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FEDERAL RESERVE BANK O F N EW YORK Fiscal Agent of the United States C ir cu la r N o . 4 8 5 2 [ F e b r u a r y 10, 1 96 0 i OFFERING OF TWO SERIES OF TREASURY BILLS $1,200,000,000 of 91-Day Bills, Additional Amount, Series Dated Nov. 19, 1959, Due May 19,1960 (To Be Issued February 18, 1960) $400,000,000 of 182-Day Bills, Dated February 18, 1960, Due August 18, 1960 To A ll Incorporated Banks and Trust 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, Wednesday, February 10, 1960: T h e Treasury Department, b y this public notice, invites tenders f o 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 February 18, 1960, in the amount o f $1,600,866,000, as fo llo w s : 91-day bills (to maturity date) to be issued February 18, 1960, in the amount o f $1,200,000,000, or thereabouts, representing an additional amount o f bills dated N ovem ber 19, 1959, and to mature M ay 19, 1960, originally issued in the amount o f $403,266,000, the additional and original bills to be freely interchangeable. 182-day bills, fo r $400,000,000, o r thereabouts, to be dated February 18, 1960, and to mature A ugust 18, 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 w ill be payable without interest. Th ey w ill be issued in bearer form only, and in denominations o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m aturity valu e). Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o ’clock p.m., Eastern Standard time, M onday, February 15, 1960. Tenders w ill 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 m ore 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 w ill be supplied b y Federal Reserve Banks or Branches on application therefor. Others than banking institutions will not be permitted to submit tenders except fo r their own account. Tenders w ill 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 fo r, 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 w ill be opened at the Federal Reserve Banks and Branches, follow in g which public announcement w ill be made b y the Treasury Department o f the amount and price range o f accepted bids. T h ose sub mitting tenders w ill be advised o f the acceptance or rejection thereof. T h e Secretary o f the Treasury expressly reserves the right to accept or reject any o r all tenders, in w hole or in part, and his action in any such respect shall be final. Subject to these reservations, noncompetitive tenders fo r $200,000 o r less fo r the additional bills dated Novem ber 19, 1959, (91 days re maining until maturity date on M ay 19, 1960) and noncom petitive tenders f o r $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 decim als) o f accepted com petitive bids fo r the respective issues. Settlement f o r accepted tenders in accordance with the bids must be made or com pleted at the Federal Reserve Bank on February 18, 1960, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing February 18, 1960. Cash and exchange tenders w ill receive equal treatment. Cash adjustments w ill be made f o r 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 fro m Treasury bills, whether interest or gain fro m the sale o r other disposition o f the bills, does not have any exemption, as such, and loss from the sale or other disposition o f Treasury bills does not have any special treat ment, as such, under the Internal Revenue Code o f 1954. T he bills are subject to estate, inheritance, g ift or other excise taxes, whether Federal or State, but are exem pt fro m all taxa tion now or 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 b y 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. A ccordin gly, the owner o f Treasury bills (oth er than life insurance com panies) issued hereunder need include in his income ta x 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 1 :30 p.m., Eastern Standard time, Monday, February 15, 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 fo r 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 February 11, 1960, representing an additional amount o f bills dated November 12, 1959, and maturing May 12, 1960; and 182-day bills dated February 11, 1960, maturing August 11, 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 (TWO SERIES ISSUED FEBRUARY 11, 1960) Range of Accepted Competitive Bids (GdVM tl'l 91-Day Treasury Bills Maturing M ay 12, 1960 182-Day Treasury Bills Maturing A ugust 11, 1960 A p p ro*, equiv. annual rate Price P rice A p p ro x . equiv. annual rate High ........................... ................ 99.112 3.513% 97.954 4.047% ........................... ................ 99.080 3.640% 97.927 4.100% Average ..................... ................ 99.099 3.563% 1 97.930 4.094% 1 L ow 1 A verage rate on a coupon issue equivalent yield basis is 3.66% fo r the 91-day bills and 4.25% fo r the 182-day bills. Interest rates on bills are quoted on the basis o f bank discount, with their length in actual number o f days related to a 360-day year. In contrast, yields on certificates, notes, and bonds are computed on the basis o f interest on the investment, with the number o f days remaining in a semiannual interest payment period related to the actual number o f days in the period, and with semiannual com pounding if m ore than one coupon period is involved. (55 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (82 percent o f the amount o f 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-D ay Treasury Bills Maturing M ay 12, 1960 A pplied f o r District 182-Day Treasury Bills Maturing August 11, 1960 A ccepted $ 20,919,000 Applied f o r $ 6,765,000 A ccepted $ 3,585,000 New Y o r k ..................... ........ 1,416,465,000 770.885,000 758,029,000 302,436,000 Philadelphia ................. ........ 30,390,000 15,390,000 9,414,000 3,514,000 Cleveland....................... ........ 26,129,000 25,979,000 21,678,000 6,438,000 19,084,000 4,666,000 4,611,000 29,889,000 10,200,000 5,417,000 Chicago ......................... 154,042,000 95,436,000 42,367,000 St. Louis ....................... 26,435,000 6,847,000 5,699,000 Richmond ..................... M inneapolis.................. ........ 16,296,000 16,296,000 4,478,000 1,978,000 Kansas City ................ ........ 47,087,000 47,069,000 10,999,000 8,146,000 D allas............................. ........ 20.103,000 19,603,000 5,600,000 5,260,000 San F ran cisco.............. 54.702,000 54,602,000 38,180,000 10,860,000 T o t a l.............. ........ $1,915,408,000 $1,200,193,000 a * Includes $259,027,000 noncompetitive tenders accepted at the average price o f 99.099. t>Includes $64,546,000 noncompetitive tenders accepted at the average price o f 97.930. $972,292,000 $400,311,000b
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