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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 r< ir c u la r N o. 4 7 1 8 M a rch 26,1959 L O FFER IN G OF T W O SERIES O F T R E A S U R Y BILLS $1,200,000,000 o f 91-Day Bills, Additional Am ount, Series Dated Jan. 2, 1959, Due July 2, 1959 (T o B e Issued A p ril 2, 1959) $400,000,000 o f 182-Day Bills, Dated A p ril 2, 1959, Due O ctober 1, 1959 To all Incorporated Banks and Trust Cotnpanies, and Others Concerned, in the Second Federal R eserve D istrict: Following is the text o f a notice issued by the Treasury Department, released for publication in morning newspapers, Thursday, March 26, 1959: T he Treasury Department, by this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o i $ 1 ,6 0 0 ,0 0 0 ,0 0 0 , o r thereabouts, fo r cash and in exchange for T reasury bills maturing A pril 2, 1959, in the amount o f $1,600,275,000, as fo llo w s : 91-day bills,1 (to maturity date) fo r $1,200,000,000, or there abouts, representing an additional amount o f bilis dated January 2, 1959, and to mature July 2, 1959, and to be freely interchangeable therewith. 182-day bills, f o r $400,000,000, or thereabouts, to be dated A p ril 2, 1959, and to mature O ctober 1, 1959. T h e 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 w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o ’clock p.m., Eastern Standard time, Monday, M arch 30, 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 may not be used. It is urged that tenders be made on the printed form s and forw arded in the special envelopes which w ill be supplied by Federal Reserve Banks o r Branches on application therefor. O thers than banking institutions w ill not be permitted to submit tenders except tor their own account. Tenders w ill 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 will 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 will be advised o f the acceptance or rejection 1 B y w a y o f e x p la n a tio n , it is de-sirab'e th a t a ll b ills m a tu r in g on th e s a m e d a te b e the sauie issu e r e g a r d le s s o f w h e th e r th e y h a ve 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 issu a n ce. thereof. T he Secretary o f the Treasury 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. Subject to these reservations, noncompetitive tenders fo r $200,000 o r less fo r the additional bills uated January 2, 1959 (91 days re maining until maturity date on July 2, 1959) and noncom petitive tenders fo r $50,000 or less fo r the 182-day bills without stated price from any one bidder w ill be accepted in fu ll at the average price (in three decim als) o f accepted competitive bids fo 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 A pril 2, 1959, in cash or other immediately available funds or in a like face amount of Treasury bills maturing A pril 2, 1959. Cash and exchange tenders will receive equal treatment. Cash adjustments w ill 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 fro m 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 n ow 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 o r 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 biils are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. A ccordingly, the owner o f Treasury bills (other than life insurance com panies) issued hereunder need include in his income tax 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 o r redemption at maturity during the taxable year fo r which the return is made, as ordinary gain or 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 $1,200,000 000, or thereabouts, o f 91-dav bills maturing July 2, 1959, offered by the above notice, are in addition to $400,059,000 o f bills dated and issued January 2, 1959, and maturing July 2, 1959. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, March 30, 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 by 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 o f the last offering o f Treasury bills (91-day bills to be issued March 26. 1959, representing an addi tional amount o f bills dated December 26, 1958, and maturing June 25, 1959; and 182-day bills dated March 26, 1959, maturing September 24, 1959) are shown on the reverse side o f this circular. A lfred H ayes , President. Co v e r ) RESULTS OF LAST O FF E R IN G OF TREASU R Y BILLS (TW O SERIES ISSUED M A R C H 26, 1959) Range of Accepted Competitive Bids 91-D ay Treasury Bills Maturing June 25, 1959 182-Day Treasury Bills Maturing September 24, 1959 A p p ro x . equiv. annual rate P rice P rice A pp rox. equiv. annual rate H ig h ............................ ........... 99.306 * 2.745% 98.483 3.001% Low ............................ ........... 99.297 2.781% 98.414 3.137% Average ...................... ........... 99.301 2.766% 98.436 3.093% a Excepting one tender o f $300,000. (39 percent o f the amount o f 91-day bills bid fo r at the low price was accepted.) (25 percent o f the amount o f 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing June 25, 1959 A pplied f o r District Boston ................................... N ew Y o r k ...................... $ 27,789,000 182-Day Treasury Bills Maturing Septem ber 24, 1959 A pplied f o r A ccepted $ 14,789,000 $ 3,556,000 A ccep ted $ 3,506,000 1,540,817,000 806,176.000 508,845,000 281,345,000 Philadelphia ................. ....... 33,941,000 18,941,000 10,402,000 5,402,000 C leveland............................... 38,443,000 38,443,000 13,130,000 9,380,000 Richmond ............................. 14,275,000 13,714,000 1,619,000 1,619,000 Atlanta ................................. 27,951.000 25,151,000 3.162,000 3,162,000 Chicago .......................... 235,520,000 194,600,000 83,847,000 49,747,000 St. Louis ........................ 18,865,000 18,865,000 6,030,000 6,030,000 M inneapolis................... 11,839,000 9,973,000 4,663,000 4,663,000 Kansas City ................. 40,889,000 29,364,000 5,017,000 5,017,000 D a llas.............................. 21,302,000 21,302,000 2,089,000 2,089,000 San F ra n cisco............... 110,778,000 108,802,000 28,175,000 28,175,000 T o ta ls ............. $2,122,409,000 $670,535,000 $400,135,000 $1,300,120,000b b Includes $259,016,000 noncompetitive tenders accepted at the average price o f 99.301. c Includes $24,620,000 noncompetitive tenders accepted at the average price o f 98.436.