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FEDERAL RESERVE BANK O F N EW YORK Circular No. 85271 January 13,1950 J Fiscal Agent o f the United States Public Notice o f Offering o f $900,000,000, or thereabouts, o f 91-Day Treasury Bills Dated January 19, 1950 Maturing April 20, 1950 T o all Incorporated Banks and Trust Companies in the Second Federal R eserve District and Others Concerned: Following is the text o f a notice today made public by the Treasury Department with respect to a new offering o f Treas ury bills payable at maturity without interest to be sold on a discount basis under competitive and non-competitive bidding. F O R R E L E A S E , M O R N IN G N E W S P A P E R S , F rid a y, January 13, 1950. TREASURY DEPARTM ENT W a sh in g to n T h e Secretary o f the T reasury, by this public notice, invites tenders for $900,000,000, or thereabouts, of 91-day Treasury bills, for cash and in exchange for T reasu ry bills m aturing January 19, 1950, to be issued on a discount basis under com peti tive and non-com petitive bidding as hereinafter provided. T h e bills of this series w ill be dated January 19, 1950, and will m ature A p ril 20, 1950, when the face am ount w ill be payable without interest. T h e y w ill be issued in bearer form only, and in denominations of $1,000, $5,000, $10,000, $100,000, $500,000, and $1,000,000 (m aturity value). T en ders will be received at Federal R eserve B anks and Branches up to the closing hour, tw o o ’clock p .m ., Eastern Standard tim e, M o n d a y , January 16, 1950. T en ders w ill not be received at the T reasu ry D epartm ent, W a sh in g to n . Each tender m u st be for an even multiple of $1,000, and in the case of competitive tenders the price offered m u st be expressed on the basis of 100, w ith not m ore than three decim als, e. g ., 99.925. F ractions m a y not be used. I t 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 B ranches on application therefor. T en d ers w ill be received without deposit from incorporated banks and trust companies and from responsible and recog nized dealers in investm ent securities. T en d ers from others m ust be accom panied by paym ent of 2 percent of the face am ount of T re asu ry bills applied for, unless the tenders are accom panied by an express guaranty of paym ent by an incorporated bank or trust com pany. Im m ed iately after the closing hour, tenders will be opened at the Federal R eserve Banks and Branches, follow in g which public announcem ent will be m ade by the Secretary of the Treasury of the am ount and price range of accepted bids. T h o se subm ittin g tenders w ill be advised o f the acceptance or rejection thereof. T h e Secretary o f 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, non-com petitive tenders for $200,000 or less w ithout stated price from any one bidder w ill be accepted in fu ll at the average price (in three decim als) of accepted competitive bids. Settlem ent for accepted tenders in accordance w ith the bids m u st be m ade or com pleted at the Federal Reserve B ank on January 19, 1950, in cash or other im m ediately available funds or in a like face am ount of T reasu ry bills m aturing January 19, 1950. Cash and exchange tenders will receive equal treatment. Cash adjustm ents will be m ade for differences between 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 reasu ry bills, w hether interest or gain from the sale or other disposition o f the bills, shall not have any exem ption, as such, and loss from the sale or other disposition of T reasu ry bills shall not have any special treatm ent, as such, under the Internal R evenue Code, or laws am endatory or supplem entary thereto. T h e bills shall be subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but shall be exem p t from all taxation n ow o r hereafter im posed on the principal or interest thereof by any State, or any of the possessions o f the U n ited States, or by any local taxin g authority. F or purposes of taxation the am ount o f discount at w hich T reasury bills are originally sold by the U nited States shall be considered to be interest. U nd er Sections 42 and 117 ( a ) ( 1 ) o f the Internal Revenue Code, as am ended by Section 115 of the R evenue A c t of 1941, the am ount of discount at w hich bills issued hereunder are sold s'hall not be considered to accrue until such bills shall be sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. A ccord in gly, the ow ner of T reasu ry bills (other than life insurance com panies) issued hereunder need include in his income tax return on ly the difference between 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 which the return is m ade, as ordinary gain or loss. T reasu ry D epartm ent Circular N o . 418, as am ended, and this notice, prescribe the term s of the T reasu ry bills and govern the conditions of their issue. Copies o f the circular m a y be obtained from any Federal Reserve B ank or Branch. In accordance with the above announcement tenders will be received at the Securities Department o f this bank (9th floor, 33 Liberty Street) New Y ork 45, N. Y ., or at the Buffalo Branch o f this bank (270 Main Street) Buffalo 5, N. Y ., up to two o’clock p.m., Eastern Standard time, on Monday, January 16, 1950. It is requested that tenders be submitted on special form printed on reverse side and returned in special envelope enclosed herewith. Paym ent fo r the Treasury bills cannot be made by credit through the Treasury T ax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. A llan S proul , President. (E xtract from Treasury Department statement released fo r publication January 10,1950, announcing results a fter tenders w ere opened fo r 91-day Treasury bills dated January 12, 1950 maturing A pril 13, 1950) T o ta l applied fo r.............$1,646,065,000 T o ta l a c c e p te d ............... $ 905,112,000 (includes $117,799,000 entered on a non-com petitive basis and accepted in full at the average price shown below ) A verage price......... 9 9 .7 2 8 + E quivalent rate of discount approx. 1 .0 7 6 % per annum Federal R eserve District B oston ........................... .... N e w Y o r k .................... .... Philadelphia ................ Cleveland ...................... R ichm ond .................... R ange o f accepted competitive bids: H ig h ......................... 99.733 Equivalent rate o f discount approx. 1 .0 5 6 % per annum L o w ........................... 99.726 Equivalent rate of discount approx. 1 .0 8 4 % per annum (3 percent of the am ount bid for at the low price was accepted) FRASER Digitized for St. L ou is ....................... M inneapolis ................ K an sa s C ity ................ San Francisco ........... T o ta l .................... .... Total Applied for $ Total Accepted 22,400,000 1,179,412,000 23,715,000 24,524,000 9,156,000 18,739,000 209,798,000 21,813,000 8,260,000 19,407,000 28,745,000 80,096,000 $ 21,908,000 492,149,000 13,715,000 24,130,000 8,656,000 18,739,000 170,098,000 21,546,000 8,163,000 19,207,000 26,805,000 79,996,000 $1,646,065,000 $905,112,000 ( over) 22 Q IM P O R T A N T — I f it is desired to bid on a com petitive basis, fill in rate per 100 and m atu rity value in paragraph headed "C om petitive Bid” . I f it is desired to bid on a non com petitive basis, fill in only the m atu rity value in paragraph headed "N on -com petitive Bid” . D O N O T fill in both paragraphs on one form . A separate tender m ust be used fo r each bid. Nq„______________ TENDER FOR 91 -D A Y TREASURY BILLS D ated January 19, 1950. M aturing A pril 20, 1950. Dated at... To F ederal R eserve B a n k of N ew Y o rk , Fiscal Agent o f the United States. .1950 COM PETITIVE BID N O N -C O M P E TIT IV E BID Pursuant to the provisions o f Treasury Department Circular No. 418, as amended, and to the provisions o f the public notice on January 13, 1950, as issued by the Secretary of the Treasury, the undersigned offers Pursuant to the provisions o f Treasury De partment Circular N o. 418, as amended, and to the provisions o f the public notice on January 13, 1950, as issued by the Secretary o f the Treasury, the undersigned offers a non-competitive tender ........... ................... ............... for a total amount o f fo r a total amount o f (N ot to exceed $200,000) (R a t e p e r 100) $......................................................... (maturity value) o f the Treasury bills therein described, or for any less amount that may be awarded, settlement therefor to be made at your bank, on the date stated in the public notice, as indicated below: (maturity value) o f the Treasury bills therein described, at the average price (in three deci mals) o f accepted competitive bids, settlement therefor to be made at your bank, on the date stated in the public notice, as indicated below : □ □ By surrender of the Treasury bills...............-....... maturing issue of $____________________ By surrender of the Treasury bills....................... maturing By cash or other immediately available funds of $.__________________ ___ (A m ount surrendered) □ issue (A m ount surrendered) □ By cash or other immediately available funds The Treasury bills for which tender is hereby made are to be dated January 19, 1950, and are to mature on April 20, 1950. This tender will be inserted in special envelope entitled “ Tender fo r Treasury bills” . N a m e of Bidder. (Please print) By (Official signature required) (T itle) Street A dd ress ................................................ (C ity, T ow n o r V illage, P.O. No., and State) I f this tender is subm itted for the account o f a custom er, indicate the custom er’s nam e on line b e lo w : (N am e o f Custom er) (C ity, T ow n o r V illage, P.O . No., and State) U s e a separate tender fo r each custom er’s bid. IM P O R T A N T IN ST R U C T IO N S: 1. N o tender for less than $1,000 will be considered, and each tender m u st be for an even m ultiple o f $1,000 (m aturity va lu e). A separate tender m u st be executed for each bid. 2 . I f the person m aking the tender is a corporation, the tender should be signed by an officer o f the corpora tion authorized to m ake the tender, and the signin g o f the tender by an officer of the corporation w ill be construed as a representation by him that he has been so authorized. I f the tender is m ade by a partnership, it should be signed b y a m em ber of the firm, w h o should sign in the form “ ............................................................................................................. . a copartnership, by ......................................................................................................................... a m em ber of the firm” . 3. T enders w ill be received w ithout deposit from incorporated banks and trust com panies and from respon sible and recognized dealers in investm ent securities. T enders from others m ust be accom panied b y p aym ent o f 2 percent o f the face am ount of T re asu ry bills applied for, unless the tenders are accom panied b y an express guaranty o f paym ent by an incorporated bank or trust com pany. 4. I f the language o f this tender is changed in any respect, which, in the opinion of the Secretary of the T reasu ry, is material, the tender m a y be disregarded. Paym ent b y cred it through Treasury T a x and Loan A cco u n t tvill n ot be perm itted. http://fraser.stlouisfed.org/ T E N T B — 1020-a Federal Reserve Bank of St. Louis * Price must be expressed on the basis o f 100, with not m ore than three decimal places. Fractions m ay not be used. ( over)