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FE D ER A L R E SE R V E BANK O F N EW YORK Fiscal Agent o f the United States [Circular No. 4 7 0 4 1 L July 30, 1959 J O FFER IN G O F T W O SERIES O F T R E A S U R Y BILLS $1,000,000,000 o f 91-Day Bills, Additional Am ount, Series Dated May 7 ,1 9 5 9 , Due N ov. 5, 1959 (T o B e Issued August 6, 1959) $400,000,000 o f 182-Day Bills, Dated August 6, 1959, Due February 4, 1960 T o A ll Incorporated Banks and Trust Companies, and Others 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, Thursday, July 30, 1959: The Treasury Department, by this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o f $1,400,000,000, o r thereabouts, fo r cash and in exchange for Treasury bills maturing August 6, 1959, in the amount o f $1,400,882,000, as fo llo w s : 91-day bills (to maturity date) to be issued August 6, 1959, in the amount o f $1,000,000,000, or thereabouts, representing an additional amount o f bills dated M ay 7, 1959, and to mature Novem ber 5, 1959, originally issued in the amount o f $400,032,000, the additional and original bills to be freely interchangeable. 182-day bills, fo r $400,000,000, or thereabouts, to be dated A ugust 6, 1959, and to mature February 4, 1960. The 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. T h ey will 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 D aylight Saving time, M onday, August 3, 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. Others than banking institutions will not be permitted to submit tenders except fo r 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 w ill be opened at the Federal Reserve Banks and Branches, follow in g which public announcement w ill be made by the Treasury Department o f the amount and price range o f accepted bids. T h ose sub mitting tenders w ill be advised o f the acceptance or rejection thereof. T he Secretary o f the Treasury expressly reserves the right to accept or 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 f o r $200,000 or less for the additional bills dated M ay 7, 1959, (91 days remain ing until maturity date on Novem ber 5, 1959) and noncom petitive tenders fo r $100,000 or less fo r the 182-day bills without stated price fro m any one bidder will be accepted in full at the average price (in three decim als) o f accepted com petitive bids for the respective issues. Settlement fo r accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on August 6, 1959, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing August 6, 1959. Cash and exchange tenders will receive equal treatment. Cash adjustments w ill be made f o r differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. T he income derived from Treasury bills, whether interest o r 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 o r State, but are exem pt fro m all taxa tion now or hereafter imposed on the principal or interest thereof b y 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 o f, and such bills are excluded from consideration as capital assets. Accordingly, the owner 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 o r 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 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 m ay be obtained from any Federal Reserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday, August 3, 1959, at the Securities Department o f its Head Office and at its Buffalo Branch. Tender forms fo r 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 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 30, 1959, representing an additional amount of bills dated April 30, 1959, and maturing October 29, 1959; and 182-day bills dated July 30, 1959, matur ing January 28, 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 30, 1959) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing October 29, 1959 182-Day Treasury Bills Maturing January 28, 1960 A p p ro x . equiv. annual rate P rice P rice A p p rox. equiv. annual rate H ig h ..... 99.245 2.987% 9 8.0 60 : 3.837% L ow ..... 99.220 3.086% 98.046 3.865% Average 99.230 3.047% 98.049 3.860% a E xcepting one tender o f $60,000. (96 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (91 percent o f the amount o f 182-day bills bid fo r at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing October 29, 1959 A ccepted Applied f o r D istrict $ Boston ............................ 15,020,000 182-Day Treasury Bills Maturing January 28, 1960 A pplied f o r $ 6,200,000 A ccepted $ 3,120,000 N ew Y o r k ...................... 1,350,426,000 655,526,000 610,743,000 258,465,000 Philadelphia ................. 25,022,000 10,022,000 6,912,000 1,912,000 Cleveland........................ 33,629,000 32,829,000 30,655,000 24,234,000 Richmond ...................... 12,876,000 12,876,000 2,009,000 2,009,000 A tlan ta............................ 24,073,000 22,973,000 3,047,000 2,777,000 Chicago .......................... 189,898,000 128,898,000 87,886,000 57,886,000 St. L o u is ........................ 25,723,000 25,081,000 4,416,000 4,416,000 M inneapolis.................... 9,035,000 9,035,000 3,557,000 2,348,000 Kansas City .................. 33,709,000 33,709,000 5,787,000 5,485,000 D a llas.............................. 13,614,000 13,614,000 8,542,000 2,642,000 San F ra n cisco............... 40,546,000 40,526,000 51,142,000 35,492,000 $820,896,000 $400,786,000 T o ta ls ............. ....... $1,783,576,000 $1,000,109,000b b Includes $205,061,000 noncompetitive tenders accepted at the average price of 99.230. c Includes $40,282,000 noncompetitive tenders accepted at the average price of 98.049.