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FED ERAL RE SE R V E BANK O F NEW YORK Fiscal A g en t o f the U nited States rC ircu la r N o. 4 8 6 T T U M arch 31, 1960 J TREASURY FINANCING T o A ll Banking In stitution s, and Others Concerned, in th e Second Federal R eserve D istrict: The following statement was made public today: The Treasury will borrow $2^> billion, or thereabouts, to cover its estimated requirements fo r funds fo r the balance o f the fiscal year ending June 30, 1960. These funds will be obtained from the issue o f : 4X A percent Treasury bonds to be dated A pril 5, 1960, and to mature May 15, 1985, callable at the option o f the United States on any interest date on and after May 15, 1975, up to $ l 1/ 2 billion, at par and accrued interest fo r delivery and paym ent A pril 14, 1960, and 4 percent Treasury notes to be dated A p ril 14, 1960, and to mature May 15, 1962, in an amount o f $2 billion, or thereabouts. T o the extent that the amount o f public subscriptions to the 4 % percent Treasury bonds of 1975-85, when added to the amount o f the 4 percent Treasury notes issued exceed $21/£ billion in the aggregate, the excess funds borrowed in this operation w ill be used by the Treasury to reduce the amounts o f the weekly issues o f 91-day Treasury bills in the weeks ahead. In addition the Treasury w ill issue on A p ril 15, 1960, $2 billion o f 1-year Treasury bills, to be sold at auction, the proceeds o f which w ill be used to redeem $2 billion o f quarterly trea su ry bills m aturing on that date. The subscription books will be open fo r the Treasury bonds and notes only on Monday, A p ril 4, q,nd Tuesday, A pril 5, 1960. The Treasury bill auction yrill be held on Tuesday, A p p l 12, I960. 4 1/ p ercen t Treasury bonds Cash subscriptions tp the 41/4 percent Treasury bonds fr.om commercial banks, fo r their own account, and from States, political subdivisions or instrumentalities thereof, and public pension and retirement and other public fun ds w ill be received without deposit. Savings-type investors will be permitted to p ay fo r bonds allotted to them in installments up to June 15, 1960 (not less than 40 percent b y A p ril 14, the deliyery date; 70 percent b y May 1 5 ; and fu ll payment by June 15). Am ounts allotted to other classes o f subscribers must be paid fo r in full on A p ril 14. A ll subscriptions from others than commercial banks fo r tjieir pwn account and from States, political subdivisions or instrumentalities thereof and public fund? ipust be accompanied by a cash down-payment o f 20 percent at the time o f the subscription. Commercial bank subscriptions will be limited to an amount not exceeding 4 percent o f the combined amount o f time certificates o f deposit (bu t only those issued in the names o f individuals, and o f corporations, associations, and other organizations not operated fo r profit) and o f savings deposits, or 10 percent o f the combined capital, surplus and undivided profits, whichever is greater. In addition to the amount offered fo r public subscription, the Secretary o f the Treasury may allocate up to $100,000,000 o f these bonds to Govern ment Investment Accounts. Subscription books fo r this issue will be open op. A p ril 4 and A p ril 5. A ll subscriptions will be allotted in fu ll unless the total public subscriptions exceed $V /2 billion. In that event subscriptions w ill be subject to allotment, except that subscriptions up to a maximum o f $25,000 i f they are accompanied by 100 percent paym ent at the time the subscriptions are entered, ^ ill be allotted in fu ll to all subscribers. Savjng$T£yp(3 inyes|;prs who may subscribe to the i 1/^ per cent bonds on a deferred payment basis are: Pension and retirement funds— public and private Endowment funds (O V E K ) Common trust funds under Regulation F o f the B oard of Governors o f the Federal Reserve System Insurance companies Mutual savings banks Fraternal benefit associations and labor u n ions’ insurance funds Savings and loan associations Credit unions Other savings organizations (not including commercial banks) States, political subdivisions or instrumentalities thereof, and public funds. W here subscribers in this group (except States, political subdivisions or instrumentalities thereof, and public pension and retirement and other public funds) elect to pay fo r such bonds in installments, delivery o f 5 percent o f the total par amount allotted will be withheld until paym ent fo r the total amount allotted has been completed. The bonds may be paid fo r by credit in Treasury Tax and Loan Accounts. The bonds will be redeemable at par prior to m aturity in payment o f Federal estate taxes if owned by the decedent at time o f death. 4 p ercen t Treasury notes Subscriptions to the 4 percent Treasury notes of May 15, 1962, from commercial banks, fo r their own account, will be received without deposit, but will be restricted to 50 percent o f the combined capital, surplus, and undivided profits o f the subscribing bank, and subscriptions from all others must be accompanied by payment o f 2 percent o f the amount o f notes applied fo r not subject to withdrawal until after allotment. Payment fo r 75 percent o f these Treasury notes may be made by credit in Treasury Tax and Loan Accounts. General requirem ents fo r 4 % p ercen t Treasury bonds and 4 p ercen t Treasury notes The Secretary o f the Treasury reserves the right to reject or reduce any subscription, to allot less than the amount o f bonds or notes applied fo r, and to make different percentage allotments to various classes o f subscribers. Commercial banks and other lenders are requested to refrain from making unsecured loans, or loans collateralized in whole or in part by the notes or bonds subscribed fo r, to cover the deposits required to be paid when subscriptions are entered, and banks will be required to make the usual cer tification to that effect. A ll subscribers to the bonds and notes are required to agree not to purchase or sell, or to make any agreements with respect to the purchase or sale or other disposition o f the securities subscribed fo r under this offering, until after midnight, A p ril 5. A n y subscriptions fo r the notes or the bonds addressed to a Federal Reserve Bank or Branch, or to the Treasurer o f the United States, and placed in the mail before m idnight A p ril 5, w ill be con sidered as timely. Treasury bills maturing A p ril 15, 1960 The Treasury also w ill issue $2,000 million or thereabouts, o f 1-year Treasury bills on A p ril 15, 1960, fo r cash or in exchange fo r the $2,003 m illion o f Treasury bills which mature on that date. The new bills w ill be sold on an auction basis, and tenders fo r such bills will be received on A p ril 12, 1960. Paym ent fo r these bills cannot be made by credit in Treasury T ax and Loan Accounts. F u ll details regarding the offering o f the bills to be issued on A p ril 15, 1960, w ill be released next week. The circulars and subscription forms for the bond and note offerings will be mailed to reach you by Monday, A pril 4, 1960. A lfred H ayes, President.
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