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FED ERAL RE SE R V E BANK O F N EW YORK Fiscal Agent of the United States C i r c u la r N o . 4 9 5 6 ] N o v e m b e r 2, 1 9 6 0 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,100,000,000 of 91-Day Bills, Additional Amount, Series Dated August 11, 1960, Due Feb. 9, 1961 (To Be Issued November 10, 1960) $400,000,000 of 182-Day Bills, Dated November 10, 1960, Due May 11, 1961 To A ll 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 Standard tim e: The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $1,500,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing November 10, 1960, in the amount of $1,505,272,000, as follows: 91-day bills (to maturity date) to be issued November 10, 1960, in the amount of $1, 100,000,000, or thereabouts, repre senting an additional amount o f bills dated August 11, 1960, and to mature February 9, 1961, originally issued in the amount of $500,026,000, the additional and orig inal bills to be freely interchangeable. 182-day bills, for $400,000,000, or thereabouts, to be dated November 10, 1960, and to mature May 11, 1961. The bills of 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 of $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (maturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty o’clock p.m., Eastern Standard time, Monday, November 7, 1960. Tenders will not be re ceived at the Treasury Department, Washington. Each tender must be for an even multiple of $1,000, and in the case of competitive tenders the price offered must be expressed on the basis of 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 will not be permitted to submit tenders except for 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 of 2 percent of the face amount of 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 will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price range o f accepted bids. Those sub mitting tenders will be advised of the acceptance or rejection fo r publication today at thereof. The Secretary of 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 for $200,000 or less for the additional bills dated August 11, 1960, (91 days re maining until maturity date on February 9, 1961) 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) of 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 November 10, 1960, in cash or other immediately available funds or in a like face amount of Treasury bills maturing November 10, 1960. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. The income derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, does not have any exemption, as such, and loss from the sale or other disposition of 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 of the possessions o f the United States, or by any local taxing authority. For purposes of taxa tion the amount of discount at which Treasury bills are originally sold by the United States is considered to be interest. Under Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954 the amount of discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of 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 of the Treasury bills and govern the conditions of 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 Standard time, M onday, N ovem ber 7, 1960, at the Securities Departm ent 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 en d er fo r T reasu ry B ills.” T enders may be submitted by telegraph, su bject to written confirm ation; they may not be submitted by telephone. P a ym en t f o r the T reasury bills cannot be made b y credit through the T reasury T a x and L oan 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 o r in maturing T reasury bills. Results o f the last offering o f Treasury bills (91-day bills to be issued November 3, 1960, representing an additional amount o f bills dated August 4, 1960, and maturing February 2, 1961; and 182-day bills dated Novem ber 3, 1960, maturing May 4, 1961) are shown on the reverse side o f this circular. A l f r e d H a y e s , President. ( over) RESULTS OF LAST OFFERIN G OF TR EA SU RY BILLS (TW O SERIES TO BE ISSUED N OVEM BER 3, 1960) Range of Accepted Competitive Bids 91-D a y T rea su ry Bills 1 8 2 -D a y T reasury Bills M aturing F eb ru a ry 2, 1961 M atu rin g M a y 4, 1961 Price A pprox. equiv. annual rate H ig h ............................. ................. 99.475 2 .0 7 7 % 98.772 2 .4 2 9 % L o w ............................... ................. 99.444 2 .2 0 0 % 98.751 2 .4 7 1 % 2 .1 2 7 % x 98.760 2.453% * A vera g e ...................... Price A pprox. equiv. annual rate 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 f o r the 91-day- bills, and 2.52 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. (5 percent o f the amount o f 91-day bills bid fo r at the low price was accepted.) (8 3 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 -D a y T rea su ry Bills M aturing F eb ru a ry 2, 1961 Accepted Applied, fo r District B oston ............................. ........ $ 21,675,000 1 8 2 -D a y T rea su ry Bills M aturing M a y 4, 1961 $ 11,675,000 Applied for $ 2,540,000 Accepted $ 2,340,000 N e w Y o r k ...................... ........ 1,326,892,000 679,142,000 736,774,000 278,337,000 Philadelphia .................. ........ 27,104,000 17,104,000 6,942,000 1,942,000 C lev ela n d ........................ ........ 18,259,000 18,259,000 14,287,000 10,484,000 R ich m on d ...................... 11,918,000 8,687,000 2,187,000 A tla n ta ............................. 15,649,000 5,860,000 5,660,000 Chicago ........................... 121,999,000 91,943,000 54,618,000 20,148,000 19,173,000 4,910,000 4,910,000 14,173,000 14,173,000 5,258,000 2,648,000 Kansas C ity .................. ........ 39,168,000 39,118,000 12,799,000 7,499,000 D a lla s ............................... ........ 12,786,000 12,786,000 3,951,000 3,901,000 San F r a n c is c o ............... ........ 39,245,000 39,245,000 44,014,000 25,514,000 T o t a l ............... ........ $1,727,916,000 $937,965,000 $400,040,000 St. L ouis ........................ ........ M in n ea p olis.................... ......... $1,000,241,000» a Includes $200,892,000 noncompetitive tenders accepted at the average price of 99.462. b Includes $47,168,000 noncompetitive tenders accepted at the average price of 98.760.
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