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F E D E R A L R E S E R V E BANK O F N E W YORK Fiscal Agent of the United States C ircular N o. 4 7 3 4 M a y 7, 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 ILL S $1,000,000,000 o f 91-D ay Bills, A dditional Am ount, Series D ated Feb. 13, 1959, D ue A ug. 13, 1959 (T o B e Issued M a y 14, 1959) $400,000,000 o f 182-D ay Bills, D ated M ay 14, 1959, D ue N ovem ber 12, 1959 T o A ll Incorporated, B anks and Tru st 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 for publication in morning new spapers, Th ursday, M ay 7, 1959: T h e T re a su ry D epartm ent, by this pu blic notice, invites tenders fo r tw o series o f T reasu ry bills to the a ggregate amount o f $1,400,000,000, o r thereabouts, fo r cash and in exch ange for T re a su ry bills m aturing M ay 14, 1959, in the am ount o f $1,401,266,000, as fo llo w s : 9 1-d ay bills (to m aturity date) to be issued M a y 14, 1959, in the am ount o f $1,000,000,000, or thereabouts, representing an a dd ition al am ount o f bills dated February 13, 1959, and to mature A u gust 13, 1959, origin a lly issued in the am ount o f $399,998,000, the addition al and origin a l bills to be freely interchangeable. 182-day bills, fo r $400,000,000, or thereabouts, to be dated M a y 14, 1959, and to mature N ovem ber 12, 1959. T he bills o f both series w ill be issued on a discount basis under com petitive and n oncom petitive bid d in g as hereinafter provided , and at m aturity their face am ount w ill be payable w ith ou t interest. T h e y w ill be issued in bearer form only, and in den om in ation s o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m atu rity valu e). T en ders w ill be received at F ed eral R eserve Banks and B ranches up to the closin g hour, on e-thirty o ’ c lo ck p.m., E astern D a y lig h t S a vin g time, M on day, M ay 11, 1959. Tenders w ill not be received at the T reasu ry Departm ent, W ash ington. E a ch tender m ust 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 hich w ill be supplied by Federal R eserve Banks o r B ran ches on a pp lication therefor. O thers than banking institutions w ill not be perm itted 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 b y paym ent o f 2 percent o f the face am ount o f T reasu ry bills applied fo r, 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 a fter the clo s in g hour, tenders w ill be opened at the F ed eral 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 Departm ent o f the am ount and price range o f accepted bids. T h ose sub m itting tenders w ill be advised o f the acceptance or rejection thereof. T he Secretary o f the T reasu ry exp ressly reserves the right to accep t o r reject any o r a ll tenders, in w hole or in part, and his action in any such respect shall be final. S u b ject to these reservations, noncom petitive tenders for $200,000 or less fo r the addition al bills dated F ebru ary 13, 1959, (91 days re m aining until m aturity date on A u gu st 13, 1959) and n on com petitive tenders fo r $50,000 or less for the 182-day bills w ithout stated price from any on e bidder w ill be a ccepted in fu ll at the a verage price (in three decim a ls) o f a ccep ted com petitive bids for the respective issues. Settlem ent fo r a ccepted tenders in a ccord a n ce with the bids must be made or com pleted at the Federal R eserve Bank on M ay 14, 1959, in ca sh o r other im m ediately available funds or in a like face am ount o f T reasu ry bills m aturing M a y 14, 1959. Cash and exch ange tenders w ill receive equal treatment. Cash adjustm ents w ill be made for differences betw een the par value o f m aturing bills accepted in exch ange 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 from the sale or other disposition o f the b ills, does not have any exem ption, as such, and loss from the sale o r 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. The bills are subject to estate, inheritance, g ift o r oth er excise taxes, w hether Federal or State, but are exem pt from all ta x a tion now or hereafter im posed on the principal or interest th ereof by any State, or any o f the possessions o f the United States, or by any local ta x in g authority. F o r purposes o f ta x a tion the amount o f discou nt at w hich T reasu ry bills are o rigin a lly sold by 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, redeemed o r otherw ise disposed o f, and such bills are exclu ded 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 co m panies) issued hereunder need include in his incom e tax return only 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 actu ally received either upon sale o r redem ption at m aturity d u rin g the taxable yea r fo r w hich the return is made, as ord in a ry gain o r loss. Treasu ry Departm ent C ircu la r N o. 418, R evised, and this n otice, prescribe the terms o f the T reasu 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 Federal R eserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday, May 11, 1959, at the Securities Department o f its Head Office and at its Buffalo Branch. Tender form s for the respective series are enclosed. Please use the appropriate forms to submit tenders and return them in an envelope marked “ Tender fo r 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 May 7, 1959, representing an addi tional amount of bills dated February 5, 1959, and maturing August 6, 1959; and 182-day bills dated May 7, 1959, maturing November 5, 1959) are shown on the reverse side of this circular. A lfred H ayes , President. ( over) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES ISSUED MAY 7, 1959) Range o f A ccepted Com petitive Bids 91-Day Treasury Bills Maturing August 6,19 59 182-Day Treasury Bills Maturing N ovem ber 5, 1959 P rice A p p rox. equiv. annual rate 99.267a 2.900% 98.340b 3.284% L o w ..................................... 99.256 2.943% 98.306 3.351% A verage 99.258 2.935% 98.324 3.316% H ig h .................................. ............................ a E x cep tin g one tender o f $300,000. P rice A p p ro x . equiv. annual rate b E x cep tin g tw o tenders totaling $100,000. (74 percent o f the am ount o f 91-day bills bid for at the low price was accep ted .) (20 percent o f the am ount o f 182-day bills bid fo r at the lo w price was accepted.) T otal Tenders A pplied for and A ccepted (B y Federal Reserve Districts) 9 1-Day Treasury Bills Maturing August 6,19 59 D istrict A pplied for B oston ....................................... $ 25,109,000 182-Day Treasury Bills Maturing N ovem ber 5, 1959 A ccepted $ 14,712,000 A pplied for $ 4,078,000 A ccepted $ 4,078,000 N ew Y o r k ..................... ........... 1,430,569,000 670,369,000 612,976,000 299,376,000 Philadelphia ............... ........... 29,929,000 13,877,000 6,062,000 1,062,000 C le v e la n d ...................... ........... 35,429,000 30,180,000 4,971,000 4,971,000 R ich m on d ................... ........... 8,297,000 8,297,000 531,000 531,000 A t la n t a .......................... ........... 37,233,000 27,482,000 8,407,000 8,407,000 C hicago ........................ ........... 199,450,000 121,750,000 95,596,000 53,996,000 St. L o u i s ...................... ........... 16,272,000 15,772,000 1,905,000 1,905,000 ............... ........... 11,386,000 10,134,000 1,316,000 1,316,000 Kansas C i t y ............... ........... 35,612,000 19,360,000 5,144,000 4,844,000 D a l l a s ............................ ........... 16,418,000 16,418,000 1,968,000 1,968,000 San F r a n c is c o ............. 64,426,000 52,861,000 17,578,000 17,578,000 M inneapolis T o t a l ............. ........... $1,910,130,000 $1,001,212,000° c Includes $216,815,000 noncompetitive tenders accepted at the average price of 99.258. d Includes $16,777,000 noncompetitive tenders accepted at the average price of 98.324. $760,532,000 $400,032,000d
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