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FEDERAL RESERVE BANK O F NEW YORK Fiscal Agent of the United States r C ircu lar N o . 5 0 1 1 T L M a r c h 22, 1961 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,100,000,000 o f 91-Day Bills, Additional Amount, Series Dated Dec. 29, 1960, Due June 29, 1961 (T o Be Issued March 30, 1961) $500,000,000 of 182-Day Bills, Dated March 30, 1961, Due September 28, 1961 T o A ll In corporated B anks and T rust Companies, and Others C oncerned, in the Second Federal R eserv e D istrict: Following is the text of a notice issued by the Treasury Department, released for publication today at 4 p.m. Eastern Standard time: T h e T r e a s u ry D ep a rtm en t, b y this p u b lic n otice, invites ten ders fo r tw o series o f T rea su ry bills to the a g g reg a te a m ou n t o f $1,600,000,000, o r th erea b ou ts, f o r cash and in e x ch a n g e for T r e a s u ry bills m a tu rin g M a rch 30, 1961, in the a m ou n t o f $1,500,859,000, as fo llo w s : 9 1-d ay bills ( t o m atu rity date) to be issued M a rch 30, 1961, in the a m ou n t o f $1,100,000,000, o r th erea b ou ts, rep re s en tin g an add ition a l a m ou n t o f b ills dated D e ce m b e r 29, 1960, and t o m ature June 29, 1961, o rig in a lly issued in the a m ou n t o f $500,633,000, th e a dd ition al and origin a l bills to be fre e ly in terch angeable. 1 8 2 -d ay b ills, fo r $500,000,000, o r th ereabouts, to be dated M arch 30, 1961, and t o m ature S ep tem b er 28, 1961. T h e bills o f b o th series w ill be issued on a d iscou n t basis under co m p e titiv e and n o n com p etitiv e b id d in g as h ereinafter p r o vided, and at m atu rity th eir fa ce a m ou n t w ill be pa ya b le w ith ou t interest. T h e y w ill b e issued in bearer fo r m o n ly , and in d e n om in a tio n s o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m a tu rity v a lu e ). T e n d e rs w ill be re ceiv ed at F ed eral R e serv e B anks and B ra n ch e s up t o the c lo s in g h our, on e -th irty o ’ c lo c k p.m ., E astern S ta n da rd tim e, M o n d a y , M a rch 27, 1961. T e n d e rs w ill n ot be receiv ed at the T re a su ry D epartm en t, W a s h in g to n . E a ch tender m u st b e fo r an even m u ltiple o f $1,000, and in the case o f com p e titiv e ten ders th e price offered m u st be exp ressed on the basis o f 100, w ith n o t m o re than three decim als, e.g., 99.925. F ra ctio n s m a y n o t be used. It is u rg ed that tenders be m ade on the printed fo rm s and fo rw a rd ed in the special en velop es w hich w ill b e supplied b y F ed eral R e serv e B anks o r B ran ch es on app lica tion th erefor. O th ers than b a n k in g institutions w ill n ot be perm itted to su b m it ten ders e x ce p t f o r th eir o w n a ccou n t. T en d ers w ill be receiv ed w ith ou t dep osit fr o m in corp ora ted banks and trust c o m pan ies and fr o m resp on sib le and re co g n iz e d dealers in investm ent securities. T e n d e rs fro m oth ers m u st be a ccom p a n ied b y p a y m en t o f 2 p e rce n t o f the face a m ou n t o f T rea su ry bills applied for, unless the ten ders are a cco m p a n ie d b y an exp ress gu aranty o f p a ym en t b y an in co rp o ra ted ba n k o r trust com p a n y . Im m ed ia tely a fter th e clo s in g h our, ten ders w ill be op e n ed at the Federal R e se rve B anks and B ra n ch es, fo llo w in g w hich public an n ou n cem en t w ill b e m ade b y th e T rea su ry D epa rtm en t o f the am ou nt and p rice ran ge o f a ccep ted bids. T h o s e subm itting ten ders w ill b e advised o f th e a ccep ta n ce or re je ctio n th ereof. T h e S ecreta ry o f th e T r e a s u ry ex p re s sly reserves th e rig h t to a cce p t o r r e je c t a n y o r all ten ders, in w h o le o r in part, a n d his a ction in a n y su ch resp ect shall be final. S u b je ct to these reser va tion s, n o n co m p e titiv e ten ders fo r $200,000 o r less f o r the a d d i tional bills dated D e ce m b e r 29, 1960, (91 d a ys rem ain in g until m aturity date on June 29, 1961) and n on com p etitiv e ten ders fo r $100,000 o r less fo r th e 182-day bills w ith ou t stated price from a n y on e b id d er w ill be a cce p te d in full at the a vera ge p r ice (in th ree d ecim a ls) o f a ccep ted com p etitiv e bids fo r the respective issues. S ettlem ent fo r a ccep ted ten ders in a cco rd a n ce w ith the b id s m u st be m a d e o r com p leted at the F ed era l R e s e rv e B ank on M a rch 30, 1961, in cash o r oth er im m ed iately a v a ila b le fu n ds o r in a like face a m ou n t o f T rea su ry bills m atu rin g M a rch 30, 1961. Cash and e x ch a n g e ten ders w ill receiv e equal treatm ent. Cash ad ju stm en ts w ill be m ade fo r d ifferen ces b etw een th e par valu e o f m a tu rin g b ills a ccep ted in ex ch a n g e and th e issue price o f th e n ew bills. T h e in com e derived fr o m T r e a s u ry bills, w h eth er in terest o r gain fr o m th e sale o r oth er d isp osition o f the bills, d o e s n o t have an y ex em p tion , as such, and loss fr o m the sale o r oth e r d isp o si tion o f T rea su ry bills d o e s n ot have a n y special treatm en t, as such, u nder the In tern al R even u e C o d e o f 1954. T h e bills are su b ject to estate, in heritance, g ift o r oth er e x cis e taxes, w h eth er F ed eral o r State, but are exem p t fro m all ta xation n o w o r h e re after im p osed on the principal or in terest th e re o f b y a n y State, o r a n y o f the p ossession s o f the U n ited States, o r b y a n y loca l ta x in g authority. F o r pu rp oses o f taxation the a m ou n t o f d is co u n t at w h ich T rea su ry bills are orig in a lly s o ld b y th e U n ited States is co n sid e re d t o be interest. U n d er S ection s 4 5 4 (b ) and 1221(5) o f the In tern a l R even u e C o d e o f 1954 the a m ou n t o f d is co u n t at w h ich bills issued hereun der are s o ld is n ot co n sid e re d t o a ccru e until su ch bills are sold , red eem ed o r oth erw ise d is posed o f, and such bills are ex clu d ed fro m con sid e ra tio n as capital assets. A c c o r d in g ly , the o w n e r o f T rea su ry bills (o th e r than life in su rance co m p a n ie s ) issued hereun der need in clu d e in his in co m e ta x return o n ly the differen ce b etw een th e p rice paid fo r such bills, w h eth er o n origin a l issue o r on su b seq u en t p u r chase, a n d the a m ou n t actu a lly receiv ed either u pon sale o r red em p tion at m atu rity d u rin g the taxable yea r fo r w h ich the return is m ade, as ord in a ry gain or loss. T r e a s u ry D epa rtm en t C ircu lar N o. 418, R evised , and this n otice, prescrib e the term s o f the T rea su ry bills and g o v e r n the co n d itio n s o f their issue. C op ies o f the circu la r m a y be obtain ed fr o m a n y F ed era l R e s e rv e B a n k o r B ran ch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, March 27, 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 may be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. Payment for 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 o f the last offe rin g o f T reasu ry bills (9 2 -d a y bills to be issued M arch 23, 1961, representing an additional amount o f bills dated D ecem ber 22, 1960, and m aturing June 23, 1 961; and 182-day bills dated M arch 23, 1961, maturing Septem ber 21, 1961) are shown on the reverse side o f this circular. A lfred H a y e s , President. ( o v e r) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED MARCH 23, 1961) Range o f Accepted Com petitive Bids 92-Day Treasury Bills Maturing June 23,1961 182-Day Treasury Bills Maturing September 21,1961 A p p ro x . equiv. annual rate P r ice A p p r o x . equiv. annual rate High ............................... 99.426 2.246% 98.768 2.437% L o w ................................. 99.412 2.301% 98.748 2.476% Average ......................... 99.418 2.278%* 98.751 2.471%* 1 O n a c o u p o n issue o f the sam e len gth and fo r th e sam e a m ou n t in vested, the return on th ese b ills w ou ld provide yield s o f 2.32 p e r ce n t f o r th e 9 2 -d a y b ills, and 2.54 p ercen t f o r th e 182-day bills. In terest rates on bills are q u o te d in term s o f ba n k d iscou n t, w ith the return related to th e fa ce a m ou n t o f the bills p a y a b le at m a tu rity rather than the a m o u n t in vested, and th eir len g th in actual n u m ber o f d a ys rela ted t o a 3 6 0 -d ay yea r. In con tra st, yield s on certificates, n o te s, and b o n d s are co m p u te d in term s o f interest on the a m ou n t in vested, and relate th e n u m ber o f days rem ain in g in an in terest p a y m en t p eriod to the actual n um ber o f days in th e p eriod , w ith sem ian nu al c o m p o u n d in g if m o re than on e co u p o n p e r io d is in v olv ed . (67 percent of the amount of 92-day bills bid for at the low price was accepted.) (99 percent of the amount of 182-day bills bid for at the low price was accepted.) T otal T enders A pplied fo r and Accepted (By Federal Reserve Districts) 92-Day Treasury Bills Maturing June 23,1961 D istrict A pplied fo r Boston ......................... $ 37,679,000 182-Day Treasury Bills Maturing September 21,1961 A ccep ted $ 27,019,000 A pplied f o r $ 4,952,000 A ccep ted $ 4,302,000 New Y o r k ................... 1,399,263,000 612,613,000 843,090,000 386,870,000 Philadelphia ............... 27,564,000 10,752,000 7,047,000 2,047,000 Cleveland ..................... 38,237,000 38,237,000 22,999,000 11,399,000 Richmond ................... 11,016,000 11,016,000 12,583,000 2,583,000 Atlanta ....................... 26,595,000 25,131,000 12,230,000 11,530,000 Chicago ....................... 238,598,000 202,628,000 74,027,000 34,566,000 St. Louis ..................... 28,379,000 27,379,000 5,467,000 4,967,000 Minneapolis ............... 20,424,000 17,424,000 4,390,000 2,390,000 Kansas C ity ................. 35,509,000 34,849,000 14,197,000 12,994,000 D allas........................... 17,770,000 17,210,000 5,259,000 5,239,000 San Francisco............. 76,860,000 75,830,000 27,540,000 21,140,000 Total ............ $1,957,894,000 $1,100,088,000* $1,033,781,000 a Includes $255,239,000 noncompetitive tenders accepted at the average price of 99.418. b Includes $59,447,000 noncompetitive tenders accepted at the average price of 98.751. $500,027,000b
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