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F E D E R A L R E S E R V E BAN K O F NEW YO R K
Fiscal Agent of the United States

[ Circular N o . 5195
D
June 13,1962

OFFERING OF TWO SERIES OF TREASURY BILLS
$1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated March 22, 1962, Due Sept. 20, 1962
(To Be Issued June 21, 1962)
$700,000,000 of 182-Day Bills, Dated June 21, 1962, Due December 20, 1962
To All 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 Daylight Saving time:
The Treasury Department, by this public notice, invites
tenders for two series of Treasury bills to the aggregate amount
of $2,000,000,000, or thereabouts, for cash and in exchange for
Treasury bills maturing June 21, 1962, in the amount of
$1,802,246,000, as follow s:
91-day bills (to maturity date) to be issued June 21, 1962,
in the amount of $1,300,000,000, or thereabouts, repre­
senting an additional amount of bills dated March 22,
1962, and to mature September 20, 1962, originally issued
in the amount of $600,081,000, the additional and original
bills to be freely interchangeable.
182-day bills, for $700,000,000, or thereabouts, to be dated
June 21, 1962, and to mature December 20, 1962.
The 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. They will be issued in bearer form only, and
in denominations of $1,000, $5,000, $10,000, $50,000, $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 p.m., Eastern Day­
light Saving time, Monday, June 18, 1962. Tenders will not be
received at the Treasury Department, Washington. 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.
Banking institutions generally may submit tenders for ac­
count of customers, provided the names of the customers are
set forth in such tenders. 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 companies and from responsible and recognized
dealers in investment securities. Tenders from others must be
accompanied by payment 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 sub-

mitting 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 reservations, noncompetitive tenders for $200,000 or less
for the additional bills dated March 22, 1962 (91 days remaining
until maturity date on September 20, 1962) 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
respective issues. Settlement for accepted tenders in accordance
with the bids must be made or completed at the Federal Reserve
Bank on June 21, 1962, in cash or other immediately available
funds or in a like face amount of Treasury bills maturing June
21, 1962. 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
of 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
disposition of Treasury bills does not have any special treat­
ment, 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 taxa­
tion now or hereafter imposed on the principal or interest
thereof by any State, or any of the possessions of the United
States, or by any local taxing authority. For purposes of taxa­
tion the amount of discount 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 discount at which bills issued
hereunder are sold is not considered to accrue until such bills
are sold, redeemed or otherwise disposed of, and such bills are
excluded from consideration as capital assets.
Accordingly,
the owner of Treasury bills (other than life insurance com­
panies) 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 purchase, and the amount
actually received cither 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 (current revision)
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,
June 18, 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 for the Treasury hills 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 June 14, 1962, representing an additional
amount of bills dated March 15, 1962, and maturing September 13, 1962; and 182-day bills dated June 14 1962
maturing December 13, 1962) are shown on the reverse side of this circular.




A

lfred

H

ayes,

President.
( over )

RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED
JUNE 14, 1962)

Range of Accepted Competitive Bids

91 -Day Treasury Bills
Maturing September 13,1962

182-Day Treasury Bills
Maturing December 13,1962

Price

Approx. equiv.
annual rate

High ........................ ........

99.331

2.647%

98.612a

2.745%

........................ ........

99.321

2.686%

98.604

2.761%

.................. ........

99.325

2.671%!

98.606

2.758%!

Low

Average

Price

Approx. equiv.
annual rate

a Excepting two tenders totaling $500,000.
1 On a coupon issue of the same length and for the same amount invested, the return on these bills would provide yields
of 2.73 percent for the 91-day bills, and 2.84 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.

(37 percent of the amount of 91-day bills
bid for at the low price was accepted.)

(29 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 September 13,1962
Accepted

Applied for

District

........

$

23,907,000

182-Day Treasury Bills
Maturing December 13,1962

$

13,907,000

Applied for

$

10,192,000

Accepted

$

9,624,000

........

1,627,958,000

911,138,000

1,328,617,000

569,617,000

Philadelphia ................ ........

37,573,000

20,683,000

8,252,000

2,994,000

........

54,238,000

32,978,000

24,191,000

17,596,000

........

10,690,000

10,690,000

1,888,000

1,738,000

........

27,895,000

25,865,000

6,180,000

5,317,000

........

208,234,000

121,084,000

99,093,000

37,248,000

........

29,347,000

24,087,000

6,364,000

4,009,000

.................. ........

22,068,000

15,438,000

6,062,000

3,427,000

Kansas City .................. ........

21,483,000

21,483,000

6,834,000

4,334,000

........

22,668,000

15,038,000

8,627,000

3,427,000

San Francisco ..............

114,196,000

87,896,000

61,208,000

40,786,000

Total ..............

$2,200,257,000

Minneapolis

$1,300,287,000b

b Includes $217,943,000 noncompetitive tenders accepted at the average price of 99.325.
c Includes $54,925,000 noncompetitive tenders accepted at the average price of 98.606.




$1,567,508,000

$700,117,000^