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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 A g e n t o f the U nited States r C ircular No. 4 8 4 7 ~1 L January 28, 1960 J OFFERING OF TW O SERIES OF TREASURY BILLS $1,000,000,000 of 91-Day Bills, Additional Amount, Series Dated Nov. 5, 1959, Due May 5, 1960 (To Be Issued February 4, 1960) $400,000,000 of 182-Day Bills, Dated February 4,1960, Due August 4,1960 T o A ll In corporated Batiks and Trust Companies, and Others Concerned, in the Second Federal R eserv e D istrict: F ollow in g is the text o f a notice issued by the Treasury Department, released for publication in morning new spapers, Th ursday, January 28, 1960: T h e T reasu ry D epartm ent, b y this pu blic n otice, invites tenders fo r tw o series o f T reasu ry bills to the a ggregate amount o f $1,400,000,000, o r thereabouts, fo r cash and in exch a n ge for T re a su ry bills m aturing February 4, 1960, in the amount o f $1,400,466,000, as f o llo w s : 91-day bills (to m aturity date) to be issued Febru ary 4, 1960, in the amount o f $1,000,000,000, or thereabouts, representing an addition al am ount o f bills dated N o vem ber 5, 1959, and to mature M ay 5, 1960, origin a lly issued in the amount o f $400,106,000, the additional and o rigin a l bills to be freely interchangeable. 182-day bills, fo r $400,000,000, or thereabouts, to be dated F ebru ary 4, 1960, and to mature A u gu st 4, 1960. T h e bills o f both series w ill be issued on a discou nt basis under com petitive and noncom petitive bid d in g as hereinafter provided , and at m aturity their face am ount w ill be payable w ith ou t interest. T h ey w ill be issued in bearer form only, and in denom inations o f $1,000, $5,000, $10,000, $100,000, $500,00U and $1,000,000 (m aturity va lu e). T en ders w ill be received at F ed eral R eserve Banks and Branches up to the clo s in g hour, on e-thirty o ’ c lo ck p.m., Eastern Standard time, M on day, Febru ary 1, 1960. Tenders w ill not be received at the T reasu ry Departm ent, W ash ington. E ach tender must be fo r an even m ultiple o f $1,000, and in the ca se o f com petitive tenders the price offered must be expressed on the basis o f 100, w ith n ot m ore than three decim als, e.g., 99.925. F raction s may 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 ran ches on application therefor. O thers than banking institutions w ill n ot be perm itted to subm it tenders e xcep t fo r their ow n account. T en ders w ill be received w ithout deposit from in corporated banks and trust com panies and from responsible and recogn ized dealers in in vestm ent securities. T en ders fro m others m ust be accom panied by paym ent o f 2 percent o f the fa ce am ount o f T rea su ry bills applied for, unless the tenders are accom panied by an express guaranty o f paym ent b y 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 Reserve Banks and B ranches, fo llo w in g w hich pu blic announcem ent w ill be made b y the T reasu ry Departm ent 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 right to accep t or reject any or all tenders, in w h ole o r in part, and his action in any such respect shall be final. S u b ject to these reservations, n on com petitive tenders fo r $200,000 o r less for the addition al bills dated N ovem ber 5, 1959, (91 days re m aining until m aturity date on M a y 5, 1960) and n on com petitive tenders fo r $100,000 or less for the 182-day bills w ithout stated price from any one b idd er w ill be accepted in fu ll at the average price (in three d ecim a ls) o f accepted com petitive bids for the respective issues. Settlem ent fo r a ccepted tenders in accord a n ce w ith the bids must be made or com pleted at the Federal R eserve Bank on February 4, 1960, in cash or other im m ediately available funds or in a like fa ce am ount o f Treasu ry bills m aturing F ebru ary 4, 1960. Cash and exch a n ge tenders w ill receive equal treatment. Cash adjustm ents w ill be made fo r differences between the par value o f m aturing bills a ccepted in exch a n ge and the issue price o f the new bills. T h e incom e derived from T reasu ry bills, whether interest or gain from the sale o r oth er disposition o f the b ills, does not have any exem ption, as such, and loss from the sale or oth er disp osition 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 o r oth er excise taxes, w hether F ed eral o r State, but are exem pt from a ll ta x a tion n ow or hereafter im posed on the principal or interest th ereof b y any State, o r any o f the possessions o f the United States, or by any lo ca l ta x in g authority. F o r purposes o f ta x a tion the am ount o f discount, at w h ich T reasu ry bills are origin a lly sold b y the U nited States is con sid ered to be interest. U nder S ections 4 5 4(b) and 1221(5) o f the Internal Revenue C ode o f 1954 the am ount o f discou nt at w hich bills issued hereunder are s o ld is n ot con sidered to accru e until such bills are sold, redeem ed or otherw ise disp osed o f, and such bills are exclu d ed from con sidera tion as capital assets. A cco r d in g ly , the ow ner o f T rea su ry bills (oth er than life insurance c o m pan ies) issued hereunder need include in his in com e ta x return on ly the difference betw een the price paid fo r such bills, whether on origin a l issue o r on subsequent purchase, and the am ount actu ally received either upon sale or redem ption at m aturity du rin g the taxable yea r fo r w hich the return is made, as ord in a ry gain o r loss. T reasu ry Departm ent C ircu la r N o. 418, R evised , and this notice, prescribe the terms o f the T reasu ry bills and govern the con dition s o f their issue. Copies o f the circu la r m ay be obtained from any F ed eral R eserve Bank o r B ranch. T h is Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, M on day, February 1, 1960, 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 en velope marked “ T en d er for T reasu ry B ills.” Ten ders m ay be subm itted b y telegraph, su bject to w ritten confirm ation; they may not be submitted by telephone. Payment for 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 esults o f the last offerin g o f T reasury bills (91-day bills to be issued January 28, 1960, representing an additional am ount o f bills dated O ctob er 29, 1959, and m aturing A pril 28, 1960; and 182-day bills dated January 28, 1960, m aturing July 28, 1960) are shown on the reverse side o f this circular. A lfred H ayes , President. (o v e r) RESULTS OF LAST OFFERING OF TREASURY BILLS (TW O SERIES ISSUED JANUARY 28, 1960) Range o f Accepted Competitive Bids 91-Day Treasury Bills Maturing April 28, 1960 P r ice 182-Day Treasury Bills Maturing July 28, 1960 A p p ro x . equiv. annual rate P r ice A p p ro x . equiv. annual rate ........ 98.970 4.075% 97.682 4.585% L o w .......................... ........ 98.954 4.138% 97.668 4.613% ................. ........ 98.960 4.116% ! 97.671 4.608% 1 H igh A verage 1 A ve ra g e rate on a cou pon issue equivalent yield basis is 4.23% fo r the 91-day bills and 4.80% fo r the 182-day bills. Interest rates on bills are quoted on the basis o f bank discount, w ith their length in actual num ber o f days related to a 360-day year. In con trast, yields on certificates, notes, and bonds are com puted on the basis o f interest on the investment, w ith the num ber o f days rem aining in a sem iannual interest paym ent period related to the actual num ber o f days in the p eriod, and w ith sem iannual com pou nding if m ore than on e cou pon period is involved. (74 percent o f the am ount o f 91-day bills bid fo r at the low price was accep ted .) (88 percent o f the am ount o f 182-day bills bid fo r at the low price w as accepted.) Total Tenders A pplied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing A pril 28. 1960 D istrict A ccepted A pplied for B oston ............................ ........ $ 29,448,000 $ 19,448,000 182-Day Treasury Bills Maturing July 28, 1960 A pplied for $ 5,352,000 A ccepted $ 5,346,000 N ew Y o r k ..................... ......... 1,247,592,000 570,789,000 627,578,000 214,571,000 Philadelphia ................. ........ 30,502,000 15,002,000 13,303,000 8,143,000 ..................... ........ 33,688,000 33,688,000 27,017,000 20,667,000 R ich m on d ..................... ........ 13,135,000 12,710,000 2,269,000 2,019,000 4,217,000 Cleveland A t la n t a ............................ ........ 22,559,000 20,359,000 4,417,000 C h icago .......................... ........ 214,483,000 143,053,000 91,823,000 69,268,000 St. L o u i s ....................... ........ 30,457,000 29,457,000 9,324,000 4,324,000 ................. ........ 12,906,000 12,706,000 4,074,000 2,538,000 Kansas C ity ................. .......... 43,659,000 35,159,000 6,959,000 6,759,000 D a l l a s .............................. .......... 17,573,000 17,073,000 6,405,000 6,405,000 San F r a n c is c o ............... 97,363,000 90,638,000 73,741,000 56,145,000 M inneapolis T ota l ....................... $1,793,365,000 $1,000,082,000a a Includes $258,474,000 noncom petitive tenders accepted at the a verage price o f 98.960. b Includes $61,811,000 n on com petitive tenders accepted at the average price o f 97.671. $872,262,000 $400,402,000b
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