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FED ERAL RESERVE BANK O F N E W YORK Fiscal Agent of the United States Circular N o. 5 5 3 0 1 August 5, 1964 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,200,000,000 of 91-Day Bills, Additional Amount, Series Dated May 14,1964, Due November 12,1964 (To Be Issued August 13,1964) $900,000,000 of 182-Day Bills, Dated August 13,1964, Due February 11,1965 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 Daylight Saving time: The tenders am ount change am ount T reasu ry D epartm ent, by this public notice, invites for tw o series of T reasury bills to the aggregate of $2,100,000,000, or thereabouts, for cash and in e x for T reasury bills m aturing A u g u st 13, 1964, in the of $2,101,434,000, as fo llo w s: 91-d a y bills (to m aturity date) to be issued A u g u st 13, 1964, in the am ount of $1,200,000,000, or thereabouts, representing an additional am ount of bills dated M ay 14, 1964, and to mature N ovem ber 12, 1964, originally issued in the am ount of $900,452,000 (an additional $100,086,000 was issued July 29, 1964), the additional and original bills to be freely interchange able. 182-day bills, for $900,000,000, or thereabouts, to be dated A u g u st 13, 1964, and to mature February 11, 1965. T h e bills of both series w ill be issued on a discount basis under com petitive and noncom petitive bidding as hereinafter provided, and at m aturity their face am ount will be payable without interest. T h e y will be issued in bearer form only, and in denom inations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m aturity valu e). T enders will be received at Federal R eserve Banks and Branches up to the closing hour, one-thirty p.m ., Eastern D aylight Saving tim e, M on d ay , A u g u st 10, 1964. T en ders will not be received at the T reasury D epartm ent, W a sh in g ton . Each tender m u st be for an even m ultiple of $1,000, and in the case of com petitive tenders the price offered m ust be expressed on the basis of 100, with not m ore than three decimals, e.g., 99.925. Fractions m ay not be used. It is urged that tenders be made on the printed form s and forw arded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions generally m ay subm it tenders for account of custom ers, provided the nam es of the custom ers are set forth in such tenders. O th ers than banking institu tions will not be perm itted to submit tenders except for their ow n account. T enders will be received w ithout deposit from incorporated banks and trust com panies and from respon sible and recognized dealers in investm ent securities. T enders from others m ust be accom panied by paym ent of 2 percent of the face am ount of T reasury bills applied for, unless the tenders are accom panied by an express guaranty of paym ent by an incorporated bank or trust com pany. Im m ediately after the closing hour, tenders w ill be opened at the Federal R eserve B anks and Branches, follow ing which public announcem ent will be m ade by the T reasury D ep art- m ent of the am ount and price range of accepted bids. T h o se subm itting tenders will be advised of the acceptance or rejec tion thereof. T h e Secretary of the T reasu ry exp ressly re serves 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 M ay 14, 1964 (91 days rem aining until m aturity date on N o ve m b e r 12, 1964) and noncom petitive tenders for $100,000 or less for the 182-day bills w ithout stated price from any one bidder will be accepted in full at the average price (in three deci m als) of accepted com petitive bids for the respective issues. Settlem ent for accepted tenders in accordance w ith the bids must be m ade or com pleted at the Federal R eserve B ank on A u g u st 13, 1964, in cash or other im m ediately available funds or in a like face am ount of T reasury bills m aturing A u g u st 13, 1964. Cash and exchange tenders will receive equal treat ment. Cash adjustm ents w ill be m ade for differences be tween the par value of m aturing bills accepted in exchange and the issue price of the new bills. T h e incom e derived from T reasury bills, whether interest or gain fro m the sale or other disposition of the bills, does not have any exem ption, as such, and loss fro m the sale or other disposition of T reasury bills does not have any special treatment, as such, under the Internal R evenue Code of 1954. T h e bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exem pt from all taxation now or hereafter im posed on the principal or interest thereof by any State, or any of the possessions of the U nited States, or by any local taxing authority. F or purposes of taxation the am ount of discount at w hich T r e a s ury bills are originally sold by the U nited States is con sidered to be interest. U nder Sections 4 5 4 (b ) and 122 1 (5 ) of the Internal R evenue Code of 1954 the am ount of discount at which bills issued hereunder are sold is not considered to accrue until such bills are sold, redeem ed or otherwise disposed of, and such bills are excluded from consideration as capital assets. A cco rd in gly , the ow ner of T reasu ry 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 am ount actually received either upon sale or redem ption at m aturity during the taxable year for which the return is m ade, as ordinary gain or loss. T reasury D epartm ent Circular N o . 418 (current revision) and this notice prescribe the term s of the T reasu ry bills and govern the conditions of their issue. Copies of the circular m ay be obtained from any Federal R eserve B ank or Branch. 1 his Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday, August 10, 1964, 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 o f Treasury bills (91-day bills to be issued August 6, 1964, representing an addi tional amount of bills dated May 7, 1964, and maturing November 5, 1964; and 182-day bills dated August 6, 1964, maturing February 4, 1965) are shown on the reverse side of this circular. 19 A lfred H ayes , President. ( o ver) 14 FI FTI ETH A N N I V E R S A R Y 19 6 4 RESULTS OF LAST OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED AUGUST 6, 1964) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing November 5, 1964 182-Day Treasury Bills Maturing February 4, 1965 Approx. equiv. Price annual rate 99.1223 Low ...................................... 99.116 Average ................................ 99.118 High .................................... Approx. equiv. Price annual rate 3 .4 7 3 % 98.192 3 .5 7 6 % 3 .4 9 7 % 98.184 3.592% 3.488%1 98.186 3.588%! a E xcep tin g one tender of $200,000. 1 O n a coupon issue of the sam e length and for the sam e am ount invested, the return on these bills w ould provide yields of 3.57 percent for the 91-d a y bills, and 3.71 percent for the 182-day bills. Interest rates on bills are quoted in term s of bank discount, with the return related to the face am ount of the bills payable at m aturity rather than the am ount invested, and their length in actual number of days related to a 360-d ay year. In contrast, yields on certificates, notes, and bonds are computed in term s of interest on the am ount invested, and relate the num ber of days rem aining in an interest paym ent period to the actual num ber of days in the period, with semiannual com p ound ing if m ore than one coupon period is involved. (72 percent of the amount of 91-day bills bid for at the low price was accepted.) (82 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-Day Treasury Bills Maturing November 5, 1964 Accepted Applied, for District Boston .......................... $ 33,286,000 182-Day Treasury Bills Maturing February 4, 1965 $ 20,486,000 Applied for $ 13,270,000 Accepted $ 6,434,000 1,542,551,000 810,411,000 1,305,553,000 607,330,000 ................ 28,220,000 12,220,000 8,505,000 3,478,000 Cleveland...................... 23,938,000 23,938,000 35,688,000 23,888,000 Richmond .................... 18,098,000 15,538,000 10,111,000 4,111,000 A tlan ta.......................... 25,252,000 22,608,000 11,054,000 8,027,000 Chicago ........................ 183,902,000 121,582,000 188,324,000 120,850,000 St. Louis ...................... 34,047,000 26,711,000 32,844,000 30,144,000 Minneapolis ................ 21,709,000 15,149,000 7,637,000 5,137,000 Kansas City ................ 32,969,000 32,689,000 9,004,000 8,986,000 D a lla s............................ 25,218,000 16,938,000 10,157,000 5,977,000 81,951,000 118,740,000 76,179,000 $1,750,887,000 $900,541,000= New Y o r k .................... Philadelphia San Francisco ............ 111,971,000 Total ............ $2,081,161,000 $1,200,221,000b b Includes $233,542,000 noncompetitive tenders accepted at the average price of 99.118. c Includes $58,219,000 noncompetitive tenders accepted at the average price of 98.186.