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F E D E R A L R E SE R V E BANK O F N EW YORK Fiscal Agent of the United States [ C ir c u l a r N o. 4 7 1 4 1 I M a rch 19.1959 J O F FE R IN G OF T W O SERIES O F T R E A S U R Y BILLS §1,300,000,000 o f 91-Day Bills, Additional Am ount, Series Dated D ec. 26, 1958, Due June 25, 1959 (T o B e Issued M arch 26, 1959) $400,000,000 o f 182-Day Bills, Dated M arch 26, 1959, Due September 24, 1959 To all Incorporated Banks and Trusts Companies, and O thers Concerned, in the Second Federal R eserv e D istrict: Following is the text o f a notice issued by the Treasury Department, released for publication in morning newspapers, ihursday, March 19, 1959: T h e Treasury Department, by this public notice, invites tenders for tw o series o f Treasury bills to the aggregate amount o f $ 1 ,/00,000,000, o r thereabouts, f o r cash and in exchange for Treasury bills maturing M arch 26, 1959, in the amount o f $i,o(K»,7o9,000, as fo llo w s : 91-day bnls,1 ( t o maturity date) fo r $1,300,000,000, or there abouts, representing an additional amount o f bills dated Decem ber 26, 1958, and to mature June 25, 1959, and to be freely interchangeable therewith. 182-day bills, io r $400,000,000, or thereabouts, to be dated M arch 26, 1959, and to mature September 24, 1959. T he bills o f both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. They w ill be issued in bearer form only, and in denominations o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m aturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o'clock p.m., Eastern Standard time, M onday, M arch 23, 1959. Tenders will not be received at the Treasury Department, W ashington. Each tender must be fo r an even multiple o f $1,000, and in the case o f competitive tenders the price offered must be expressed on the basis o f 100, with not more than three decimals, e.g., 99.925. Fractions m ay not be used. It is urged that tenders be made on the printed form s and forw arded in the special envelopes which will be supplied by Federal Reserve Banks o r Branches on application therefor. Others than banking institutions will not be permitted to submit tenders except fo r their ow n account. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in in vestment securities. Tenders from others must be accompanied by payment o f 2 percent o f the face amount o f Treasury bills applied for, unless the tenders are accompanied by an express guaranty o f payment by an incorporated bank or trust company. Immediately after the closing hour, tenders w ill be opened at the Federal Reserve Banks and Branches, follow in g which public announcement will be made by the Treasury Department o f the amount and price range o f accepted bids. Those sub mitting tenders w ill be advised o f the acceptance o r rejection 1 B y w a y o f e x p l a n a t i o n , it i s d e s i r a b l e t h a t a l l b i l l s m a t u r i n g o n t h e s a m e d a t e b e t h e s a m e i s s u e r e g a r d l e s s o f w h e t h r t h e y h a v e 91 d a y s o r 18 2 d a y s t o r u n a t t im e o f o r i g i n a l is s u a n c e . thereof. T he Secretary o f the Treasury expressly reserves the right to accept or reject any o r all tenders, in w hole or in part, and his action in any such respect shall be final. Subject to these reservations, noncompetitive tenders fo r $200,000 o r less for the additional bills dated Decem ber 26, 1958 (91 days re maining until maturity date on June 25, 1959) and noncom petitive tenders for $50,000 or less io r the 182-day bills without stated price from any one bidder will be accepted in fu ll at the average price (in three decimals) o f accepted competitive bids io r the respective issues. Settlement fo r accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on M arch 26, 1959, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing M arch 26, 1959. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. The income derived from Treasury bills, whether interest or gain from the sale or other disposition o f the bills, does not have any exemption, as such, and loss from the sale or other disposition o f Treasury bills does not have any special treat ment, as such, under the Internal Revenue Code o f 1954. The bills are subject to estate, inheritance, g ift or other excise taxes, whether Federal or State, but are exem pt from all taxa tion now or hereafter imposed on the principal or interest thereof by any State, or any o f the possessions o f the United States, o r by any local taxing authority. F or purposes o f taxa tion the amount o f discount at which Treasury bills are originally sold by the United States is considered to be interest. Under Sections 4 5 4 (b ) and 1221(5) o f the Internal Revenue Code o f 1954 the amount o f 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 o f Treasury bills (other than life insurance com panies) issued hereunder need include in his income ta x return only the difference between the price paid fo r such bills, whether on original issue or on subsequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year fo r which the return is made, as ordinary gain o r loss. Treasury Department Circular N o. 418, Revised, and this notice, prescribe the terms o f the Treasury bills and govern the conditions o f their issue. Copies o f the circular may be obtained from any Federal Reserve Bank or Branch. The $1,300,000,000. or thereabouts, o f 91-day bills maturing June 25, 1959, offered by the above notice, are in addition to $399,593,000 o f bills dated and issued December 26, 1958, and maturing June 25, 1959. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, March 23, 1959, at the Securities Department o f its Head Office and at its Buffalo Branch. Tender forms for the respective series are enclosed. Please use the appropriate forms to submit tenders and return them in an envelope marked “ Tender for Treasury Bills.” Tenders may be submitted by telegraph, subject to written confirmation; they may not be submitted bv telephone. Payment fo r the Treasury bills cannot be made by credit through the Treasury T ax 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 19, 1959, representing an addi tional amount of bills dated December 18. 1958, and maturing June 18, 1959; and 182-day bills dated March 19, 1959, maturing September 17, 1959) are shown on the reverse side of this circular. A lfred H a y e s , President. (o v e r ) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES ISSUED MARCH 19, 1959) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing June 18, 1959 ■ 182-D ay Treasury B illy ' ' ' Maturing September 17, 1959 Price Approx. equiv. annual rate Price Approx. equiv. annual rate H ig h ....... ................................ 99.308 2.738% 98.464 3.038% L ow ...... ................................. 99.297 2.781% 98.445 3.076% Average ................................. 99.302 2.763% 98.454 3.058% (6 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (44 percent o f the amount o f 182-day bills bid fo r at the low price was accepted.) T ota l Tenders A pplied for and A ccepted (B y Federal R eserve Districts) 91-Day Treasury Bills Maturing June 18, 1959 Applied for D istrict Boston .................. ................. $ 26,654,000 Accepted $ 182-Day Treasury Bills Maturing Septem ber 17, 1959 Applied for Accepted 16,496,000 $ 13,114,000 $ 12,359,000 New Y o r k ............ ................ 1,374,910,000 767,488,000 521,667,000 225,404,000 Philadelphia ........ ................ 30,730,000 15,230,000 9,051,000 3,751,000 Cleveland.............. ................ 56,256,000 49,875,000 17,391,000 11,941,000 Richmond ............ ................ 12,612,000 12,412,000 1,102,000 602,000 Atlanta ................ ................ 41,151,000 34,449,000 3,603,000 3,203,000 Chicago ................ ................ 234,608,000 179,123,000 95,639,000 84,437,000 St. Louis .............. ................ 42,177,000 41,472,000 6,011,000 3,761,000 M inneapolis.......... ................ 19,592,000 17,602,000 5,126,000 2,626,000 Kansas City ........ ................ 50,591,000 44,591,000 5,413,000 4,643,000 D a llas..................... ................ 38,485,000 34,059,000 1,905,000 1,755,000 San F ra n cisco..... ................ 91,674,000 87,794,000 46,984,000 45,579,000 Totals .... ................ $2,019,440,000 $1,300,591,000* a Includes $276,803,000 noncompetitive tenders accepted at the average price o f 99.302. b Includes $27,910,000 noncompetitive tenders accepted at the average price of 98.454. $727,006,000 $400,061,000b