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FED ERAL RESER VE BANK O F NEW YORK Fiscal Agent of the United States r Circular N o . 5 0 3 7 1 t M a y 1 7 ,1 9 6 1 J OFFERING OF TW O SERIES OF TREASURY BILLS $1,100,000,000 of 91-Day Bills, Additional Amount, Series Dated Feb. 23, 1961, Due Aug. 24, 1961 (T o Be Issued May 25, 1961) $500,000,000 o f 183-Day Bills, Dated May 25, 1961, Due November 24, 1961 To All Incorporated Bonks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text o f a notice issued by the Treasury Department, released fo r publication today at 4 p.m., Eastern Daylight Saving tim e: 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 re g a te am ou nt o f $1,600,000,000, o r th erea b ou ts, f o r ca sh a n d in e x ch a n g e for T re a su ry bills m a tu rin g M a y 25, 1961, in th e a m ou n t o f $1,602,596,000, as fo llo w s : 9 1 -d a y bills ( t o m atu rity da te) to be issued M a y 25, 1961, in th e a m ou n t o f $1,100,000,000, o r th erea b ou ts, rep re sen tin g an a dd ition al a m ou n t o f bills dated F eb ru a ry 23, 1961, and t o m ature A u g u st 24, 1961, o rig in a lly issued in the a m ou n t o f $500,145,000, th e addition al and original bills t o be fre e ly in terch angeable. 183-day bills, fo r $500,000,000, or th ereabouts, t o be dated M a y 25, 1961, and to mature N o v e m b e r 24, 1961. T h e bills o f b o th series w ill be issued on a d iscou n t basis u nder co m p e titiv e a n d n o n com p etitiv e b id d in g as h erein a fter p r o vid ed , and at m a tu rity th eir fa c e a m ou n t w ill be pa ya b le w ith ou t in terest. T h e y w ill b e issu ed in b ea rer fo r m o n ly , and in d e n om in ation 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 b e re ce iv ed at F ed era l R e s e rv e B an ks and B ra n ch e s u p t o the c lo s in g h our, o n e-th irty o ’ c lo c k p.m ., E astern D a y lig h t S a v in g tim e. M o n d a y , M a y 22, 1961. T e n d e rs w ill n ot be re ce iv e d at th e T re a su ry D ep a rtm en t, W a s h in g to n . E a ch ten d e r m u st b e fo r an even m u ltiple o f $1,000, and in th e ca se o f com p e titiv e ten ders th e p rice offered m u st be exp ressed on the basis o f 100, w ith n o t m o re than three decim a ls, e.g., 99.925. F ra ctio n s m a y n o t b e used. It is u rg ed that tenders b e m ade on th e p rin ted fo rm s and fo rw a rd ed in th e special en velop es w hich w ill be sup plied b y F ed eral R e serv e B an ks o r B ra n ch es on a p p lica tion th erefor. O th e rs than b a n k in g in stitu tions w ill n o t be perm itted to subm it ten ders excep t fo r th eir o w n a ccou n t. T e n d e rs w ill be rece iv e d w ith ou t dep osit fr o m in corp ora ted banks and trust c o m p a n ies and fr o m re sp o n sib le a n d re co g n iz e d dealers in in vestm ent securities. T e n d e rs fr o m oth ers m u st b e a ccom p a n ied b y p a y m e n t o f 2 p e rce n t o f the fa ce a m ou n t o f T r e a s u ry bills applied fo r, unless th e ten ders are a ccom p a n ied b y an exp ress gu aranty o f p a y m e n t b y an in co rp o ra te d b a n k o r trust com p a n y . Im m ed ia tely after th e clo s in g h our, ten ders w ill b e op en ed at th e F ed era l R e se rv e B anks and B ra n ch es, fo llo w in g w h ich public a n n o u n ce m e n t w ill b e m a d e b y th e T r e a s u ry D ep a rtm en t o f the a m ou n t a n d p rice ra n ge o f a ccep ted bids. T h o s e subm itting ten ders w ill b e advised o f the a ccep ta n ce o r re je ctio n thereof. T h e S ecreta ry o f th e T r e a s u ry ex p re s sly reserv es 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, and his a ction in a n y su ch re s p e ct shall b e final. S u b je ct to th ese 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 th e a d d i tional bills dated F eb ru a ry 23, 1961, (91 d a y s rem ain in g until m a tu rity date on A u g u s t 24, 1961) and n on com p etitiv e tenders fo r $100,000 o r less f o r th e 183-day bills w ith ou t stated p rice fr o m a n y o n e b id d e r w ill b e a cce p te d in full at th e a v era g e p r ic e (in th ree d ecim a ls) o f a ccep ted com p etitiv e b id s fo r th e 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 b e m a d e o r com p le te d at th e F ed era l R e s e rv e B ank on M a y 25, 1961, in cash or oth er im m ediately available funds o r in a like fa ce a m ou n t o f T rea su ry bills m a tu rin g M a y 25, 1961. Cash and e x ch a n g e ten ders w ill receiv e eq u a l treatm en t. Cash ad ju stm en ts w ill be m a d e fo r d ifferen ces b etw een th e par valu e o f m a tu rin g bills a cce p te d in ex ch a n g e a n d th e issue price o f th e n e w bills. T h e in co m e derived fr o m T r e a s u ry bills, w hether interest o r gain fr o m th e sale o r oth er d isp osition o f th e bills, d o e s n o t have a n y ex em p tion , as such, and lo s s fr o m th e sale o r oth er d isp o si tion o f T rea su ry bills d o e s n o t h av e a n y special treatm en t, as su ch , u n d er th e In tern al R e v en u e C o d e o f 1954. T h e bills are s u b je ct t o estate, in heritance, g ift o r oth er e x cis e taxes, w h eth er F ed eral o r State, b u t are ex em p t fr o m a ll ta x ation n o w o r h e re after im p osed o n th e prin cip a l o r in terest th e re o f b y a n y State, o r a n y o f th e p oss e s s io n s o f the U n ited States, o r b y a n y lo ca l ta x in g authority. F o r pu rp oses o f taxation the a m ou n t o f dis co u n t at w h ich T rea su ry bills are o rig in a lly s o ld b y th e U n ited States is co n sid e re d to be interest. U n d er S ection s 4 5 4 (b ) and 1221(5) o f th e In tern al R even u e C o d e o f 1954 th e a m ou n t o f dis 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 u ntil su ch bills are sold , red eem ed o r oth erw ise dis posed o f, and su ch bills are exclu d ed fr o m con sid era tio n as capital a ssets. A c c o r d in g ly , th e o w n e r o f T r e a s u ry bills (o th e r than life in su rance co m p a n ie s ) issued h ereun der need in clu d e in his in co m e ta x return o n ly th e differen ce b etw een the p r ice 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 th e a m ou n t actu a lly receiv ed either u p on sale o r red em p tion at m atu rity du rin g th e ta x a b le yea r fo r w h ich the return is m ade, as ord in a ry gain o r loss. T rea su ry D epa rtm en t C ircu lar N o . 418, R ev ised , and this n otice, p rescrib e th e term s o f the T r e a s u ry bills a n d g o v e r n the co n d itio n s o f their issue. C op ies o f th e circu la r m a y b e 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 Daylight Saving time, Monday, M ay 22, 1961, at the Securities Department o f its Head Office and at its Buffalo Branch. Tender form s for the respective series are enclosed. Please use the appropriate forms to submit tenders and return them in an envelope marked “ Tender fo r Treasury Bills.” Tenders may be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. Paym ent fo r the Treasury bills cannot be made by credit through the Treasury T ax and Loan Account. Settlem ent must be made in cash or other immediately available funds or in maturing Treasury bills. Results o f the last offering o f Treasury bills (91-day bills to be issued May 18, 1961, representing an additional amount o f bills dated February 16, 1961, and maturing August 17, 1961; and 182-day bills dated M ay 18, 1961, maturing November 16, 1961) are shown on the reverse side o f this circular. A lfred H ayes, President. J'Sf^Please note that the Treasury bills maturing November 24,1961, will be 183-day bills. (ovn) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED MAY 18, 1961) Range of Accepted Competitive Bids 91 -D ay Treasury Bills Maturing August 17,1961 Price Approx. equiv. annual rate 182-Day Treasury Bills Maturing N ovem ber 16,1961 Price Approx. equiv. annual rate H igh ........................ ......... 99.440 2.215% 98.775a 2.423% L o w .......................... ......... 99.425 2.275% 98.766 2.441% ................. ......... 99.428 2 .26 4% 1 98.769 2.435%* Average a E x c e p tin g t w o ten ders to ta lin g $1,200,000. 1 O n a c o u p o n issu e o f th e sa m e len g th and fo r the sam e a m ou n t in vested , th e return o n th ese bills w o u ld p ro v id e yie ld s o f 2.31 p e r ce n t f o r th e 9 1 -d a y b ills, a n d 2.50 p ercen t fo r th e 182-day bills. In terest rates on b ills are q u o te d in term s o f b a n k d iscou n t, w ith the return related t o th e fa ce a m ou n t o f the bills p a ya b le at m a tu rity rath er than the a m o u n t in vested, a n d th eir len g th in actu al n u m ber o f days rela ted t o a 360-day year. In con tra st, yield s o n certificates, n otes, a n d b o n d s a re co m p u te d in term s o f interest on th e a m ou n t in vested, and relate th e n u m ber o f d a ys rem a in in g in an in te re st p a y m en t p e r io d to th e actu al n u m b er o f days in th e p eriod , w itn sem iannual c o m p o u n d in g if m o r e than on e co u p o n p e r io d is in v o lv e d . (8 0 percent o f the amount o f 91-day bills bid fo r at the low price was accepted.) (11 percent o f the amount o f 182-day bills bid fo r at the low price was accepted.) Total Tenders Applied for and Accepted ( B y Federal Reserve Districts) 91 -D ay Treasury Bills Maturing August 17,1961 District Boston Applied for ............................ $ 26,668,000 182-D ay Treasury Bills Maturing N ovem ber 16,1961 Accepted $ 15,798,000 Applied for $ 7,737,000 Accepted $ 4,309,000 New Y o r k ...................... 1,501,189,000 730,689,000 1,029,107,000 409,677,000 ................. 27,465,000 12,465,000 8,333,000 2,995,000 C le v ela n d ........................ 34,514,000 34,414,000 21,031,000 15,997,000 Richmond ..................... 12,925,000 12,925,000 1,932,000 1,932,000 A t la n t a ............................ 23,552,000 21,152,000 5,020,000 4,573,000 C h ic a g o ............................ 212,463,000 136,263,000 79,101,000 32,279,000 St. Louis ....................... 23,242,000 18,031,000 5,354,000 3,854,000 M in n eap olis................... 22,547,000 16,347,000 6,921,000 4,321,000 Kansas C i t y ................... 39,722,000 25,657,000 10,383,000 5,157,000 D a lla s .............................. 19,816,000 18,816,000 2,987,000 2,987,000 San F r a n c is c o ............... 67,961,000 57,461,000 23,510,000 12,645,000 Philadelphia Total ............. $2,012,064,000 $1,100,018,000b $1,201,416,000 Includes $228,045,000 noncom petitive tenders accepted at the average price o f 99.428. c Includes $S2,026,000 noncom petitive tenders accepted at the average price o f 98.769. $500,726,000°
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