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F E D E R A L R E S E R V E B A NK O F N E W Y O R K Fiscal Agent of the United States r Circular No. 4 9 4 1 ~1 L October 5,1960 J O FFE RIN G OF T W O SERIES OF T R E A SU R Y BILLS $1,000,000,000 o f 91-Day Bills, Additional Amount, Series Dated July 14, 1960, Due Jan. 12, 1961 (To Be Issued October 13, 1960) $500,000,000 o f 182-Day Bills, Dated October 13, 1960, Due April 13, 1961 T o A ll In corporated Banks and Trust Companies, and Others Concerned, in the Second Federal R eserve 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 tim e: T h e T reasu ry D epartm ent, by this pu blic notice, invites tenders fo r tw o series o f T reasu ry bills to the a ggregate amount o f $1,500,000,000, o r thereabouts, for cash and in exch an ge for T re a su ry bills m aturing O ctober 13, 1960, in the am ount o f $1,501,320,000, as f o l lo w s : 91-day bills (to m aturity date) to be issued O ctober 13, 1960, in the am ount o f $1,000,000,000, or thereabouts, represen ting an a dd ition al am ount o f bills dated July 14, 1960, and to mature January 12, 1961, originally issued in the am ount o f $500,189,000, the a dd ition al and o rigin a l bills to be freely interchangeable. 182-day b ills, fo r $500,000,000, or thereabouts, to be dated O ctober 13, 1960, and to mature A p ril 13, 1961. T h e bills o f both series w ill be issued on a discou nt basis under com petitive and n oncom petitive b idd ing as hereinafter provided , and at m aturity their face am ount w ill be payable w ithout 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 Federal R eserve Banks and B ran ches up to the clo s in g h our, tw o o ’c lo ck p.m., E ast ern D a yligh t S avin g tim e, M on day, O ctober 10, 1960. Tenders w ill not be received at the T reasu ry Departm ent, W ash ington. E ach tender m ust be fo r an even m ultiple o f $1,000, and in the case 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 not be used. It is urged that tenders be m ade on the printed form s and forw a rded in the special envelopes w hich w ill be supplied by Federal R eserve Banks o r B ranches on a pp lication therefor. O thers than banking institutions w ill n ot be perm itted to subm it tenders excep t fo r their ow n account. T en ders w ill be received w ithout deposit from in corporated banks and trust com panies and from responsible and recogn ized dealers in in vestm ent securities. Tenders from others m ust be accom panied by paym ent o f 2 percent o f the fa ce amount o f T reasu 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 F ed eral R eserve Banks and B ranches, fo llo w in g which p u blic announcem ent w ill be made by the T reasu ry D epartment o f the am ount and price range o f accepted bids. T h ose sub m itting tenders w ill be advised o f the acceptance or rejection thereof. T he Secretary o f the T reasu ry expressly reserves the right to accep t or reject any or a ll tenders, in w hole or in part, and his action in any such respect shall be final. S u b ject to these reservations, noncom petitive tenders fo r $200,000 or less for the a dd ition al bills dated July 14, 1960, (91 days re m aining until m aturity date on January 12, 1961) and n on com petitive tenders fo r $100,000 or less for the 182-day bills w ithout stated price from any one bidder w ill be accepted in fu ll at the average price (in three decim als) o f accepted com petitive bids for the respective issues. Settlem ent fo r accepted tenders in a ccord a n ce with the bids must be made or com pleted at the F ederal R eserve Bank on O ctober 13, 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 O ctob er 13, 1960. Cash and exch an ge tenders w ill receive equal treatment. Cash adjustm ents w ill be m ade fo r differences between the par value o f m aturing bills a ccepted in exch a n ge and the issue price o f the new bills. T h e incom e derived from T reasu ry b ills, whether interest or gain from the sale o r other disposition o f the b ills, does not have any exem ption, as such, and loss from the sale or oth er disp osition o f T reasu ry bills does not have any special treat ment, as such, under the Internal Revenue C ode o f 1954. T he bills are subject to estate, inheritance, g ift or oth er excise taxes, whether F ed eral or State, but are exem pt from a ll ta x a tion now or hereafter im posed on the principal or interest thereof by any State, or any o f the possessions o f the United States, or by any loca l taxing authority. F o r purposes o f taxa tion the am ount o f discou nt at w h ich T reasu ry bills are o rig in a lly sold b y the U nited States is con sidered to be interest. U nder Sections 4 5 4(b) and 1221(5) o f the Internal Revenue C ode o f 1954 the am ount o f discou n t at w h ich bills issued hereunder are sold is not con sidered to accru e until such bills are sold, redeem ed o r otherw ise disp osed 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 in com e ta x return on ly the difference between the price paid fo r such bills, whether on origin a l issue or on subsequent purchase, and the amount actually received either upon sale or redem ption at m aturity du rin g the ta x ab le year fo r w hich the return is m ade, as ord in a ry gain o r loss. T reasu ry Departm ent C ircu lar N o . 418, R evised, and this notice, prescribe the terms o f the T reasu ry bills and govern the con dition s o f their issue. Copies o f the circu la r m ay be obtained from any Federal R eserve Bank o r Branch. This Bank will receive tenders for both series up to 2 p.m., Eastern Daylight Saving time, Monday, October 10, 1960, 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. funds or in maturing Treasury bills. Settlement must be made in cash or other immediately available Results of the last offering of Treasury bills (91-day bills to be issued October 6, 1960, representing an additional amount of bills dated July 7, 1960, and maturing January 5, 1961; and 182-dav bills dated October 6, 1960, maturing April 6, 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 OCTOBER 6, 1960) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing January 5, 1961 P r ice 182-Day Treasury Bills Maturing April 6, 1961 A p p ro x . equiv. annual rate P r ice A p p ro x . equiv. annual rate High ..................... ........ 99.388 2.421% 98.538a 2.892% L o w ....................... ........ 99.367 2.504% 98.510 2.947% A v e ra g e ................. ........ 99.375 2.473%! 98.521 2.925 % J a E x ce p tin g s ix tenders tota lin g $3,420,000. 1 O n a cou pon issue o f the sam e length and fo r the same am ount invested, the return on these bills w ou ld provide yield s o f 2.52 percent fo r the 91-day bills, and 3.01 percent fo r the 182-day bills. Interest rates on bills are quoted in term s o f bank discou nt, w ith the return related to the fa ce am ount o f the bills payable at m aturity rather than the amount invested, and th eir length in actu al num ber o f days related to a 360-day yea r. In contrast, yield s on certificates, notes, and bonds are com pu ted in term s o f interest on the am ount invested, and relate the num ber o f days rem ainin g in an interest paym ent p eriod to the actual num ber o f days in the period, w ith sem iannual com pou n din g i f m ore than one cou pon p eriod is involved. (73 percent of the amount of 91-day bills bid for at the low price was accepted.) (24 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing January 5, 1961 A ccepted A pplied fo r D istrict Boston ............. ................... New Y o r k ........ ................... $ 21,425,000 182-Day Treasury Bills Maturing April 6, 1961 $ 11,425,000 A pplied fo r $ 3,088,000 A ccepted $ 3,088,000 1,379,639,000 707,239,000 824,644,000 410,904,000 Philadelphia .. . ................... Cleveland......... ................... 32,602,000 14,602,000 7,389,000 2,389,000 18,456,000 18,456,000 24,562,000 15,762,000 ........... 10,276,000 10,276,000' 1,655,000 1,655,000 Atlanta ............ ................... Chicago ............ ................... 19,411,000 19,011,000 5,596,000 5,196,000 160,584,000 99,584,000 69,194,000 26,814,000 Richmond ........ ............ 23,209,000 21,709,000 4,367,000 4,367,000 Minneapolis . . . ................. 15,516,000 15,246,000 4,161,000 2,161,000 Kansas City .. . ................... 34,031,000 29,951,000 6,533,000 5,773,000 ................... 10,635,000 10,535,000 3,395,000 2,795,000 San Francisco . ................... 43,126,000 42,126,000 37,598,000 19,218,000 Total .. .................. $1,768,910,000 $992,182,000 $500,122,000' St. L o u is .......... $1,000,160,000b b Includes $184,524,000 n on com petitive tenders a ccepted at the average price o f 99.375. c Includes $38,965,000 n on com petitive tenders a ccep ted at the average price o f 98.521.
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