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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States r Circular N o. 4 7 8 8 1 L October 29,1959 J OFFERIN G O F T W O SERIES OF T R E A S U R Y BILLS 81,000,000,000 o f 91-Day Bills, Additional Amount, Series Dated August 6, 1959, Due Feb. 4, 1960 (T o Be Issued N ovem ber 5, 1959) $400,000,000 o f 182-Day Bills, Dated N ovem ber 5, 1959, Due May 5, 1960 T o A ll Incorporated Banks and T ru st 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, October 29, 1959: The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $1,400,000,000, or thereabouts, for cashand in exchange for Treasury bills maturing November 5, 1959, in the amount of $1,400,546,000, as follows: 91-day bills (to maturity date) to be issued November 5, 1959, in the amount of $1,000,000,000, or thereabouts, representing an additional amount of bills dated August 6, 1959, and to mature February 4, 1960, originally issued in the amount o f $400,170,000, the additional and original bills to be freely interchangeable. 182-day bills, for $400,000,000, or thereabouts, to be dated November 5, 1959, and to mature May 5, 1960. The bills of both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter pro vided, and at maturity their face amount will be payable without interest. They will be issued in bearer form only, and in de nominations of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (maturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o’clock p.m., Eastern Standard time, Monday, November 2, 1959. Tenders will not be received at the Treasury Department, Washington. Each tender must be for an even multiple of $1,000, and in the case of competitive tenders the price offered must be expressed on the basis of 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 forms and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Others than banking institutions will not be permitted to submit tenders except for their own account. Tenders will be received without deposit from incorporated banks and trust com panies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by pay ment of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price range of accepted bids. Those submitting tenders will be advised of the acceptance or rejection thereof. The Secretary o f the Treasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and his action in any such respect shall be final. Subject to these reserva tions, noncompetitive tenders for $200,000 or less for the addi tional bills dated August 6, 1959, (91 days remaining until matur ity date on February 4, 1960) and noncompetitive tenders for $100,000 or less for the 182-day bills without stated price from any one bidder will be accepted in full at the average price (in three decimals) of accepted competitive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on November 5, 1959, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing November 5, 1959. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. The 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 or other disposi tion of Treasury bills does not have any special treatment, as such, under the Internal Revenue Code of 1954. The bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exempt from all taxation now or here after imposed on the principal or interest thereof by any State, or any o f the possessions of the United States, or by any local taxing authority. For purposes of taxation the amount of dis count at which Treasury bills are originally sold by the United States is considered to be interest. Under Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954 the amount of dis count at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherwise dis posed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) issued hereunder need include in his income tax return only the difference between the price paid for such bills, whether on original issue or on subsequent pur chase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made, as ordinary gain or loss. Treasury Department Circular No. 418, Revised, and this notice, prescribe the terms of the Treasury bills and govern the conditions of their issue. Copies o f the circular may be obtained from any Federal Reserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, November 2, 1959, at the Securities Department o f its Head Office and at its Buffalo Branch. Tender form s 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 maie by crcdit through the Treasury Tax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. Results o f the last offering o f Treasury bills (9 1 -day bills to be issued October 29, 1959, representing an additional amount o f bills dated July 30, 1959, and maturing January 28, 1960; and 182-day bills dated October 29, 1959, maturing April 28, 1960) are shown on the reverse side o f this circular. A lfred H a y e s , President. pip33 Please note that closing time is 1 :3 0 p.m ., Eastern Standard time. ( over ) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES ISSUED OCTOBER 29, 1959) Range o f A ccepted Com petitive Bids 91-D ay Treasury Bills Maturing January 28,1960 182-Day Treasury Bills Maturing April 28,1960 Price Approx. equiv. annual rate H igh ........................ ........ 99.000 3.956% 97.735a 4.480% ........................ ........ 98.972 4.067% 97.720 4.510% 98.983 4.022% 97.726 4.499% L ow Average ................. ........ Price A pprox. equiv. annual rate a Excepting one tender of $500,000. (67 percent o f the amount o f 182-day bills bid fo r at the low price was accepted.) (84 percent o f the amount o f 91-day bills bid fo r at the low price was accepted.) T otal Tenders A p p lied fo r and A ccepted (B y Federal Reserve Districts) 91-Day Treasury Bills Maturing January 28,1960 Accepted A pplied for District $ 10,247,000 626,206,000 600,130,000 281,390,000 ................. 27,351,000 12,351,000 13,298,000 8,298,000 Cleveland ........................ 40,034,000 40,034,000 22,093,000 15,093,000 Richmond ..................... 12,026,000 12,026,000 4,869,000 2,239,000 Atlanta ............................ 27,045,000 26,265,000 5,863,000 5,228,000 .......................... 181,332,000 147,812,000 46,514,000 24,322,000 St. Louis ....................... 23,239,000 23,194,000 10,628,000 10,578,000 New Y ork ..................... Philadelphia Chicago $ Accepted 1,242,606,000 ............................ 23,739,000 Applied fo r 13,739,000 Boston $ 182-Day Treasury Bills Maturing April 28,1960 $ 8,847,000 Minneapolis ................. 9,315,000 9,315,000 2,399,000 2,399,000 Kansas City ................. 42,017,000 41,017,000 4,933,000 4,800,000 Dallas .............................. . . 13,385,000 13,385,000 5,326,000 5,311,000 San Francisco ............... 34,681,000 34,681,000 37,508,000 32,236,000 Total ........... $1,676,770,000 $1,000,025,000b b Includes $212,110,000 noncompetitive tenders accepted at the average price of 98.983. c Includes $45,565,000 noncompetitive tenders accepted at the average price o f 97.726. $763,808,000 $400,741,000°