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F E D E R A L R E S E R V E BANK O F N EW YORK Fiscal Agent of the United States C ircular N o. 4 7 1 3 M arch 12, 1959 ] O F F E R IN G O F T W O S E R IE S O F T R E A S U R Y B IL L S $1,300,000,000 o f 91-D ay Bills, Additional A m ount, Series D ated D ec. 18, 1958, D ue June 18, 1959 (T o B e Issued M arch 19, 1959) $400,000,000 o f 182-D ay Bills, D ated M arch 19,1959, D ue Septem ber 17,1959 T o all In corporated Banks and Trust Companies, and Others Concerned, in the Second Federal R eserve D istrict: F ollow in g is the text o f a notice issued by the Treasury Department, released fo r publication in m orning newspapers, Thursday, M arch 12, 1959: T h e T re a su ry D epartm ent, b y this pu blic n otice, invites tenders fo r tw o series o f T reasu ry bills to the a ggregate amount o f $1,700,000,000, o r thereabouts, fo r cash and in exch ange for T re a su ry bills m aturing M a rch 19, 1959, in the am ount o f $1,600,423,000, as f o l lo w s : 91-day bills,1 (to m aturity date) fo r $1,300,000,000, o r there abouts, representing an a dd ition al am ount o f bills dated D ecem ber 18, 1958, and to mature June 18, 1959, and to be freely in terchangeable therewith. 182-day b ills, fo r $400,000,000, or thereabouts, to be dated M a rch 19, 1959, and to mature Septem ber 17, 1959. T h e bills o f both series w ill be issued on a discou nt basis under com petitive and noncom petitive bid d in g as h ereinafter provided , and at m aturity their face am ount w ill be payable w ithout interest. T h e y w ill be issued in bearer form on ly, and in den om in ation s o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m aturity valu e). T en ders w ill be received at Federal R eserve Banks and B ranches up to the clo s in g hour, on e-thirty o ’ c lo ck p.m., E astern Standard time, M on day, M arch 16, 1959. T en ders w ill n ot be received at the T rea su ry D epartm ent, W ash ington. E a ch tender must be fo r an even m ultiple o f $1,000, and in the ca se o f com petitive tenders the price offered must be expressed on the basis o f 100, w ith n ot m ore than three decim als, e.g., 99.925. F raction s m ay not be used. It is urged that tenders be m ade on the printed form s and forw a rd ed in the special envelopes w h ich w ill be supplied by F ed eral R eserve Banks o r B ran ches on a pp lication therefor. O thers than banking institutions w ill n ot be perm itted to subm it tenders e xcep t fo r their ow n account. T en ders w ill be received w ith ou t 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 b y paym ent o f 2 percent o f the face am ount o f T reasu ry bills applied for, unless the tenders are accom panied by an express gu aranty o f paym ent by an in corporated bank or trust com pany. Im m ediately after the clo s in g hour, tenders w ill be opened at the F ed eral R eserve Banks and Branches, fo llo w in g w hich p u 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 su b 1 B y w a y o f e x p la n a t io n , it is d e s ir a b le t h a t a l l b i l l s m a tu r in g on th e sa m e d a te b e th e sa m e is s u e r e g a r d le s s o f w h e th e r th e y h a v e 91 d a y s o r 182 d a y s t o ru n a t tim e o f o r ig in a l is su a n c e . m itting tenders w ill be advised o f the acceptance o r rejection thereot. T h e S ecretary o f the T reasu ry exp ressly reserves the righ t to accep t o r reject any or a ll tenders, in w hole o r in part, and his a ction in any such respect shall be final. S u b ject to these reservations, n on com petitive tenders fo r $200,000 o r less fo r the a dd ition al bills dated D ecem ber 18, 1958 (91 days rem aining until m aturity date on June 18, 1959) and n on com petitive tenders fo r $50,000 or less fo r the 182-day bills w ithout stated price from any one b idder w ill be a ccepted in fu ll at the average price (in three decim a ls) o f accepted com petitive bids fo r the respective issues. Settlem ent fo r a ccepted tenders in a ccord a n ce w ith the bids must be made or com pleted at the Federal R eserve Bank on M a rch 19, 1959, in cash or other im m ediately available funds or in a like fa ce am ou nt o f T reasu ry bills m aturing M a rch 19, 1959. Cash and exch ange tenders w ill receive equal treatment. Cash adjustm ents w ill be made fo r differences betw een the par value o f m aturing bills accepted in exch a n ge and the issue price o f the new bills. T h e incom e derived from T reasu ry bills, w hether interest or gain fro m the sale o r other disp osition o f the b ills, does not have any exem ption, as such, and loss fro m the sale or other disp osition o f T rea su 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, w hether F ed eral o r State, but are exem pt fro m all ta x a tion n ow o r hereafter im posed on the principal or interest th ereof b y any State, o r any o f the possessions o f the U nited States, o r b y any lo ca l ta x in g authority. F o r purposes o f ta x a tion the am ount o f discou n t at w hich T rea su ry bills are o rigin a lly sold b y the U n ited States is con sid ered to be interest. U n der S ections 454(b) and 1221(5) o f the Internal Revenue C ode o f 1954 the am ount o f discou nt at w h ich bills issued hereunder are sold is not con sidered to a ccru e until such bills are sold, redeem ed or otherw ise disposed of, and such bills are exclu ded from con sidera tion as capital assets. A cco rd in g ly , the ow ner o f T reasu ry bills (oth er than life insurance co m panies) issued hereunder need include in his incom e tax return on ly the difference betw een the price paid fo r such bills, w hether on origin a l issue or on subsequent purchase, and the am ount actually received either upon sale o r redem ption at m aturity du rin g the taxable year fo r w hich the return is made, as ord in a ry gain o r loss. T reasu ry D epartm ent C ircu lar N o. 418, R evised, and this notice, prescribe the terms o f the T rea su ry bills and govern the con dition s o f their issue. Copies o f the circu la r m ay be obtained from any F ed eral R eserve Bank or Branch. The $1,300,000,000, or thereabouts, o f 91-day bills maturing June 18, 1959, offered by the above notice, are in addition to $400,101,000 o f bills dated and issued December 18, 1958, and maturing June 18, 1959. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, M onday, March 16, 1959, at the Securities Department o f its H ead Office and at its Buffalo Branch. Tender form s for the respective series are enclosed. Please use the appropriate form s to submit tenders and return them in an envelope marked “ Tender for Treasury Bills.” Tenders may be submitted by telegraph, subject to written confirm ation; 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 immediately available funds or in maturing Treasury bills. Results of the last offering of Treasury bills (91-day bills to be issued March 12, 1959, representing an addi tional amount of bills dated December 11, 1958, and maturing June 11, 1959; and 182-day bills dated March 12, 1959, maturing September 10, 1959) are shown on the reverse side of this circular. A lfred H ay e s , President. (o v e r ) RESULTS O F L A S T O F FE R IN G OF T R E A S U R Y BILLS (T W O SERIES ISSUED M A R C H 12, 1959) Range o f A ccepted Com petitive Bids 91-D ay Treasury Bills Maturing June 11, 1959 182-Day Treasury Bills Maturing Septem ber 10, 1959 P r ice A p p ro x . equiv. annual rate P r ice A p p ro x . equiv. annual rate .. 99.288 2.817% 98.312* 3.339% L ow . . . 99.223 3.074% 98.292 3.378% Average 99.226 3.062% 98.294 3.375% H igh a E x cep tin g tw o tenders totalin g $200,000. (98 percent o f the amount o f 182-day bills bid for at the low price was accepted.) (8 percent o f the amount o f 91-day bills bid fo r at the low price was accepted.) Total Tenders A p p lied fo r and A ccepted (B y Federal Reserve Districts) 91-Day Treasury Bills Maturing June 11, 1959 A pplied for D istrict B o s t o n ............................. ........ $ 37,300,000 182-Day Treasury Bills Maturing Septem ber 10, 1959 A ccepted $ 27,300,000 A pplied for $ 6,810,000 A ccep ted $ 6,810,000 New Y o rk ..................... ......... 1,640,608,000 879,727,000 756,299,000 295,245,000 ................. ........ 33,152,000 9,877,000 11,639,000 784,000 Cleveland ....................... ........ 47,869,000 41,199,000 29,576,000 17,565,000 R ic h m o n d ....................... ........ 12,730,000 12,730,000 768,000 768,000 Atlanta ........................... ........ 42,279,000 37,130,000 5,946,000 5,896,000 C h ic a g o ............................ ........ 222,439,000 138,257,000 114,578,000 60,099,000 Philadelphia St. Louis ....................... ......... 24,996,000 23,496,000 3,247,000 2,032,000 Minneapolis ................... ........ 18,185,000 15,025,000 4,288,000 1,088,000 Kansas C i t y ................... ......... 43,895,000 28,679,000 8,316,000 5,327,000 Dallas .............................. ........ 18,482,000 18,114,000 2,394,000 2,344,000 112,298,000 69,432,000 23,644,000 2,341,000 San Francisco ............... Totals ............. ........ $2,254,233,000 $1,300,966,000b b Includes $259,862,000 noncompetitive tenders accepted at the average price of 99.226. c Includes $28,196,000 noncompetitive tenders accepted at the average price of 98.294. $967,505,000 $400,299,000*