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F E D E R A L R E S E R V E B A N K O F N E W Y O RK F isca l A g e n t o f the U n ited States r Circular No. 4 7 8 0 1 L September 17, 1959 J 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 L,200,000,000 o f 91-D ay Bills, Additional Am ount, Series D ated June 25, 1959, D ue D ec. 24, 1959 (T o B e Issued Septem ber 24, 1959) $400,000,000 o f 182-D ay Bills, D ated September 24, 1959, D ue M arch 2 4,1960 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: F ollow in g is the text o f a notice issued by the Treasury Department, released for publication in morning newspapers, Th ursday, Septem ber 17, 1959: T h e T reasu 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 $1,600,000,000, o r thereabouts, fo r cash and in exch a n ge for T reasu ry bills m aturing Septem ber 24, 1959, in the am ount o f $1,600,211,000 as fo llo w s : 91-day bills (to m aturity date) to be issued Septem ber 24, 1959, in the am ount o f $1,200,000,000, or thereabouts, representing an addition al amount o f bills dated June 25, 1959, and to mature D ecem ber 24, 1959, originally issued in the am ount o f $500,242,000, the addition al and origin a l bills to be freely interchangeable. 182-day b ills, fo r $400,000,000, or thereabouts, to be dated Septem ber 24, 1959, and to mature M arch 24, 1960. T h e 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 ey 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 F ed eral 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 ayligh t S avin g time, M on day, Septem ber 21, 1959. T en ders w ill n ot be received at the T reasu ry Department, W ash ington. E ach tender must be fo r an even m ultiple o f $1,000, and in the case o f com petitive tenders the price offered m ust be expressed on the basis o f 100, w ith not m ore than three decim als, e.g., 99.925. F raction s m ay not be used. It is urged that tenders be made 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 o r B ranches on application therefor. O thers than banking institutions w ill n ot be perm itted to subm it tenders excep t fo r their own account. T en ders w ill be received w ithout deposit from in corporated banks and trust com panies and from responsible and recognized dealers in in vestm ent securities. T en ders from others must 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 by 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 F ed eral R eserve Banks and Branches, fo llo w in g w hich public announcem ent w ill be made b y the T reasu ry Department 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 h e Secretary o f the T reasu ry exp ressly reserves the righ t to accep t o r reject any or all tenders, in w hole or in part, and his action in any such respect shall be final. S u bject to these reservations, noncom petitive tenders for $200,000 or less, fo r the a dd ition al bills dated June 25, 1959, (91 days re m aining until m aturity date on D ecem ber 24, 1959) and n on com petitive tenders for $100,000 or less for the 182-day bills without stated price from any one bidder w ill be accepted in fu ll at the a verage price (in three decim als) o f a ccepted com petitive bids for the respective issues. Settlem ent for accepted tenders in a ccord a n ce with the bids must be made or com pleted at the F ederal R eserve Bank on Septem ber 24, 1959, in cash or other im m ediately available funds or in a like face am ount o f T reasu ry bills m aturing Septem ber 24, 1959. Cash and exch ange tenders w ill receive equal treatment. Cash adjustm ents w ill be made for differences between the par value o f m aturing bills a ccepted in exch an ge 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 or other disposition o f T reasu ry bills does not have any special treat ment, as such, under the Internal Revenue C ode o f 1954. T he bills are subject to estate, inheritance, g ift or oth er excise taxes, w hether Federal or State, but are exem pt from all ta x a tion n ow or hereafter im posed on the principal or interest th ereof b y any State, or any o f the possessions o f the United States, o r b y any loca l ta x in g authority. F o r purposes o f taxa tion the am ount o f discou nt at w h ich T reasu ry bills are origin a lly sold by the U nited States is con sidered to be interest. U nder S ections 454(b) and 1221(5) o f the Internal Revenue C ode o f 1954 the am ount o f discou n t at w h ich bills issued hereunder are sold is n ot con sidered to accru e until 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 c o m pan ies) issued hereunder need include in his incom e ta x 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 a lly received either upon sale or redem ption at m aturity du rin g the taxable year fo r w hich the return is made, as ord in a ry ga in o r loss. T reasu ry D epartm ent C ircu lar N o. 418, R evised, and this notice, prescribe the 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 obtained from any F ed eral R eserve B ank or Branch. T h is Bank w ill receive tenders for both series up to 1 :30 p.m ., Eastern D a yligh t S aving time, M onday, Septem ber 21, 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 envelope m arked “ T en d er fo r T reasu ry B ills.” T en d ers m ay be subm itted b y telegraph, su bject to w ritten 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. R e su lts o f the last o ffe r in g o f T r e a s u r y b ills (9 1 -d a y b ills to b e issu ed S e p te m b e r 17, 1959, re p re se n tin g an a d d ition a l a m o u n t o f b ills d a ted J u ne 18, 1959, an d m a tu rin g D e c e m b e r 17, 1 959; an d 182-day b ills d a ted S e p te m b e r 17, 1959, m a tu rin g M a rch 17, 1960) are sh o w n o n the re v e rse sid e o f th is circu la r. A lfred H ayes, President. (o v e r) RESULTS OF LAST OFFERING OF TREASURY BILLS (TW O SERIES ISSUED SEPTEMBER 17, 1959) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing D ecem ber 17, 1959 Price 182-Day Treasury Bills Maturing March 17, 1960 Approx. equiv. annual rate Price Approx. equiv. annual rate H ig h ........................ ........ 98.964a 4.098% 97.602b 4.743% L o w .......................... ........ 98.926 4.249% 97.524 4.898% ................. ......... 98.947 4.166% 97.575 4.796% A verage a E x ce p tin g three tenders tota lin g $1,000,000. b E x cep tin g three tenders totaling $824,000. (88 percent o f the am ount o f 91-day bills bid for at the low price w as accepted.) (13 percent o f the am ount o f 182-day bills bid for at the lo w price w as accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing D ecem ber 17, 1959 District Applied for B oston ............................ ......... $ 28,859,000 182-Day Treasury Bills Maturing March 17, 1960 Accepted $ 18,859,000 Applied for $ 7,596,000 Accepted $ 7,596,000 N ew Y o r k ..................... ......... 1,403,388,000 713,388,000 516,235,000 217,445,000 Philadelphia ................. ......... 40,500,000 30,500,000 9,417,000 9,417,000 Cleveland ..................... ......... 31,941,000 30,441,000 27,320,000 27,320,000 R ich m on d ..................... ......... 17,761,000 17,761,000 1,862,000 1,862,000 .......................... ........ 33,729,000 33,729,000 5,418,000 5,418,000 C h icago .......................... ........ 206,375,000 189,775,000 87,001,000 80,001,000 St. L o u i s ........................ ......... 20,581,000 20,581,000 7,977,000 7,977,000 ................. ......... 13,435,000 13,435,000 3,202,000 3,202,000 Kansas C i t y ................. ......... 38,633,000 38,633,000 8,518,000 8,518,000 D allas 21,473,000 21,473,000 3,376,000 3,376,000 77,153,000 72,153,000 32,954,000 27,954,000 A tlanta M inneapolis ............................ ......... San Francisco ............. T ota l ............. ......... $1,933,828,000 $1,200,728,000c c Includes $295,905,000 noncompetitive tenders accepted at the average price of 98.947. d Includes $53,776,000 noncompetitive tenders accepted at the average price of 97.575. $710,876,000 $400,086,000d