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FEDERAL RESERVE BANK OF NEW YORK f Circular N o . 4 9 8 2 1 L J anuary 4 , 1961 J Fiscal Agent o f the United States OFFERING OF TWO SERIES OF TREASURY BILLS $1,000,000,000 of 91-Day Bills, Additional Amount, Series Dated October 13, 1960, Due April 13, 1961 (To Be Issued January 12, 1961) $500,000,000 of 182-Day Bills, Dated January 12, 1961, Due July 13, 1961 To All Incorporated Banks and Trust Companies, and O thers Concerned, in the Second Federal Reserve District: Follow ing is the text o f a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard time: T h e 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 January 12, 1961, in the amount of $1,500,493,000, as follow s: 91-day bills (to maturity date) to be issued January 12, 1961, in the amount of $1,000,000,000, or thereabouts, representing an additional amount of bills dated October 13, 1960, and to mature April 13, 1961, originally issued in the amount of $500,480,000, the additional and original bills to be freely interchangeable. 182-day bills, for $500,000,000, or thereabouts, to be dated January 12, 1961, and to mature July 13, 1961. The bills of both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter pro vided, and at maturity their face amount will be payable without interest. They will be issued in bearer form only, and in de nominations 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, January 9, 1961. 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 com panies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by pay ment 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 submitting 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 reser vations, noncompetitive tenders for $200,000 or less for the addi tional bills dated October 13, 1960, (91 days remaining until maturity date on April 13, 1961) and noncompetitive 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 January 12, 1961, in cash or other immediately available funds or in a like face amount of Treasury bills maturing January 12, 1961. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences be tween 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 disposi tion of Treasury bills does not have any special treatment, 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 taxation now or here after 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 taxation the amount of dis count 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 dis count at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeemed or otherwise dis posed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) 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 pur chase, 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 N o. 418, Revised, and this notice, prescribe the terms of the Treasury bills and govern the conditions of their issue. Copies of the circular m ay be obtained from any Federal Reserve Bank or Branch. T h is B ank w ill receive tenders fo r both series up to 1 :30 p.m., Eastern Standard time, M on d ay, January 9, 1961, at the Securities Departm ent o f its H ead O ffice and at its B u ffalo Branch. T en d er form s fo r the respective series are enclosed. Please use the appropriate form s to subm it tenders and return them in an en velope 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 con firm ation ; they m ay not be subm itted b y telephone. P a y m e n t f o r th e T r e a s u r y bills c a n n o t b e m a d e b y c re d 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 ca sh 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. R esults o f the last offerin g o f T reasu ry bills (91-day bills to be issued January 5, 1961, representing an addi tional am ount o f bills dated O ctob er 6, 1960, and m aturing A pril 6, 1961; and 182-day bills dated January 5, 1961, m aturing July 6, 1961) are show n on the reverse side o f this circular. A l f r e d H a y e s , President. ( o v e r ) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED JANUARY 5, 1961) Range of Accepted Competitive Bids 9 1 -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 A p r i l 6 ,1 9 6 1 M a tu r in g J u ly 6 ,1 9 6 1 Price Approx. equiv. annual rate H igh .................................. 99.449* 2.180% 98.786b 2.401% L o w ..................................... 99.430 2.255% 98.760 2.453% Average ............................ 99.435 2.234% 1 98.772 2.429% 1 Price A pprox. equiv. annual rate a Excepting one tender of $100,000. • b Excepting one tender of $200,000. 1 O n a coupon issue of the same length and for the same amount invested, the return on these bills would provide yields of 2.28 percent for the 91-day bills, and 2.49 percent for the 182-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. (T h e entire am ount o f 91-day bills bid for at the low price was accepted.) (86 percent o f the amount o f 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (B y Federal Reserve Districts) 9 1 -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 A p r i l 6 ,1 9 6 1 District Boston Applied for ............................ $ 21,094,000 M a tu r in g J u ly 6 ,1 9 6 1 Accepted $ 21,094,000 Applied for $ 1,475,000 Accepted $ 1,475,000 New Y ork ...................... 1,359,936,000 703,436,000 796,169,000 422,989,000 Philadelphia ................... 24,283,000 13,283,000 6,754,000 1,754,000 Cleveland ........................ 18,221,000 18,221,000 10,566,000 10,559,000 Richmond ..................... 10,498,000 10,498,000 1,504,000 1,504,000 Atlanta ............................ 17,973,000 16,873,000 3,431,000 3,231,000 .......................... 173,945,000 108,445,000 55,544,000 24,264,000 St. Louis ........................ 25,498,000 24,498,000 3,339,000 3,089,000 Minneapolis ................... 11,413,000 7,413,000 3,615,000 2,115,000 Kansas C i t y ................... 35,586,000 34,586,000 12,655,000 12,501,000 Dallas .............................. 10,239,000 10,239,000 2,248,000 2,248,000 San Francisco ............... 47,757,000 31,757,000 29,397,000 14,407,000 Chicago T o t a l ............. $1,756,443,000 $1,000,343,000*; $926,697,000 c Includes $176,589,000 noncompetitive tenders accepted at the average price o f 99.435. d Includes $30,932,000 noncompetitive tenders accepted at the average price of 98.772. $500,136,000'
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