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FED ERAL RE SE R V E BANK O F NEW YORK
C ir cu la r N o.
A p r il 10, 1951

Fiscal Agent of the United States

1
J

Mi

O ffering o f $ 1 ,0 0 0 ,0 0 0 ,0 0 0 o f 9 1-D a y Treasury B ills
Dated April 26, 1951

Maturing July 26, 1951

To all Incorporated Banks and Trust Companies in the
Second Federal Reserve District and Others Concerned:

Following i the t x of a n t c published today:
s
et
oie
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 ,
T h u rsd a y, A p ril 19, 1951.

TREASU RY D EPARTM EN T
W a sh in g to n

T h e S ecreta ry o f the T reasu ry, b y this p u b lic n otice, invites tenders fo r $1,000,000,000, or th ereabouts, o f 91-d a y T re a s ­
u ry bills, fo r cash and in exch a n ge fo r T rea su ry bills m aturing A pril 26, 1951, t o be issued on a d iscou n t basis under co m p e ti­
tive and n on -com p etitive bid d in g as h ereinafter provid ed . T h e bills o f this series w ill be dated A p ril 2§, 1951, and w ill mature
Ju ly 26, 1951, w h en the face a m ou n t w ill be payable w ith ou t interest. T h e y w ill be issued in bearer forh i o n ly , and in den om i­
nations o f $1,000, $5,000, $10,000, $100,000, $500,000, and $1,000,000 (m a tu rity v a lu e).
.
T e n d e rs w ill be received at F ed eral R eserve B anks and B ran ches up t o the clo s in g hour, tw o o ’ c lo ck p.m ., E astern
Standard tim e, M o n d a y , A p ril 23, 1951. T en d ers w ill n ot be received at the T reasu ry D epa rtm en t, W a sh in g ton .
E ach
ten der m u st be fo r an even m u ltiple o f $1,000, and in the case o f com p etitive tenders the price offered m u st be exp ressed on
the basis o f 100, w ith n ot m ore than th ree decim als, e.g., 99.925. F ra ction s m ay n ot be used. It is u rged that tenders be
m ade on the printed form s and forw a rd ed in the special en velopes w hich w ill be supplied b y Federal R eserve B anks or
B ran ch es o n a pp lication th erefor.
O th e rs than b ankin g institutions w ill n ot be perm itted to subm it tenders e x ce p t fo r their ow n a ccou n t. T en d ers w ill be
receiv ed w ith ou t dep osit fro m in corp ora ted banks and trust com panies and fr o m respon sible and recog n ized dealers in in ­
vestm en t securities. T e n d e rs fro m oth ers m u st be a ccom p a n ied b y paym ent o f 2 p ercen t o f the face a m ou n t o f T rea su ry bills
a pp lied for, unless the ten ders are a ccom p a n ied b y an express gu a ra n ty o f pa ym en t b y an in corpora ted bank o r trust com pan y.
Im m ed ia tely a fter the clo s in g h our, ten ders w ill be op en ed at the F ed eral R eserve B anks and B ran ches, fo llo w in g w hich
p u b lic a n n ou n cem en t w ill be m ade b y the S ecreta ry o f the T reasu ry o f the a m ou n t and price ran ge o f a ccep ted bids. T h o s e
subm itting ten ders w ill be advised o f the a ccep ta n ce o r rejection th ereof. T h e S ecretary o f the T rea su ry ex p ressly reserves
the righ t t o a cce p t or re je ct a n y o r all tenders, in w h ole or in part, a n d his a ction in any such resp ect shall be final. S u b ject
to these reservations, n on -com p etitiv e tenders for $200,000 o r less w ith ou t stated price fro m any on e bidder w ill be a ccep ted
in full at the average price (in three d ecim a ls) o f a ccep ted com petitive bids. Settlem ent fo r a ccep ted tenders in a cco rd a n ce
w ith the bids m ust be made or com p leted at the Federal R eserve Bank on A p ril 26, 1951, in cash or oth er im m ediately avail­
able funds o r in a like face am ou nt o f T rea su ry bills m aturing A p ril 26, 1951. Cash and exch a n ge tenders w ill receive equal
treatm ent. Cash adjustm ents w ill be m ade for d ifferen ces betw een the par value o f m aturing bills a ccep tcd in exch a n ge and
the issue p rice o f the n ew bills.
T h e in co m e derived fr o m T rea su ry bills, w hether interest or gain fro m the sale or oth er d isp osition o f the bills, shall
n ot have any e x e m p tion , as such, and loss fro m the sale o r oth er d isp osition o f T rea su ry bills shall n ot have any special
treatm ent, as such, under the Internal R even u e C od e, o r laws am en da tory or supplem entary thereto. T h e bills shall be
su b ject to estate, inheritance, g ift, or oth er excise taxes, w hether Federal o r State, but shall be exem p t fro m all taxation
n o w o r hereafter im posed on the principal o r interest th ereof b y any State, or a n y o f the possession s o f the U n ited States,
o r b y a n y loca l ta x in g authority. F o r pu rposes o f taxation the a m ou n t o f d iscou n t at w hich T rea su ry bills are originally
so ld b y the U n ited States shall be con sid ered to be interest. U n der S ection s 42 and 117 ( a ) ( 1 ) o f the Internal R even ue
C ode, as am ended b y S ection 115 o f the R even u e A c t o f 1941, the am ou nt o f d iscou n t at w hich bills issued h ereunder are
s o ld shall n ot be con sid ered t o a ccru e until such bills shall be sold , red eem ed or oth erw ise disp osed of, and such bills are
exclu d ed fro m con sidera tion as capital assets. A c co r d in g ly , the o w n e r o f T rea su ry bills (o th e r than life insurance co m ­
pan ies) issued hereun der need include in his in com e tax return on ly the differen ce betw een the price paid fo r such bills,
w hether on origin al issue or on subsequent purchase, and the am ou nt actu ally receiv ed either u pon sale o r redem ption at
m aturity d u rin g the taxable year fo r w h ich th e return is m ade, as ord in a ry gain or loss.
T re a su ry D epartm en t Circular N o . 418, as am en ded, and this n otice, prescribe the term s o f the T rea su ry bills and g o v e rn
the con dition s o f their issue. C op ies o f the circu la r m a y be obtain ed fro m a n y F ed eral R eserve B ank or B ranch.

This Bank w l re e v tenders up t 2 p m , Eastern Standard t m Monday, April 2 , 1951, a t S c r t e
il c i e
o
..
i e,
3
t he e u i i s
Department of is Head O f c and a is Buffalo Branch. Please use t e form on th reverse s d of t i c r u a t
t
fie
t t
h
e
ie
hs iclr o
submit a t n e , and return i i an envelope marked “Tender f r Treasury B l s ” Payment for the Treasury bills
edr
t n
o
il.
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.
A l l a n S p r o u l , President.
Results of last offering of Treasury bills (91-day bills dated April 19, 1951, maturing July 19, 1951)
T o ta l applied fo r .......... $1,929,812,000
T o ta l a c c e p t e d ...............$1,000,486,000 (inclu des $117,622,000
en tered on a n o n -com p etitive basis
and a ccep ted in full at the average
price show n b e lo w )
E quivalent rate o f discou nt
A ve ra g e p rice........ 9 9 .6 1 3 +
a p p rox. 1.529% per annum
R a n g e o f a ccep ted com p etitive b id s : (e x ce p tin g on e tender
o f $100,000)
H ig h ........................ 99.620
E quivalent rate o f discou nt
app rox. 1.503% per annum
L o w .......................... 99.612
E q u iva len t rate o f discou nt
a p p rox. 1.535% p er annum
(31 p ercen t o f the a m ou n t bid for at the low
price w as a ccep ted )




Federal Reserve
District
B oston ..............................
N ew Y o r k ........................
Philadelphia
C leveland .......
R ich m on d .......
A tlanta ...........
C h ica g o ...........
St. L ou is .........
M in n eap olis ...
K ansas C ity ...
D allas ..............
San F ra n cisco
T otal ........................

Total
Applied for

Total
Accepted

14,410,000
1,427,442,000
28.555.000
59.730.000
13.570.000
16.033.000
190,913,000
16.110.000
4,758,000
22.246.000
39.779.000
96.266.000

13.030.000
608.817.000
15.105.000
59.592.000
13.570.000
15.343.000
126.073.000
14.020.000
4,545,000
22.246.000
32.679.000
75.466.000

$1,929,812,000

$1,000,486,000

$

( oveb)

25E
IMPORTANT— If you desire to bid on a competitive basis, fill in rate per 100 and maturity
value in paragraph headed "Competitive Bid.” If you desire to bid on a non-competitive
basis, fill in only the maturity value in paragraph headed "Non-competitive Bid.” DO N O T
fill in both paragraphs on one form. A separate tender must be used for each bid.

No............

TENDER FOR 91 -DAY TREASURY BILLS
Dated April 26, 1951

To

Maturing July 26, 1951

Dated a -- -----t
F e d eral R eserve B a n k o f N e w Y o r k ,

F s a Agent of th United S a e .
icl
e
tts

___ 1951

COMPETITIVE BID

NON-COMPETITIVE BID

Pursuant t th provisions of Treasury
o e
Department Circular No. 418, as amended, and
t the provisions of t e public n t c on
o
h
oie
April 1 , 1951, as issued by the Secretary
9
of the Treasury, the undersigned o f r
fes

Pursuant t the provisions of Treasury De­
o
partment Circular No. 418, as amended, and t th
o e
provisions of the p b c n t c on April 1 ,
u li o i e
9
1
951, as issued by the Secretary of the Treasury,
the undersigned o f r a non-competitive tender
fes

......... ........ * for a t t l amount of
oa

f r a t t l amount of $..................
o
oa

(R ate per 100)

(N ot to exceed $200,000)

$.................... (maturity value)
of the Treasury b l s the e n d s r e , or for
il
r i e c ib d
any l s amount t a may be awarded, settlement
es
ht
therefor t be made a your Bank, on the date
o
t
s a e i t pu l n t c , as i
t t d n he b ic o i e
ndicated below:
□ By surrender of maturing Treasury b l s
il
amounting to
___ _____ $_____________

(maturity value) of the Treasury b l s t e e n
il h r i
d s r be , a the average p i e ( n three d
eci d t
rc i
eci­
mals) of accepted competitive b d , s
i s ettlement
therefor t be made a your Bank, on the date
o
t
s a e i the public n t c , as i i a d below :
ttd n
oie
nd c te
□ By surrender of maturing Treasury b l s
il
amounting t _________ $ _______ ______
o
.

□

□

By cash or other immediately a a l b e funds
vial

*Price must be expressed on the basis of 100, with
more than three decimal places, fo r example, 99.925.

By cash or other immediately a a l b e funds
vial

not

The Treasury b l s f r which tender i hereby made are t be dated April 2 , 1951, and are t mature
il o
s
o
6
o
on July 2 , 19 1
6 5.
This tender will be inserted in special envelope marked “Tender for Treasury Bills”
N a m e o f Bidder..

By

(P lease print)

(Official signature required)

(T itle)

S treet A d d ress

(C ity, T ow n o r V illage, P.O . No., and State)

If this tender is submitted by a bank for the account of a customer, indicate the customer’s name on line below:
(N am e o f Custom er)

(C ity, T ow n or V illage, P.O. No., and State)

Use a separate tender for each customer’s bid.
IMPORTANT INSTRUCTIONS:
1. N o ten der fo r less than $1,000 w ill be con sidered, and each tender m ust be fo r an even m ultiple o f $1,000
(m a tu rity v a lu e ). A separate ten der m u st be execu ted fo r each bid.
2. I f the person m a k in g the ten der is a corp ora tion , th e ten der should be sign ed b y an officer o f the c o rp o ra ­
tion authorized t o m ake the tender, and the sign in g o f the ten der b y an officer o f the corp ora tion w ill be con stru ed as a
representation b y him that he has been s o auth orized. I f the ten der is m ade b y a partnership, it sh ou ld be sign ed b y a
m em b er o f the firm , w h o sh ou ld sign in the fo rm “ ................................................................................................... . a cop artn ersh ip, b y
........... .................................................................................................. a m em b er o f the firm .”
3. T e n d e rs w ill be received w ith ou t dep osit fro m in corpora ted banks and trust com pa n ies and fro m resp o n ­
sible and re co g n ize d dealers in in vestm ent securities. T en ders fro m oth ers m ust be a ccom p a n ied b y paym ent o f 2 percent
o f the face am ou nt o f T rea su ry bills applied fo r, unless th e tenders are a ccom p a n ied b y an exp ress gu aranty o f paym ent
b y an in corp ora ted bank o r trust com p a n y .
4. I f the language o f this ten der is ch a n ged in a n y respect, w hich, in the opin ion o f the S ecreta ry o f the
T re a su ry , is m aterial, the ten der m a y be disregarded.

Payment b y credit through Treasury Tax and Loan Account will not be permitted.

T E N TB — 1086-a


(O T E ft)

S E C O N D D IS T R IC T C O M M E R C IA L BA N K IN G
V O L U N T A R Y C R E D I T R E S T R A I N T C O M M IT T E E

Created pursuant t t e Program f r Voluntary C e i R s r i t
o h
o
rdt etan
a t o i ed by t Defense Production Act of 1950
uhrz
he
3 3 LIBERTY STREET
N E W Y O R K 4 5 . N. Y.

A p ril 20, 1951.
RESTRICTION OF BUSINESS CAPITAL EXPENDITURE FINANCING

Bulletin No. 2 of Voluntary Credit Restraint Committee

To the Chief Executive Officer o f each
Covimercial BanJc in the Second Federal Reserve District:

Following is the text o f Bulletin No. 2 o f the national Voluntary Credit Restraint Committee,
which was released fo r publication A pril 23,1951:

RESTRICTION OF BUSINESS CAPITAL EXPENDITURE FINANCING
The Voluntary Credit Restraint Committee, at i s meeting on April 1 , 1951, in considering the func­
t
8
tioning of the Program t d t , discussed the matter of financing for capital expenditures and unanimously
o ae
adopted the following statement.
American business concerns are currently planning t spend, and are spending, record sums for the
o
enlargement and modernization of their f c l t e . According to a recent survey of business plans,1 outlays
aiiis
for new plant and equipment during 1951 may t t l $24 b l i n an increase of 29 per cent from the 1950 l v l
oa
ilo,
ee,
nearly one-fourth greater than the previous peak expenditure of $19.2 b l i n in 1948, and three times the
ilo
dollar expenditures in 1941.
This huge expenditure for capital investment bids f i to exceed the t t l amount of savings, both
ar
oa
corporate and individual, for the next twelve months. Perhaps some substitution of bank credit for savings
w l be necessary. But at a time l k the present when materials and labor are s a c , i becomes imperative,
il
ie
cre t
i we desire t cu t i inflationary f r e , that great care be exercised by financing i s t ti n participating
f
o ral
ocs
n ti u o s
in the Voluntary Credit Restraint Program in extending credit for investment purposes where such an
extension does not tend t increase output e s n i l for the defense program.
o
seta
In non-defense industry, business s vi
a ngs, i not spent on plant and equipment, could be used a
f
s
working capi al t meet p yr l , carry inventories and finance accounts of buyers of their products. This
t o
a o ls
would reduce the need for bank loans and other c e i .
rdt
Roughly half of the anticipated capital expenditures of business concerns during 1951 may be classed a
s
defense or defense supporting, with emphasis on the l t e . Included in these categoriesare expansion of basic
atr
productive capacity in such manufacturing industries as s e l aluminum, and petroleum; additions t
te,
o
e e t i power generating and transmission f c l t e ; and the purchase of additional rolling stock by the
lcrc
aiiis
r i r a s Every e f r should be made t assure a i ability of materials, equipment and financing e s n i l
alod.
fot
o
va l
seta
t the completion of these p o e t .
o
rjcs
On the other hand, approximately half of the capital expenditures planned by business for 1951 f l s
al
in a more or l s indeterminate c a s so far as t e r relationship t the defense e f r i concerned. Some are
es
ls
hi
o
fot s
1 The survey referred to is that o f the U. S. Department o f Commerce and the Securities and Exchange Commission.




(O V E E )

cle rl non-essential and deferrable, while others border c o e y on the defense-supporting a e . There i,fo
a y
lsl
ra
s r
example, the $5.4 b l i n capital expenditure anticipated by the commereial and miscellaneous group, a large
ilo
part of which could undoubtedly be postponed without detriment t the defense e f r and in the i t re t o
o
fot
ne s f
reducing inflationary pressures and conserving labor and materials. Limitations on construction of s e i i
pcfc
types and Governmental r s r c i n and a l ca i s of materials should play a large part in curtailing some
etitos
l o t on
business plans for capital expenditures and in eliminating o h r . Thus the responsibility of financing i s i
tes
nt­
tutions w l be limited t those cases whose e s n i l t has not been predetermined by Government a e c e .
il
o
setaiy
gnis
Since i may be d f i u t in individual cases to d f e e t a e e s n i l from non-essential capital expendi­
t
ifcl
ifrnit seta
t r s as well as those which i would be desirable to postpone in the i t r s of longer-run economic s a i i y
ue,
t
neet
tblt,
certain t s s are suggested to financing i s t t o s cooperating in the Voluntary Credit Restraint Program
et
n ti u i n
in making financing d c s o s Among the non-essential uses of long-term financing that in the judgment o
eiin.
f
the Committee might be postponed t a more propitious time are those for such purposes as:
o
( ) Construction of f c l t e t improve the competitive position of an individual producer o
1
aiiis o
f
non-essential goods.
(2) Expansion and modernization expenditures of concerns i distribution or ser c l n s where
n
vi e i e
the distribution or service i not defense supporting.
s
( ) Expansion and modernization programs for the manufacture of consumer goods not related t
3
o
the defense e f r .
fot
Financing i st t i ns are urged t give equal consideration to the needs of small as well as large business
n i ut o
o
in screening applications for long-term financing.
Additional copies o f this letter will be furnished upon request.




G

eorge

W

h it n e y

,

Chairman.

F E D E R A L. R E S E R V E B A N K
O F NEW YORK

April 20, 1951.

RESTRICTION OF BUSINESS CAPITAL EXPENDITURE FINANCING

Bulletin No. 2 of Voluntary Credit Restraint Committee

To Financing Institutions in the
Second Federal Reserve D istrict:

W e reprint below fo r your information the text o f Bulletin No. 2 o f the national Voluntary
Credit Restraint Committee, which was released fo r publication A pril 23, 1951:

RESTRICTION OF BUSINESS CAPITAL E XPENDITURE FINANCING
The Voluntary Credit Restraint Committee, at i s meeting on April 1 , 1951, in considering the func­
t
8
tioning of the Program t d t , discussed the matter of financing for capital expenditures and unanimously
o ae
adopted the following statement.
American business concerns are currently planning t spend, and are spending, record sums for the
o
enlargement and modernization of t e f c l t e . According t a recent survey of business plans,1 outlays
h ir a i i i s
o
for new plant and equipment during 1951 may t t l $24 b l i n an increase of 29 per cent from the 1950 l v l
oa
ilo,
ee,
nearly one-fourth greater than the previous peak expenditure of $19.2 b l i n in 1948, and three times the
ilo
dollar expenditures in 1941.
This huge expenditure for capital investment bids f i to exceed the t t l amount of savings, both
ar
oa
corporate and individual, for the next twelve months. Perhaps some substitution of bank credit for savings
w be necessary. But at a time l k the present when materials and labor are s a c , i becomes imperative,
ill
ie
cre t
i we d i e t cu t i inflationary f r e , that great care be exercised by financing i s t t o s participating
f
es r o r a l
ocs
n ti u i n
in the Voluntary Credit Restraint Program in extending credit for investment purposes where such an
extension does not tend t increase output e s n i l for the defense program.
o
seta
In non-defense industry, business s vi
a ngs, i not spent on plant and equipment, could be used a
f
s
working cap a t meet p yr l , carry inventories and finance accounts of buyers of their products. This
it l o
a o ls
would reduce the need for bank loans and other c e i .
rdt
Roughly half of the anticipated capi al expenditures of business concerns during 1951 may be classed a
t
s
defense or defense supporting, with emphasis on the l t e . Included in these categories are expansion of basic
atr
productive capacity in such manufacturing industries as s e l aluminum, and petroleum; additions t
te,
o
e e t i power generating and transmission f c l t e ; and the purchase of additional ro l n stock by the
lcrc
aiiis
lig
r i r a s Every e f r should be made t assure a i ab l y of materials, equipment and financing e s n i l
alod.
fot
o
va l i it
seta
t the completion of these pr j c s
o
oet.
On the other hand, approximately half of the capital expenditures planned by business for 1951 f l s
al
in a more or l s indeterminate c a s so far as th i relationship t the defense e f r i concerned. Some are
es
ls
er
o
fot s
cle rl non-essential and deferrable, while others border c s l on the defense-supporting a e There i,for
a y
lo e y
r a.
s
example, the $5.4 b l i n capital expenditure anticipated by the commercial and miscellaneous group, a large
ilo
1 The survey referred to is that o f the U. S. D epartment o f Commerce and the Securities and Exchange Commission.




part of which could undoubtedly be postponed without detriment to the defense e f r and in the i te e of
fot
n r st
reducing inflationary pressures and conserving labor and m
aterials. Limitations on construction of s e i i
pcfc
types and Governmental r s r c i n and a l a io s of materials should play a large part in curtailing some
etitos
l oc t n
business plans for capital expenditures and in eliminating o h r . Thus the responsibility of financing i s i
tes
nt­
tutions w l be limited t those cases whose e s n i l t has not been predetermined by Government a e c e .
il
o
setaiy
gnis
Since i may be d f i u t in individual cases to d f e e t a e e s n i l from non-essential capital expendi­
t
ifcl
ifrnit seta
t r s as well as those which i would be desirable to postpone in the i t e t of longer-run economic s a i i y
ue,
t
n er s
tblt,
certain t s s are suggested to financing i t t t o s cooperating in the Voluntary Credit Restraint Program
et
ns i u i n
in making financing d c s o s Among the non-essential uses of long-term financing that in the judgment of
eiin.
the Committee might be postponed t a more propitious time are those for such purposes as:
o
( ) Construction of f c l t e to improve the competitive position of an individual producer of
1
aiiis
non-essential goods.
( ) Expansion and modernization expenditures of concerns in distribution or ser ic l n s where
2
v e ie
the distribution or service i not defense supporting.
s
( ) Expansion and modernization programs for the manufacture of consumer goods not related t
3
o
the defense e f r .
fot
Financing i st t t o s are urged t give equal consideration t the needs of small as well as large business
n iuin
o
o
in screening applications for long-term financing.
Additional copies o f this letter will be furnished upon request.




A

llan

S

proul,

President.

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