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F E D E R A L R E S E R V E B A NK O F N E W YORK Fiscal Agent of the United States r C ircular N o. 4 7 5 9 1 J u ly 16, 19 59 J L 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 L ,000,000,000 o f 91-D ay Bills, Additional A m ount, Series D ated April 23, 1959, D ue O ct. 22, 1959 (T o Be Issued July 23, 1959) $400,000,000 o f 182-D ay Bills, D ated July 23, 1959, D ue January 21, 1960 T o A ll Incorporated B anks and T rust 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, July 16, 1959: T h e T re a su ry D epartm ent, by this pu blic notice, invites tenders f o r tw o series o f T reasu ry bills to the a ggregate amount o f $1,400,000,000, o r thereabouts, for cash and in exch an ge for Treasu ry bills m aturing July 23, 1959, in the am ount o f $1,400,956,000, as f o ll o w s : 91-day bills (to m aturity date) to be issued July 23, 1959, in the am ount o f $1,000,000,000, or thereabouts, representing an addition al am ount o f b ills dated A p ril 23, 1959, and to mature O ctober 22, 1959, o rigin a lly issued in the am ount o f $400,070,000, 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 July 23, 1959, and to mature January 21, 1960. The bills o f both series w ill be issued on a discou nt basis under com petitive and noncom petitive b idd ing as hereinafter 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 denom inations 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 D a yligh t S a vin g time, M onday, Ju ly 20, 1959. Tenders w ill n ot be received at the T reasu ry Departm ent, W ash ington. E ach 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 F ed eral R eserve Banks or Branches on a pp lication therefor. O thers than banking institutions w ill n ot 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 m ust be accom panied by paym ent o f 2 percent o f the face amount o f T reasu ry bills applied for, unless the tenders are accom panied b y an express guaranty o f paym ent b y 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 Federal R eserve Banks and B ranches, fo llo w in g w hich public announcem ent w ill be made b y 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 o r rejection thereof. T h e Secretary o f the T reasu ry expressly reserves the right to accept or reject any or all tenders, in w hole or in part, and his a ction in any such respect shall be final. S ubject to these reservations, noncom petitive tenders for $200,000 o r less fo r the a dd ition al bills dated A p ril 23, 1959, (91 days re m aining until m aturity date on O ctob er 22, 1959) and noncom petitive tenders fo r $100,000 o r less fo r the 182-day bills w ithout stated price from any one b idder w ill be accepted in fu ll at the average price (in three decim als) o f accepted com petitive bids for the respective issues. Settlem ent fo r accepted tenders in a ccord a n ce with the bids must be made or com pleted at the Federal Reserve Bank on July 23, 1959, in cash or other im m ediately available funds o r in a like face am ount o f Treasu ry bills m aturing July 23, 1959. Cash and exchange 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 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 bills, does not have any exem ption, as such, and loss from the sale o r other d isp osition o f T reasu 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 or other excise taxes, w hether Federal or State, but are exem pt from all ta x a tion n ow o r hereafter im posed on the principal or interest th ereof by any State, o r any o f the possessions o f the United States, o r by any lo ca l 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 origin a lly sold by the U nited States is con sid ered to be interest. U n der S ections 4 5 4(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 u ntil such bills are sold, redeem ed or otherw ise disposed of, and such bills are exclu ded from con sideration 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 in com e tax return only the difference between the price paid fo r such bills, whether 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 du rin g the taxable yea r 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 th e terms o f the T reasu ry bills and govern the con ditions o f their issue. Copies o f the circu la r m ay be obtain ed from any F ed eral Reserve Bank o r B ranch. T h is Bank w ill receive tenders fo r both series up to 1 :30 p.m., Eastern D a yligh t S avin g time, M onday, July 20, 1959, at the Securities D epartm ent o f its H ead Office and at its B uffalo Branch. T en d er form s for the respective series are enclosed. Please use the appropriate form s to subm it tenders and return them in an en velope m arked “ T en d er fo r T reasu ry B ills.” Ten ders m ay be subm itted b y telegraph, su bject 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 immediately available funds or in maturing Treasury bills. Results of the last offering of Treasury bills (91-day bills to be issued July 16, 1959, representing an ad ditional amount of bills dated April 16, 1959, and maturing October 15, 1959; and 182-day bills dated July 16, 1959, maturing January 14, 1960) 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 JULY 16, 1959) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing October 15, 1959 182-Day Treasury Bills Maturing January 14, 1960 P rice A p p ro x . equiv. annual rate H ig h ....................... ........ 99.155a 3.343% 97.978 4.000% L o w ......................... ........ 99.117 3.493% 97.960 4.035% A verage 99.140 3.401% 97.963 4.029% ................. ........ P rice A p p ro x . equiv. annual rate a E x cep tin g one tender o f $50,000. (60 percent o f the am ount o f 91-day bills bid for at the low price was accepted.) (62 percent o f the am ount 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 October 15, 1959 A pplied for D istrict B oston ......................... ........... $ 182-Day Treasury Bills Maturing January 14, 1960 A pplied for 26,664,000 N ew Y o r k ................... ........... 1,385,440,000 A ccep ted $ 16,664,000 801,415,000 $ 6,239,000 A ccepted $ 5,762,000 688,675,000 261,236,000 Philadelphia ............... ........... 28,078,000 18,078,000 7,057,000 1,657,000 C le v e la n d ..................... ........... 39,078,000 39,078,000 18,602,000 11,362,000 R ich m on d ................... ........... 23,629,000 23,629,000 970,000 951,000 A t la n t a ......................... ........... 23,183,000 23,163,000 3,307,000 2,880,000 C h icago ....................... ........... 172,050,000 113,050,000 100,640,000 54,095,000 St. L o u i s ..................... ........... 23,497,000 23,497,000 3,915,000 3,515,000 ............... ........... 8,969,000 8,969,000 2,422,000 2,422,000 Kansas C ity ............... .......... 36,165,000 36,165,000 7,005,000 4,846,000 D a l l a s ............................ ........... 20,150,000 20,150,000 2,374,000 2,374,000 San F r a n c is c o ............. 76,142,000 76,142,000 65,443,000 49,922,000 M inneapolis T o t a l ............. ........... $1,863,045,000 $1,200,000,000b b Includes $229,025,000 noncompetitive tenders accepted at the average price of 99.140. c Includes $42,502,000 noncompetitive tenders accepted at the average price o f 97.963. $906,649,000 $401,022,000°