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F E D E R A L R E S E R V E BANK O F NEW Y ORK Fiscal Agent of the United States r Circular No. 5 4 2 8 1 L December 11, 1963 j OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated September 19,1963, Due March 19,1964 (To Be Issued December 19, 1963) $800,000,000 of 182-Day Bills, Dated December 19, 1963, Due June 18, 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 tw o series o f Treasury bills to the aggregate amount o f $2,100,000,000, or thereabouts, for cash and in ex change for Treasury bills maturing Decem ber 19, 1963, in the amount of $2,101,497,000, as follow s: 91-day bills (to maturity date) to be issued D ecem ber 19, 1963, in the amount o f $1,300,000,000, or thereabouts, representing an additional amount of bills dated Sep tember 19, 1963, and to mature March 19, 1964, origi nally issued in the amount of $800,730,000 (an addi tional $100,092,000 was issued O ctober 28, 1963), the additional and original bills to be freely interchange able. 182-day bills, for $800,000,000, or thereabouts, to be dated Decem ber 19, 1963, and to mature June 18, 1964. The bills o f both series w ill 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 Standard time, M onday, D ecem ber 16, 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 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 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 o f 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 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 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 19, 1963 (91 days remaining until maturity date on March 19, 1964) 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 D ecem ber 19, 1963, in cash or other immediately available funds or in a like face amount of Treasury bills maturing D ecem ber 19, 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 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 of the possessions o f 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. 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. 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 No. 418 (current revision) and this notice prescribe the terms o f the Treasury bills and govern the conditions o f their issue. Copies o f 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 16, 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. Paym ent fo r the Treasury bills cannot be made by credit through the Treasury Tax and Loan Account. Treasury bills. Settlem ent m ust be made in cash or other immediately available fu n ds or in maturing Results of the last offering of Treasury bills (91-day bills to be issued December 12, 1963, representing an additional amount of bills dated September 12, 1963, and maturing March 12, 1964; and 182-day bills dated December 12, 1963, maturing June 11, 1964) are shown on the reverse side of this circular. A lfred Hayes, President. ( over) RESULTS OF LAST OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED DECEMBER 12, 1963) Range of Accepted Competitive Bids 91-D a y 12, 1964 11, 1964 Approx. equiv. annual rate Price 3.489% 3.505% 3.500%! 99.118 99.114 99.115 Treasury Bills M aturing June A pprox. equiv. annual rate Price High ........ ... Low ......... ... Average ........ ... 182-D a y Treasury Bills M aturing M arch 98.154 98.147 98.149 3.651% 3.665% 3.662%! 1 On a coupon issue of the same length and for the same amount invested, the return on these bills would provide yields o f 3.59 percent for the 91-day bills, and 3.79 percent for the 182-day bills. Interest rates on bills are quoted in terms o f bankdiscount, 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 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 o f 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. (68 percent of the amount of 91-day bills bid for at the low price was accepted.) (3 percent of the amount of 182-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) 91-D a y Treasury Bills M aturing M arch District Boston ......... New York....... Philadelphia...... Cleveland ....... Richmond ....... Atlanta ........ Chicago ........ St. Louis ........ Minneapolis ..... Kansas City ..... Dallas ......... San Francisco..... Total .... 12, 1964 Applied fo r 13,924,000 834,063,000 15,689,000 27,556,000 14,177,000 25,146,000 191,589,000 28,064,000 12,212,000 27,491,000 20,266,000 89,923,000 $1,300,100,000* $ 24,113,000 1,430,064,000 12,248,000 52,035,000 3,657,000 15,173,000 113,092,000 9,913,000 9,396,000 7,667,000 11,511,000 80,141,000 $1,769,010,000 $ a Includes $264,417,000 noncom petitive tenders accepted at the average price of 99.115. b Includes $73,826,000 noncom petitive tenders accepted at the average price of 98.149. Treasury Bills Accepted Applied fo r $ 24,924,000 1,521,063,000 31,289,000 29,076,000 14,177,000 32,214,000 289,709,000 34,328,000 21,712,000 28,666,000 29,586,000 119,103,000 $2,175,847,000 182-D a y M aturing June 11, 1964 Accepted $ 23,768,000 634,249,000 6,048,000 15,729,000 3,657,000 12,173,000 35,018,000 7,713,000 4,796,000 7,270,000 6,511,000 43,834,000 $800,766,000b
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