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FEDERAL R ESER VE

BANK OF NEW YORK

Fiscal Agent of the United States
r Circular No. 5 6 7 7 T
L
July 21, 1965
J

OFFERING OF TWO SERIES OF TREASURY BILLS
$1,200,000,000 of 91-Day Bills, Additional Amount, Series Dated April 29, 1965, Due October 28, 1965
(To Be Issued July 29, 1965)
$1,000,000,000 of 182-Day Bills, Dated July 29, 1965, Due January 27, 1966
T o A ll Incorporated Banks and Trust Companies, and Others
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 Daylight Saving time:
The Treasury Department, by this public notice, invites
tenders for two series of Treasury bills to the aggregate
amount of $2,200,000,000, or thereabouts, for cash and in ex­
change for Treasury bills maturing July 29, 1965, in the
amount of $2,204,331,000, as follows:
91-day bills (to maturity date) to be issued July 29,
1965, in the amount of $1,200,000,000, or thereabouts,
representing an additional amount of bills dated
April 29, 1965, and to mature October 28, 1965,
originally issued in the amount of $1,003,275,000, the
additional and original bills to be freely interchange­
able.
182-day bills, for $1,000,000,000, or thereabouts, to be
dated July 29, 1965, and to mature January 27, 1966.
The bills of 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 of $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
Daylight Saving time, Monday, July 26, 1965. Tenders will
not be received at the Treasury Department, Washington.
Each tender must be for an even multiple of $1,000, and in
the case of competitive tenders the price offered must be
expressed on the basis of 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
account of customers, provided the names of the customers
are set forth in such tenders. Others than banking institu­
tions 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 of 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 of accepted bids.
Those submitting tenders will be advised of the acceptance
or rejection thereof. The Secretary of 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 each issue for $200,000 or less 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 accord­
ance with the bids must be made or completed at the Federal
Reserve Bank on July 29, 1965, in cash or other immediately
available funds or in a like face amount of Treasury bills
maturing July 29, 1965. 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 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 of Treasury bills does not have any special
treatment, 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 taxation now or hereafter imposed 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 taxation the amount of discount at which Treas­
ury 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 of 1954, the amount of discount at
which bills issued hereunder are sold is not considered to ac­
crue 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 companies) 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 of 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 Daylight Saving time, Monday, July 26,
1965, 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 weekly offering of Treasury bills (91-day bills to be issued July 22, 1965, representing an
additional amount of bills dated April 22, 1965, maturing October 21, 1965; and 182-day bills dated July 22, 1965,
maturing January 20, 1966) are shown on the reverse side of this circular.




A

lfred

H

ayes,

President.
( over)

RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS
(TWO SERIES TO BE ISSUED JULY 22, 1965)

Range of Accepted Competitive Bids
91 -D ay Treasury Bills
Maturing October 21,1965

182-Day Treasury Bills
Maturing January 20,1966

Price

A p p rox. equiv.
annual rate

99.034a

3.822%

98.024b

3.909%

Low ....................... ............

99.030

3.837%

98.021

3.915%

A v e ra g e ................. ............

99.031

3.833%!

98.022

3.913%1

..................... ............

High

P rice

A p p rox. equiv.
annual rate

a Excepting one tender of $5,000.
b Excepting one tender of $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 of
3.92 percent for the 91-day bills, and 4.05 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 computed in terms of interest on
the amount invested, and relate the number of 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.

(73 percent of the amount of 91-day bills
bid for at the low price was accepted.)

(97 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 21,1965
A ccepted

A pplied for

D istrict

$

47,007,000

182-Day Treasury Bills
Maturing January 20,1966

$

33,218,000

A ccepted

Applied for

$

32,860.000

$

11,560,000

New Y o r k .....................

1,427,623,000

774,143,000

1,620,427,000

809,328,000

Philadelphia .................

30,196,000

18,196.000

13,746,000

4,921,000

Cleveland

.....................

30,412,000

29,552,000

28,089,000

15,531,000

Richmond

...................

16,273,000

14,322.000

5,667.000

3,617,000

Atlanta .........................

35,116,000

24,025,000

22,160.000

8,760,000

.......................

291,942.000

152,812,000

279,935,000

97,050.000

St. L o u is .......................

42,563,000

35,612,000

15,614,000

10,214,000

Minneapolis .................

22,581,000

17,256,000

9,730,000

6,200,000

Kansas City .................

27,928,000

26,748,000

9,532.000

8,317.000

Dallas

...........................

27,525,000

17,147,000

11,397,000

6,397,000

San Fran cisco ...............

129,829,000

58,662.000

143,884,000

22,699,000

Chicago

T

o t a l ................

$2,128,995,000

$1,201,693,000°

c Includes $269,612,000 noncompetitive tenders accepted at the average price of 99.031.
d Includes $91,299,000 noncompetitive tenders accepted at the average price of 98.022.




$2,193,041,000

$1,004,594,000d


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102