View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

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