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FEDERAL RESERVE BANK O F N E W YORK Fiscal Agent o f the United States [ C ir c u l a r N o . 4 9 8 0 1 L D e ce m b e r 27, 19C0 I RESULTS OF BIDDING FOR 91-DAY AND 182-DAY TREASURY BILLS TO BE ISSUED DECEMBER 29, 1960 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: A t the time o f printing our Circular No. 4979, dated December 22, 1960. announcing an offering o f 91-day and 182-day Treasury bills, to be issued January 5, 1961, the results o f bidding for the previous week’s offering o f 91-day and 182-day Treasury bills, to be issued December 29, 1960, were not available. The results, now avail able, a re : Range of Accepted Competitive Bids 91- D a y T r e a s u r y B ills 1 8 2 -D a y T r e a s u r y B ills M a tu r in g M a r c h 3 0 , 1961 M a tu r in g J u n e 29, 1961 Approx. equiv. annual rate Price Approx. equiv. annual rate Price H igh .......................... ................. 99.464 2 .1 2 0 % 98.838 2.298% L o w ............................ ................. 99.449 2.180 % 98.814 2.346% Average ................... ................. 99.457 2.148% 1 98.820 2.333% 1 1 On a coupon issue of the same length and for the same amount invested, the return on these bills would provide yields of 2.19 percent for the 91-day bills, and 2.39 percent for the 182-day bills. Interest rates on bills are quoted in terms of 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. (78 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (62 percent o f the amount o f 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 9 1 -D a y T r e a s u r y B ills M a tu r in g M a r c h 3 0 , 1961 Applied for District Boston ........................... ........ $ 26,142,000 New Y o r k ..................... 1 8 2 -D a y T r e a s u r y B ills M a tu r in g J u n e 2 9 , 1961 Accepted $ 26,142,000 Applied for $ Accepted 2,193,000 $ 1,943,000 698,357,000 881,639,000 431,138,000 Philadelphia ................ ........ 23,288,000 11,888.000 7,563,000 2,563,000 C leveland....................... ........ 40,314,000 25,014,000 16,129,000 11,129,000 Richmond ..................... ........ 9,864,000 9,764,000 1,875,000 1,373,000 ........ 14,881.000 13,181,000 6,710,000 6,310,000 ........ 155,487,000 87,777,000 64,090,000 14,260,000 St. Louis ....................... ........ 16,036,000 15,036,000 4,604,000 3,489,000 M inneapolis.................. ........ 11,721,000 7,501,000 4,148,000 1,648,000 Kansas City ................ ........ 19,633,000 18,633,000 6,262,000 4,643,000 ........ 30,869,000 10,869,000 6,191,000 3,041,000 San F ran cisco.............. ........ 83,676,000 76,176,000 29,423,000 18,945,000 T o ta l.............. ........ $2,011,868,000 $1,030,827,000 $500,482,000 $1,000,338,000a * Includes $165,857,000 noncompetitive tenders accepted at the average price of 99.457. b Includes $33,026,000 noncompetitive tenders accepted at the average price of 98.820. A l f r e d H a y e s , President. f ir Hfgo Federal R e serv e NEW Ba n k o f N ew Y o r k YORK RECTOR 45, N.Y. 2 - 5 7 0 0 December 28, i 960 RESTRICTION ON PAYMENT OF DIVIDENDS To All State Member Banks in the Second Federal Reserve District: The Board of Governors of the Federal Reserve System has advised us that cases have recently arisen in which dividends were paid improperly in violation of the Act of September 8, 1959* which amended the sixth para graph of section 9; Federal Reserve Act, and section 5199(b), U- S. Revised Statutes (12 U . S . C . 60), indicating that State member banks may not be fully aware of this recently enacted law and its applicability to them. The Act of September 8, 1959 requires the approval of the Board of Governors of the Federal Reserve System if the total of all dividends declared by a State member bank in any calendar year shall "exceed the total of its net profits of that year combined with its retained net profits of the preceding two years, less any required transfers to surplus or a fund for the retirement of any preferred stock." The law became effective September 8, 1959* Hence, in respect to dividends declared in 1959 > consideration should have been given to the amount of retained net profits for the years 1957 and 1958 in combination with the net profits of 1959* For dividends declared in i960, the retained net profits for the years 195$ and 1959 would have to be considered in combination with the net profits of i 960. For your information, printed on the reverse side of this letter are the provisions of section 5199(b )> Revised Statutes, as amended, and the pertinent portion of the sixth paragraph of section 9 of the Federal Reserve Act, as amended. HOWARD D. CROSSE, Vice President. (Over) Section 5199(b), Revised Statutes, as amended. Sec. 5199(b)- The approval of the Comptroller of the Currency shall be required if the total of all dividends declared by such association in any calendar year shall exceed the total of its net profits of that year combined with its retained net profits of the preceding two years, less any required transfers to surplus or a fund for the retirement of any preferred stock. Extract from paragraph 6, section 9> Federal Reserve Act, as amended Sec. 9 , paragraph 6. Provisions of law to be complied with; reports of condition. All banks admitted to membership under authority of this section shall be required to comply with the reserve and capital re quirements of this Act, *** to conform to the provisions of sections 5199(b) and 5204 of the Revised Statutes with respect to the payment of dividends; except that any reference in any such provision to the Comptroller of the Currency shall be deemed for the purposes of this sentence to be a reference to the Board of Governors of the Federal Reserve System. ***
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