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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States 'C ircular N o. 5 4 2 2 “I . N ovem ber 27, 1963 J OFFERING OF TWO SERIES OF TREASURY BILLS [,300,000,000 of 91-Day Bills, Additional Amount, Series Dated September 5,1963, Due March 5,1 9 6 4 (To Be Issued December 5, 1963) $800,000,000 of 182-Day Bills, Dated December 5, 1963, Due June 4, 1964 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: The Treasury Department, by this public notice, invites tenders for two 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 D ecem ber 5, 1963, in the amount of $2,101,094,000, as follow s: 91-day bills (to maturity date) to be issued Decem ber 5, 1963, in the amount of $1,300,000,000, or thereabouts, representing an additional amount of bills dated Sep tember 5, 1963, and to mature March 5, 1964, originally issued in the amount of $801,671,000 (an additional $100,092,000 was issued O ctober 28, 1963), the addi tional and original bills to be freely interchangeable. 182-day bills, for $800,000,000, or thereabouts, to be dated D ecem ber 5, 1963, and to mature June 4, 1964. 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, M onday, D ecem ber 2, 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 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 account of 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 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 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 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 of the Treasury expressly reserves the right to iccept 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, noncom petitive tenders for $200,000 or less for the additional bills dated September 5, 1963 (91 days remain ing until maturity date on March 5, 1964) 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 aver age price (in three decimals) of accepted competitive bids for the respective issues. Settlement for accepted tenders in accord ance with the bids must be made or com pleted at the Federal Reserve Bank on Decem ber 5, 1963, in cash or other im medi ately available funds or in a like face amount of Treasury bills maturing D ecem ber 5, 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 income derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, does not have any exemption, as such, and loss from the sale or other disposi tion of Treasury bills does not have any special treatment, 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 taxation now or here after imposed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority. For purposes o f taxation the amount of 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) of the Internal Revenue Code of 1954 the amount of discount at which bills issued hereunder are sold is not con sidered to accrue until such bills are sold, redeemed or other wise disposed of, and such bills are excluded from consideration as capital assets. A ccordin gly, the owner of 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 subse quent 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 Departm ent Circular N o. 418 (current revision) and this notice prescribe the terms o f 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, December 2, 1963, 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 Treasury 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. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. Results of the last offering of Treasury bills (90-day bills to be issued November 29, 1963, representing an addi tional amount of bills dated August 29, 1963, and maturing February 27, 1964; and 181-day bills dated November 29, 1963, maturing May 28, 1964) are shown on the reverse side of this circular. A lfred Hayes, President. RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED NOVEMBER 29, 1963) Range of Accepted Competitive Bids 90-Day Treasury Bills Maturing February 27,1964 Price High.......... ...... Low .......... ...... Average........ ...... 99.134 99.128 99.130 181-Day Treasury Bills Maturing May 28,1964 Approx. equiv. annual rate Price 3.464% 3.488% 3.480%1 98.180 98.173 98.175 Approx. equiv. annual rate 3.620% 3.634% 3.631%! 1 On a coupon issue of the same length and for the same amount invested, the return on these bills would provide yields of 3.57 percent for the 90-day bills, and 3.76 percent for the 181-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 of 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 o f days remaining in an interest payment period to the actual number of days in the period, with semiannual com pounding if more than one coupon period is involved. (42 percent of the amount of 90-day bills bid for at the low price was accepted.) percent of the amount of 181-day bills bid for at the low price was accepted.) (72 Total Tenders Applied for and Accepted (By Federal Reserve Districts) 90-Day Treasury Bills Maturing February 27,1964 Applied for District Accepted ... ... ... ... ... ... ... ... ... ... ... $ 22,376,000 1,458,061,000 28,434,000 28,570,000 18,947,000 25,092,000 202,671,000 32,624,000 20,687,000 56,382,000 33,324,000 59,866,000 $ Total.... ... $1,987,034,000 $1,201,346,000a Boston......... New York ...... Philadelphia ...... Cleveland ....... Richmond....... Atlanta ........ Chicago........ St. Louis........ Minneapolis ...... Kansas City...... Dallas ......... San Francisco .... 12,212,000 800,661,000 12,599,000 28,570,000 12,947,000 19,674,000 157,551,000 26,108,000 13,940,000 54,214,000 17,164,000 45,706,000 181-Day Treasury Bills Maturing May 28,1964 Applied for Accepted $ 19,302,000 1,250,477,000 8,738,000 9,998,000 5,823,000 8,870,000 176,839,000 11,413,000 7,683,000 10,317,000 9,474,000 95,374,000 $ 12,302,000 581,657,000 3,378,000 9,413,000 2,823,000 6,675,000 109,979,000 9,913,000 3,283,000 6,567,000 4,474,000 51,214,000 $1,614,308,000 $801,678,000b a Includes $219,788,000 noncom petitive tenders accepted at the average price of 99.130. k Includes $57,428,000 noncompetitive tenders accepted at the average price of 98.175.
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