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FED ERA L RESERV E BANK O F N EW YORK r C ircular N o. 4 3 4 3 1 I June 21, 1956 J Fiscal Agent of the U nited States Offering o f $ 1 ,6 0 0 ,0 0 0 ,0 0 0 o f 91-D ay Treasury B ills Dated June 28, 1956 Maturing September 27, 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 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 hursday, June 21, 1956. TREA SU RY D EPA R TM EN T W ashington T he T reasury Departm ent, by this public notice, invites tenders for $1,600,000,000, o r thereabouts, of 91-day T reasury bills, for cash and in exchange for T reasury bills m aturing June 28, 1956, in the am ount of $1,600,391,000, 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 June 28, 1956, and will m ature September 27, 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). le n d e r s will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o’clock p.m., E astern D aylight Saving time, Monday, June 25, 1956. T enders will n o t be received a t 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 n o t be used. I t is urged th at tenders be made on the printed forms 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 subm it tenders except fo r 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 reasury bills applied for, unless the tenders are accompanied by an express guaranty of paym ent by an incorporated bank or tru st company. Immediately after the closing hour, tenders will be opened a t the Federal Reserve Banks and Branches, following which public announcem ent will be m ade 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 th e acceptance or rejection thereof. T h e S ecretary of the T reasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and his action in any such respect shall be final. Subject to these reservations, noncom petitive tenders for $200,000 or less w ithout stated price from any one bidder will be accepted in full at the average price (in three decimals) 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 June 28, 1956, in cash o r other immediately available funds or in a like face am ount of T reasury bills m aturing June 28, 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 th e new bills. T h e income derived from T reasury bills, w hether interest o r gain from the sale or oth er 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 tre a t ment, as such, under the Internal Revenue Code of 1954. T he bills are subject to estate, inheritance, gift or other excise taxes, w hether Federal o r State, but are exem pt from all taxation now or hereafter imposed 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 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. U nder Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954 the am ount of discount a t 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. Accordingly, the owner of T reasu ry 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 o r redem ption a t m aturity during the taxable year for which the return is made, as ordinary gam or loss. T reasury D epartm ent Circular No. 418, Revised, and this notice, prescribe the term s of the T reasury bills and govern the conditions of their issue. Copies of the circular m ay be obtained from any Federal Reserve Bank o r Branch. T his Bank will receive tenders up to 1 :30 p.m., E astern Daylight Saving time, Monday, June 25, 1956, at the Securities 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 it in an envelope marked “Tender for T reasury Bills.” Tenders may be submitted by telegraph, sub ject to written confirmation; they may not be submitted by telephone. Paym 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. W i l l i a m F. T r e i b e r , First Vice President. R esu lts o f la st offerin g o f T r ea su ry bills (9 1 -d a y b ills d a ted Ju n e 2 1 , 1 9 5 6 , m a tu r in g Septem ber T otal applied for ...$2,684,698,000 T otal accepted ........ $1,600,639,000 (includes $288,876,000 entered on a noncompetitive basis and accepted in full a t the average price show n below) Average price . . . 99.386 Equivalent rate of discount approx. 2.430% per annum . . V ., Range of accepted competitive bids: H igh ................ 99.391 Equivalent rate of discount approx. 2.409% per annum L o w .................. 99.384 Equivalent rate of discount approx. 2.437% per annum (16 percent of the amount bid for at the low price was accepted) Federal Reserve Total ------ District-----Applied for Boston $ 26,390,000 New Y ork .............. . . . . 1,829,662,000 Philadelphia ....... 30,725,000 Cleveland .......... 98,029,000 Richmond ......... 22,961,000 A tlanta 55,894,000 Chicago 373,051,000 St. Louis 36,052,000 Minneapolis ....... 35,610,000 Dal'lasS F ra n c is c o ....... !! . ! T otal .............. 43 48l’000 $ 8«$0 $2,684,698,000 20, 1956) Total Accepted $ 25,870,000 926,874,000 12,615,000 90,614,000 21,241,000 38,276,000 294,762,000 33,752,000 32,228,000 76 7 lf ’nm $1,600,639,000 ( over ) 35 O 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 b asis, fill in r a te p er 100 a n d m a tu r ity v a lu e in p aragrap h h ead ed " C om p etitiv e B id .” I f y o u d esire to b id on a n o n c o m p e titiv e b asis, 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 ragraphs on one fo r m . A separate ten d e r m u st be u sed fo 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 a n d th e ir cu sto m ers’ a cc o u n ts m a y su b m it one ten d er fo r th e t o ta l a m o u n t b id a t ea c h 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 fo r h is a c c o u n t, a n 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. No........................... TENDER FOR 9 1 -DAY TREASURY BILLS D a te d J u n e 2 8 , 19 5 6 To F ed er a l R eserv e B a n k of N ew M a tu rin g Septem ber 2 7 , 1956 Y Dated at ork, 1956 Fiscal Agent of the United States. C O M P E 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 T reasury Departm ent C ircular No. 418, Revised, and to the provisions o f the public notice on June 21, 1956, as issued by the T reasury Department, the Pursuant to the provisions of Treasury Departm ent Circular No. 418, Revised, and to the provisions of the public notice on June 21, 1956, as issued by the T reasury Department, the undersigned offers a noncompetitive tender undersigned o f f e r s .........................................* fo r a (R ate per 100) total amount of $ ............ .............. :----- (m aturity value) of the T reasury bills therein described, or fo r any less am ount 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 ................... $____________________ □ □ □ By cash or other immediately available fluids By cash or other immediately available funds *Price m ust be expressed on the basis o f 100, with not more tlum three decimal places, fo r example, 99.925. T he T reasury bills fo r which tender is hereby made are to be dated June 28, 1956, and are to m ature on September 27, 1956. This tender will be inserted in special envelope marked “Tender fo r Treasury Bills.” N am e of Bidder ........................................... (P lease print) By. (Title) (Official signature required) Street A ddress (City, Town or V illage, P . O. N o., 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 Customer) (C ity, Town or V illage, P. O. N o., and State) IM PO R TA N T IN STR U C TIO 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 of $1,000 (m aturity value). 2. If the 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, who 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 com panies and from respon sible and recognized dealers in investm ent securities. T enders 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 o r 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 r e d it th r o u g h T r e a su ry T a x a n d Loan A c c o u n t w ill n o t be p e rm itte d . T E N T B — 1356-a (OVER) FEDERAL RESERVE BANK OF NEW Y O R K Ju ly 2, 1956 To all Banking Institutions in the Second Federal Reserve District: We are pleased to announce th at the S tate Bank of Suffolk, Bay Shore, New York, lias become a member of the Federal Reserve System effective today. W illia m F. T r e ib e r , F irst Vice President.