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FEDERAL RESERVE BANK O F N EW YORK Fiscal Agent of the United States C ir c u la r N o . 5 0 1 9 A p r il 5,1961 [ O FFE R IN G OF T W O SERIES OF T R E A S U R Y BILLS $1,100,000,000 o f 91-Day Bills, Additional Amount, Series Dated Jan. 12, 1961, Due July 13, 1961 (To Be Issued April 13, 1961) $500,000,000 o f 183-Day Bills, Dated April 13, 1961, Due October 13, 1961 T o A ll In corporated B anks and Trust Companies, and Others Concerned, in the Second Federal R eserv e D istrict: Follow ing 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 reasu ry D epartm ent, b y this p u b lic n otice, invites tenders fo r tw o series o f T rea su ry bills to the a ggreg ate amount o f $1,600,000,000, o r thereabouts, fo r cash and in exch a n ge for T reasu ry bills m aturing A p ril 13, 1961, in the am ount o f $1,500,921,000, as f o llo w s : 91-day bills (to m aturity date) t o be issued A p r il 13, 1961, in the am ount o f $1,100,000,000, or thereabouts, rep re senting an a dd ition al am ount o f bills dated January 12, 1961, and to mature July 13, 1961, orig in a lly issued in the am ount o f $500,112,000, the a dd ition al and origin al bills to be freely interchangeable. 183-day b ills, fo r $500,000,000, or thereabouts, to be dated A p r il 13, 1961, and to m ature O ctob er 13, 1961. T h e b ills o f both series w ill be issued on a discou n t basis under com petitive and noncom petitive b id d in g as h ereinafter provided , and at m aturity their fa ce am ount w ill be payable w ith ou t interest. T h e y w ill be issued in bearer form on ly, and in den om in ation s o f $1,000, $5,000, $10,000, $100,000, $500,000 and $1,000,000 (m atu rity va lu e). T en ders w ill be receiv ed at F ed eral R eserve B anks and B ran ches up t o the clo s in g h our, on e-th irty o ’c lo c k p.m., E a st ern Standard tim e, M on d a y, A p r il 10, 1961. T en ders w ill not be received at the T reasu ry D epartm ent, W ashington. E ach ten der must be fo r an even m ultiple o f $1,000, and in the ca se o f com petitive tenders the price offered must be expressed on the basis o f 100, w ith n ot m ore than three decim als, e.g., 99.925. F raction s m ay not be used. It is urged that tenders be m ade on the printed form s and forw a rd ed in the special envelopes w hich w ill be supplied by Federal R eserve Banks o r Branches on a pp lication th erefor. O thers than banking institutions w ill not be perm itted to subm it tenders excep t fo r their ow n a ccou nt. T en ders will be receiv ed w ithout deposit from in corpora ted banks and trust com panies and from responsible and recogn ized dealers in in vestm ent securities. T en ders from others must be accom panied by paym ent o f 2 percent o f the face am ount o f T reasu ry bills applied for, unless the tenders are accom panied by an express guaranty o f paym ent by an in corporated bank or trust com pany. Im m ediately a fter the clo s in g hour, tenders w ill be opened at the F ed eral R eserve Banks and B ranches, fo llo w in g w hich p u b lic announcem ent w ill be m ade by the T reasu ry D epartm ent o f the am ount and price ran ge o f a ccepted bids. T h o s e sub m itting tenders w ill be advised o f the acceptance or rejection th ereof. T h e S ecretary o f the T reasu ry exp ressly reserves the righ t to accep t o r reject any o r a ll tenders, in w h ole o r in part, and his a ction in any such respect shall be final. S u b ject to these reservations, n on com petitive tenders fo r $200,000 o r less fo r the a dd ition al bills dated January 12, 1961, (91 days re m ain in g until m aturity date on July 13, 1961) and n o n co m petitive tenders fo r $100,000 or less fo r the 183-day bills w ithout stated price fro m any one b idder w ill be a ccep ted in fu ll at the average price (in three decim als) o f a ccepted com petitive bids fo r the respective issues. Settlem ent fo r a ccepted tenders in a ccord a n ce w ith the bids must be made or com pleted at the F ed era l R eserve B ank on A p ril 13, 1961, in cash o r oth er im m ediately availa b le funds or in a like face am ount o f T reasu ry bills m aturing A p r il 13, 1961. Cash and exch an ge tenders w ill receive equal treatment. Cash adjustm ents w ill be m ade fo r differences betw een the par valu e o f m aturing bills a ccepted in exch a n ge and the issue price o f the new bills. T h e in com e derived from T reasu ry b ills, w hether interest o r gain from the sale or oth er d isp osition o f the b ills, does not have any exem ption, as such, and loss from the sale o r other d isp osition o f T reasu ry bills does n ot have any special treat m ent, as such, under the Internal Revenue C ode o t iy54. i'he bills are subject to estate, inheritance, g ift o r other excise taxes, w hether Federal or State, but are exem pt from all ta x a tion now or hereafter im posed on the principal o r interest th ereof by any State, or any o f the possessions o f the United States, or by any lo ca l ta x in g authority. F o r purposes o f ta x a tion the am ount o f discou nt at w hich T reasu ry bills are o rig in a lly sold by the U nited States is con sid ered to be interest. U nder S ections 4 5 4(b) and 1221(5) o f the Internal Revenue C ode o f 1954 the am ount o f discou nt at w hich bills issued hereunder are sold is not con sidered to a ccru e until such bills are sold , redeem ed or otherw ise disp osed of, and such bills are exclu d ed fro m con sidera tion as capital assets. A cco rd in g ly , the ow n er o f T reasu ry bills (oth er than life insurance com panies) issued hereunder need include in his in com e ta x return on ly the difference between the p rice paid fo r such bills, whether on origin a l issue or on subsequent purchase, and the am ount actu ally received either upon sale or redem ption at m aturity du rin g the ta xab le yea r fo r w h ich the return is made, as ord in a ry gain o r loss. T reasu ry D epartm ent C ircu la r N o. 418, R evised , and this n otice, prescrib e the terms o f the T reasu ry bills and govern the con dition s o f their issue. C opies o f the circu la r m ay be obtain ed from any Federal R eserve B ank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, April 10, 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 of the last offering of Treasury bills (91-day bills to be issued April 6, 1961, representing an additional amount of bills dated January 5, 1961, and maturing July 6, 1961 ; and 182-day bills dated April 6, 1961, maturing October 5, 1961) are shown on the reverse side of this circular. Please A lfred H a y e s , President. note that the Treasury bills maturing October 13, 1961, will be 183-day bills. ( over) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED APRIL 6, 1961) Range o f Accepted Competitive Bids 91-Day Treasury Bills Maturing July 6, 1961 P rice A p p ro x . equiv. annual rale P rice 2.437% 2.488% 2.470%1 98.666“ 98.650 98.656 99.384 99.371 High Low Average 182-Day Treasury Bills Maturing October 5,1961 99.376 A p p ro x . equiv. annual rate 2.639% 2.670% 2.658%1 a E x ce p tin g tw o tenders tota lin g $565,000. 1 On a cou p on issue o f the same length and for the same am ount invested, the return on these bills w ould provide yields o f 2.52 percent fo r the 91-day bills, and 2.73 percent fo r the 182-day bills. Interest rates on bills are quoted in term s o f bank discou nt, w ith the return related to the fa ce am ount o f the bills payable at m aturity rather than the amount invested, and th eir length in actual num ber o f days related to a 360-day year. In con tra st, yield s on certificates, notes, and bonds are com pu ted in term s o f interest on the am ount invested, and relate the num ber o f days rem aining in an interest paym ent p eriod to the actual num ber o f days in the period, w ith sem iannual com pou n din g i f m ore than one coupon period is in volved. (73 percent of the amount of 91-day bills bid for at the low price was accepted.) (16 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders A pplied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing July 6, 1961 D istrict A pplied for Boston ....................... .......... $ 24,234,000 New Y o r k ................. ......... 1,436,869,000 Philadelphia ............. ......... 22,079,000 Cleveland ................. .......... 28,410,000 Richmond ................. ......... 8,535,000 A tla n ta......................... .......... 182-Day Treasury Bills Maturing October 5, 1961 A ccep ted $ 13,694,000 A pplied fo r $ 742,403,000 1,747,000 A ccep ted $ 1,747,000 897,160,000 418,560,000 7,079,000 8,347,000 1,063,000 28,410,000 14,604,000 9,604,000 8,535,000 748,000 748,000 21,609,000 20,001,000 6,013,000 4,868,000 Chicago ..................... ......... 214,955,000 158,145,000 66,056,000 32,238,000 St. Louis ................... .......... 19,743,000 18,743,000 5,424,000 4,964,000 Minneapolis ............. ......... 11,573,000 8,303,000 4,683,000 2,183,000 City .............. ......... 32,992,000 20,492,000 12,671,000 4,735,000 D a lla s......................... ......... 9,868,000 9,868,000 2,977,000 2,977,000 84,985,000 64,433,000 27,716,000 16,448,000 $1,048,146,000 $500,135,000° K ansas San F ran cisco........... Total ......... $1,915,852,000 $1,100,106,000b b Includes $176,841,000 noncompetitive tenders accepted at the average price of 99.376. c Includes $37,151,000 noncompetitive tenders accepted at the average price of 98.656.
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