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FEDERAL RESERVE BANK O F NEW YORK Fiscal A g e n t o f the U nited States r C ir c u la r N o . 4 9 6 7 "I L N o v e m b e r 23, 1960 J OFFERING OF TW O SERIES OF TREASURY BILLS $1,000,000,000 of 91-Day Bills, Additional Amount, Series Dated Sept. 1, 1960, Due March 2, 1961 (To Be Issued December 1, 1960) $500,000,000 of 182-Day Bills, Dated December 1, 1960, Due June 1, 1961 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: F o llow in g is the text o f a notice issued b y the Treasury D epartm ent, released fo r publication today at 4 p.m., E astern Standard time : 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 December 1, 1960, in the amount of $1,500,737,000, as follow s: 91-day bills (to maturity date) to be issued December 1, 1960, in the amount of $1,000,000,000, or thereabouts, representing an additional amount of bills dated Sep tember 1, 1960, and to mature March 2, 1961, originally issued in the amount of $505,724,000, the additional and original bills to be freely interchangeable. 182-day bills, for $500,000,000, or thereabouts, to be dated December 1, 1960, and to mature June 1, 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., East ern Standard time, Monday, November 28, 1960. Tenders will not be received 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 of accepted bids. Those sub mitting tenders will be advised of the acceptance or rejection 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 le^s for the additional bills dated September 1, 1960, (91 days re maining until maturity date on March 2, 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 December 1, 1960, in cash or other immediately available funds or in a like face amount of Treasury bills maturing December 1, 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 of 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 of 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 of the circular may be obtained from any Federal Reserve Bank or Branch. T h is Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, M onday, N ovem ber 28, 1960, at the Securities D epartm ent o f its H ead O ffice and at its B uffalo Branch. T en d er form s for the respective series are enclosed. Please use the appropriate form s to subm it tenders and return them in an envelope m arked “ T en d er for T reasu ry B ills.” T en d ers m ay be subm itted b y telegraph, su bject to written confirmation; they may not be submitted by telephone. P a y m e n t f o r th e T r e a s u r y hills ca n n ot b e m a d e b y cred it th rou g h th e T r e a s u r y T a x and L o a n A c c o u n t. S e ttle m e n t m u st b e m a d e in cash o r o th e r im m ed ia tely available fu n d s o r in m a tu rin g T r e a s u r y bills. Results o f the last offerin g o f T reasu ry bills (90-day bills to be issued N ovem ber 25, 1960, representing an additional am ount o f bills dated A u g u st 25, 1960, and m aturing February 23, 1961; and 181-day bills dated N ovem ber 25, 1960, m aturing M ay 25, 1961) are show n on the reverse side o f this circular. A lfred H ay e s , President. ( over) RESULTS OF L A ST O FFE R IN G OF TR E A SU R Y BILLS (T W O SERIES T O BE ISSUED N O V E M B E R 25, 1960) Range o f A ccepted Com petitive Bids 9 0 -D a y T r e a s u r y B ills M a tu r in g F e b r u a r y 2 3 ,1 9 6 1 Price 1 8 1 -D a y T r e a s u r y B ills M a tu r in g M a y 2 5 ,1 9 6 1 Approx. equiv. annual rate Price Approx. equiv. annual rate H ig h ........................ ......... 99.412 2.352% 98.626 2.733% Low ........................ ........ 99.389 2.444% 98.612 2.761 % ................. ........ 99.401 2.396% 1 98.618 2.749% 1 A verage 1 On a coupon issue of the same length and for the same amount invested, the return on these bills would provide yields of 2.44 percent for the 90-day bills, and 2.83 percent for the 181-day bills. Interest rates on bills are quoted in terms o f bank discount, with the return related to the face amount of the bills payable at maturity rather than the amount invested, and their length in actual number of days related to a 360-day year. In contrast, yields on certificates, notes, and bonds are computed in terms of interest on the amount invested, and relate the number of days remaining in an interest payment period to the actual number of days in the period, with semiannual compounding if more than one coupon period is involved. (20 percent o f the am ount o f 90-day bills bid for at the low price w as accep ted .) (12 percent o f the am ount o f 181-day bills bid fo r at the lo w price w as accepted.) T otal Tenders A p p lied fo r and A ccepted (B y Federal Reserve Districts) 9 0 -D a y T r e a s u r y B ills M a tu r in g F e b r u a r y 2 3 ,1 9 6 1 District Accepted Applied for B oston ............................ ......... $ 28,292,000 1 8 1 -D a y T r e a s u r y B ills M a tu r in g M a y 2 5 ,1 9 6 1 $ 18,292,000 Applied for $ 17,772,000 Accepted $ 6,547,000 N ew Y o r k ..................... ......... 1,320,790,000 720,290,000 1,040,302,000 344,898,000 Philadelphia ................. ......... 28,199,000 13,114,000 7,357,000 1,957,000 ...................... ........ 29,772,000 29,772,000 27,166,000 8,133,000 2,446,000 C leveland R ich m on d ...................... ......... 12,546,000 12,546,000 7,546,000 .......................... ......... 19,870,000 18,470,000 4,284,000 4,084,000 C h icago .......................... ......... 185,418,000 136,418,000 103,561,000 61,651,000 St. L ou is ........................ ........ 20,877,000 20,477,000 4,081,000 3,581,000 ................. ........ 20,925,000 19,025,000 4,514,000 2,014,000 Kansas C ity ................. ......... 46,444,000 46,444,000 31,445,000 22,344,000 ............................ ......... 13,278,000 13,278,000 4,719,000 3,919,000 51,977,000 51,877,000 51,824,000 40,117,000 A tlan ta M inneapolis D allas San F ran cisco ............. T ota l ............. .......... $1,778,388,000 $1,100,003,000* $1,304,571,000 a Includes $218,643,000 noncompetitive tenders accepted at the average price of 99.401. b Includes $51,446,000 noncompetitive tenders accepted at the average price of 98.618. $501,691,000b
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