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F E D E R A L R E S E R V E BA N K O F N E W Y O RK Fiscal Agent of the United States [s5S2beM* imo] OFFERING OF TWO SERIES OF TREASURY BILLS $1,100,000,000 o f 91-Day Bills, Additional Amount, Series Dated June 23, 1960, Due Dec. 22, 1960 (T o Be Issued September 22, 1960) $500,000,000 o f 182-Day Bills, Dated September 22, 1960, Due March 23, 1961 T o A ll Incorporated Banks and Trust Companies, and O thers C oncerned, in the Second Federal R eserv e D istrict: Following is the text of a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Daylight Saving time: T h e T re a su ry D epa rtm en t, b y this p u b lic n otice, invites ten ders fo r tw o series o f T rea su ry bills t o th e a g g reg a te am ou nt o f $1,600,000,000, o r th ereabouts, fo r cash and in ex ch a n g e for T re a su ry bills m atu rin g S ep tem ber 22, 1960, in the a m ou n t o f $1,600,774,000, as fo llo w s : 91 -d a y bills ( t o m atu rity da te) to be issued S ep tem ber 22, 1960, in the a m ou n t o f $1,100,000,000, or thereabouts, rep resen tin g an additional a m ou n t o f bills dated June 23, 1960, and to m ature D ecem b er 22, 1960, origin a lly issued in the a m ou n t o f $500,157,000, the additional and origin a l bills to be fre e ly interchangeable. 182-day bills, fo r $500,000,000, o r th ereabouts, t o be dated S ep tem ber 22, I960, and to m ature M a rch 23, 1961. T h e bills o f b oth series w ill be issued on a d iscou n t basis u nder co m p etitive and n o n com p etitiv e bid d in g as h erein a fter p r o vid ed, and at m aturity their fa ce a m ou n t w ill b e p a ya b le w ith ou t interest. T h e y w ill be issued in bearer fo r m o n ly , and in d e n om in ation s o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m a tu rity va lu e). T e n d e rs w ill be re ce iv ed at F ed eral R eserve B anks and B ran ch es up to the clo s in g h our, on e-th irty o ’ c lo c k p.m ., E astern D a y lig h t S a v in g tim e, M o n d a y , S ep tem ber 19, 1960. T en d ers will n ot be received at the T re a su ry D epa rtm en t, W a s h in g to n . E ach ten der m ust be fo r an even m u ltiple o f $1,000, and in the case o f com p e titiv e ten ders th e price offered m u st b e exp ressed on the basis o f 100, w ith n o t m o re than th ree decim als, e.g., 99.925. F ra ctio n s m ay n o t be used. It is u rged that tenders be m ade on the printed fo rm s and fo rw a rd ed in th e special en velop es w h ich w ill be supplied b y F ed eral R es e rv e B anks o r B ran ches on application th erefor. O th e rs than b ankin g institutions w ill n ot b e perm itted to subm it tenders e xcep t fo r th eir o w n a ccou n t. T e n d e rs w ill be received w ith ou t dep osit fro m in corp ora ted banks and trust c o m panies and fro m resp o n sib le a n d re co g n iz e d dealers in investm ent securities. T e n d e rs fro m oth ers m u st b e a ccom p a n ied b y p a y m en t o f 2 p e rce n t o f the face a m ou n t o f T rea su ry bills applied fo r, unless the ten ders are a ccom p a n ied b y an exp ress guaranty o f pa ym en t b y an in co rp o ra ted b a n k o r trust com p a n y . Im m ed ia tely a fter the clo s in g h our, ten ders w ill be op en ed at the Federal R e se rve B anks and B ran ches, fo llo w in g w hich public a n n ou n cem en t w ill be m ade b y the T rea su ry D epa rtm en t o f the am ou nt and p rice ran ge o f a ccep ted bids. T h o s e subm itting ten ders w ill b e a d vised o f the a ccep ta n ce o r re je ctio n thereof. T h e S ecreta ry o f the T r e a s u ry ex p ressly reserves the rig h t to a ccep t o r re je c t a n y o r all tenders, in w h ole o r in part, and his action in a n y su ch re s p e ct shall be final. S u b je ct to these reser vations, n on com p etitiv e ten ders fo r $200,000 o r less fo r the add i tional bills dated June 23, 1960, (91 days rem ain in g until m a turity date on D e ce m b e r 22, 1960) and n on com p etitive tenders fo r $100,000 o r less fo r th e 182-day bills w ith ou t stated p rice fro m a n y on e b id d er w ill b e a cce p te d in full at the a vera ge p rice (in th ree decim a ls) o f a ccep ted com p etitive b id s fo r the respective issues. Settlem ent fo r a ccep ted ten ders in a ccord a n ce w ith the b id s m u st be m a d e o r com p le te d at th e F ed era l R eserve B ank on S ep tem ber 22, 1960, in cash o r oth er im m ediately available funds o r in a like face a m ou n t o f T rea su ry bills m a tu rin g S e p tem ber 22, 1960. Cash and exch a n ge tenders w ill receive equal treatm ent. Cash adjustm ents w ill be m ade fo r d ifferen ces b e tw een the pa r value o f m aturing bills a ccep ted in ex ch a n g e and the issue price o f the n ew bills. T h e in com e derived fr o m T r e a s u ry bills, w h eth er interest o r gain fr o m the sale o r oth er d isp osition o f the bills, d o e s n o t have a n y exem p tion , as such, and loss fr o m the sale o r oth er d isp o si tion o f T rea su ry bills d o e s n ot have a n y special treatm ent, as such, u nder the Internal R even u e C o d e o f 1954. T h e bills are su b ject to estate, inheritance, g ift or oth er e x cis e taxes, w hether Fed eral or State, but are ex em p t fro m all ta xation n o w o r h e re a fter im p osed o n the principal o r in terest th e re o f b y a n y State, o r a n y o f the p ossession s o f the U n ited States, o r b y any loca l taxin g authority. F o r pu rp oses o f taxation the a m ou n t o f dis co u n t at w hich T r e a s u ry bills are origin a lly sold b y the U n ited States is co n sid e re d to be interest. U n d er S ection s 4 5 4 (b ) and 1221(5) o f th e Internal R even u e C od e o f 1954 the a m ou n t o f dis cou n t at w hich bills issued hereunder are sold is n ot co n sid e re d to a ccru e until such bills are sold, red eem ed o r oth erw ise dis posed o f, and such bills are ex clu d ed fro m con sidera tion as capital assets. A c c o r d in g ly , th e o w n e r o f T r e a s u ry bills (o th e r than life insurance co m p a n ie s ) issued hereun der need in clu d e in his in com e ta x return o n ly the differen ce betw een the price paid fo r such bills, w h eth er o n origin a l issue or on su b seq u en t p u r chase, and the am ou nt actu ally received either upon sale o r red em p tion at m aturity d u rin g th e taxable year for w h ich the return is m ade, as ord in a ry gain o r loss. T rea su ry D ep a rtm en t C ircu lar N o. 418, R evised , and this n otice, prescrib e th e term s o f the T rea su ry bills and g o v e r n the co n d itio n s o f their issue. C op ies o f the circu la r m a y be obtain ed fro m a n y F ed era l R e serv e B a n k o r B ran ch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday, September 19, I960, at the Securities Department of its Head Office and at its Buffalo Branch. Tender forms for the respective series are enclosed. Please use the appropriate forms to submit tenders and return them in an envelope marked “ Tender for Treasury Bills.” Tenders may be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. Payment for the Treasury bills cannot be made by credit through the Treasury Tax 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 September 15, 1960, representing an additional amount of bills dated June 16, 1960, and maturing December 15, I960; and 182-day bills dated September 15, 1960, matur ing March 16, 1961) are shown on the reverse side of this circular. A lfred H ayes, President. ( over ) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED SEPTEMBER 15, 1960) Range o f Accepted Competitive Bids 91-Day Treasury Bills Maturing December 15, 1960 182-Day Treasury Bills Maturing March 16, 1961 Price Approx. equiv. annual rate Price Approx. equiv. annual rate 99.338a 2.619% 98.550 2.868% L o w ..................... ......... 99.323 2.678% 98.520 2.927% Average ............. .......... 99.329 2.654%1 98.526 2.916%! ......... High a E x c e p tin g tw o tenders tota lin g $795,000. 1 O n a co u p o n issue o f the sam e len g th and fo r the sam e am ou nt invested, the return on these bills w o u ld provide yield s o f 2.71 p ercen t fo r the 91-day bills, and 3.00 percent fo r the 182-day bills. In terest rates on bills are qu oted in terms o f bank discount, with the return related to the face amount o f the bills payable at maturity rather than the a m ou n t invested, and their len gth in actual n um ber o f days related to a 360-day year. In con trast, yield s o n certificates, notes, and b o n d s are com p u ted in term s o f interest on the am ou nt invested, and relate the n um ber o f days rem ainin g in an interest paym ent p e r io d to the actual n u m ber o f days in the period, w ith sem iannual c o m p o u n d in g if m ore than one co u p o n p e r io d is in volved. (52 percent of the amount of 91-day bills bid for at the low price was accepted.) (86 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders Applied f o r and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing December 15, 1960 Applied for District Boston ......................... $ 27,572,000 182-Day Treasury Bills Maturing March 16, 1961 Accepted $ 17,572,000 Applied for $ Accepted 5,991,000 $ 5,991,000 1,393,749,000 695,029,000 807,158,000 289,597,000 Philadelphia............... 29,740,000 14,740,000 9,619,000 4,169,000 Cleveland ................... 32,594,000 30,594,000 25,310,000 24,610,000 Richmond................... 13,886,000 13,886,000 12,189,000 Atlanta....................... 24,193,000 22,693,000 5,219,000 Chicago ..................... 225,115,000 161,155,000 120,453,000 St. Louis ................... 19,236,000 19,236,000 10,296,000 . 9,705,000 Minneapolis............... 24,361,000 20,185,000 5,493,000 2,393,000 Kansas C it y ............... 36,859,000 28,859,000 16,845,000 6,106,000 Dallas ......................... 13,981,000 13,981,000 3,103,000 3,103,000 San Francisco........... 70,207,000 62,247,000 58,840,000 46,210,000 Total ........... $1,911,493,000 New Y o r k ................... $1,100,177,000b $1,080,516,000 b In clu d es $248,054,000 n on com p etitiv e tenders a ccep ted at the average price o f 99.329. c In clu d es $53,092,000 n on com p etitive tenders a ccep ted at the a v era g e p rice o f 98.526. 7,189,000 ' 4,584,000 96,422,000 $500,079,000" A t 1*935 Federal Reserve NEW Ba n k of YORK RECTOR 45. N ew York N. Y. 2 - 5 7 0 0 September 19, i960 To Member and Nonmember Clearing Banks of the Second Federal Reserve District: We have been informed by the Federal Reserve Bank of Atlanta that, as a result of the recent hurricane, delays may be anticipated in the receipt of advices of nonpayment and in the return of unpaid items from banks in Marathon and Everglades, Florida; Mobile, Alabama; Pascagoula, Moss Point, Ocean Springs, Biloxi, Gulfport, and Pass Christian, Mississippi; and Port Sulphur, Louisiana. We will continue to dispatch cash items deposited with us payable in the affected areas and to give credit therefor in accordance with our time schedules, but we reserve the right to charge back any unpaid items at any time. ALFRED HAYES, President.
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