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FEDERAL RESERVE BANK O F N E W YORK Fiscal Agent of the United States r Circular No. 50531 I July 5 .1 9 6 1 J OFFERING OF TWO SERIES OF TREASURY BILLS S1,100,000,000 of 92-Day Bills, Additional Amount, Series Dated April 13, 1961, Due Oct. 13, 1961 (T o Be Issued July 13,1961) $500,000,000 o f 182-Day Bills, Dated July 13, 1961, Due January 11, 1962 To All Incorporated Banks 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 for publication today at 4 p.m., Eastern Daylight Saving tim e: The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $1,600,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing' July 13, 1961, in the amount of $1,600,927,000, as follows: 92-day bills (to maturity date) to be issued July 13, 1961, in the amount of $1,100,000,000, or thereabouts, repre senting an additional amount of bills dated April 13, 1961, and to mature October 13, 1961, originally issued in the amount of $600,479,000 (including $100,104,000 issued June 14, 1961), the additional and original bills to be freely interchangeable. 182-day bills, for $500,000,000, or thereabouts, to be dated July 13, 1961, and to mature January 11, 1962. T h e bills of both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. T h ey will be issued in bearer form only, and in denominations 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 Daylight Saving time, Monday, July 10, 1961. Tenders will not be received at the Treasury Department, W ashington. 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 April 13, 1961, (92 days remaining until maturity date on October 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 respec tive issues. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on July 13, 1961, in cash or other immediately available funds or in a like face amount of Treasury bills maturing July 13, 1961. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value of maturing bills accepted in exchange and the issue price o f 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 o f 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 No. 418, Revised, and this notice, prescribe the terms of the Treasury bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday, July 10, 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 for Treasury Bills.” Tenders may be submitted by telegraph, subject to written confirmation; they may not be submitted by 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 r e d it th r o u g h th e T r e a s u r y T a x an d 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 cash o r o th e r im m ed ia tely available fu n d s o r in m a tu r in g T r e a s u r y bills. Results o f the last offering o f Treasury bills (91-day bills to be issued July 6, 1961, representing an additional amount o f bills dated April 6, 1961, and maturing October 5, 1961 ; and 182-day bills dated July 6, 1961, maturing January 4, 1962) are shown on the reverse side o f this circular. A lfred H ayes, P r es id e n t. X^ T Please note that the Treasury bills maturing O ctober 13, 1961, will be 92-day bills. ( over) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED JULY 6, 1961) Range o f Accepted Competitive Bids 91 -D a y T r e a s u r y B ills M a tu r in g O c t o b e r 5 ,1 9 6 1 P r ice A p p ro x . equiv. annual rate 1 8 2 -D a y T r e a s u r y B ills M a tu r in g J an u ary 4 ,1 9 6 2 P r ice A p p rox. equiv. annual rate H igh ........................ ........ 99.429a 2.259% 98.764 2.445% L o w .......................... ......... 99.407 2.346% 98.733 2.506% ................. ......... 99.417 2.305%* 98.743 2 .48 6% 1 Average a Excepting one tender of $7,000. 1 On a coupon issue of the same length and for the same amount invested, the return on these bills would provide yields of 2.35 percent for the 91-day bills, and 2.55 percent for the 182-day bills. Interest rates on bills are quoted in terms of 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. (19 percent o f the amount o f 91-day bills bid fo r at the low price was accepted.) (64 percent o f the amount o f 182-day bills bid fo r at the low price was accepted.) Total Tenders Applied fo r 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 Bills M a tu r in g O c t o b e r 5 ,1 9 6 1 A ccep ted A pplied f o r D istrict $ Boston 26,424,000 $ 12,804,000 M a tu r in g Janu ary 4, 1962 A pplied f o r $ 3,319,000 A ccep ted $ 3,319,000 1,371,872,000 782,572,000 814,175,000 428,175,000 Philadelphia 20,144,000 14,144,000 10,567,000 5,567,000 Cleveland ..................... 17,365,000 17,365,000 9,551,000 9,551,000 ..................... 5,351,000 5,351,000 1,704,000 1,704,000 A t la n t a ............................ 15,404,000 15,404,000 1,441,000 1,441,000 C h ic a g o ............................ 194,152,000 155,102,000 57,378,000 27,378,000 St. Louis ....................... 20,024,000 16,024,000 3,346,000 2,846,000 Minneapolis ................... 13,826,000 13,826,000 4,405,000 3,405,000 Kansas C i t y ................... 18,262,000 17,212,000 5,285,000 5,084,000 Dallas .............................. 7,365,000 7,365,000 2,437,000 2,437,000 San F r a n c is c o ............... 52,018,000 43,018,000 9,142,000 9,142,000 New Y o r k ..................... Richmond Total ............. $1,762,207,000 $1,100,187,000b $922,750,000 b Includes $149,477,000 noncompetitive tenders accepted at the average price o f 99.417. c Includes $30,592,000 noncom petitive tenders accepted at the average price o f 98.743. $500,049,000c
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