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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 Circular No. 4 7 8 4 1 October 1. 1959 J OFFERING OF TW O SERIES OF TREASURY BILLS $1,200,000,000 of 91-Day Bills, Additional Amount, Series Dated July 9, 1959, Due Jan. 7, 1960 (To Be Issued October 8, 1959) $400,000,000 of 182-Day Bills, Dated October 8, 1959, Due April 7, 1960 T o A ll Incorporated Banks and Trust Companies, and O thers 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, October 1, 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 f $1,600,000,000, o r thereabouts, fo r cash and in exchange for Treasury bills maturing October 8, 1959, in the amount o f $1,601,226,000, as fo llo w s : 91-day bills (to maturity date) to be issued October 8, 1959, in the amount o f $1,200,000,000, or thereabouts, repre senting an additional amount o f bills dated July 9, 1959, and to mature January 7, 1960, originally issued in the amount o f $399,992,000, the additional and original bills to be freely interchangeable. 182-day bills, for $400,000,000, o r thereabouts, to be dated O ctober 8, 1959, and to mature April 7, 1960. T he 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 will be issued in bearer fo rm 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, tw o o ’clock p.m., Eastern Daylight Saving time, M onday, October 5, 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 will 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 ow n account. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in in vestment securities. Tenders fro m 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 ing which public announcement w ill be made by the Treasury Department o f the amount and price range o f accepted bids. Those 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 o r in part, and his action in any such respect shall be final. Subject to these reservations, noncompetitive tenders fo r $200,000 or less for the additional bills dated July 9, 1959, (91 days remain ing until maturity date on January 7, 1960) and noncom petitive tenders fo r $100,000 or less fo r the 182-day bills without stated price from any one bidder w ill be accepted in full at the average price (in three decim als) o f accepted competitive 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 October 8, 1959, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing October 8, 1959. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for 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 or gain from the sale or other disposition o f the bills, does not have any exemption, as such, and loss from the sale o r 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 exempt from all taxa tion now o r hereafter imposed on the principal or interest thereof by any State, or any o f the possessions o f the United States, or 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 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 (oth er 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 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 2 p.m., Eastern Daylight Saving time, Monday, October 5, 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 fo r 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 October 1, 1959, representing an additional amount of bills dated July 2, 1959, and maturing December 31, 1959; and 182-day bills dated October 1, 1959, maturing March 31, 1960) are shown on the reverse side of this circular. A lfred H a y e s , President. (o v e r) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES ISSUED OCTOBER 1, 1959) Range o f A ccepted C om petitive Bids 91-Day Treasury Bills Maturing Decem ber 31, 1959 182-Day Treasury Bills Maturing March 31, 1960 A p p rox. equiv. annual rate P rice P rice A p p rox. equiv. annual rate H ig h ...... . .............................. 98.961 * 4.110% 97.550b 4.846% L o w ........................................ 98.927 4.245% 97.482 4.981% Average ................................. 98.940 4.194% 97.526 4.895% a Excepting one tender o f $2,000,000. b E xcepting tw o tenders totaling $101,000. (65 percent o f the amount o f 91-day bills bid fo r at the low price was accepted.) (61 percent o f the amount o f 182-day bills bid for at the low price was accepted.) T ota l Tenders Applied for and A ccepted (B y Federal R eserve D istricts) D istrict Boston ................. ............ $ 91-Day Treasury Bills Maturing Decem ber 31, 1959 182-Day Treasury Bills Maturing March 31, 1960 A pplied f o r A pplied f o r 24,651,000 A ccepted $ A ccepted 14,651,000 $ 13,151,000 $ 13,151,000 New Y o r k .............. .............. 1,538,892,000 804,342,000 525,884,000 257,634,000 Philadelphia .......... .............. 27,215,000 12,215,000 10,969,000 5,969,000 Cleveland................ .............. 36,106,000 30,856,000 14,219,000 9,219,000 Richmond .............. .............. 11,244,000 11,244,000 1,447,000 1,392,000 A tlan ta..................... ............ 18,279,000 17,479,000 2,697,000 2,697,000 Chicago ................ .............. 160,331,000 97,981,000 76,986,000 52,986,000 St. Louis .............. ............ 20,024,000 18,024,000 8,367,000 8,367,000 9,192,000 9,192,000 2,702,000 2,702,000 Kansas City ......................... 34,263,000 21,263,000 5,662,000 5,652,000 D a llas...................................... 14,045,000 14,045,000 4,713,000 4,713,000 San F ra n cisco........ .............. 55,226,000 48,726,000 40,657,000 35,657,000 Total ..... ............ $1,949,468,000 M inneapolis ........... $1,100,018,000c c Includes $201,988,000 noncompetitive tenders accepted at the average price of 98.940. d Includes $46,769,000 noncompetitive tenders accepted at the average price of 97.526. $707,454,000 $400,139,000d
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