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F E D E R A L R E S E R V E BANK O F N E W YORK Fiscal Agent of the United States r C ircular No. 4 9 5 1 ] L O ctober 26, 1960 J OFFERING OF TW O SERIES OF TREASURY BILLS $1,000,000,000 o f 91-Day Bills, Additional Amount, Series Dated August 4, 1960, Due Feb. 2, 1961 (To Be Issued November 3, 1960) $400,000,000 o f 182-Day Bills, Dated November 3, 1960, Due May 4, 1961 T o A ll Incorporated Banks and Trust Companies, and Others Concerned, 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 he Treasury Department, by this public notice, invites tenders fo r tw o series o f Treasury bills to the aggregate amount o f $1,400,000,000, or thereabouts, fo r cash and in exchange for T reasury bills maturing Novem ber 3, 1960, in the amount o f $1,400,149,000, as fo llo w s : 91-day bills (to maturity date) to be issued Novem ber 3, 1960, in the amount o f $1,000,000,000, or thereabouts, repre senting an additional amount o f bills dated August 4, 1960, and to mature February 2, 1961, originally issued in the amount o f $400,019,000, the additional and orig inal bills to be freely interchangeable. 182-day bills, fo r $400,000,000, or thereabouts, to be dated N ovem ber 3, 1960, and to mature M ay 4, 1961. T he 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. T h ey 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 valu e). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o ’clock p.m., Eastern Standard time, M onday, O ctober 31, 1960. Tenders w ill not be re ceived at the Treasury Department, W ashington. Each tender must be fo r 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 m ore 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 will be supplied by Federal Reserve Banks or Branches on application therefor. O thers than banking institutions w ill not be permitted to submit tenders except fo r their own 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 for, unless the tenders are accompanied by an express guaranty o f payment by an incorporated bank or trust company. Immediately a fter the closing hour, tenders w ill be opened at the Federal Reserve Banks and Branches, follow in g which public announcement will be made by the Treasury Department o f 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 right to accept or reject any or all tenders, in w hole or in part, and his action in any such respect shall be final. Subject to these reservations, noncompetitive tenders fo r $200,000 or less fo r the additional bills dated August 4, 1960, (91 days re maining until maturity date on February 2, 1961) and noncom petitive tenders for $100,000 or less fo r the 182-day bills without stated price from any one bidder w ill be accepted in full at the average price (in three decim als) o f accepted com petitive bids fo r the respective issues. Settlement fo r accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on Novem ber 3, 1960, in cash o r other immediately available funds or in a like face amount o f Treasury bills maturing Novem ber 3, 1960. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made fo r differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. T he income derived fro m Treasury bills, whether interest o r gain fro m the sale or other disposition o f the bills, does not have any exemption, as such, and loss fro m the sale o r other disposition o f Treasury bills does not have any special treat ment, as such, under the Internal Revenue Code o f 1954. T h e bills are subject to estate, inheritance, g ift or other excise taxes, whether Federal or State, but are exem pt fro m all taxa tion n ow or hereafter imposed on the principal o r interest thereof b y any State, or any o f the possessions o f the United States, or by any local taxing authority. F or purposes o f taxa tion the amount o f discount at which Treasury bills are originally sold b y 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 w hich 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. A ccordingly, the ow ner o f Treasury bills (oth er than life insurance com panies) issued hereunder need include in his incom e ta x return only the difference between the price paid fo r such bills, whether on original issue or on subsequent purchase, and the amount actually received either upon sale o r redemption at maturity during the taxable year f o r 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 m ay be obtained fro m any Federal Reserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, October 31, 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. 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 October 27, 1960, representing an additional amount of bills dated July 28, 1960, and maturing January 26, 1961; and 182-day bills dated October 27, 1960, maturing April 27, 1961) are shown on the reverse side of this circular. A lfred H ayes, President. Please note that closing time is 1:30 p.m., Eastern Standard time. (o v e r ) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED OCTOBER 27, 1960) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing January 26, 1961 : • ts ■r 182-Day Treasury Bills Maturing April 27, 1961 A p p r o x . equiv. annual rate P rice P rice A p p r o x . equiv. annual rate High ........................ ............... 99.470 2.097% 98.718 2.536% L ow .......................... ............... 99.457 2.148% 98.698 2.575% Average ................... ............... 99.462 2.129%x 98.701 2.569%1 1 O n a coupon issue o f the same length and fo r the same amount invested, the return on these bills would provide yields o f 2.17 percent fo r the 91-day bills, and 2.64 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 compounding i f m ore than one coupon period is involved. (52 percent of the amount of 91-day bills bid for at the low price was accepted.) (20 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 26, 1961 A pplied fo r District Boston ........................ ....... $ 24,179,000 182-Day Treasury Bills Maturing April 27, 1961 A ccepted $ 12,679,000 A pplied f o r / $ 6,448,000 A ccepted $ 4,119,000 New Y o r k .................. ....... 1,357,132,000 660,111,000 706,885,000 265,218,000 Philadelphia ............... ....... 27,863,000 12,037,000 10,421,000 3,652,000 Cleveland.................... ....... 27,697,000 27,277,000 21,290,000 20,990,000 Richmond ................... ....... 15,763,000 15,642,000 7,666,000 7,641,000 Atlanta..... ................... ....... 19,697,000 16,247,000 4,636,000 4,137,000 Chicago ....................... ....... 188,483,000 116,603,000 76,733,000 36,983,000 St. L ou is.................... ....... 21,200,000 17,400,000 6,706,000 6,706,000 Minneapolis ................. ....... 13,535,000 12,020,000 4,340,000 2,340,000 Kansas City ............... ....... 33,188,000 27,068,000 21,637,000 10,887,000 Dallas.......................... ....... 12,075,000 11,575,000 3,203,000 2,823,000 San Francisco............. ....... 73,481,000 71,691,000 91,455,000 34,690,000 Total............. ....... $1,814,293,000 $961,420,000 $400,186,000 $1,000,350,000a a Includes $204,738,000 noncompetitive tenders accepted at the average price o f 99.462. b Includes $51,338,000 noncompetitive tenders accepted at the average price o f 98.701.
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