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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 Y O R K [ December1234i959 3 Fiscal Agent of the United States OFFERING OF TWO SERIES OF TREASURY BILLS $1,100,000,000 o f 91-Day Bills, Additional Amount, Series Dated Oct. 1, 1959, Due March 31, 1960 (T o Be Issued December 31,1959) $500,000,000 of 182-Day Bills, Dated December 31,1959, Due June 30,1960 T 0 All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text o f a notice issued by the Treasury Department, released fo r publication in morning newspapers, Wednesday, December 23, 1959: T h e T r e a s u ry D epa rtm en t, b y this p u b lic n otice, invites ten ders fo r tw o series o f T rea su ry bills to the a g g reg a te a m ou n t o f $1,600,000,000, o r th erea b ou ts, fo r cash and in ex ch a n g e for T rea su ry bills m atu rin g D ecem b er 31, 1959, in th e a m ou n t o f $1,599,783,000, as fo llo w s : 9 1 -d a j' bills ( t o m aturity da te) to b e issu ed D e ce m b e r 31, 1959, in the a m ou n t o f $1,100,000,000, o r th ereabouts, rep resen tin g anfaddition al a m ou n t o f bills dated O c t o b e r 1, 1959, and to m ature M a rch 31, 1960, o rigin a lly issued in the a m ou n t o f $400,424,000, th e a dd ition al and original bills to be fre e ly interchangeable. 182-day b ills, fo r $500,000,000, o r th ereabouts, to be dated D e ce m b e r 31, 1959, and to m ature June 30, 1960. T h e bills o f b o th series w ill b e issued on a d iscou n t basis u nder co m p etitive and n o n com p etitiv e b id d in g as h ereinafter p r o vid ed , and at m atu rity their face am ou nt w ill be pa ya b le w ith ou t interest. T h e y w ill b e issued in bearer fo r m o n ly , and in de n om in ation s o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m a tu rity va lu e). T e n d e rs w ill be received at F ed eral R e s e rv e B anks and B ra n ch es up to the clo s in g h our, on e-th irty o ’ c lo c k p.m ., E astern S tandard tim e, M on d a y , D e ce m b e r 28, 1959. T e n d e rs w ill n ot be receiv ed at the T r e a s u ry D epa rtm en t, W a s h in g to n . E ach ten der m u st be fo r an even m u ltiple o f $1,000, and in the case o f com p etitive tenders the p rice o ffe re d m ust b e ex p ressed on the basis o f 100, w ith n o t m ore than th ree decim a ls, e.g., 99.925. F ra ctio n s m ay n o t be used. It is u rged that ten ders be m ade on th e printed fo rm s and fo rw a rd ed in th e special en velop es w h ich w ill be supplied b y Federal R e serv e B anks o r B ra n ch es on a pp lica tion th erefor. O th e rs than b a n k in g institutions w ill n ot b e perm itted to subm it ten ders e x ce p t f o r th eir o w n a ccou n t. T en d ers w ill be receiv ed w ith ou t d ep o sit fr o m in corp ora ted banks and trust c o m pan ies and fr o m resp o n sib le and re co g n iz e d dealers in investm ent securities. T e n d e rs fr o m oth ers m u st b e a ccom p a n ied b y p a y m en t o f 2 p ercen t o f th e fa ce a m ou n t o f T r e a s u ry bills applied fo r, unless the tenders are a ccom p a n ied b y an exp ress guaranty o f pa ym en t b y an in co rp o ra ted bank o r trust com p a n y . Im m ed ia tely a fter the clo s in g h our, ten ders w ill be op en ed at the F ed era l R e se rv e B anks and B ra n ch es, fo llo w in g w h ich p u b lic a n n ou n cem en t w ill be m ade b y the T r e a s u ry D ep a rtm en t o f the a m ou n t and price ra n ge o f a ccep ted bids. T h o s e subm itting ten ders w ill b e advised o f th e a ccep ta n ce o r re je ctio n th ereof. T h e S ecreta ry o f the T r e a s u ry ex p ressly reserves the righ t to a ccep t o r reject a n y o r all tenders, in w h o le o r in part, and his a ction in a n y such resp ect shall b e final. S u b ject to these re se rv a tion s, n on com p etitiv e ten ders fo r $200,000 o r less fo r the add i tional bills dated O c t o b e r 1, 1959, (91 days rem ainin g u ntil m a turity date o n M a rch 31, 1960) and n on com p etitiv e ten ders fo r $100,000 o r less fo r the 182-day bills w ith ou t stated p rice fro m a n y on e b id d er w ill b e a ccep ted in full at the a vera ge price (in th ree decim a ls) o f a ccep ted com p etitiv e bids fo r the respective issues. S ettlem ent f o r a ccep ted ten ders in a ccord a n ce w ith the b id s m u st be m ade o r com p leted at th e F ed eral R e serv e B ank o n D e ce m b e r 31, 1959, in cash o r oth er im m ediately available fu n ds o r in a like face a m ou n t o f T rea su ry bills m atu rin g D e ce m b e r 31, 1959. Cash and ex ch a n g e ten ders w ill receiv e equal treatm ent. Cash adjustm ents w ill be m ade fo r d ifferen ces b e tw e e n the par value o f m a tu rin g bills a ccep ted in e x ch a n g e and the issue p rice o f the n ew bills. T h e in com e derived fro m T r e a s u ry bills, w h eth er in terest o r gain fr o m the sale o r oth er d isp osition o f the bills, d oes n ot have a n y exem ption , as su ch , and loss fr o m the sale o r oth er d isp osi tion o f T r e a s u ry bills d o e s n o t have a n y special treatm ent, as such, under th e In tern al R even u e C o d e o f 1954. T h e bills are s u b je ct t o estate, inheritance, g ift o r oth er e x cis e taxes, w h eth er F ed era l o r State, b u t are exem p t fr o m all taxation n o w o r h ere a fter im p o s e d on the prin cip a l o r interest th ereof b y a n y State, o r a n y o f the p ossession s o f the U n ited States, o r b y a n y loca l ta x in g authority. F o r pu rp oses o f ta xation th e a m ou n t o f dis co u n t at w h ich T r e a s u ry bills are origin a lly sold b y th e U nited States is con sid ered to be interest. U n d er S ection s 4 5 4 (b ) and 1221(5) o f the In tern al R even u e C od e o f 1954 th e a m ou n t o f dis co u n t at w h ich bills issued h ereun der are s o ld is n ot con sid ered to a ccru e until su ch bills are sold , red eem ed o r oth erw ise dis p osed of, and such bills are exclu d ed fr o m con sid era tio n as capital assets. A c c o r d in g ly , the o w n e r o f T r e a s u ry bills (o th e r than life in su rance co m p a n ie s ) issued h ereun der n eed in clu d e in his in com e ta x return o n ly the differen ce betw een th e p rice paid fo r su ch bills, w h eth er on origin a l issue o r on su b seq u en t pur ch ase, and the a m ou n t actu ally receiv ed either u p on sale o r red em ption at m atu rity d u rin g th e taxable y e a r fo r w h ich the return is m ade, as ord in a ry gain o r loss. T rea su ry D epa rtm en t C ircu lar N o . 418, R evised , and this n otice, prescrib e the term s o f the T r e a s u ry bills and g o v e rn the con d ition s o f their issue. C op ies o f the circu la r m a y b e obtain ed fr o m a n y F ed eral R e serv e B ank o r B ranch. This Bank will receive tenders fo r both series up to 1 :30 p.m., Eastern Standard time, Monday, December 28, 1959, at the Securities Department o f its Head Office and at its Buffalo Branch. Tender form s for the respective series are enclosed. Please use the appropriate form s 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 f o r the Treasury bills cannot be made by credit through the Treasury T a x and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. This circular was printed before the results o f the bidding for Treasury bills to be issued December 24, 1959, were available; those results will be announced after release by the Treasury Department. A lfred H a y e s , President.
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