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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 o f the United States [ Cj2£iSryN7®‘ «5o 9] O F F E R I N G O F T W O SERIES O F T R E A S U R Y BILLS §1,200,000,000 of 91-Day Bills, Additional Amount, Series Dated Oct. 15,1959, Due April 14,1960 (To Be Issued January 14, 1960) §400,000,000 of 182-Day Bills, Dated January 14,1960, Due July 14,1960 To A ll /ncorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve D istrict: Following is the text o f a notice issued by the Treasury Department, released fo r publication in morning newspapers, Thursday, January 7, 1960: T h e T r e a s u ry D ep a 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 t o th e a g g reg a te am ou nt o f $1,600,000,000, o r th ereabouts, fo r cash and in ex ch a n g e for T r e a s u ry bills m atu rin g January 14, 1960, in the am ou nt o f $1,601,924,000, as fo llo w s : 9 1-d ay bills ( t o m aturity da te) t o be issued January 14, 1960, in the a m ou n t o f $1,200,000,000, o r thereabouts, rep resen tin g an addition al a m ou n t o f bills dated O c to b e r 15, 1959, and to m ature A p ril 14, 1960, origin a lly issued in the a m ou n t o f $400,316,000, th e addition al and original b ills t o be fre e ly in terch angeable. 182-day bills, fo r $400,000,000, o r th ereabouts, to be dated J anuary 14, 1960, and to m ature J u ly 14, 1960. T h e bills o f b oth series w ill be issued on a d iscou n t basis u nder co m p e titiv e 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 a m ou n t w ill be pa ya b le w ith ou t interest. T h e y w ill be issued in bearer fo r m o n ly , and in d e 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 v a lu e ). T e n d e rs w ill be receiv ed at F ed eral R e serv e B anks and B ran ches up to the clo s in g h ou r, o n e-th irty o ’ c lo c k p.m ., E astern S tandard tim e, M o n d a y , January 11, 1960. T en d ers w ill not be receiv ed at the T re a su ry D epartm en t, W a s h in g to n . E ach ten der m u st be f o r an even m u ltiple o f $1,000, and in the case o f com p etitive tenders the p r ice o ffe re d m ust be exp ressed on the basis o f 100, w ith n ot m o re than th ree decim a ls, e.g., 99.925. F ra ctio n s m ay n ot b e used. It is u rged that ten ders be m ade on the printed fo rm s and forw a rd ed in the special en velop es w hich 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 be perm itted to subm it tenders e x ce p t fo r their o w n a ccou n t. T en d ers w ill be receiv ed w ith o u t dep osit fro m in corp ora ted banks and trust c o m pan ies and fro m resp on sib le and re co g n iz e d dealers in investm ent secu rities. T e n d e rs fr o m oth ers m u st be a ccom p a n ied b y p a y m en t o f 2 p ercen t o f th e face a m ou n t o f T rea su ry bills applied fo r, u nless th e tenders are a ccom p a n ied b y an exp ress guaranty o f p a 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 c lo s in g h our, ten ders w ill be op en ed at the F ed era l R e s e rv e B anks and B ran ches, fo llo w in g w h ich pu blic 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 ran ge o f a ccep ted b ids. T h o s e subm itting ten ders w ill be 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 rea su ry ex p ressly reserves the righ t to a cce p t o r reject a n y o r all ten ders, in w h o le o r in part, and his a ction in a n y such resp ect shall be final. S u b je ct to these reserva tion s, n on com p etitiv e tenders fo r $200,000 o r less fo r the addi tional bills dated O c t o b e r 15, 1959, (91 d a ys rem ain in g until m a turity date on A p ril 14, 1960) and n on com p etitiv e ten ders fo r $100,000 o r less for the 182-day bills w ith ou t stated p r ice fr o m any o n e b idd er w ill be a ccep ted in full at th e a vera ge p rice (in th ree decim a ls) o f a ccep ted com p etitive b id s fo r the respective issues. Settlem ent f o r a ccep ted ten ders in a cco rd a n ce w ith the bids m ust b e m ade o r com p leted at the Federal R es e rv e Bank on January 14, 1960, in cash o r oth er im m ediately available fu n ds o r in a like fa ce a m ou n t o f T rea su ry bills m a tu rin g January 14, 1960. C ash and exch a n ge tenders w ill receiv e equal treatm ent. Cash a dju stm en ts w ill be m ade f o r d ifferen ces betw een the par value o f m a tu rin g bills a ccep ted in ex ch a n g e and the issue price o f th e n ew bills. T h e in com e derived fro m T rea su ry bills, w h eth er in terest o r gain fro m the sale o r oth er d isp osition o f the bills, d oes n o t have a n y ex em p tion , as such, and lo s s fr o m the sale o r oth e r d isp o si tion o f T rea su ry bills d oes n ot have a n y sp ecia l treatm ent, as such, under the Internal R even u e C o d e o f 1954. T h e bills are su b ject to estate, inheritance, g ift or oth er e x cis e taxes, w hether Fed eral or State, but are exem p t fr o m all ta xation n o w o r h ere a fter im p osed on the principal o r interest th ereof b v 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 local ta x in g authority. F o r pu rp oses o f taxation the a m ou n t o f dis co u n t at w h ich T rea su ry bills are o rigin a lly s o ld b y the U n ited States is con sid ered to be interest. U n d er S e ctio n 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 o t con sid ered to a ccru e until su ch bills are sold , red eem ed o r oth erw ise dis p o sed o f, and such bills are exclu d ed fro m con sid era tion as capital assets. A c c o r d in g ly , the o w n e r o f T rea su ry bills (o th e r than life insurance co m p a n ie s ) issued hereun der need in clu d e in his in com e ta x return o n ly the differen ce betw een the price paid fo r such bills, w h eth er o n origin al issue o r on su b seq u en t pu r ch ase, and the a m ou n t actu a lly receiv ed either u pon sale o r red em ption at m atu rity d u rin g the taxable yea r fo r w h ich the return is m ade, as ord in a ry gain o r loss. T r e a s u ry D ep a rtm en t C ircu lar N o . 418, R evised , and this n otice, p rescrib e the term s o f the T rea su ry bills a n d g o v e r n the con d ition s o f their issue. C opies 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 Bank o r B ranch. This Bank will receive tenders for both series up to 1:30 p.m., Eastern Standard time, Monday, January 11, 1960, 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 ax 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 (91-day bills to be issued January 7, 1960, representing an addi tional amount o f bills dated October 8, 1959, and maturing April 7, 1960; and 182-day bills dated January 7, 1960, maturing July 7, 1960) are shown on the reverse side o f this circular. A lfred H ayes , President. (o v e h ) RESULTS OF LAST OFFERING OF TREASURY BILLS (TW O SERIES ISSUED JANUARY 7, 1960) Range of Accepted Competitive Bids 91 -D ay Treasury Bills Maturing April 7, 1960 High ........ L ow ....................... Average ................. ......... 182-Day Treasury Bills Maturing July 7, 1960 Price Approx. equiv. annual rate Price Approx. equiv. annual rate 98.862 4.502% 97.448a 5.048% 98.814 4.692% 97.400 5.143% 98.837 4.602% 1 97.422 S.099% 1 a E x ce p tin g th ree ten ders tota lin g $250,000. 1 A v e ra g e rate on a co u p o n issue equivalent yield basis is 4.73% fo r the 9 1-d ay bills and 5.32% fo r the 182-day bills. In terest rates on bills are q u oted on the basis o f bank discou nt, w ith their len gth in actual n u m ber o f days related to a 360-day yea r. In con tra st, yield s on certificates, n otes, and b on d s are com p u ted on the basis o f interest on the investm ent, w ith the n u m ber o f d a ys rem ain in g in a sem iannual interest p a y m en t period related to the actual n u m ber o f days in the p eriod, and w ith sem iannual c o m p o u n d in g if m ore than on e c o u p o n period is in volved. (5 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (31 percent o f the amount o f 182-day bills bid fo r at the low price was accepted.) Total Tenders A pplied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing April 7, 1960 Applied for District Boston ............................ $ 23,248,000 New Y ork ..................... 1,474,715,000 Philadelphia................... 182-Day Treasury Bills Maturing July 7, 1960 Accepted $ 13,248,000 A pplied for $ 3,789,000 Accepted $ 3,789,000 786,565,000 576,040,000 261,140,000 24,348,000 14,348,000 12,292,000 7,292,000 Cleveland ....................... 32,546,000 32,546,000 24,342,000 24,342,000 Richmond ..................... 14,676,000 14,676,000 2,828,000 2,828,000 .......................... 30,931,000 30,931,000 5,977,000 5,977,000 ......................... 175,130,000 133,130,000 70,164,000 45,664,000 St. Louis ........................ 30,048,000 30,048,000 4,705,000 4,705,000 Minneapolis ................. 12,119,000 12,119,000 3,015,000 3,015,000 Kansas C i t y ................... 42,450,000 42,450,000 8,212,000 8,112,000 Dallas .............................. 21,099,000 21,099,000 4,917,000 4,917,000 San Francisco ............... 69,086,000 69,086,000 28,230,000 28,230,000 Atlanta Chicago Total ........... $1,950,396,000 $1,200,246,000b $744,511,000 *> In clu d es $239,374,000 n on com p etitiv e ten ders a ccep ted at the a vera ge p rice o f 98.837. c In clu d es $57,613,000 n on com p etitiv e ten ders a ccep ted at the a vera ge price o f 97.422. $400,011,000°