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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States C ir c u la r N o. 3 7 8 7 Novem ber 29,1951 Offering o f $1,100,000,000 o f 91-Day Treasury Bills Dated D ecem ber 6, 1951 Maturing M arch 6, 1952 To all Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve D istrict: % Following is the text of a notice published today: 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, N o v e m b e r 29, 1951. TREASU RY DEPARTM EN T W a sh in g to n T h e S ecretary o f the T reasu ry, b y this public n otice, in vites tenders fo r $1,100,000,000, o r thereabouts, o f 91 -d a y T r e a s u ry bills, fo r cash and in exch a n ge fo r T rea su ry bills m atu rin g D ecem b er 6, 1951, in the am ount o f $1,102,785,000, to be issued on a discou n t basis under com p etitive and n on -com p etitiv e b id d in g as h ereinafter provided . T h e bills o f this series w ill be dated D e ce m b e r 6, 1951, and w ill m ature M arch 6, 1952, w hen 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 fo rm on ly, and in den om in a tion s o f $1,000, $5,000, $10,000, $100,000, $500,000, and $1,000,000 (m a tu rity va lu e). T e n d e rs w ill b e receiv ed at F ed eral R eserve Banks and B ran ches up to the clo s in g h our, tw o o ’ c lo ck p.m ., E astern Standard tim e, M o n d a y , D ecem b er 3, 1951. T en d ers w ill n ot be received at the T rea su ry D epartm en t, W a s h in g to n . E ach ten der m u st be fo r an even m ultiple o f $1,000, and in the case o f com p etitive ten ders th e price offered m ust be exp ressed on the basis o f 100, w ith n ot m o re than th ree decim als, e.g., 99.925. F ra ction s m a y n o t be used. It is u rg ed that ten ders be m a d e o n the printed fo rm s and forw a rd ed in the special en velop es w hich w ill be supplied b y Federal R eserve B anks o r B ran ch es o n a pp lication th erefor. O th ers than ban kin g in stitu tions w ill n ot be perm itted t o subm it tenders e x ce p t fo r their o w 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 p a n ies and fr o m respon sible and recog n ized dealers in in vest m en t securities. T en d ers fro m oth ers m u st b e 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 applied fo r, unless the tenders are a ccom p a n ied b y an exp ress gu aranty o f p a ym en t b y an in corpora ted bank or trust com p a n y . Im m ed ia tely a fter the clo s in g h our, tenders w ill be op en ed at the F ed eral R eserve Banks and B ran ches, fo llo w in g w hich p u blic a n n ou n cem en t w ill be m ade b y the S ecreta ry o f the T rea su ry o f the a m ou n t and price range o f a ccep ted bids. T h o s e subm itting tenders w ill be advised o f the a ccep ta n ce o r rejection th ereof. T h e S ecreta ry o f the T rea su ry ex p ressly reserves the righ t to a ccep t o r reject a n y o r all tenders, in w h ole or in part, and his a ction in any such resp ect shall be final. S u b ject to these reservations, n on -com p etitive tenders fo r $200,000 or less w ith ou t stated price fro m a n y on e b idder w ill be a ccep ted in full at the a vera ge price (in three decim a ls) o f a ccep ted com p etitive bids. Settlem ent fo r a ccep ted tenders in a cco rd a n ce w ith the bids m u st be m ade o r com p leted at the Federal R e serv e Bank on D e ce m b e r 6, 1951, in cash or oth er im m ediately available funds o r in a like face a m ou n t o f T rea su ry bills m atu rin g D ecem b er 6, 1951. Cash and exch a n ge tenders w ill re ceive equal treatm ent. Cash adjustm ents w ill be m ade fo r differences betw een the par value o f m atu rin g bills a ccep te d in exch a n ge and the issue price o f the new bills. T h e in com e derived fro m T rea su ry bills, w hether interest or gain fr o m the sale or oth er disp osition o f the bills, shall not have any exem ption , as such, and loss fr o m the sale o r oth er disp osition o f T rea su ry bills shall n ot have a n y special treat m en t, as such, under the Internal R even u e C ode, or law s am en da tory o r sup plem entary th ereto. T h e bills shall be su b ject to estate, inheritance, gift, or oth er excise taxes, w hether F ed eral or State, but shall be exem p t from all taxation n ow o r h ere a fter im posed on the principal or interest th ereof b y a n y State, or any o f the possession s o f the U n ited States, o r b y a n y local ta x in g authority. F o r pu rp oses o f taxation the am ou nt o f discou n t at w h ich T rea su ry bills are origin a lly sold b y the U n ited States shall be con sid ered to be interest. U n d er S ection s 42 and 1 1 7 (a )(1 ) o f the Internal R even u e C ode, as a m en ded b y S ection 115 o f the R even u e A c t o f 1941, the am ou nt o f discou n t at w hich bills issued hereunder are sold shall n ot be con sidered to accru e until such bills shall be sold, red eem ed or oth erw ise disp osed of, and such bills are exclu d ed from con sideration as capital assets. A c co r d in g ly , the ow n er o f T rea su ry bills (o th e r than life insurance com p a n ies) issued h ereun der need in clu de in his in co m e ta x return on ly the difference betw een the price paid fo r such bills, w hether on origin a l issue or o n sub sequent purchase, and the a m ou n t actu ally received either u pon sale or red em ption at m aturity du rin g the taxable year for w h ich the return is m ade, as ord in a ry ga in or loss. T re a su ry D epa rtm en t Circular N o . 418, as am en ded, and this n otice, prescrib e the term s o f the T rea su ry bills and go v e rn the con d ition s o f their issue. C op ies o f the circular m a y be ob ta in ed fro m a n y F ed eral R eserve B ank or B ranch. This Bank will receive tenders up to 2 p.m., Eastern Standard time, Monday, December 3, 1951, at the Securi ties Department of its Head Office and at its Buffalo Branch. Please use the form on the reverse side of this circular to submit a tender, and return itin an envelope marked “Tender for Treasury Bills.” Payment for the Treasury bills cannot be nwde 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. Resuits o f last offering o f Treasury bills (91-day bills dated November 29, 1951, maturing February 28, 1952) T o ta l applied fo r .......... $1,954,319,000 T o ta l a c c e p t e d ...............$1,100,013,000 (in clu d es $154,705,000 entered on a n on -com p etitiv e basis and a ccep ted in full at the a verage price sh ow n b e lo w ) A v e ra g e price........ 99.593-f- E quivalent rate o f discou nt a p p rox. 1.609% per annum R a n g e o f a ccep ted com p etitive b ids: H ig h ........................ 99.611 L o w .......................... 99.591 E quivalent rate o f discount a p p rox. 1.539% per annum E quivalent rate o f discou nt a p p rox. 1.618% per annum (22 p ercen t o f the a m ou n t bid fo r at the low price w as a ccep ted ) Federal R eserve D istrict B oston .......................... .... N ew Y o r k ................. .... Philadelphia ............... C leveland ................... R ich m on d ................... C h ica g o ....................... St. L ou is ..................... M in neapolis ............... K ansas C ity .............. D allas .......................... San F ra n cisco .......... T otal ...................... .... Total A pplied f o r $ 38.228,000 1,368,505,000 46.211.000 42,491,000 13.322,000 16,867,000 205.830,000 37.305,000 7,140,000 49,488,000 39,532,000 89,400,000 $1,954,319,000 Total A ccep ted $ 33,278,000 668,305,000 28,211,000 35.371,000 12.322,000 15,867,000 149,890,000 27,189,000 7,140,000 46,928,000 27,972,000 47,540,000 $1,100,013,000 ( over) 26K IM PORTANT— 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 fo r each bid, except that banks submitting bids on a competitive basis for their own and their customers’ accounts may submit one tender fo r the total amount bid at each price, provided a list is attached showing the name o f each bidder, the amount bid fo r his account, and method o f payment. Forms fo r this purpose will be furnished upon request. No............. TENDER FOR 91 -DAY TREASURY BILLS Dated December 6, 1951 M a tu r in g M a r c h 6 , 1 9 5 2 Dated at........ To F ed era l R eserve B a n k o f N ew Y ork , .1951 Fiscal Agent of the United States. COMPETITIVE BID NON-COMPETITIVE BID Pursuant to the provisions of Treasury Department Circular No. 418, as amended, and to the provisions of the public notice on November 29, 1951, as issued by the Secretary of the Treasury, the undersigned offers Pursuant to the provisions of Treasury De partment Circular No. 418, as amended, and to the provisions of the public notice on November 29, 1951, as issued by the Secretary of the Treasury, the undersigned offers a non-competitive tender ...................* for a total amount of for a total amount of (Not to exceed §200,000) (Rate per 100) $... ... ........ ..... (maturity value) of the Treasury bills therein described, or for any less amount that may be awarded, settlement therefor to be made at your Bank, on the date stated in the public notice, as indicated below: □ By surrender of maturing Treasury bills amounting to........$ -------------- (maturity value) of the Treasury bills therein described, at the average price (in three deci mals) of 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 maturing Treasury bills amounting to........$--------------- □ □ By cash or other immediately available funds By cash or other immediately available funds *Price must be expressed on the basis o f 100, with not more than three decimal places, fo r example, 99.925. The Treasury bills for which tender is hereby made are to be dated December 6, 1951, and are to mature on March 6, 1952. This tender will be inserted in special envelope marked “ Tender fo r Treasury Bills.” N am e o f B id der ............................................. By (Please print) (Official signature required) (Title) Street A d d re ss ................................................ (City, Town or Village, P.O. No., and State) If this tender is submitted by a bank for the account of a customer, indicate the customer’s nam e on line below: (Name of Customer) (City, Town or Village, P.O. No., and State) IMPORTANT INSTRUCTIONS: 1. N o tender fo r less than $1,000 w ill be con sidered, and each tender m ust be for an even m ultiple o f $1,000 (m atu rity valu e). 2. I f the person m a k in g the tender is a corp ora tion , the tender should be signed b y an officer o f the c o rp o ra tion authorized to m ak e the tender, and the sign in g o f the tender 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 so authorized. I f the tender is m ade b y a partnership, it should be signed b y a m em ber o f the firm , w h o shou ld sign in the fo rm “ ......................................................................................................... a copartnership, by ..................................................................................................................... . a m em b er o f the firm .” 3. T e n d e rs w ill be received w ith ou t deposit fro m in corpora ted banks and trust com panies and fro m resp o n sible and re co g n iz e d dealers in in vestm ent securities. T en d ers fro m others m u st be accom pa n ied b y p a ym en t o f 2 percen t o f the face am ou nt o f T rea su ry bills a pplied for, unless the tenders are a ccom p a n ied b y an express gu aranty o f paym ent b y an in corp ora ted bank or trust com pan y. 4. I f the la n g u a ge o f this ten der is ch a n ged in any respect, w hich, in the op in 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 http://fraser.stlouisfed.org/ E N T B —1118-a FederalTReserve Bank of St. Louis by credit through Treasury Tax and Loan Account will not be permitted. ( over) 6. Y S E C O N D D I S T R I C T S A V IN G S A N D L O A N V O L U N T A R Y C R E D IT R E S T R A IN T C O M M IT T E E Created pursuant to the Program for Voluntary Credit Restraint authorized by the Defense Production Act of 1950 33 LIB E R TY STREET N E W Y O R K 4 5 . N. Y. N ovem ber 28, 1951. To the C h ief E xecu tive Officer o f each Savings and Loan A ssociation in the Second Federal R eserve D istrict: On N ovem ber 9, 1951, the N ational V olu n tary Credit R estraint Committee released a digest o f a sam pling o f opinions which had been expressed through Septem ber 1951 by the regional com mittees on typical cases referred to them b y individual lending institu tions. The N ational Committee believes that the release o f inform ation on typical cases w ill assist cooperating financing institutions in conducting their operations in accord ance with the principles o f the P rogram , and that the publication o f these digests should also be o f interest to b orrow ers in planning their operations and to the public at large. F o r you r inform ation, a cop y o f the digest o f opinions is printed on the follow in g pages. A lthough the digest o f the cases is necessarily brief, we hope that it w ill be helpful to you in indicating the general approach o f the regional com m ittees to problem s arising under the P rogram . It is still necessary, o f course, fo r lenders to consider each proposed loan or investment on the basis o f the facts o f the particular case. W e believe that you will want you r lending and investment officers to be fu lly fam iliar with this material, and we shall be glad to furnish you with additional copies fo r this purpose upon request. I f you have any question as to whether a prop osed loan or investment conform s with the principles o f the P rogra m as amplified b y the various bulletins which have been sent you and b y the digest o f opinions, we shall be glad to review the case and let you know our views prom ptly. Please submit your request fo r consideration o f a specific loan or invest ment on the special form devised fo r that pu rp ose (F orm C R -S L 1 ). T his fo rm should be prepared in triplicate and sent to G. M o r g a n B r o w n e , S ecretary o f the Committee, 33 L iberty Street, New Y ork 45, N. Y ., to w hom requests fo r additional copies o f the form should be addressed. Y ou r continued cooperation in the P rog ra m w ill be greatly appreciated. E rnest A . M in ie r , Chairman. VOLUNTARY CREDIT RESTRAINT PROGRAM Digest o f Opinions Through September 1951 SEASONAL A N D INVENTORY LOANS Borrower and Purpose Wholesale seeds.— To buy and clean seeds for resale to retailers of seed for use by farmers in necessary reseeding operations. Retail dry goods.— For normal seasonal inventory acquisition. Retail hardware, lumber and building supplies.— For normal inventory acquisi tion to care for summer and early fall trade. Retail fuel oil.— To purchase 1 million gallons of fuel oil (one-tenth of annual volume) for storage and sale during the 1951-2 season. Public accountant.— Seasonal loan for operating funds. Retail hardware.— To enable borrower to carry inventory disproportionate to his normal business operations. Retail sewing machine.— To increase inventory of imported machines in anticipa tion of future curtailment in domestic manufacture of sewing machines. Opinion Favorable Favorable Favorable Favorable Favorable Unfavorable Unfavorable BUILDING PROGRAMS Machine tool company.— To build new plant to take care of present needs. Pres ent rental property too small and unsuitable for increased volume and employment. Delicatessen.— To build a new store building to serve a newly developed resi dential area. Retail farm tractor and implement dealer.— To erect sales and service building in order to retain franchise. Grain elevator and feed mill— Sale of feeds and seeds to farmers.— To erect a new building to replace present facilities which are not very convenient from standpoint of services to customers. Municipality.— To erect agricultural-live stock exhibition building. Nursing home for aged.— To buy existing building which is suitable for needed additional space for operations. Mortuary.— To build a new mortuary in replacement of present quarters which are inadequate for needs of community. This is the only mortuary serving the area. Tourists’ hotel.— To construct 25-room motel in vacation and recreational area. Educational institution.— To finance partially construction of a library. Municipality.— For construction of needed school buildings. Committee deferred its opinion on financing for that part of program which extended beyond current fiscal year. Church.— To build a new church in replacement of present structure which is in unsafe and hazardous condition. Church.— To build a parish hall and an addition to Sunday School building. Favorable Favorable Unfavorable Unfavorable Unfavorable Favorable Favorable Unfavorable Unfavorable Favorable Favorable Unfavorable N E W PLANT O R EQUIPMENT Publisher of daily newspaper.— To purchase a printing press in replacement of outmoded press which does not take care of present requirements. Tankship owners.— To purchase oil tanker for charter to an oil company. Favorable Favorable N EW PLAN T OR EQUIPMENT (Continued) Borrower and Purpose Excavating contractor.— To purchase diesel tractor shovel to replace worn and obsolete equipment now in use. Wholesale petroleum.— To buy tractor-tanker units necessary in operations— one replacement and one additional unit. Public utility.— For improvements to its gas distribution system. Municipality.— For needed fire-fighting equipment in rapidly expanding community. Laundry.— To purchase new machinery and equipment for expansion of plant. Deferrable unless program had been started and commitments made prior to inauguration of V C R Program. Social club and recreation center.— To purchase bar and equipment together with furnishings for social room. Present facilities not adequate to demand. Opinion Favorable Favorable Favorable Favorable Unfavorable Unfavorable MODERNIZATION Farmer.— To repair and remodel farm buildings on 176-acre producing farm. Retail variety store.— For modernization and enlargement of store building. Approval based on facts that architect’s plans drawn and materials con tracted for prior to inception of V C R Program. Retail ladies ready-to-wear.— To modernize store, add new front and increase floor capacity to maintain competitive position. Gasoline service station.— For purchase and modernization of equipment and facilities of two existing gas stations. Favorable Favorable Unfavorable Unfavorable W O R K I N G CAPITAL LOANS Woodworking— Manufacturer of business fixtures and equipment.— For neces sary and normal working capital in connection with contract work in process. Metal stamping plant.— For necessary and normal working capital. Sixty-five per cent of present volume is under defense contract. Shoe manufacturer.— For necessary and normal working capital. Favorable Favorable Favorable DE B T RETIREMENT A N D REFINANCING Retail automobile dealer.— To repay existing bank loans. Manufacturer of electrical appliances.— For reduction of bank debt. Retail milk dealer.— To refinance existing indebtedness held by former owner of business. Chain variety stores.— To retire outstanding preferred stock. Favorable Favorable Unfavorable Unfavorable ACQUISITION OF EXISTING BUSINESSES Hotel operator.— To purchase building and equipment of hotel from owner who is retiring because of illhealth. Failure to effect transfer might create hard ship for community in having hotel closed. Approval based on assumption self-financing purchaser cannot be found or that seller is unable to accept a purchase-money mortgage. Trucking.— To purchase motor trucking company and equipment for expansion of present operations. Trucking business to be acquired is currently hauling foodstuffs but continued operation by present owner is assured until a sale can be made. Favorable Unfavorable (over) ACQUISITION OF E X IST IN G BUSINESSES (Continued) Borrower and Purpose Opinion Pharmacist.— To purchase business, inventory and fixtures of an existing drug store. Accountant.— To purchase an established accounting business. Unfavorable Unfavorable ACQUISITION OF S TOCKH OLDE RS’ OR PART N E R S ’ INTERESTS Individual (officer and principal stockholder— machine tool manufacturer).— To acquire one-third stock interest in company from widow of borrower’s former partner. Proceeds of this loan, used to purchase the minority interest in the company, would preserve continuity of management and avoid the minority stock interest’s getting into possibly unfriendly hands. Retail novelty store.— To buy other partner’s interest in business to become sole owner. Wholesale iron and steel.— To purchase minority shareholders’interest. Trucking company.— Family group operating company wishes to buy back 51 per cent of stock now held by outside interests. Favorable Unfavorable Unfavorable Unfavorable N E W VENTURES Retail grocer.— To stock a new store to be opened in a new and expanding com munity now lacking a grocery. Retail grocer.— To stock a new grocery store which facility appears not to be necessary in the community. Dentist.— To purchase furnishings and equipment necessary to operate a dental office. Borrower recently graduated from dental school. Retail men’s clothing.— To open new men’s clothing store. City has sufficient retailers to satisfy the demand. Retail gasoline distributor.— To equip a new self-service station. Present facilities in community are adequate. Amusement park.— For erection of plant and purchase of equipment necessary for operations. Other amusement and recreational facilities are available in area. Favorable Unfavorable Favorable Unfavorable Unfavorable Unfavorable LOANS TO FARMERS, ETC. Rancher.— To purchase and carry cattle. Farmer.— To clear 50 additional acres of land for pasturage. Farmer.— To purchase 260-acre farm for purpose of putting it into production. Farmer.— To purchase farm land for lease as an investment. Considered specu lative in character where the land is already in production and borrower desires simply to increase his holdings of real estate. Favorable Favorable Favorable Unfavorable D E V E L O P M E N T OF LAN D Individual.— To purchase acreage for housing developments in a defense area. Individual.— To purchase and develop land for sale as building lots. Municipality.— To acquire unimproved land for erection of parking facilities. Favorable Unfavorable Unfavorable O T H E R LOANS Housewife.— To buy single premium life insurance contract. To provide for purchase of discounted premium life insurance contract. Individual.— To purchase real estate for investment. Property isalready financed on a long-term basis. State Government.— For payment of bonus to veterans of World War II. Unfavorable Unfavorable Unfavorable
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