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FED ERA L RESERV E BANK O F NEW YORK Fiscal Agent of the United States r Circular N o. 4 3 3 7 1 M ay 1 7 ,1956 J I Offering o f $ 1 ,6 0 0 ,0 0 0 ,0 0 0 of 91-D ay Treasury B ills Dated May 24, 1956 Maturing August 23, 1956 To all Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice published to d ay : FOR RELEASE, MORNING NEWSPAPERS, TREASURY DEPARTMENT T hursday, May 17, 1956. W ashington T he T reasury D epartm ent, by this public notice, invites tenders for $1,600,000,000, or thereabouts, of 91-day T reasury bills, for cash and in exchange for T reasury bills m aturing May 24, 1956, in the am ount of $1,601,349,000, to be issued on a discount basis under competitive and noncom petitive bidding as hereinafter provided. T he bills of this series will be dated May 24, 1956, and will m ature A ugust 23, 1956, when the face am ount will be payable w ithout interest. T hey will be issued in bearer form only, and in denom inations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m aturity value). T enders will be received a t Federal Reserve Banks and Branches up to the closing hour, one-thirty o’clock p.m., E astern D aylight Saving time, M onday, May 21, 1956. T enders will not be received at the T reasury D epartm ent, W ashington. Each tender m ust be for an even m ultiple of $1,000, and in the case of competitive tenders the price offered m ust be expressed on the basis of 100, w ith not m ore than three decimals, e. g., 99.925. Fractions may not be used. I t is urged th at tenders be made on the printed form s and forw arded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. O thers than banking institutions will not be perm itted to submit tenders except for their own account. T enders will be received w ithout deposit from incorporated banks and tru st companies and from responsible and recognized dealers in invest m ent securities. T enders from others m ust be accompanied by paym ent of 2 percent of the face am ount of T reasu ry bills applied for, unless the tenders are accompanied by an express guaranty of paym ent by an incorporated bank or tru st company. Im m ediately after the closing hour, tenders will be opened a t the Federal Reserve Banks and Branches, following which public announcem ent will be made by the T reasury D epartm ent of the am ount and price range of accepted bids. Those subm itting tenders will be advised of the acceptance or rejection thereof. T h e Secretary of the T reasury expressly reserves the rig h t to accept or reject any o r all tenders, in whole or in part, and his action in any such respect shall be final. Subject to these reservations, noncompetitive tenders for $200,000 o r less w ithout stated price from any one bidder will be accepted in full a t the average price (in three decim als) of accepted competitive bids. Settlem ent for accepted tenders in accordance with the bids m ust be made or completed at the Federal Reserve Bank on May 24, 1956, in cash or other immediately available funds or in a like face am ount of T reasury bills m aturing May 24, 1956. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents will be made for differences between the par value of m aturing bills accepted in exchange and the issue price of the new bills. T he income derived from T reasury bills, w hether interest or gain from the sale or other disposition of the bills, does not have any exemption, as such, and loss from the sale or other disposition of T reasury bills does n ot have any special treat ment, as such, under the Internal Revenue Code of 1954. T h e bills are subject to estate, inheritance, gift o r other excise taxes, w hether Federal o r State, but are exempt from all taxation now or hereafter imposed on th e principal or interest thereof by any State, or any of the possessions of the U nited States, or by any local taxing authority. F o r purposes of taxation the am ount of discount a t which T reasury bills are originally sold by the U nited States is considered to be interest. Under Sections 454(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 otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the ow ner of T reasury bills (other than life insurance com panies) issued hereunder need include in his income tax return only 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 a t m aturity during the taxable year for which the return is made, as ordinary gain or loss. T reasury D epartm ent Circular No. 418, Revised, and this notice, prescribe the term s of the T reasu ry bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank o r Branch. T his Bank will receive tenders up to 1 :30 p.m., Eastern Daylight Saving time, Monday, May 21, 1956, at the Securities Department of its H ead Office and at its Buffalo Branch. Please use the form on the reverse side of this circular to submit a tender, and return it in an envelope marked “Tender for T reasury Bills.” Tenders may be submitted by telegraph, sub ject to written confirm ation; they may not be submitted by telephone. P aym ent fo r the Treasury bills cannot be made by credit through the Treasury T a x and Loan Account. Settlem ent m ust be made in cash or other immediately available fu n d s or in maturing Treasury bills. A l l a n S p r o u l , President. R e s u lts o f la s t o ffe rin g o f T r e a s u r y b ills ( 9 1 - d a y b ills d a te d M ay 1 7 , 1 9 5 6 , m a tu r in g A u g u s t 16, 1 9 5 6 ) Total applied for ...$2,557,875,000 T otal accepted ........ $1,600,563,000 (includes $230,845,000 entered on a noncom petitive basis and accepted in full a t the average price shown below) A verage price . . 99.315+ Equivalent rate of discount approx. 2.708% per annum Range of accepted competitive bids: (excepting six tenders totaling $2,285,000) Equivalent rate of discount H igh ................ 99.330 approx. 2.651% per annum Equivalent rate of discount Low .................. 99.312 approx. 2.722% per annum (6 percent of the am ount bid for at the low price was accepted) Federal Reserve District Boston ...................... New Y ork ................ Philadelphia ............ Cleveland .................. Richmond ................ A tlanta ...................... Chicago .................... St. L o u is .................... Minneapolis .............. Kansas City ............ Dallas ........................ San F ra n c is c o .......... Total Total Applied fo r $ 31,002,000 1,826,301,000 34.582.000 90.074.000 16.713.000 34.648.000 258.846.000 19.120.000 24.345.000 49.332.000 28.049.000 144.863.000 Total Accepted $ 20,532,000 1,007,609,000 17.702.000 85.074.000 16.713.000 33.628.000 191.086.000 19.120.000 24.345.000 41.392.000 19.049.000 124.313.000 $2,557,875,000 $1,600,563,000 ( over ) 35 J IM P O R T A N T — I f y o u d esire to b id on a c o m p e titiv e basis, fill in r a te p er 100 an d m a tu r ity v a lu e in p aragrap h h ead ed " C o m p etitiv e B id .” I f y o u d esire to bid o n a n o n c o m p e titiv e basis, fill in o n ly th e m a tu r ity v a lu e in p a ra g ra p h h ead ed " N o n c o m p e titiv e B id.” D O N O T fill in b o th p a ra g ra p h s on one fo r m . A separate ten d er m u st be u sed f o r ea c h b id , e x c e p t th a t b an k s su b m ittin g bids on a co m p etitiv e basis fo r th e ir o w n an d th e ir custom ers* a cc o u n ts m a y su b m it one ten d er fo r th e to ta l a m o u n t b id a t each p ric e, p ro v id ed a lis t is a tta c h e d sh o w in g th e nam e o f each b id d er, th e a m o u n t b id f o r h is a c c o u n t, an d m eth o d o f p a y m en t. Form s f o r th is p urpose w ill be fu r n ish e d u p on req u est. N o .................................. TENDER FOR 9 1 -DAY TREASURY BILLS M atu rin g A u g u s t 2 3 , 1956 D a te d M ay 2 4 , 1956 To F ederal R eserv e B a n k of N ew Dated at Y ork, 1956 Fiscal Agent of the United States. C O M PE T IT IV E B ID N O N C O M P E T IT IV E B ID P ursuant to the provisions of Treasury Department Circular No. 418, Revised, and to the provisions of the public notice on May 17, 1956, as issued by the T reasury Department, the Pursuant to the provisions of Treasury Department Circular No. 418, Revised, and to the provisions of the public notice on M ay 17, 1956, as issued by the T reasury Department, the undersigned offers a noncompetitive tender undersigned o f f e r s .........................................* for a (R a te p er 100) total amount of $ ..................................... (m aturity value) of the T reasury bills therein described, or for any less amount that may be awarded, settle ment therefor to be made at your Bank, on the date stated in the public notice, as indicated below: for a total amount of $ ............................................... (N o t to exceed $200,000) By surrender of m aturing T reasury bills (m aturity value) of the T reasury bills therein described, at the average price (in three decimals) 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 m aturing T reasury bills amounting to ................... $------------------------------ amounting to ................... $_____________________ □ 0 □ By cash o r other immediately available funds By cash or other immediately available funds *Price m ust be expressed on the basis o f 100, w ith not more than three decimal places, fo r example, 99.925. The T reasury bills fo r which tender is hereby made are to be dated May 24, 1956, and are to m ature on A ugust 23, 1956. This tender will be inserted in special envelope marked “Tender fo r Treasury Bills.” N am e of Bidder .............................................................................................................................. (P lease p rint) By. (Official signature required) (T itle) Street A ddress (C ity, Tow n or V illage, P . O . N o., and S tate) If this tender is subm itted by a bank for the account of a custom er, indicate th e custom er’s nam e on line below: (N am e o f C ustom er) (C ity, Tow n or V illage, P . O . N o., a n d S tate) IM P O R T A N T IN S T R U C T IO N S : 1. N o tender for less than $1,000 will be considered, and each tender m ust be for an even multiple of $1,000 (m aturity value). 2. If th e person m aking the tender is a corporation, the tender should be signed by an officer of the corpora tion authorized to m ake the tender, and the signing of the tender by an officer of the corporation will be construed as a representation by him th at he has been so authorized. If the tender is made by a partnership, it should be signed by a m em ber of the firm, w ho should sign in the form “ ........................................................................................... , a copartnership, by ............................................................................................................................. a m em ber of the firm.” 3. T enders will be received w ithout deposit from incorporated banks and tru st companies and from respon sible and recognized dealers in investm ent securities. Tenders from others m ust be accompanied 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 tru st company. 4. If the language of this tender is changed in any respect, which, in the opinion of the Secretary of the T reasury, is material, the tender may be disregarded. P a y m e n t b y c re d it th r o u g h T r e a su ry T a x and Loan A c c o u n t w ill n o t be p e rm itte d . T E N T B — 1351-a (OVER)
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