The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States [C ir c u la r N o . 4 9 3 0 1 L A u g u s t 24 , I 9 6 0 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,000,000,000 of 91-Day Bills, Additional Amount, Series Dated June 2, 1960, Due Dec. 1, 1960 (To Be Issued September 1, 1960) $500,000,000 of 182-Day Bills, Dated September 1, 1960, Due March 2, 1961 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: F ollow in g is the text o f a notice issued by the T reasu ry Department, released 4 p.m ., Eastern D aylight Saving tim e: T he Treasury Department, by this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o f $1,500,000,000, o r thereabouts, fo r cash and in exchange for Treasury bills maturing September 1, 1960, in the amount o f $1,500,658,000, as fo llo w s : 91-day bills (to maturity date) to be issued September 1, 1960, in the amount o f $1,000,000,000, or thereabouts, repre senting an additional amount o f bills dated June 2, 1960, and to mature December 1, 1960, originally issued in the amount o f $500,299,000, the additional and orig inal bills to be freely interchangeable. 182-day bills, for $500,000,000, or thereabouts, to be dated September 1, 1960, and to mature M arch 2, 1961. The 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 will be payable without interest. They will 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 value). Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o ’clock p jn ., Eastern Daylight Saving time, M onday, August 29, 1960. Tenders w ill not be re ceived at the Treasury Department, W ashington. Each tender must be for 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 more 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 by Federal Reserve Banks or Branches on application therefor. Others than banking institutions will not be permitted to submit tenders except for their ow n account. Tenders will 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 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 will be opened at the Federal Reserve Banks and Branches, follow ing which public announcement w ill be made by the Treasury Department ut the amount and price range o f accepted bids. Those sub mitting tenders will be advised o f the acceptance or rejection thereof. T he Secretary o f the Treasury expressly reserves the fo r publication today at 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 for $200,000 o r less fo r the additional bills dated June 2, 1960, (91 days re maining until maturity date on Decem ber 1, I960) 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 decim als) o f accepted competitive bids for the respective issues. Settlement fo r accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on September 1, 1960, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing September 1, 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, g ift or other excise taxes, whether Federal or State, but are exem pt 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 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. Accordingly, the ow ner 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 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 may be obtained from any Federal Reserve Bank or Branch. T his Bank w ill receive tenders fo r both series up to 1 :30 p.m ., Eastern Daylight Saving time, M onday, A ugu st 29, 1960, at the Securities Department o f its H ead Office and at its B uffalo Branch. T ender form s fo r the respective series are enclosed. Please use the appropriate form s to submit tenders and return them in an envelope marked “ T ender fo r T reasury B ills.” Tenders may be submitted by telegraph, subject to written confirm ation; they may not be submitted by telephone. P aym en t f o r the T reasury bills cannot be made by credit through the T reasury T a x and Loan A ccou n t. S ettlem en t m ust be made in cash or oth er im m ediately available fu n d s or in maturing T reasury bills. Results o f the last offering o f Treasury bills (92-day bills to be issued August 25, 1960, representing an additional amount o f bills dated May 26. 1960, and maturing November 25, 1960; and 182-day bills dated August 25, 1960, maturing February 23, 1961) are shown on the reverse side o f this circular. A l f r e d H a y e s , President. ( over) R E S U L T S OF L A ST O F F E R IN G OF T R E A S U R Y B IL L S (T W O SE R IE S T O B E ISSU E D A U G U ST 2 5,1 96 0 ) Range of Accepted Competitive Bids 9 2 -D a y T reasury Bills 1 8 2 -D a y T rea su ry Bills M aturing N o v em b er 25, 1960 M aturing F eb ru a ry 23, 1961 Approx. equiv. annual rate Price Price Approx. equiv. annual rate High ....................... ................. 9 9 .3 7 0 a 2 .4 6 5 % 98.590 b 2 .7 8 9 % L o w ............................... ................. 99.351 2 .5 4 0 % 98.580 2 .8 0 9 % Average .................. ................. 99.356 2.5 1 8 % 1 98.582 2 .8 0 6 % 1 3 E xcepting one tender o f $150,000. b Excepting tw o tenders totaling $125,000. 1 On a coupon issue o f the same length and for the same amount invested, the return on these bills would provide yields o f 2.57 percent fo r the 92-day bills, and 2.89 percent fo r the 182-day bills. Interest rates on bills are quoted in terms o f bank discount, with the return related to the face amount o f the bills payable at maturity rather than the amount invested, and their length in actual number o f days related to a 360-day year. In contrast, yields on certificates, notes, and bonds are computed in terms o f interest on the amount invested, and relate the number o f days remaining in an interest payment period to the actual number o f days in the period, with semiannual com pounding if more than one coupon period is involved. (3 4 percent o f the amount o f 92-day bills bid fo r at the low price was accepted.) (2 2 percent o f the amount o f 182-day bills bid fo r at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 9 2 -D a y T reasury B ills M aturing N o v em b er 25, 1960 Applied for District Boston ....................... ........ $ 23,547,000 1 8 2 -D a y T rea su ry Bills M atu rin g F eb ru a ry 23, 1961 Applied for Accepted $ 13,547,000 $ 15,154,000 Accepted $ 1,219,000 New York.................. ........ 1,38 8 ,6 % , 000 763,166,000 1,090,332,000 418,387,000 Philadelphia .............. ........ 26,332,000 12,352,000 8,441,000 1,363,000 Cleveland................... ........ 41,971,000 41,971,000 26,436,000 14,386,000 Richmond .................. ........ 10,586,000 10,586,000 2,312,000 1,910,000 Atlanta....................... ........ 23,737,000 22,237,000 9,705,000 3,315,000 193,027,000 128,539,000 99,256,000 16,363,000 16,746.000 15,246,000 3,584,000 2,538,000 7,830,000 7,664,000 2,589,000 2,389,000 35,724,000 31,924,000 14,501,000 3,969,000 7,634,000 7,634,000 2,810,000 2,810,000 50,353,000 45,153,000 46,749,000 32,175,000 Chicago ..................... ........ St. Louis ................... ........ Minneapolis......................... Kansas City .............. ........ Dallas......................... ........ San Francisco............ . Total .......... ........ $1,826,183,000 $1 ,1 0 0 ,0 1 9 ,0 0 0 c c Includes $194,650,000 noncompetitive tenders accepted at the average price of 99.356. d Includes $41,308,000 noncompetitive tenders accepted at the average price of 98.582. $1,321,869,000 $ 5 0 0 ,8 2 4 ,000 d