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F E D ER A L R ES ER V E BANK O F NEW YO RK Fiscal A gen t of the U nited States rCircular No. 5 8 7 9 T L October 5, 1966 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated July 14, 1966, Due January 12, 1967 (To Be Issued October 13, 1966) $1,000,000,000 of 182-Day Bills, Dated October 13, 1966, Due April 13, 1967 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal R eserve District: Following is the text of a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Daylight Saving tim e: T h e T reasury D epartm en t, by this public notice, invites tenders for tw o series of T reasury bills to the aggregate am ount of $2,300,000,000, or thereabouts, for cash and in e x change for T reasu ry bills m aturing O ctob er 13, 1966, in the am ount of $2,302,664,000, as fo llo w s: 91-day bills (to m aturity date) to be issued O ctob er 13, 1966, in the am ount of $1,300,000,000, or thereabouts, representing an additional am ount of bills dated July 14, 1966, and to mature January 12, 1967, originally issued in the am ount of $1,000,993,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,000,000,000, or thereabouts, to be dated O ctob er 13, 1966, and to mature A pril 13, 1967. T h e bills of both series will be issued on a discount basis under competitive 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 denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m aturity value). T en ders will be received at Federal R eserve Banks and Branches up to the closing hour, on e-thirty p.m ., Eastern D ayligh t Saving time, M on d ay, O ctob er 10, 1966. T enders will not be received at the T reasu ry D epartm ent, W ash in g ton . E ach tender m ust be for an even multiple of $1,000, and in the case of competitive 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 forwarded in the special envelopes which will be supplied by Federal Reserve B anks or Branches on application therefor. B anking institutions generally m ay 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 permitted to subm it tenders except for their ow n account. T enders will be received without deposit from incorporated 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 accompanied by an express guaranty of paym ent by an incorporated bank or trust com pany. Im m ediately after the closing hour, tenders w ill be opened at the Federal Reserve B anks and Branches, follow in g which public announcem ent will be made by the T reasu ry D ep artm 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 reasury 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 competitive bids for the respective issues. Settlem ent for accepted tenders in accordance w ith the bids m ust be made or com pleted at the Federal R eserve Bank on O ctob er 13, 1966, in cash or other im m ediately available funds or in a like face am ount of T reasury bills m aturing O ctob er 13, 1966. Cash and exchange tenders will receive equal treatment. Cash adjust m ents will be made for differences betw een the par value of m aturing bills accepted in exchange and the issue price of the new bills. T h e incom e derived from T reasury 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 reasury bills does not have any special treat ment, as such, under the Internal Revenue Code o f 1954. T h e bills are subject to estate, inheritance, gift or other excise taxes, whether 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 of the possessions of the U nited States, or by any local taxing authority. F or purposes of taxation the am ount of discount at w hich T reasury bills are originally sold by the U nited States is considered to be interest. U nd er Sections 4 5 4 (b ) and 1221(5) of the Internal Revenue Code of 1954, the am ount of discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed 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 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 reasury D epartm ent Circular N o . 418 (current revision) and this notice prescribe the term s of the T reasury bills and govern the conditions of their issue. Copies o f 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, October 10, 1966, 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 October 6, 1966, representing an additional amount of bills dated July 7, 1966, maturing January 5, 1967; and 182-day bills dated October 6, 1966, maturing April 6, 1967) are shown on the reverse side of this circular. A lfr ed H ayes, President. ( over) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED OCTOBER 6, 1966) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing January 5,1967 182-Day Treasury Bills Maturing April 6,1967 Price A p prox. equiv. annual rate H i g h .............................. ................. 98.647 5.353% 97.148a 5.641% L ow .............................. ................. 98.618 5.467% 97.112 5.713% Average ........................ ................. 98.633 5.408% 1 97.132 S.673% 1 Price A pprox. equiv. annual rate a E xcep tin g one tender of $603,000. 1 T h ese rates are on a bank discount basis. 5.92 percent for the 182-day bills. T h e equivalent coupon issue yields are 5.56 percent for the 91-d a y bills, and (26 percent of the amount of 91-day bills bid for at the low price was accepted.) (100 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 January 5,1967 B o s t o n ............................ ........... $ 19,563,000 Applied for Accepted A pplied for District 182-Day Treasury Bills Maturing April 6,1967 $ 9,562,000 $ 12,811,000 Accepted $ 12,810,000 ................... ........... 1,274,284,000 837,381,000 Philadelphia ................. ........... 28,383,000 16,383,000 15,048,000 7,048,000 ..................... ........... 31,958,000 31,958,000 26,379,000 25,419,000 Richmond ...................... ........... 16,093,000 16,073,000 7,786,000 7,786,000 Atlanta .......................... ........... 45,857,000 39,857,000 37,083,000 28,083,000 C h ic a g o .......................... ........... 190,321,000 147,921,000 162,858,000 97,857,000 St. L o u i s ........................ ........... 57,651,000 54,651,000 39,516,000 33,016,000 Minneapolis ................. ........... 19,175,000 19,175,000 10,628,000 10,628,000 Kansas C i t y ................. ........... 23,876,000 23,876,000 18,116,000 18,116,000 ............................ ........... 26,643,000 22,643,000 19,700,000 18,700,000 80,606,000 80,606,000 85,545,000 65,395,000 New Y ork Cleveland Dallas San Francisco ............. Total ............. ........... $1,814,410,000 $1,300,086,000b 1,018,366,000 $1,453,836,000 b Includes $276,370,000 noncompetitive tenders accepted at the average price of 98.633. c Includes $200,376,000 noncompetitive tenders accepted at the average price of 97.132. 675,366,000 $1,000,224,000c