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FED ERAL RE SE R V E BANK O F N EW YORK Fiscal Agent of the United States r C ircular No. 4 8 9 2 1 M ay 24, 1960 J L O FFE R IN G OF T W O SERIES OF T R E A S U R Y BILLS $1,100,000,000 o f 91-Day Bills, Additional Amount, Series Dated Mar. 3, 1960, Due Sept. 1, 1960 (T o Be Issued June 2, 1960) $500,000,000 o f 182-Day Bills, Dated June 2,1960, Due December 1, 1960 T o A ll Incorporated B anks and T ru st 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 b y the T reasu ry D epartm ent, released fo r publication in m orning newspapers, T u esd ay, M ay 24, 1960: T h e T reasu ry Departm 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 $1,600,000,000, o r thereabouts, fo r cash and in exch ange for T reasu ry bills m aturing June 2, 1960, in the am ount o f $1,501,246,000, as f o llo w s : 91-d a y bills (to m aturity date) to be issued June 2, 1960, in the am ount o f $1,100,000,000, or thereabouts, repre senting an add ition a l amount o f bills dated M arch 3, 1960, and to mature Septem ber 1, 1960, o rigin a lly issued in the am ount o f $400,084,000, the a dd ition al and o r ig inal bills to be freely interchangeable. 182-day bills, fo r $500,000,000, or thereabouts, to be dated June 2, 1960, and to mature D ecem ber 1, 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 fa ce am ount w ill be payable w ith ou t interest. T h e y w ill be issued in bearer form only, and in denom inations o f $1,000, $5,000, $10,000, $100,000, $500,000 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, one-thirty o ’c lo ck p.m., Eastern D a yligh t S a vin g tim e, F rida y, M a y 27, 1960. Tenders w ill not be received at the T reasu ry D epartm 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 m ay n ot be used. It is urged that tenders be m ade on the printed form s and forw a rd ed in the special envelopes w hich w ill be supplied b y F ed eral R eserve Banks o r B ranches on application th erefor. O thers than banking institutions w ill n ot be perm itted to subm it tenders excep t fo r their ow n a ccou nt. T en ders w ill be received w ith ou t deposit from in corpora ted 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 by 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 Federal Reserve Banks and B ranches, fo llo w in g w hich pu blic announcem ent w ill be m ade b y the T reasu ry Departm ent o f the am ount and price range o f a ccepted bids. T h ose sub m itting tenders w ill be advised o f the acceptance o r rejection thereof. T h e Secretary o f the T reasu ry expressly reserves the right to accept o r reject any o r all tenders, in w hole or in part, and his action in any such respect shall be final. S u bject to these reservations, noncom petitive tenders fo r $200,000 o r less fo r the a dd ition al bills dated M arch 3, 1960, (91 days re m aining until m aturity date on Septem ber 1, 1960) and n on com potitive tenders fo r $100,000 or less for the 182-day bills without stated price from any one b idd er w ill be accepted in fu ll at the a verage price (in three decim a ls) o f accepted com petitive bids for the respective issues. Settlem ent fo r accepted tenders in a ccord a n ce w ith the bids must be made or com pleted at the Federal R eserve Bank on June 2, 1960, in cash or other im m ediately available funds or in a like fa ce am ount o f T reasu ry bills m aturing June 2, 1960. Cash and exchange tenders w ill receive equal treatment. Cash adjustm ents w ill be m ade fo r differences betw een the par value o f m aturing bills accepted in exch ange and the issue price o f the new bills. T h e in com e derived from T reasu ry bills, w hether interest o r gain from the sale o r other disp osition o f the bills, does not have any exem ption, as such, and loss from the sale o r oth er disp osition o f T reasu ry bills does not have any special treat ment, as such, under the Internal R evenue C ode o f 1954. T he bills are subject to estate, inheritance, g ift o r other 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 by any State, o r any o f the possessions o f the U nited States, o r by any loca l ta x in g authority. F o r purposes o f ta x a tion the am ount o f discount at w hich T reasu ry bills are o rigin a lly sold by the U nited States is con sidered 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 sold is n ot con sidered to accrue until such bills a re sold , redeem ed or otherw ise disposed of, and such bills are exclu ded from con sideration as capital assets. A ccord in g ly , the ow ner o f T reasu ry bills (oth er than life insurance co m panies) issued hereunder need include in his incom e ta x return o n ly the difference betw een the price paid fo r such bills, w hether on origin a l issue or on subsequent purchase, and the am ount actu a lly received either upon sale or redem ption at m aturity during 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 n otice, prescribe the term s o f the T reasu ry bills and govern the con dition s o f th eir issue. Copies o f the circu la r m ay be obtained from any F ed eral R eserve Bank o r Branch. T h is Bank w ill receive tenders for both series up to 1 :30 p.m., Eastern D ayligh t Saving time, Friday, M ay 27, 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 envelope m arked “ T en d er fo r T reasury B ills.” Ten ders m ay be subm itted b y telegraph, subject to written confirmation; they may not be submitted by telephone. Payment jor 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. T h is circular w as printed before the results o f the b iddin g for Treasury bills to be issued M ay 26, 1960, w ere available; those results w ill be announced after release b y the Treasury Departm ent. A lfred H ayes, President. Closing date for receipt of tenders is Friday, M ay 27.