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F ED ER AL RESE RVE BANK O F N E W YORK Fiscal Agent o f the United States /"Circular N o. 5 3 2 0 1 I April 3, 1963 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated January 10, 1963, Due July 11, 1963 (To Be Issued April 11, 1963) $800,000,000 of 182-Day Bills, Dated April 11, 1963, Due October 10, 1963 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text o f a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard time: T he Treasury Department, by this public notice, invites tenders for tw o series of Treasury bills to the aggregate amount of $2,100,000,000, or thereabouts, for cash and in ex change for Treasury bills maturing April 11, 1963, in the am ount of $2,001,487,000, as follow s: 91-day bills (to maturity date) to be issued April 11, 1963, in the amount of $1,300,000,000, or thereabouts, repre senting an additional amount of bills dated January 10, 1963, and to mature July 11, 1963, originally issued in the am ount of $800,450,000, the additional and original bills to be freely interchangeable. 182-day bills, for $800,000,000, or thereabouts, to be dated A pril 11, 1963, and to mature O ctober 10, 1963. The bills o f both series will be issued on a discount basis under competitive and noncom petitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. Th ey 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 Standard time, M onday, April 8, 1963. Tenders will not be received at the Treasury Department, W ashington. 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 m ore 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 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 o f 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 incor porated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accom panied by payment o f 2 percent of 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 will be opened at the Federal Reserve Banks and Branches, follow in g which public announcement will be made by the Treasury Depart ment of the amount and price range o f accepted bids. Those submitting tenders will be advised o f the acceptance or rejec tion 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, noncom petitive tenders for $200,000 or less for the additional bills dated January 10, 1963 (91 days remaining until maturity date on July 11, 1963) and n on com petitive 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) o f accepted com petitive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or com pleted at the Federal Reserve Bank on April 11, 1963, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing April 11, 1963. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. The incom e 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 of 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 im posed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority. For purposes of taxa tion the amount of discount at which Treasury bills are originally sold by the United States is considered to be interest. U nder Sections 454(b) and 1221(5) of the Internal Revenue Code of 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. A ccordin gly, the ow ner o f Treasury bills (other than life insurance com panies) issued hereunder need include in his incom e 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 N o. 418 (current revision) and this notice prescribe the terms o f the Treasury bills and govern the conditions o f their issue. Copies of 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 Standard time, Monday, April 8, 1963, at the Securities Department o f 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 fo r 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 o f the last offering o f Treasury bills (92-day bills to be issued April 4, 1963, representing an additional amount o f bills dated January 3, 1963, and maturing July 5, 1963; and 182-day bills dated April 4, 1963, maturing October 3, 1963) are shown on the reverse side o f this circular. A l f r e d H a y e s, President. ( over ) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED APRIL 4, 1963) Range of Accepted Competitive Bids 92-Day Treasury Bills Maturing July 5, 1963 182-Day Treasury Bills Maturing October 3, 1963 Price A pprox. equiv. annual rate Price A pprox. equiv. annual rate 99.265 2.876% 98.498 2.971% ............................ ........... 99.251 2.931% 98.489 2.989% Average ..................... ........... 99.253 2.922% ! 98.492 2 .98 2% 1 H i g h ............................ ........... L ow 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 2.98 percent for the 92-day bills, and 3.07 percent for the 182-day bills. Interest rates on bills are quoted in terms of 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 com puted in terms of 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 com pounding if m ore than one coupon period is involved. (23 percent of the amount o f 92-day bills bid for at the low price was accepted.) (61 percent o f the amount o f 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 92-Day Treasury Bills Maturing July 5, 1963 District Boston Applied, fo r ............................ New Y ork ..................... $ 25,005,000 182-Day Treasury Bills Maturing October 3, 1963 Applied for Accepted $ 15,005,000 $ 19,394,000 Accepted $ 4,394,000 1,481,758,000 813,142,000 1,137,659,000 581,219,000 ................. 26,156,000 11,156,000 9,798,000 4,798,000 Cleveland ........................ 32,851,000 32,851,000 19,494,000 14,073,000 Richmond ..................... 11,415,000 11,415,000 3,805,000 3,805,000 A tla n ta ............................ 32,967,000 29,613,000 6,877,000 6,877,000 249,157,000 219,877,000 92,390,000 69,440,000 St. Louis ....................... 33,328,000 25,974,000 6,763,000 4,763,000 M in n ea p olis................... 24,850,000 17,441,000 6,484,000 3,984,000 Kansas City ................. 38,973,000 31,125,000 13,302,000 9,522,000 Dallas .............................. 22,473,000 15,933,000 10,782,000 5,782,000 San F r a n c is c o ............... 102,143,000 77,138,000 127,471,000 91,471,000 Philadelphia Chicago Total .......................... ..................... $2,081,076,000 $1,300,670,000* $1,454,219,000 a Includes $222,804,000 noncom petitive tenders accepted at the average price of 99.253. b Includes $53,787,000 noncompetitive tenders accepted at the average price of 98.492. $800,128,000b
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