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FEDERAL RESERVE BANK O F N E W YORK Fiscal Agent of the United States r Circular No. 5 1 6 9 "I L March 28, 1962 J OFFERING OF TWO SERIES OF TREASURY BILLS L,200,000,000 of 91-Day Bills, Additional Amount, Series Dated January 4, 1962, Due July 5, 1962 (To Be Issued April 5, 1962) $600,000,000 of 182-Day Bills, Dated April 5, 1962, Due October 4,1 9 6 2 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard time: of the amount and price range of accepted bids. Those submit ting tenders will be advised o f the acceptance or rejection thereof. The Secretary o f 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 reservations, noncompetitive tenders for $200,000 or less for the 91-day bills (to maturity date) to be issued April 5, additional bills dated January 4, 1962 (91 days remaining until 1962, in the amount of $1,200,000,000, or thereabouts, maturity date on July 5, 1962) and noncom petitive tenders representing an additional amount of bills dated Janu for $100,000 or less for the 182-day bills without stated price ary 4, 1962, and to mature July 5, 1962, originally from any one bidder will be accepted in full at the average price issued in the amount of $600,464,000, the additional and (in three decimals) of accepted competitive bids for the respec original bills to be freely interchangeable. tive issues. Settlement for accepted tenders in accordance with 182-day bills, for $600,000,000, or thereabouts, to be dated the bids must be made or completed at the Federal Reserve April 5, 1962, and to mature O ctober 4, 1962. Bank on April 5, 1962, in cash or other immediately available funds or in a like face amount o f Treasury bills maturing April T he bills o f both series will be issued on a discount basis 5, 1962. Cash and exchange tenders will receive equal treat under competitive and noncompetitive bidding as hereinafter ment. Cash adjustments will be made for differences between provided, and at maturity their face amount will be payable the par value of maturing bills accepted in exchange and the without interest. They will be issued in bearer form only, and in issue price of the new bills. denominations of $1,000, $5,000, $10,000, $50,000, $100,000, T he income derived from Treasury bills, whether interest or $500,000 and $1,000,000 (maturity value). gain from the sale or other disposition of the bills, does not have Tenders will be received at Federal Reserve Banks and any exemption, as such, and loss from the sale or other disposi Branches up to the closing hour, one-thirty p.m., Eastern tion o f Treasury bills does not have any special treatment, as Standard time, M onday, April 2, 1962. Tenders will not such, under the Internal Revenue Code o f 1954. The bills are be received at the Treasury Department, W ashington. Each subject to estate, inheritance, gift or other excise taxes, whether tender must be for an even multiple of $1,000, and in the case of Federal or State, but are exempt from all taxation now or here competitive tenders the price offered must be expressed on the after imposed on the principal or interest thereof by any State, basis o f 100, with not m ore than three decimals, e.g., 99.925. or any of the possessions o f the United States, or by any local Fractions may not be used. It is urged that tenders be made on taxing authority. For purposes of taxation the amount o f dis the printed form s and forwarded in the special envelopes which count at which Treasury bills are originally sold by the United will be supplied by Federal Reserve Banks or Branches on States is considered to be interest. Under Sections 454(b) and application therefor. 1221(5) of the Internal Revenue Code o f 1954 the amount of dis Banking institutions generally may submit tenders for ac count at which bills issued hereunder are sold is not considered count o f customers, provided the names o f the customers are to accrue until such bills are sold, redeemed or otherwise disset forth in such tenders. Others than banking institutions will « posed of, and such bills are excluded from consideration as not be permitted to submit tenders except for their ow n account. capital assets. A ccordingly, the owner of Treasury bills (other Tenders will be received without deposit from incorporated than life insurance com panies) issued hereunder need include in banks and trust companies and from responsible and recognized his incom e tax return only the difference between the price paid dealers in investment securities. Tenders from others must be for such bills, whether on original issue or on subsequent pur accom panied by payment o f 2 percent o f the face amount of chase, and the amount actually received either upon sale or Treasury bills applied for, unless the tenders are accompanied redemption at maturity during the taxable year for which the by an express guaranty o f payment by an incorporated bank return is made, as ordinary gain or loss. or trust company. Treasury Department Circular N o. 418 (current revision) Immediately after the closing hour, tenders will be opened and this notice prescribe the terms o f the Treasury bills and govern the conditions o f their issue. Copies o f the circular may at the Federal Reserve Banks and Branches, follow ing which public announcement will be made by the Treasury Department be obtained from any Federal Reserve Bank or Branch. The Treasury Department, by this public notice, invites tenders for tw o series o f Treasury bills to the aggregate amount of $1,800,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing April 5, 1962, in the amount of $1,701,085,000, as follow s: This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, April 2, 1962, 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 fo r 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 of the last offering of Treasury bills (91-day bills to be issued March 29, 1962, representing an additional amount of bills dated December 28, 1961, and maturing June 28, 1962; and 182-day bills dated March 29, 1962, maturing September 27, 1962) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED MARCH 29, 1962) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing June 28,1962 182-Day Treasury Bills Maturing September 27,1962 Price Approx. equiv. annual rate Price Approx. equiv. annual rate High ........................ ............ 99.320 2.690% 98.564 2.840% Low .......................... ............ 99.309 2.734% 98.552 2.864% .................... ............ 99.313 2.719%1 98.555 2.857%! Average 1 On a coupon issue o f the same length and for the same amount invested, the return on these bills would provide yields of 2.78 percent for the 91-day bills, and 2.94 percent for the 182-day bills. Interest rates on bills are quoted in terms o f 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 o f days in the period, with semiannual com pounding if m ore than one coupon period is involved. (10 percent of the amount of 91-day bills bid for at the low price was accepted.) (91 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-Day Treasury Bills Maturing June 28,1962 Applied, fo r District Boston .......................... $ 31,779,000 182-Day Treasury Bills Maturing September 27,1962 Applied fo r Accepted $ 27,479,000 $ 9,907,000 Accepted $ 4,907,000 1,480,576,000 712,576,000 1,010,898,000 490,233,000 ................ 39,190,000 19,590,000 6,610,000 1,610,000 Cleveland .................... 34,073,000 29,573,000 27,416,000 17,416,000 Richmond .................... 11,846,000 11,846,000 2,044,000 2,026,000 A tla n ta .......................... 16,532,000 16,132,000 6,823,000 6,388,000 Chicago ........................ 264,556,000 149,956,000 121,335,000 46,155,000 St. Louis ...................... 28,170,000 20,170,000 5,013,000 3,423,000 Minneapolis ................ 22,816,000 16,916,000 4,873,000 2,373,000 Kansas City ................ 27,280,000 21,742,000 8,888,000 5,388,000 5,842,000 14,461,000 New York .................... . . . Philadelphia D a lla s............................ 19,978,000 11,978,000 8,932,000 San F ra n cisco.............. 205,001,000 162,201,000 34,963,000 Total ............ $2,181,797,000 $1,200,159,000* a Includes $198,370,000 noncompetitive tenders accepted at the average price o f 99.313. b Includes $48,981,000 noncompetitive tenders accepted at the average price o f 98.555. $1,247,702,000 $600,222,000b
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