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F E D E R A L R E S E R V E BANK O F N EW YO R K Fiscal Agent of the United States r Circular No. 5 2 5 2 "I L November 5, 1962 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated August 16, 1962, Due February 14, 1963 (To Be Issued November 15, 1962) $700,000,000 of 182-Day Bills, Dated November 15, 1962, Due May 16, 1963 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 Standard time: T h e Treasury Department, by this public notice, invites tenders for tw o series of Treasury bills to the aggregate amount o f $2,000,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing Novem ber 15, 1962, in the amount of $1,900,792,000, as follow s: 91-day bills (to maturity date) to be issued N ovem ber 15, 1962, in the amount of $1,300,000,000, or thereabouts, rep resenting an additional amount of bills dated August 16, 1962, and to mature February 14, 1963, originally is sued in the amount of $703,844,000 (an additional $100,000,000 will be auctioned N ovem ber 7 and will be outstanding N ovem ber 15, 1962), the additional and original bills to be freely interchangeable. 182-day bills, for $700,000,000, or thereabouts, to be dated N ovem ber 15, 1962, and to mature May 16, 1963. 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 Standard time, Friday, Novem ber 9, 1962. Tenders will not be received at the Treasury Department, W ashington. Each tender must be for an even multiple o f $1,000, and in the case of competitive tenders the price offered must be expressed on the basis o f 100, with not m ore than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed form s 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 o f customers, provided the names o f the customers are set forth in such tenders. Others than banking institutions will not be permitted to submit tenders except for their ow n 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 o f 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty o f payment by an incorporated bank or trust com pany. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, follow ing which public announcement will be made by the Treasury Department of the amount and price range of accepted bids. T h ose 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 w hole or in part, and his action in any such respect shall be final. Subject to these reservations, noncom petitive tenders for $200,000 or less for the additional bills dated August 16, 1962 (91 days remaining until maturity date on February 14, 1963) and noncom petitive 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 com pleted at the Federal Reserve Bank on Novem ber 15, 1962, in cash or other immediately avail able funds or in a like face amount o f Treasury bills maturing Novem ber 15, 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 o f the new bills. T h e incom e derived from Treasury bills, whether interest or gain from the sale or other disposition o f the bills, does not have any exemption, as such, and loss from the sale or other disposi tion o f Treasury bills does not have any special treatment, as such, under the Internal Revenue Code o f 1954. T h e 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 im posed 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 o f taxation the amount o f 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) o f the Internal Revenue Code o f 1954 the am ount o f 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. A ccordin gly, the ow ner o f Treasury bills (other than life insurance com panies) issued hereunder need include in his incom e 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 w hich the return is made, as ordinary gain or loss. Treasury Department Circular N o. 418 (current revision) and this notice prescribe the terms of the Treasury bills and govern the conditions o f 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 Standard time, Friday, November 9, 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 Treas ury 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. This circular was printed before the results of the bidding for Treasury bills to be issued November 8, 1962, were available; those results will be announced after release by the Treasury Department. A lfred H ayes, President. Closing date for receipt of tenders is Friday, November 9.