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FEDERAL RESERVE BANK O F N E W YORK r Circular No. 49 85 1 Fiscal Agent o f the United States L Janu 11,1961 J ary OFFERING OF TWO SERIES OF TREASURY BILLS $1,100,000,000 of 91-Day Bills, Additional Amount, Series Dated October 20,1960, Due April 20,1961 (To Be Issued January 19, 1961) $400,000,000 of 182-Day Bills, Dated January 19, 1961, Due July 20, 1961 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard tim e: T h e T r e a s u r y D e p a r t m e n t , b y t h is p u b lic n o t ic e , in v ite s t e n d e r s f o r t w o s e r ie s o f T r e a s u r y b ills t o t h e a g g r e g a t e a m o u n t o f $1,500,000,000, o r t h e r e a b o u ts , f o r c a s h a n d in e x c h a n g e fo r T r e a s u r y b ills m a t u r in g J a n u a r y 19, 1961, in th e a m o u n t o f $1,401,252,000, a s f o l l o w s : 9 1 -d a y b ills ( t o m a tu r ity d a t e ) t o b e is s u e d J a n u a r y 19, 1961, in th e a m o u n t o f $1,100,000,000, o r t h e r e a b o u ts , r e p r e s e n t in g an a d d itio n a l a m o u n t o f b ills d a t e d O c t o b e r 20, 1960, a n d t o m a tu r e A p r i l 20, 1961, o r ig in a lly issu e d in t h e a m o u n t o f $401,065,000, t h e a d d it io n a l a n d o r ig in a l b ills t o b e fr e e ly in t e r c h a n g e a b le . 1 8 2 -d a y b ills , f o r $4 00,000,000, o r t h e r e a b o u ts , t o b e d a ted J a n u a r y 19, 1961, a n d t o m a tu r e J u ly 20, 1961. T h e b ills o f b o t h s e r ie s w i l l b e is s u e d o n a d is c o u n t b a sis u n d e r c o m p e t it iv e a n d n o n c o m p e t it iv e b id d in g a s h e r e in a ft e r p r o v id e d , a n d a t m a tu r ity t h e ir f a c e a m o u n t w ill b e p a y a b le w it h o u t in te r e s t. T h e y w ill b e is s u e d in b e a r e r f o r m o n l y , a n d in d e n o m in a t io n s o f $1 ,000 , $5,000, $10,000, $1 00,0 00, $500,000 an d $ 1 ,000 ,000 (m a t u r it y v a lu e ) . T e n d e r s w i l l b e r e c e iv e d a t F e d e r a l R e s e r v e B a n k s a n d B r a n c h e s u p t o th e c l o s i n g h o u r , o n e - t h ir t y o ’c l o c k p .m ., E a s t e r n S ta n d a r d t im e , M o n d a y , J a n u a r y 16, 1961. T e n d e r s w ill n o t b e r e c e iv e d at th e T r e a s u r y D e p a r tm e n t , W a s h i n g t o n . E a c h t e n d e r m u s t b e f o r a n e v e n m u lt ip le o f $1 ,000 , a n d in t h e c a s e o f c o m p e t it iv e t e n d e r s t h e p r ic e o ff e r e d m u s t b e e x p r e s s e d o n th e b a s is o f 100, w ith n o t m o r e th a n t h r e e d e c im a ls , e .g ., 99.925. F r a c t io n s m a y n o t b e u s e d . I t is u r g e d th a t t e n d e r s b e m a d e on th e p r in te d f o r m s a n d fo r w a r d e d in t h e s p e c ia l e n v e lo p e s w h ic h w ill b e su p p lie d b y F e d e r a l R e s e r v e B a n k s o r B r a n c h e s o n a p p lic a t io n t h e r e fo r . O t h e r s th a n b a n k in g in s tit u t io n s w ill n o t b e p e r m itt e d to s u b m it t e n d e r s e x c e p t f o r t h e ir o w n a c c o u n t . T e n d e r s w ill b e r e c e iv e d w it h o u t d e p o s it f r o m i n c o r p o r a t e d b a n k s a n d t r u s t c o m p a n ie s a n d fr o m r e s p o n s ib le a n d r e c o g n i z e d d e a le r s in in v e s tm e n t se c u r itie s . T e n d e r s f r o m o t h e r s m u s t b e a c c o m p a n ie d b y p a y m e n t o f 2 p e r c e n t o f th e fa c e a m o u n t o f T r e a s u r y b ills a p p lie d f o r , u n le s s t h e t e n d e r s a re a c c o m p a n ie d b y a n e x p r e s s g u a r a n ty o f p a y m e n t b y an in c o r p o r a te d b a n k o r tru st c o m p a n y . I m m e d ia t e ly a fte r t h e c l o s i n g h o u r , t e n d e r s w ill b e o p e n e d at th e F e d e r a l R e s e r v e B a n k s a n d B r a n c h e s , f o l l o w i n g w h ic h p u b lic a n n o u n c e m e n t w i l l b e m a d e b y t h e T r e a s u r y D e p a r t m e n t o f th e a m o u n t a n d p r ic e r a n g e o f a c c e p t e d b id s . T h o s e s u b m it t in g t e n d e r s w ill b e a d v is e d o f t h e a c c e p t a n c e o r r e je c t i o n t h e r e o f. T h e S e c r e t a r y o f t h e T r e a s u r y e x p r e s s ly r e s e r v e s t h e r ig h t t o a c c e p t o r r e je c t a n y o r a ll t e n d e r s , in w h o le o r in p a r t, a n d h is a c t io n in a n y s u c h r e s p e c t s h a ll b e fin a l. S u b je c t t o t h e s e r e s e r v a t io n s , n o n c o m p e t it iv e t e n d e r s f o r $200,000 o r le s s f o r th e a d d i tio n a l b ills d a te d O c t o b e r 20, 1960, (9 1 d a y s r e m a in in g u n til m a tu r ity d a te o n A p r il 20, 19 61) a n d n o n c o m p e t i t iv e te n d e rs f o r $100,000 o r le s s f o r t h e 1 8 2 -d a y b ills w it h o u t s t a t e d p r ic e fr o m a n y o n e b i d d e r w ill b e a c c e p t e d in fu ll a t t h e a v e r a g e p r ic e (in t h r e e d e c im a ls ) o f a c c e p t e d c o m p e t it iv e b id s f o r t h e r e s p e c t iv e issu e s. S e tt le m e n t f o r a c c e p t e d t e n d e r s in a c c o r d a n c e w it h th e b id s m u s t b e m a d e o r c o m p le t e d a t t h e F e d e r a l R e s e r v e B a n k o n J a n u a r y 19, 1961, in c a s h o r o t h e r im m e d ia t e ly a v a ila b le fu n d s o r in a lik e f a c e a m o u n t o f T r e a s u r y b ills m a t u r in g J a n u a ry 19, 1961. C a s h a n d e x c h a n g e te n d e rs w ill r e c e iv e e q u a l tre a tm e n t. C a s h a d ju s t m e n ts w ill b e m a d e f o r d iffe r e n c e s b e t w e e n th e p a r v a lu e o f m a tu r in g b ills a c c e p t e d in e x c h a n g e a n d th e is s u e p r ic e o f t h e n e w b ills. T h e in c o m e d e r iv e d f r o m T r e a s u r y b ills , w h e t h e r in t e r e s t o r g a in f r o m t h e s a le o r o t h e r d is p o s it io n o f t h e b ills , d o e s n o t h a v e a n y e x e m p t io n , a s s u c h , a n d lo s s f r o m th e s a le o r o t h e r d is p o s i t io n o f T r e a s u r y b ills d o e s n o t h a v e a n y sp e c ia l t r e a tm e n t , as s u c h , u n d e r t h e In t e r n a l R e v e n u e C o d e o f 1954. T h e b ills are s u b je c t t o e s ta te , in h e r it a n c e , g i f t o r o t h e r e x c is e ta x e s , w h e th e r F e d e r a l o r S ta te , b u t a r e e x e m p t f r o m a ll t a x a t io n n o w o r h e r e a fte r im p o s e d o n t h e p r in c ip a l o r in t e r e s t t h e r e o f b y a n y S ta te, o r a n y o f t h e p o s s e s s io n s o f th e U n it e d S ta te s , o r b y a n y lo c a l t a x in g a u th o r it y . F o r p u r p o s e s o f t a x a t io n t h e a m o u n t o f d is c o u n t a t w h ic h T r e a s u r y b ills a r e o r ig in a lly s o ld b y t h e U n it e d S ta te s is c o n s id e r e d t o b e in te r e s t. U n d e r S e c t io n s 4 5 4 ( b ) a n d 1 2 2 1 (5 ) o f th e I n t e r n a l R e v e n u e C o d e o f 1954 th e a m o u n t o f d is c o u n t a t w h ic h b ills is s u e d h e r e u n d e r a r e s o l d is n o t c o n s id e r e d t o a c c r u e u n til s u c h b ills a r e s o ld , r e d e e m e d o r o t h e r w is e d is p o s e d o f , a n d s u c h b ills a r e e x c lu d e d f r o m c o n s id e r a t io n as c a p ita l a s s e ts . A c c o r d i n g l y , t h e o w n e r o f T r e a s u r y b ills (o t h e r th a n life in s u r a n c e c o m p a n ie s ) is s u e d h e r e u n d e r n e e d in c lu d e in h is in c o m e ta x r e tu r n o n l y th e d iffe r e n c e b e t w e e n t h e p r ic e p aid f o r s u c h b ills , w h e t h e r o n o r ig in a l is s u e o r o n s u b s e q u e n t p u r c h a s e , a n d t h e a m o u n t a c t u a lly r e c e iv e d e it h e r u p o n sa le o r r e d e m p t io n at m a tu r ity d u r in g th e t a x a b le y e a r f o r w h ic h th e re tu r n is m a d e , a s o r d in a r y g a in o r lo s s . T r e a s u r y D e p a r tm e n t C ir c u la r N o . 418, R e v is e d , a n d this n o t ic e , p r e s c r ib e t h e t e r m s o f th e T r e a s u r y b ills a n d g o v e r n th e c o n d it io n s o f th e ir issu e. C o p ie s o f t h e c ir c u la r m a y b e o b ta in e d fr o m a n y F e d e r a l R e s e r v e B a n k o r B r a n c h . T h is Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, M onday, January 16, 1961, 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 m ay be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. Payment f o r 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 January 12, 1961, representing an addi tional amount of bills dated October 13, 1960, and maturing April 13, 1961; and 182-day bills dated January 12, 1961, maturing July 13, 1961) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED JANUARY 12, 1961) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing A pril 13,1961 182-Day Treasury Bills Maturing July 13,1961 Price Approx. equiv. annual rate High ..................................... 99.408* 2 .3 4 2 % 98.710b 2.552% L o w ....................................... 99.393 2 .4 0 1 % 98.676 2 .6 1 9 % Average 99.397 2.385% J 98.684 2 .6 0 2 % 1 .............................. Price a E x c e p t i n g f o u r t e n d e r s t o t a lin g $1,452,OCX). Approx. equiv. annual rate t> E x c e p t i n g o n e t e n d e r o f $25,000. 1 O n a c o u p o n is s u e o f t h e s a m e le n g t h a n d f o r th e s a m e a m o u n t in v e s t e d , th e r e tu r n o n t h e s e b ills w o u ld p r o v id e y i e l d s o f 2.43 p e r c e n t f o r th e 9 1 -d a y b ills , a n d 2 .6 7 p e r c e n t f o r th e 1 8 2 -d a y b ills. I n t e r e s t r a te s o n b ills a r e q u o t e d in term s o f b a n k d iscou n t, w ith th e retu rn related t o th e fa c e am ou n t o f th e bills p a y a b le at m a tu rity rather than the a m o u n t in v e s t e d , a n d t h e ir le n g t h in a c tu a l n u m b e r o f d a y s r e la t e d t o a 3 6 0 -d a y y e a r . I n c o n t r a s t, y ie ld s o n c e r t ific a t e s , n o t e s , a n d b o n d s a r e c o m p u t e d in t e r m s o f in t e r e s t o n th e a m o u n t in v e s t e d , a n d r e la te t h e n u m b e r o f d a y s r e m a in in g in a n in t e r e s t p a y m e n t p e r i o d t o th e a ctu a l n u m b e r o f d a y s in th e p e r io d , w it h s e m ia n n u a l c o m p o u n d in g i f m o r e th a n o n e c o u p o n p e r i o d is involved. (6 2 percent o f the amount of 91-day bills (1 0 percent of the amount of 182-day bills bid for at the low price was accepted.) bid for at the low price was accepted.) T ota l T enders A pplied fo r and Accepted (B y Federal Reserve Districts) 91-Day Treasury Bills Maturing A pril 13,1961 District Boston Applied for .............................. New Y o r k ....................... $ 26,590,000 182-Day Treasury Bills Maturing July 13,1961 Accepted $ 16,590,000 Applied for $ 6,770,000 Accepted $ 6,770,000 1,389,586,000 630,736,000 800,605,000 372,705,000 .................. 33,047,000 17,517,000 8,782,000 3,602,000 Cleveland ......................... 41,358,000 38,358,000 27,499,000 27,499,000 Richmond ....................... 15,689,000 15,689,000 2,318,000 2,318,000 Atlanta ........................... 26,412,000 25,460,000 5,898,000 5,698,000 Chicago ........................... 200,548,000 113,408,000 73,930,000 34,636,000 St. Louis ......................... 36,071,000 32,691,000 5,474,000 5,474,000 Minneapolis .................. 13,026,000 8,026,000 4,355,000 1,855,000 Kansas C i t y ..................... 38,572,000 29,432,000 14,589,000 12,489,000 D a lla s ................................ 20,427,000 20,427,000 3,173,000 3,173,000 San F rancisco................ 67,842,000 51,702,000 35,193,000 23,793,000 Philadelphia Total .............. $1,909,168,000 $1,000,036,000c $988,586,000 c Includes $258,503,000 noncompetitive tenders accepted at the average price of 99.397. d Includes $52,083,000 noncompetitive tenders accepted at the average price of 98.684. $500,012,000d
@FedFRASER