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FEDERAL RESERVE BANK OF NEW YORK Fiscal A gen t o f the U nited States c C ircular No. 5 2 7 8 *1 January 2, 1963 J OFFER ING OF TW O SERIES OF TR E A SU R Y BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated October 11, 1962, Due April 11, 1963 (To Be Issued January 10, 1963) $800,000,000 of 182-Day Bills, Dated January 10, 1963, Due July 11, 1963 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: F ollow in g is the text o f a notice issued by the Treasury Departm ent, released for publication today at 4 p.m., Eastern Standard tim e : The Treasury Department, by this public notice, invites tenders for two series o f Treasury bills to the aggregate amount o f $2,100,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing January 10, 1963, in the amount of $2,001,454,000, as fo llo w s : 91-day bills (to maturity date) to be issued January 10, 1963, in the amount o f $1,300,000,000, or thereabouts, rep resenting an additional amount o f bills dated October 11, 1962, and to mature April 11, 1963, orginally issued in the amount of $700,610,000, the additional and original bills to be freely interchangeable. 182-day bills, for $800,000,000, or thereabouts, to be dated January 10, 1963, and to mature July 11, 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 o f $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, Monday, January 7, 1963. Tenders will not be received at the Treasury Department, Washington. 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 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 o f 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 o f 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 w ill be opened at the Federal Reserve Banks and Branches, follow ing which public announcement will be made by the Treasury Department o f the amount and price range of accepted bids. Those sub mitting 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 additional bills dated October 11, 1962 (91 days remain ing until maturity date on April 11, 1963) 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) o f 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 January 10, 1963, in cash or other imme diately available funds or in a like face amount o f Treasury bills maturing January 10, 1963. Cash and exchange tenders will receive equal treatment. Cash adjustments w ill 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 o f 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 o f 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 o f the possessions o f the United States, or by any local taxing authority. For purposes o f 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 o f 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 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 (current revision) and this notice prescribe the terms o f the Treasury bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. T h is Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, M onday, January 7, 1963, at the Securities D epartm ent o f its H ead Office and at its B uffalo Branch. T en d er form s for the respective series are enclosed. Please use the appropriate form s to subm it tenders and return them in an envelope marked “ T en d er for Treasury B ills.” Tenders m ay be subm itted b y telegraph, su bject 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. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. R esults of the last offerin g o f Treasury bills (91-day bills to be issued January 3, 1963, representing an additional am ount of bills dated O ctober 4, 1962, and m aturing A pril 4, 1963; and 183-day bills dated January 3, 1963, m aturing July 5, 1963) are shown on the reverse side o f this circular. A l fr e d H ayes, President. (o v e r ) RESULTS OF LA ST O FFE R IN G OF T R E A S U R Y BILLS (T W O SERIES TO BE ISSUED JA N U A R Y 3, 1963) Range o f A ccepted Com petitive Bids 91-Day Treasury Bills Maturing April 4, 1963 Price H igh .................................. .................................. L ow A verage ............................ 183-Day Treasury Bills Maturing July 5, 1963 Approx. equiv. annual rate 99.270 99.259 99.260 Price 2.888% 2.931% 2.926% 1 Approx. eqniv. annual rate 98.506 98.488 98.492 2.939% 2.974% 2.966% 1 1 On a coupon issue o f the same length and for the same amount invested, the return on these bills would provide yields o f 2.99 percent for the 91-day bills, and 3.05 percent for the 183-day bills. Interest rates on bills are quoted in terms o f bank discount, with the return related to the face amount o f 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 o f interest on the amount invested, and relate the number o f 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. (82 percent o f the am ount o f 91-day bills bid for at the low price was accepted.) (93 percent o f the am ount o f 183-day bills bid for at the low price was accepted.) Total Tenders A p p lied for and A ccepted (B y Federal Reserve Districts) 91-Day Treasury Bills Maturing April 4, 1963 Applied for District B oston ............................ ......... $ 35,614,000 183-Day Treasury Bills Maturing July 5, 1963 Applied for Accepted, $ 18,614,000 $ Accepted 12,050,000 $ 12,043,000 1,063,509,000 617,653,000 N ew Y o r k ..................... ........ 1,609,096,000 867,371,000 Philadelphia ................. ........ 24,556,000 9,288,000 11,224,000 6,034,000 Cleveland ..................... ........ 41,451,000 32,091,000 34,966,000 33,066,000 R ich m on d ..................... 19,315,000 14,955,000 2,338,000 2,338,000 A t l a n t a ............................ ........ 36,504,000 34,424,000 5,368,000 2,268,000 .......................... ........ 240,807,000 189,324,000 116,370,000 55,275,000 St. L ouis ....................... ........ 27,021,000 22,841,000 8,945,000 6,445,000 ................. ........ 26,346,000 12,866,000 6,270,000 4,270,000 Kansas C ity ................. ........ 35,794,000 32,134,000 14,788,000 14,781,000 D a l l a s .............................. ........ 25,253,000 15,973,000 8,120,000 4,050,000 San F ran cisco ............. ........ 98,470,000 51,379,000 55,459,000 42,179,000 C hicago M inneapolis T o t a l s ............. . . $2,220,227,000 $1,301,260,000 a $1,339,407,000 a Includes $209,292,000 noncompetitive tenders accepted at the average price o f 99.260. b Includes $41,136,000 noncompetitive tenders accepted at the average price o f 98.492. $800,402,000 b
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