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FE D E RA L R E SE R V E BANK O F N EW YO RK Fiscal Agent of the United States r C ir c u la r N o . 4 8 9 8 1 t J u n e 8 , 1960 J OFFERING OF TW O SERIES OF TREASURY BILLS $1,200,000,000 of 91-Day Bills, Additional Amount, Series Dated Mar. 17,1960, Due Sept. 15, 1960 (To Be Issued June 16, 1960) $500,000,000 of 182-Day Bills, Dated June 16,1960, Due December 15,1960 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve D istrict: F o llo w in g is the text o f a notice issued by the Treasury D epartm ent, released for publication today at 4 p.m., Eastern D a yligh t S aving tim e : The Treasury Department, by this public notice, invites tenders tor tw o scries o f Treasury bills to the aggregate amount o f $1,700,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing June 16, 1960, in the amount o f $1,700,273,000, as follow s: 91-day bills (to maturity date) to be issued June 16, 1960, in the amount of $1,200,000,000, or thereabouts, repre senting an additional amount o f bills dated March 17, 1900, and to nature September 15, 1960, originally issued in the amount o f $399,901,000, the additional and o r ig inal bills to be freely interchangeable. 182-day bills, for $500,000,000, or thereabouts, to be dated June 16, 1960, and to mature December 15, 1960. The bills o f both scries will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. They will be issued in bearer form only, and in denominations o i $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (maturity value). Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o’clock p.m., Eastern Daylight Saving time, Monday, June 13, 1960. Tenders will not be received at the Treasury Department, Washington. Each tender must be for an even multiple of $1,000, and in the case o f competitive tenders the price offered must be expressed on the basis o f 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Others than banking institutions w ill not be permitted to submit tenders except for 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 from others must be accompanied by payment o f 2 percent o f the face amount o f Treasury bills applied for, unless the tenders are accompanied by an express guaranty of 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 ing which public announcement will be made by the Treasury Department o f the amount and price range o f accepted bids. Those sub mitting tender'? w ill be advised o f the acceptance or rejection thereof. The Secretary o f the Treasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and his action in any such respect shall be final. Subject to these reservations, noncompetitive tenders tor $200,000 or less for the additional bills dated March 17, 1960, (91 days re maining until maturity date on September 15,1960) and noncom petitive tenders for $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 decimals) o f accepted competitive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on June 16, 1960, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing June 16, 1960. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. The income derived from Treasury bills, whether interest or gain from the sale or 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. The bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exempt from 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. For purposes o f taxa tion the amount o f discount at which Treasury bills are originally sold by the United States is considered to be interest. Under Sections 454(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 arc sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner o f Treasury bills (other than life insurance com panies) issued hereunder need include in his income tax return only the difference between the price paid for 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 for which the return is made, as ordinary gain or loss. Treasury Department Circular No. 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 may be obtained from any Federal Reserve Bank or Branch. T h is Bank will receive tenders fo r both series up to 1 :30 p.m., Eastern D a yligh t S avin g time, M onday, June 13, 1960, at the Securities D epartm ent o f its H ead O ffice 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 marked “ T en d er for T reasury Bills.” Ten ders m ay be subm itted b y telegraph, su bject to written confirmation; they may not be submitted by telephone. Payment for 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. Results of the last offering of Treasury bills (91-day bills to be issued June 9, 1960, representing an additional amount of bills dated March 10, 1960, and maturing September 8, 1960; and 182-day bills dated June 9, 1960, maturing December 8, 1960) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED JUNE 9, 1960) Range o f Accepted Competitive Bids 91-Day Treasury Bills Maturing Septem ber 8, 1960 Price 182-Day Treasury Bills Maturing Decem ber 8, 1960 Approx. equiv. annual rate Price Approx. equiv. annual rate ........................ ........ 99.330 2.651% 98.560 2.848% L o w .......................... ........ 99.298 2.777% 98.541 2.886% 99.313 2.716% 1 98.548 2.871% ! H igh A verage ................. 1 Average rate on a coupon issue equivalent yield basis is 2.77% for the 91-day bills and 2.95% for 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 compounding if more than one coupon period is involved. (50 percent o f the am ount o f 91-day bills bid for at the low price was accep ted .) (54 percent o f the am ount o f 182-day bills bid fo r at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing September 8, 1960 District Accepted Applied for B oston ....................................... $ 24,900,000 182-Day Treasury Bills Maturing D ecem ber 8. 1960 $ Applied for 14,900,000 $ 8,725,000 Accepted $ 8,275,000 N ew Y o r k ..................... .......... 1,385,749,000 867,649,000 889,398,000 Philadelphia ................. .......... 25,216,000 10,106,000 8,582,000 1,582,000 ................... .......... 41,751,000 41,751,000 16,306,000 5,626,000 R ich m on d ................... ........... 9,580,000 9,580,000 3,693,000 1,693,000 A t la n t a ....................................... 24,093,000 23,693,000 3,862,000 2,354,000 C h icago ......................... .......... 183,877,000 115,557,000 90,847,000 33,192,000 St. L o u i s ....................... .......... 16,557,000 15,057,000 4,196,000 4,046,000 C leveland 400,931,000 ................. .......... 11,515,000 11,515,000 2,508,000 1,508,000 Kansas C ity ................. .......... 29,242,000 29,242,000 5,370,000 4,740,000 D a l l a s .............................. .......... 8,556,000 8,556,000 3,245,000 3,245,000 60,268,000 52,468,000 44,140,000 32,840,000 M inneapolis San F r a n c is c o ............... T ota l ........... ........... $1,821,304,000 $1,200,074,000* $1,080,872,000 $500,032,000b a Includes $196,337,000 noncom petitive tenders a ccepted at the average price o f 99.313. b Includes $45,925,000 n on com petitive tenders a ccepted at the average price o f 98.548. J
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