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FEDERAL RESERVE BANK OF N E W YORK Fiscal Agent of the United States /C ir c u la r No. 5 5 3 6 1 1 A ugust 19, 1964 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,200,000,000 of 92-Day Bills, Additional Amount, Series Dated May 28, 1964, Due November 27, 1964 (To Be Issued August 27, 1964) $900,000,000 of 182-Day Bills, Dated August 27, 1964, Due February 25, 1965 To A ll 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 tim e: The tenders amount change amount Treasury Department, by this public notice, invites for two series of Treasury bills to the aggregate of $2,100,000,000, or thereabouts, for cash and in ex for Treasury bills maturing August 27, 1964, in the of $2,101,786,000, as follow s: 92-day bills (to maturity date) to be issued August 27, 1964, in the amount of $1,200,000,000, or thereabouts, representing an additional amount of bills dated May 28, 1964, and to mature November 27, 1964, originally issued in the amount of $900,091,000 (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 August 27, 1964, and to mature February 25, 1965. 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 Daylight Saving time, Monday, August 24, 1964. Tenders will not be received at the Treasury Department, Washington. 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 of 100, with not more 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 iu 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 institu tions will not be permitted to submit tenders except for their own account. Tenders will be received without deposit from incorporated banks and trust companies and from respon sible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent of 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, following 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 of the acceptance or rejec tion thereof. The Secretary of the Treasury expressly re serves 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 M ay 28, 1964 (92 days remaining until maturity date on November 27, 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 average price (in three deci mals) of accepted competitive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal Reserve Bank on August 27, 1964, in cash or other immediately available funds or in a like face amount of Treasury bills maturing August 27, 1964. Cash and exchange tenders will receive equal treat ment. Cash adjustments will be made for differences be tween 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 disposition 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 hereafter 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 of taxation the amount of discount at which Treas ury bills are originally sold by the United States is con sidered 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 considered to accrue until such bills are sold, redeemed or otherwise disposed of, and such bills are excluded from consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) 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 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, August 24, 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. maturing Treasury bills. Settlement must be made in cash or other immediately available funds or in Results of the last offering of Treasury bills (9 1 -day bills to be issued August 20, 1964, representing an addi tional amount of bills dated May 21, 1964, and maturing November 19, 1964; and 182-day bills dated August 20, 1964, maturing February 18, 1965) are shown on the reverse side of this circular. A lfred H ayes, President. Please note that the Treasury bills maturing November 27, 1964, will be 92-day bills. 19 1 4 ( over ) FIFTIETH ANNI V E RS A RY 1 9 6 4 R ESU LTS OF L A S T O FFER IN G OF T R E A S U R Y BILLS (T W O SER IE S TO BE ISSUED A U G U ST 20, 1964) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing November 1 9,1 96 4 182-Day Treasury Bills Maturing February 1 8 ,1 96 5 Price Approx. equiv. annual rate Price Approx. equiv. annual rate H igh . . 99.115 3.501% 98.171 3.618% L ow . . . 99.111 3.517% 98.161 3.638% Average 99.112 3.511 % X 98.163 3.634% x 1 On a coupon issue of the same length and for the same amount invested, the return on these bills would provide yields of 3.59 percent for the 91-day bills, and 3.75 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 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 of days remaining in an interest payment period to the actual number of days in the period, with semiannual compounding if more than one coupon period is involved. (81 percent of the amount of 91-day bills bid for at the low price was accepted.) (5 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 1 9 ,1 96 4 Applied for District ......... $ 37,818,000 182-Day Treasury Bills Maturing February 18,1 96 5 Accepted, $ 25,747,000 Applied for $ 19,474,000 Accepted $ 6,138,000 New Y o r k ...................... ......... 1,503,917,000 806,087,000 1,619,212,000 759,598,000 P h iladelphia................... ......... 36,969,000 16,969,000 9,954,000 3,649,000 Cleveland ........................ ......... 25,287,000 25,160,000 42,582,000 7,682,000 ..................... ......... 11,930,000 11,930,000 6,649,000 6,649,000 Atlanta ............................ ......... 37,484,000 30,148,000 12,730,000 9,530,000 ......... 195,694,000 144,059,000 162,068,000 50,977,000 St. Louis ........................ ......... 33,256,000 25,068,000 10,097,000 8,097,000 Minneapolis ................... ......... 19,942,000 13,972,000 5,772,000 3,272,000 Kansas C i t y ................... ......... 34,719,000 30,551,000 14,485,000 9,338,000 Dallas .............................. ......... 23,534,000 15,344,000 9,181,000 4,077,000 San F r a n c is c o ............... 110,342,000 55,257,000 128,897,000 32,447,000 ..................... $2,070,892,000 Richmond T otal $1,200,292,000° a Includes $246,252,000 noncompetitive tenders accepted at the average price of 99.112. b Includes $62,843,000 noncompetitive tenders accepted at the average price of 98.163. $2,041,101,000 $901,454,000b
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