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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States r L C ir c u la r N o. 4 5 9 5 ~I A p r il 24, 1958 J Offering o f $1,700,000,000 of 91-Day Treasury Bills Dated M ay 1, 1958 Maturing July 31, 1958 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 h u rsd ay, A p ril 24, 1958. TREASU RY DEPARTM ENT Washington T h e T reasu ry D epartm ent, by this pu blic n otice, invites tenders fo r $1,700,000,000, or thereabouts, o f 91-d a y T reasu ry bills, fo r cash and in exch ange for T reasu ry bills m aturing M ay 1, 1958, in the am ount o f $1,700,563,000, to be issued on a discou nt basis under com petitive and noncom petitive b idd ing as h ereinafter provided. T h e bills o f this series w ill be dated M ay 1, 1958, and w ill mature July 31, 1958, when the face am ount w ill be payable w ithout interest. T h ey w ill be issued in bearer form on ly, and in denom inations o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m atu rity v a lu e ). T en ders w ill be received at Federal R eserve Banks and Branches up to the clo s in g hour, on e-thirty o ’ clo ck p.m., Eastern Daylight Saving time, M on day, A p r il 28, 1958. T en ders w ill not be received at the T reasu ry Departm ent, W ash ington. E ach tender must be fo r an even m ultiple o f $1,000, and in the case o f com petitive tenders the price offered must be exp ressed on the basis of 100, with not m ore than three decim als, e.g., 99.925. F raction s m ay n ot be used. It is urged that tenders be made on the printed form s and forw arded in the special envelopes w hich will be supplied by Federal R eserve Banks o r Branches on application therefor. O thers than banking institutions w ill not be permitted to subm it tenders excep t fo r their ow n account. T en ders w ill be received w ithout deposit from in corporated banks and trust com panies and from responsible and recogn ized dealers in in vestm ent securities. T en ders from others must be accom panied by paym ent o f 2 percent o f the fa ce am ount o f T reasu ry bills applied for, unless the tenders are accom panied by an express guaranty o f paym ent by an in corporated bank or trust com pany. Im m ediately after the closin g hour, tenders w ill be opened at the Federal R eserve Banks and B ranches, fo llo w in g w hich pu blic announcem ent w ill be made by the T reasu ry Department o f the am ount and price range o f accepted bids. T h ose subm itting 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 o r reject any or all tenders, in w hole or in part, and his action in any such respect shall be final. S u b ject to these reservations, n oncom petitive tenders for $200,000 or less without stated price from any one bidder w ill be accepted in full at the average price (in three d ecim a ls) o f accepted com petitive bids. Settlem ent fo r accepted tenders in a ccord a n ce w ith the bids must be made or com pleted at the F ed eral Reserve Bank on M a y 1, 1958, in cash or other im m ediately available funds o r in a like fa ce amount o f T reasu ry bills m aturing M ay 1, 1958. Cash and exch ange tenders w ill receive equal treatment. Cash adjustm ents w ill be made fo r differences between the par value o f m aturing bills a ccepted in exchange and the issue price o f the new bills. T h e incom e derived from Treasu ry bills, whether interest or gain from the sale o r other disp osition o f the bills, does not have any exem ption, as such, and loss from the sale or other disposition o f T reasu ry bills does not have any special treat ment, as such, under the Internal Revenue C ode o f 1954. T he bills are subject to estate, inheritance, g ift o r oth er excise taxes, whether Federal o r State, but are exem pt from all taxation now or hereafter im posed on the principal or interest th ereof by any State, o r any o f the possessions o f the U nited States, or by any loca l taxing authority. F o r purposes o f taxation the am ount o f discou nt at w hich Treasu ry bills are origin a lly sold by the United States is con sidered to be interest. U nder Sections 454(b) and 1221(5) o f the Internal Revenue C ode o f 1954 the am ount o f discou nt at w hich bills issued hereunder are so ld is not considered to a ccru e until such bills are sold, redeem ed o r otherw ise disposed o f, and such bills are exclu d ed from con sidera tion as capital assets. A ccord in g ly , the ow ner o f T reasu ry bills (oth er than life insurance com pa n ies) issued hereunder need include in his incom e ta x return on ly the difference betw een the price paid for such bills, whether on origin a l issue o r on subsequent purchase, and the am ount actu ally received either upon sale or redem ption at m aturity during the taxable year f o r w hich the return is made, as ord in a ry gain or loss. T reasu ry Departm ent C ircu la r N o. 418, Revised, and this notice, prescribe the terms o f the T reasu ry bills and govern the con dition s o f their issue. C opies o f the circu la r m ay be obtained from any F ed eral R eserve Bank or Branch. This Bank will receive tenders up to 1 :30 p.m., Eastern Daylight Saving time, Monday, April 28, 1958, at the Secur ities Department o f 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 Treasury Bills.” Tenders may be submitted by tele graph, subject to written confirmation; they may not be submitted by telephone. Payment for the Treasury bills cannot be made by credit through the Treasury Tax and Loan Account. Settlement must be made in cash or other imme diately available funds or in maturing Treasury bills. A l f r e d H a y e s , President. Results o f last offering o f Treasury bills (91-day bills dated April 24, 1958, maturing July 24, 1958) T ota l applied f o r ......... $2,594,600,000 T o ta l a c c e p t e d ............. $1,700,465,000 (in clu des $308,495,000 entered on a noncom petitive basis and accepted in full at the a ver age price show n b elow ) R ange o f accepted com petitive b id s : (excep tin g one tender o f $300,000) H i g h ....................... 99.744 Equivalent rate o f discount approx. 1.013% per annum L o w ......................... 99.729 Equivalent rate o f discount approx. 1.072% per annum A v e r a g e ................. 99.733 E quivalent rate o f discount approx. 1.055% per annum (15 percent o f the amount bid fo r at the low price w as accepted) Federal R eserve Distrir t Total Accepted T otal Applied for .. N ew Y o rk ................. Philadelphia ............. C leveland ................... R ich m on d ................... C h icago ....................... St. L ou is ................... M inneapolis ............... K ansas City ............. D allas ......................... San F ra n cisco ......... T otai........................ . . $ 42,039,000 1,850,050.000 34,534,000 56,661.000 13.692,000 44.229,000 277,764,000 31.361,000 35,000,000 56,294,0U0 24,546,000 128,430,000 $2,594,600,000 $ 42,039,000 1,056,665,000 29,334,000 51,611,001) 13,692,000 43,929,000 213,714,000 31,361,000 34,900,000 44,194,000 24,446,000 114,580,000 $1,700,465,000 ( over) Tenders will be received up to 1:30 p.m., Eastern Daylight Saving time, Monday, April 28, 1958. No TENDER FOR 91-DAY TREASURY BILLS Dated May 1, 1958 To Maturing July 31, 1958 Dated a t ...................................................... F ed eral R eserve B a n k o f N e w Y o r k , .......................................................... 1 9 ... Fiscal Agent of the United States. Pursuant to the provisions of Treasury Department Circular No. 418, Revised, and to the provisions of the public notice issued by the Treasury Department and printed on the reverse side of this tender, the under signed hereby offers to purchase the above described Treasury bills in the amount indicated below, and agrees to make payment therefor at your Bank on or before the issue date at the price indicated below: COMPETITIVE TENDER [ D o not fill in both Com petitive and N oncom petitive tenders on one form $ ........................................................ (maturity value), or any lesser amount that may be awarded. P r i c e :.................................. per 100. (P r ic e m ust be exp ressed w ith not m ore than three decimal places, f o r exam ple, 99.925) NONCOMPETITIVE TENDER $ ........................................................ (maturity value). (N o t to ex cecd $200,000 f o r one bidder through all sources) At the average price of accepted competitive bids. Subject to allotment, please issue, deliver, and accept payment for the bills as indicated below: Pieces Denomination $ M aturity value 1,000 5,000 10,000 □ 1. D eliver over the counter to the undersigned □ 2. □ 3. H old in safekeeping ( f o r a c count o f member bank on ly) □ 4. Allotm ent attached) □ 5. 100,000 500,000 Ship to the undersigned transfer (see list Special instructions: 1,000,000 (N o changes in delivery instructions will be accepted) Totals Paym ent w ill be made as fo llo w s : □ B y charge to our reserve account □ By cash or other immediately avail able funds □ By surrender o f $ ........................... (m aturity value) o f maturing T reasu ry bills. Pay cash adjust ment, if any— □ B y check □ B y credit to our reserve account (P aym en t cannot be made through T reasury T a x and Loan A cco u n t) The undersigned (if a bank or trust company) hereby certifies that the Treasury bills which you are hereby instructed to dispose o f in the manner indicated in item 3 above are solely owned by the undersigned. N a m e o f su b scrib er Insert this tender in special envelope marked, “ T ender _ for Treasury Bills” _ (Please print) By ................................. T i t l e ............................... A d d re ss By (Official signature(s) required) ...................... . T itle ........... ........................................................................................................ (B anks submitting tenders fo r customer account must indicate name on line below, or attach a list) (Name of customer) (Address) IN S T R U C T IO N S : 1. N o ten der fo r less than $1,000 w ill be con sid e re d , and each ten der m u st be fo r an even m u ltiple o f $1,000 (m a tu rity va lu e). 2. O th e rs than b a n k in g in stitu tions w ill n o t be perm itted to subm it ten ders e x ce p t fo r their o w n a cco u n t. B anks su b m ittin g ten ders fo r c u s to m e r a cco u n t m a y co n so lid a te com p etitive tenders at the same price and m a y co n so lid a te n o n co m p e titiv e ten d ers, p r ov id ed a list is a ttached s h o w in g the nam e o f each bidd er, the a m ou n t b id fo r his a ccou n t, and m e th o d o f paym ent. F o r m s fo r this p u rp ose w ill be fu rn ish ed on request. 3. I f th e p e rso n m a k in g the ten der is a c o rp o ra tio n , the ten der sh ou ld be sign ed b y an officer o f th e co r p o r a tio n a u th o rize d to m a k e the ten der, and the sig n in g o f th e ten der b y an officer o f th e co r p o r a tio n w ill be co n stru e d as a represen tation b y him that he has been s o au th orized . I f the ten der is m ade b y a partnersh ip, it s h ou ld be sig n e d b y a m e m b e r o f the firm , w h o s h ou ld sign in the fo r m “ ............................................................................................... , a cop a rtn ersh ip , b y ................................................................................................................... . a m e m b e r o f th e firm .” 4. T e n d e r s w ill be receiv ed w ith ou t d e p o s it fr o m in co rp o ra te d banks and trust co m p a n ie s and fro m r e s p o n sib le and re c o g n iz e d dealers in in vestm ent securities. T en d ers fr o m o th ers m u st b e a cco m p a n ie d b y p a y m e n t o f 2 p ercen t o f the fa ce a m ou n t o f T r e a s u ry bills a p p lied fo r, u nless the ten ders are a ccom p a n ied b y an exp ress gu a ra n ty o f paym ent b y an in co rp o ra te d ba n k o r trust com p a n y . 5. I f th e la n g u a ge o f this ten der is ch a n g ed in a n y resp ect, w hich, in the o p in io n o f the S ecreta ry o f the T re a su ry , is m aterial, the ten der m a y b e disreg arded. ( over) a * F e d e r a l R e s e r v e Ba n k NEW YORK RECTOR 45, of 4 s y r N ew Yo r k N.Y. 2 - 5 7 0 0 April 22, 1958 To Each State Member Bank in the Second Federal Reserve District: Effective April 1 8 , 1958, the Comptroller of the Currency has amended section 2 of his regulation regarding national hank loans secured b y direct obligations of the United States to read as follows: The obligations to any national banking association in the form of notes of any person, copartnership, association, or corporation, secured b y not less than a like amount of direct obligations of the United States which will mature in not exceed ing eighteen months from the date such obligations to such national banking association are entered into shall not be subject to any limitation based upon the capital and surplus of the association. The regulation as it read prior to this amendment limited similarly secured loans by any national banking association to any one borrower "to 75 per centum of the capital and surplus of such association in addition to the 10 per centum of such capital and surplus prescribed in the opening paragraph of said section 5200 and the 15 per centum limitation referred to in p a r a graph (8 ) of section 5200." Section 11 (m) of the Federal Reserve Act makes the Comptroller's regula tion applicable to State member banks. We are therefore enclosing a copy of the Comptroller's amended regulation for your use. ALFRED HAYES, Presi d e n t . Enc. TREASURY COM PTROLLER DEPARTMENT OF THE CURRENCY W A SH IN G T O N REGULATION REGARDING NATIONAL BANK LOANS SECURED BY DIRECT OBLIGATIONS OF THE UNITED STATES Section 5200 U.S.R.S. (12 U.S.C. 84) provides as follows: “ Sec. 5200. The total obligations to any national banking association of any person, copartnership, association, or corporation shall at no time exceed 10 per centum of the amount of the capital stock of such association actually paid in and unimpaired and 10 per centum of its unimpaired surplus fund. The term ‘obligations’ shall mean the direct liability of the maker or acceptor of paper discounted with or sold to such association and the liability of the indorser, drawer, or guarantor who obtains a loan from or discounts paper with or sells paper under his guaranty to such association and shall include in the case of obligations of a copartnership or association the obligations of the several members thereof and shall include in the case of obligations of a corporation all obligations of all subsidiaries thereof in which such corporation owns or controls a majority interest. Such limitation of 10 per centum shall be subject to the following exceptions: * * * * * “ (8 ) Obligations of any person, copartnership, association, or corporation in the form of notes secured by not less than a like amount of bonds or notes of the United States issued since April 24, 1917, or certificates of indebtedness of the United States, Treasury bills of the United States, or obligations fully guaranteed both as to principal and interest by the United States, shall (except to the extent permitted by rules and regulations prescribed by the Comptroller of the Currency, with the approval of the Secretary of the Treasury) be subject under this section to a limitation of 15 per centum of such capital and surplus in addition to such 10 per centum of such capital and surplus.” SECTION 1 — SCOPE AND APPLICATION. (a) This regulation is issued by the Comptroller of the Currency with the approval of the Sec retary of the Treasury under authority of paragraph (8 ) of section 5200 of the Revised Statutes, as amended (12 U.S.C. 84), and section 321 (b) of the Act of August 23, 1935 (49 Stat. 713); (b) This regulation applies to loans made by national banks secured by direct obligations of the United States which will mature in not exceeding 18 months. SECTION 2 — GENERAL AUTHORIZATION. The obligations to any national banking association in the form of notes of any person, copartnership, association, or corporation, secured by not less than a like amount of direct obligations of the United States which will mature in not exceeding eighteen months from the date such obligations to such national banking association are entered into shall not be sub ject to any limitation based upon the capital and surplus of the association. SECTION 3 — EFFECTIVE DATE. ’This regulation is effective April 18, 1958 R A Y M. G ID N EY Comptroller of the Currency Approved: RO B E R T B. ANDERSON Secretary of the Treasury
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