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FEDERAL RESERVE BANK O F N EW YORK Fiscal A gen t o f the U nited States r C ircular N o . 5 0 9 5 "1 L O ctober 1 1 , 19 61 J OFFERING OF TWO SERIES OF TREASURY BILLS L ,100,000,000 of 91-Day Bills, Additional Amount, Series Dated July 20, 1961, Due Jan. 18, 1962 (To Be Issued October 19, 1961) ),000,000 of 182-Day Bills, Dated October 19, 1961, Due April 19, 1962 To A ll 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: T h e T re a su ry D epartm en t, b y this pu 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 am ount o f $1,700,000,000, o r th ereabouts, fo r cash and in ex ch a n ge fo r T re a su ry bills m atu rin g O c to b e r 19, 1961, in the a m ou n t o f $1,600,399,000, as fo llo w s : 91-day bills (to m aturity date) to be issued O c to b e r 19, 1961, in the am ou nt o f $1,100,000,000, o r thereabouts, rep resen tin g an additional a m ou n t o f bills dated July 20, 1961, and to m ature January 18, 1962, origin a lly issued in the am ou nt o f $499,904,000, the additional and origin a l bills to be freely in terch angeable. 182-day bills, fo r $600,000,000, or th ereabouts, to be dated O c t o b e r 19, 1961, and to m ature A p ril 19, 1962. T h e bills o f b o th series w ill be issued on a discou n t basis u nder co m p etitive and n on com p etitive b id d in g as hereinafter p ro vid ed , and at m atu rity their face am ou nt w ill be pa ya b le w ith o u t interest. T h e y w ill be issued in bearer fo r m on ly, and in den om in a tion 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 receiv ed at F ed eral R eserv e B anks and B ran ch es up to the clo s in g h our, tw o o ’ c lo ck p.m ., E astern D a y ligh t S a vin g time, M on d a y, O c to b e r 16, 1961. T en d ers w ill n ot be receiv ed at the T re a s u ry D epa rtm en t, W a s h in g to n . E a ch ten der m u st b e fo r an even m u ltiple o f $1,000, and in the case o f com p etitive tenders the p rice offered m u st be exp ressed on the basis o f 100, w ith n o t m ore than three decim als, e.g., 99.925. F ra ctio n s m a y n o t be used. It is u rged that ten ders be m ade on the printed fo rm s and fo rw a rd e d in the special en velopes w hich w ill be supplied b y F ederal R eserve B anks or B ra n ch es on a p p lica tion th erefor. O th e rs than b ank in g institutions w ill n o t be perm itted to subm it ten ders e x ce p t fo r their o w n a ccou n t. T e n d e rs w ill be receiv ed w ith ou t dep osit fr o m in corp ora ted banks and trust c o m panies and fro m resp on sib le and re co g n ize d dealers in in vest m en t 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 ym en t o f 2 p ercen t o f the face a m ou n t o f T re a s u ry bills a pplied fo r, unless the ten ders are a ccom p a n ied b y an express g u a ra n ty o f pa ym en t b y an in corp ora ted bank o r trust com pa n y. Im m ed ia tely after the c lo s in g h our, tenders w ill be op en ed at th e F ed era l R e se rve B anks and B ran ch es, fo llo w in g w hich p u b lic a n n ou n cem en t w ill be m ade b y the T rea su ry D ep a rtm en t o f the a m ou n t and price ran ge o f a ccep ted bids. T h o s e subm it tin g ten ders w ill be a dvised o f the a ccep ta n ce or rejection th ereof. T h e S ecreta ry o f the T rea su ry e x p ressly reserves the righ t to a ccep t o r re je ct any o r all tenders, in w h ole or in part, and his action in a n y such resp ect shall be final. S u b ject to these reservations, n on com p etitiv e ten ders fo r $200,000 or less fo r the additional bills dated July 20, 1961 (91 days rem ain in g until m aturity date on January 18, 1962) and n on co m p e titiv e tenders fo r $100,000 or less fo r the 182-day bills w ith ou t stated p rice fr o m any on e b idd er w ill be a ccep ted in full at the a vera ge price (in three decim a ls) o f a ccep ted com p etitiv e bids fo r the re sp e c tive issues. S ettlem ent fo r a ccep ted tenders in a ccord a n ce w ith the bids m u st be m ad e o r com p leted at th e F ed era l R e se rve Bank on O c t o b e r 19, 1961, in cash o r oth er im m ediately available funds o r in a like fa ce am ou nt o f T rea su ry bills m a tu rin g O c t o ber 19, 1961. Cash and exch a n ge tenders w ill receiv e equal treatm ent. Cash a djustm ents w ill be m ade fo r differen ces b e tw een the par value o f m a tu rin g bills a ccep ted in e x ch a n g e and the issue p rice o f the n ew bills. T h e in com e derived fro m T rea su ry bills, w h eth er interest o r gain fro m the sale or o th e r d isp osition o f the bills, d oes n o t have any exem p tion , as such, and loss fro m the sale o r oth er d isp o si tion o f T rea su ry bills d oes n ot have any special treatm ent, as such, under the Internal R even u e C o d e o f 1954. T h e bills are su b ject to estate, inheritance, g ift or oth er ex cise taxes, w hether F ederal o r State, but are exem p t fro m all ta xation n o w o r h ere after im p osed on the principal o r interest th ereof b y a n y State, o r any o f the p ossession 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 cou n t at w h ich T rea su ry bills are orig in a lly sold b y the U n ited States is con sid ered to be interest. U n d er S ection s 4 5 4 (b ) and 1221(5) o f the Internal R even u e C od e o f 1954 the a m ou n t o f dis cou n t at w h ich bills issued h ereun der are sold is n ot co n sid e re d to accru e until such bills are sold, red eem ed or oth erw ise dis p osed of, and such bills are ex clu d ed fr o m con sid era tion as capital assets. A c c o r d in g ly , the ow n er o f T rea su ry bills (o th e r than life insurance com p a n ies) issued hereunder need in clu d e in his in com e tax return o n ly the difference betw een the p rice paid fo r such bills, w hether on original issue o r on subsequen t p u r chase, and the am ou nt a ctu ally receiv ed either u pon sale o r red em p tion at m atu rity d u rin g the taxable year 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 evised , and this n otice, p rescrib e the term s o f the T rea su ry bills and g o v e rn the con d ition s o f their issue. C opies o f the circular m a y b e ob ta in ed fro m any F ed era l R eserve B ank o r Branch. This Bank will receive tenders for both series up to 2 p.m., Eastern Daylight Saving time, Monday, October 16, 1961, at the Securities Department o f 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. Settle ment must be made in cash or other immediately available funds or in maturing Treasury bills. Results o f the last offerin g o f T reasury bills (9 0 -d a y bills to be issued O ctober 13, 1961, representing an additional am ount o f bills dated July 13, 1961, and m aturing January 11, 1962; and 181-day bills dated O ctober 13, 1961, maturing A p ril 12, 1962) are shown on the reverse side o f this circular. A lfred H ayes, President. ( over) R E S U L T S O F L A S T O F F E R IN G O F T R E A S U R Y B IL L S (T W O S E R IE S T O B E ISSU E D O C T O B E R 13, 1961) Range o f Accepted Competitive Bids 90-Day Treasury Bills Maturing January 11,1962 Price 181-Day Treasury Bills Maturing A pril 12,1962 Approx. equiv. annual rate Price Approx. equiv. annual rate H igh ........................................... 9 9 .4 1 0 2.360% 98.660b 2.665% L o w ............................................. 99.401 2.396% 98.646 2.693% Average 99.403 2.389% ! 98.651 2.684% ! .................................... - . a E x ce p tin g tw o ten ders tota lin g $428,000. b E x ce p tin g tw o ten ders tota lin g $850,000. 1 O n a co u p o n issue o f the sam e len gth and fo r the sam e a m ou n t invested, the return on these bills w o u ld p ro v id e yield s o f 2.44 p ercen t fo r the 90-day bills, and 2.76 p ercen t fo r the 181-day bills. In terest rates on bills are q u o te d in term s o f bank discou n t, w ith the return related to the face a m ou n t o f the b ills p ayable at m a tu rity rath er than the a m ou n t in vested, and th eir len gth in actual n um ber o f days related to a 360-day year. In con tra st, y ield s on certificates, n otes, and b o n d s are co m p u te d in term s o f in terest on the a m ou n t invested, and relate th e n u m ber o f days rem ainin g in an in terest p a ym en t p eriod to th e actual n um ber o f days in the p eriod , w ith sem iannual co 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 volved . (33 percent o f the amount o f 90-day bills bid for at the low price was accepted.) (27 percent o f the amount o f 181-day bills bid for at the low price was accepted.) Total Tenders Applied fo r and Accepted (By Federal Reserve Districts) 90-Day Treasury Bills Maturing January 11,1962 District Boston Applied for ............................ $ 39,101,000 181-Day Treasury Bills Maturing A pril 12,1962 Accepted $ 16,200,000 A pplied for $ 3,877,000 Accepted $ 3,485,000 New Y o r k ...................... 1,572,833,000 756,333,000 864,442,000 452,703,000 Philadelphia................... 27,142,000 11,969,000 7,343,000 2,343,000 C lev ela n d ........................ 26,176,000 20,231,000 23,292,000 14,292,000 R ich m o n d ........................ 11,121,000 10,920,000 1,871,000 1,871,000 A tla n ta ............................ 22,173,000 17,698,000 7,410,000 4,772,000 .......................... 207,431,000 142,751,000 115,771,000 84,131,000 St. Louis ........................ 29,740,000 24,740,000 6,964,000 5,914,000 M in n eap olis................... 24,494,000 14,154,000 5,482,000 2,882,000 Kansas C i t y ................... 36,100,000 21,500,000 7,570,000 6,397,000 D a lla s .............................. 14,031,000 14,031,000 5,266,000 5,066,000 San F r a n c is c o ............... 96,749,000 49,739,000 51,982,000 16,379,000 T o t a l ............... $2,107,091,000 Chicago $1,100,266,000c $1,101,270,000 c Includes $213,491,000 noncompetitive tenders accepted at the average price of 99.403. d Includes $52,462,000 noncompetitive tenders accepted at the average price of 98.651. $600,235,000d
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