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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent o f the United States /"Circular No. 5 3 2 3 1 L April 10, 1963 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated January 17, 1963, Due July 18, 1963 (To Be Issued April 18, 1963) $800,000,000 of 182-Day Bills, Dated April 18, 1963, Due October 17, 1963 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text o f a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard time: The Treasury Department, by this public notice, invites tenders for tw o series of Treasury bills to the aggregate amount o f $2,100,000,000, or thereabouts, for cash and in ex change for Treasury bills maturing A pril 18, 1963, in the amount of $2,001,115,000, as follow s: 91-day bills (to maturity date) to be issued A pril 18, 1963, in the amount of $1,300,000,000, or thereabouts, repre senting an additional amount of bills dated January 17, 1963, and to mature July 18, 1963, originally issued in the amount of $800,045,000, the additional and original bills to be freely interchangeable. 182-day bills, for $800,000,000, or thereabouts, to be dated April 18, 1963, and to mature O ctober 17, 1963. The bills o f both series will be issued on a discount basis under competitive and noncom petitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. T h ey 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, M onday, April 15, 1963. 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 o f com petitive 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 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 incor porated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accom panied by payment of 2 percent of the face amount o f Treasury bills applied for, unless the tenders are accompanied by an express guaranty o f payment by an incorporated bank or trust company. Immediately after the closing hour, tenders wTill be opened at the Federal Reserve Banks and Branches, follow in g which public announcement will be made by the Treasury Depart ment o f the amount and price range of accepted bids. Those submitting tenders will be advised o f the acceptance or rejec tion 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 January 17, 1963 (91 days remaining until maturity date on July 18, 1963) and n on com 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) o f accepted competitive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or com pleted at the Federal Reserve Bank on April 18, 1963, in cash or other immediately available funds or in a like face amount of Treasury bills maturing A pril 18, 1963. 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 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 disposition o f 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 exem pt from all taxa tion n ow or hereafter im posed on the principal or interest thereof by any State, or any of the possessions o f the United States, or by any local taxing authority. F or purposes of taxa tion the amount o f discount at which Treasury bills are originally sold by the United States is considered to be interest. U nder Sections 454(b) and 1221(5) o f the Internal Revenue Code o f 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. A ccordin gly, the owner 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 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 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, Monday, April 15, 1963, at the Securities Department o f 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. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. Results o f the last offering o f Treasury bills (91-day bills to be issued April 11, 1963, representing an additional amount o f bills dated January 10, 1963, and maturing July 11, 1963; and 182-day bills dated April 11, 1963, matur ing October 10, 1963) are shown on the reverse side o f this circular. A l fr e d H ayes, President. ( over ) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED APRIL 11, 1963) Range o f A ccepted Com petitive Bids 91-Day Treasury Bills Maturing July 11, 1963 182-Day Treasury Bills Maturing October 10, 1963 Price Approx. equiv. annual rate Price A pprox. equiv. annual rate 99.267 2.900% 98.500 2.967% ............................ ........... 99.263 2.916% 98.493 2.981% Average ..................... ........... 99.264 2.913% ! 98.495 2 .97 8% 1 H i g h ............................ ........... L ow 1 On a coupon issue of the same length and for the same amount invested, the return on these bills would provide yields of 2.98 percent for the 91-day bills, and 3.07 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 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 com puted 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. (92 percent o f the amount o f 91-day bills bid fo r at the low price was accepted.) (56 percent o f the amount o f 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 July 11, 1963 Applied, fo r District $ 33,411,000 182-Day Treasury Bills Maturing October 10, 1963 Applied for Accepted $ 23,008,000 $ Accepted 24,486,000 $ 12,198,000 1,597,319,000 815,348,000 1,249,011,000 624,096,000 ................. 29,405,000 14,315,000 7,765,000 2,765,000 Cleveland ........................ 34,769,000 32,995,000 16,821,000 6,771,000 Richmond 26,145,000 14,845,000 14,071,000 2,071,000 39,232,000 27,803,000 10,023,000 9,479,000 .......................... 250,176,000 175,086,000 95,551,000 55,711,000 St. Louis ........................ 41,991,000 32,684,000 9,918,000 7,918,000 M in n ea p olis................... 21,997,000 14,527,000 6,030,000 3,266,000 Kansas City 34,411,000 25,102,000 18,190,000 12,690,000 30,903,000 20,879,000 11,574,000 8,574,000 151,810,000 104,961,000 89,807,000 55,900.000 New Y o r k ...................... Philadelphia Chicago ..................... ................. San F r a n c is c o ............... Total ...................... $2,291,569,000 $1,301,553,000 $1,553,247,000 a Includes $269,854,000 noncom petitive tenders accepted at the average price o f 99.264. b Includes $60,236,000 noncom petitive tenders accepted at the average price o f 98.495. $801,439,000b
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