Treasury bills and
govern the conditions o f their issue. Copies o f the circular may
be obtained from any Federal Reserve Bank or Branch.
This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday,
July 16 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 July 12, 1962, representing an
additional amount of bills dated April 12, 1962, and maturing October 11, 1962; and 182-day bills dated
July 12, 1962, maturing January 10, 1963) are shown on the reverse side of this circular.
A
lfred
H
ayes,
President.
( over )
RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED
JULY 12, 1962)
Range of Accepted Competitive Bids
91-Day Treasury Bills
Maturing October 11, 1962
Price
Price
2.935%
2.987%
2.974% 1
99.258
99.245
99.248
High
L ow . . .
Average
Maturing January 10, 1963
A pprox. equiv.
annual rate
Approx. equiv.
annual rate
98.454
98.425
98.435
3.058%
3.115%
3.096% 1
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 3.04 percent for the 91-day bills, and 3.19 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 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 of days in the period, with semiannual compounding if more than one
coupon period is involved.
(27 percent of the amount o f 91-day bills
bid for at the low price was accepted.)
(18 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 October 11, 1962
Accepted
Applied for
District
Boston .......................... ........
New Y o r k .................... ........
$
41,792,000
182-Day Treasury Bills
Maturing January 10, 1963
$
35,332,000
Applied for
$
8,204,000
Accepted
$
8,204,000
1,637,165,000
752,565,000
890,116,000
540,816,000
29,869,000
14,869,000
9,971,000
4,971,000
.................... ........
45,534,000
31,884,000
27,121,000
12,121,000
Richm ond .................... ........
19,107,000
19,107,000
4,209,000
4,209,000
A tla n t a ..........................
37,462,000
31,832,000
5,740,000
5,740,000
...
287,582,000
220,092,000
88,173,000
38,173,000
St. Louis ...................... ........
37,785,000
32,785,000
7,180,000
6,180,000
Minneapolis
19,112,000
12,517,000
5,065,000
5,065,000
43,160,000
8,328,000
8,328,000
25,279,000
15,549,000
10,540,000
5,540,000
135,861,000
91,371,000
61,767,000
60,767,000
. .
Philadelphia
Cleveland
Chicago ........................
48,160,000
Kansas City
........
San Francisco
Total
............ ........
$2,364,708,000
$1,301,063,000*
$1,126,414,000
a Includes $263,543,000 noncompetitive tenders accepted at the average price of 99.248.
b Includes $51,735,000 noncompetitive tenders accepted at the average price of 98.435.
$700,114,000b
@FedFRASER