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F E D E R A L R E S E R V E BA N K O F NEW YO R K Fiscal Agent of the United States rCircular No. 5 7 7 4 1 L February 9, 1966 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated November 18,1965, Due May 19, 1966 (To Be Issued February 17, 1966) $1,000,000,000 of 182-Day Bills, Dated February 17, 1966, Due August 18, 1966 T o A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal R eserve D istrict: Following is the text o f a notice issued by Eastern Standard tim e: th e Treasury Department, released for publication today at T h e T reasury D ep artm en t, by this public notice, invites tenders for tw o series of T reasu ry bills to the aggregate am ount of $2,300,000,000, or thereabouts, for cash and in e x change for T reasury bills m aturing February 17, 1966, in the am ount of $2,201,653,000, as fo llo w s: 91-day bills (to m aturity date) to be issued February 17, 1966, in the am ou nt of $1,300,000,000, or thereabouts, representing an additional am ount of bills dated N o ve m b e r 18, 1965, and to mature M a y 19, 1966, originally issued in the am ount of $1,000,958,000, the additional and original bills to be freely interchange able. 182-day bills, for $1,000,000,000, or thereabouts, to be dated February 17, 1966, and to m ature A u g u st 18, 1966. T h e bills of both series will be issued on a discount basis under com petitive and noncom petitive bidding as hereinafter provided, and at m aturity their face am ount will be payable without interest. T h e y will be issued in bearer form only, and in denom inations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m atu rity va lu e). Tenders will be received at Federal R eserve B anks and Branches up to the closin g hour, one-thirty p.m ., E astern Standard tim e, M on d ay , February 14, 1966. T enders will not be received at the T reasu ry D epartm ent, W a s h in g to n . E ach tender m ust be for an even m ultiple of $1,000, and in the case of com petitive tenders the price offered m ust 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 m ade on the printed form s and forw arded in the special envelopes which will be supplied by Federal R eserve B anks or Branches on application therefor. B anking institutions generally m a y submit tenders for account 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 perm itted to subm it tenders except for their ow n account. T en ders will be received w ithout deposit from in corporated banks and trust com panies 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 am ount of T reasury bills applied for, unless the tenders are accom panied by an express guaranty of paym ent b y an incorporated bank or trust com p an y. Im m ediately after the closin g hour, tenders w ill be opened at the Federal R eserve B anks and Branches, follow in g w hich 4 p .m ., public announcem ent will be m ade by the T reasury D epartm ent 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 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 each issue for $200,000 or less w ithout 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. Settlem ent for accepted tenders in accordance with the bids m ust be made or com pleted at the Federal R eserve B ank on F ebruary 17, 1966, in cash or other im m ediately available funds or in a like face am ount of T re asu ry bills m aturing February 17, 1966. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be m ade for differences betw een the par value o f m aturing bills accepted in exchange and the issue price of the new bills. T h e incom e derived from T reasu ry bills, w hether 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 ment, as such, under the Internal R evenue Code of 1954. T h e bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exem p t from all taxa tion now or hereafter im posed on the principal or interest thereof by any State, or any of the p ossessions of the U nited States, or by any local taxing authority. F or purposes of taxation the am ount of discount at which T reasu ry bills are originally sold by the U nited States is considered to be inter est. U n d er Sections 4 5 4 (b ) and 1 22 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 c c o rd ingly, the ow ner of T reasu ry bills (other than life insurance com panies) issued hereunder need include in his incom e tax return only 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 made, as ordinary gain or loss. T reasu ry D epartm ent Circular N o . 418 (current revision) and this notice prescribe the term s of the T re asu ry bills and govern the conditions of their issue. Copies o f the circular m ay be obtained from any Federal R eserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, February 14, 1966, 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 end 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 February 10, 1966, representing an additional amount of bills dated November 12, 1965, maturing May 12, 1966; and 182-day bills dated February 10, 1966, maturing August 11, 1966) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST W EEKLY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED FEBRUARY 10, 1966) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing M ay 12,1966 Price High . 182-Day Treasury Bills Maturing August 11,1966 A p p ro x . equiv. annual rate Price A pprox. equiv. annual rate 98.83 l a 4.625% 97.593 4.761% .. 98.822 4.660% 97.582 4.783% Average 98.825 4 .65 0% 1 97.586 4 .77 4% ! Low a E xcep tin g one tender of $1,600,000. 1 I hese rates are on a bank discount basis. 4.96 percent for the 182-day bills. T h e equivalent coupon issue yields are 4.77 percent for the 91-d a y bills, and (69 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (74 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) 91-Day Treasury Bills Maturing M ay 12,1966 District Boston Applied fo r ............................ ......... $ 21,849,000 182-Day Treasury Bills Maturing August 11,1966 Applied fo r Accepted $ 11,849,000 $ 25,529,000 Accepted $ 15,529,000 New Y ork ..................... ........ 1,686,839,000 838,699,000 1,368,013,000 651,533,000 ................. ........ 27,044,000 20,044,000 20,327,000 7,327,000 Cleveland ....................... ......... 44,683,000 39,683,000 68,953,000 44,758,000 Richmond ..................... ........ 16,858,000 16,358,000 5,745,000 5,645,000 Atlanta ............................ ......... 43,190,000 29,804,000 28,588,000 14,280,000 .......................... ......... 325,553,000 156,622,000 285,285,000 125,643,000 St. Louis ....................... ........ 54,848,000 33,193,000 23,111,000 9,659,000 Minneapolis ................... ........ 18,717,000 15,407,000 10,596,000 9,096,000 Kansas C i t y ................... ........ 26,680,000 24,310,000 14,436,000 13,936,000 Dallas .............................. ......... 27,701,000 20,391,000 12,884,000 11,624,000 San Francisco ............... ........ 105,510,000 95,720,000 146,188,000 Philadelphia Chicago T otal ............................ $2,399,472,000 $1,302,080,000b $2,009,655,000 b Includes $252,819,000 noncom petitive tenders accepted at the average price of 98.825. c Includes $111,366,000 noncom petitive tenders accepted at the average price of 97.586. 91,684,000 $1,000,714,000^
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