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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent o f the United States /"Circular No. 5 3 5 9 1 I July 17, 1963 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated April 25, 1963, Due October 24, 1963 (To Be Issued July 25, 1963) $800,000,000 of 182-Day Bills, Dated July 25, 1963, Due January 23, 1964 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 Daylight Saving time: The Treasury Department, by this public notice, invites tenders for tw o series of Treasury bills to the aggregate amount of $2,100,000,000, or thereabouts, for cash and in ex change for Treasury bills maturing July 25, 1963, in the amount of $2,100,500,000, as follow s: 91-day bills (to maturity date) to be issued July 25, 1963, in the amount of $1,300,000,000, or thereabouts, representing an additional amount of bills dated April 25, 1963, and to mature O ctober 24, 1963, origi nally issued in the amount of $801,100,000, the addi tional and original bills to be freely interchangeable. 182-day bills, for $800,000,000, or thereabouts, to be dated July 25, 1963, and to mature January 23, 1964. 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. Th ey 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 Daylight Saving time, M onday, July 22, 1963. Tenders will not be received at the Treasury Department, W ashington. Each tender must be for an even multiple of $1,000, and in the case o f 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 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 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 will be opened at the Federal Reserve Banks and Branches, follow in g which public announcement will be made by the Treasury Depart ment of the amount and price range of accepted bids. Those submitting tenders will be advised o f the acceptance or rejec tion 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 April 25, 1963 (91 days re maining until maturity date on O ctober 24, 1963) and n oncom 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 respective issues. Settlement for accepted tenders in accordance with the bids must be made or com pleted at the Federal Reserve Bank on July 25, 1963, in cash or other immediately available funds or in a like face amount of Treasury bills maturing July 25, 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 o f 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 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 o f the possessions of the United States, or by any local taxing authority. For purposes o f 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 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. A ccordingly, 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 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, July 22, 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 of the last offering o f Treasury bills (91-day bills to be issued July 18, 1963, representing an additional amount o f bills dated April 18, 1963, and maturing October 17, 1963; and 182-day bills dated July 18, 1963, matur ing January 16, 1964) are shown on the reverse side o f this circular. A lf r e d H ayes, President. (over) RESULTS OF LAST OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED JULY 18, 1963) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing October 17,1963 182-Day Treasury Bills Maturing January 16,1964 Price Approx. equiv. annual rate H i g h ............................. ........... 99.203 3.153% 98.318 3.327% ............................ ........... 99.183 3.232% 98.288 3.386% Average ....................... ........... 99.193 3.192% ! 98.304 3.355% ! Low Price A pprox. equiv. annual rate 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 3.26 percent for the 91-day bills, and 3.46 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 o f 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 com pounding if m ore than one coupon period is involved. (55 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (39 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 October 17,1963 Applied fo r District Boston ............................ $ 50,764,000 182-Day Treasury Bills Maturing January 16,1964 Accepted $ 40,664,000 Applied fo r $ Accepted 10,616,000 $ 10,616,000 1,452,340,000 747,590,000 985,353,000 572,053,000 ................. 32,494,000 17,494,000 9,437,000 4,437,000 C lev ela n d ........................ 39,811,000 39,811,000 9,449,000 9,449,000 Richmond ..................... 16,241,000 14,241,000 3,655,000 3,655,000 A tla n ta ............................ 27,854,000 25,854,000 7,775,000 7,775,000 .......................... 219,285,000 161,285,000 113,501,000 59,501,000 St. Louis ........................ 50,781,000 46,781,000 9,377,000 8,877,000 M in n eap olis................... 23,571,000 23,571,000 7,410,000 7,410,000 Kansas C i t y ................... 46,998,000 46,198,000 18,361,000 18,361,000 D a lla s .............................. 36,447,000 36,447,000 11,012,000 11,012,000 San F r a n c is co ............... 102,168,000 100,168,000 86,997,000 86,997,000 New Y o r k ..................... Philadelphia Chicago Total ............. $2,098,754,000 $1,300,104,000“ $1,272,943,000 a Includes $321,045,000 noncompetitive tenders accepted at the average price of 99.193. b Includes $68,076,000 noncompetitive tenders accepted at the average price o f 98.304. $800,143,000b
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