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FEDERAL RESERVE BANK OF N EW YORK
Fiscal Agent of the United States
r Circular No. 5 6 1 2 1
L February 3, 1965 -I

OFFERING OF TWO SERIES OF TREASURY BILLS
$1,200,000,000 of 91-Day Bills, Additional Amount, Series Dated November 12,1964, Due May 13,1965
(To Be Issued February 11, 1965)
$1,000,000,000 of 182-Day Bills, Dated February 11, 1965, Due August 12, 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 Standard time:
The Treasury Department, by this public notice, invites
tenders for two series of Treasury bills to the aggregate
amount of $2,200,000,000, or thereabouts, for cash and in ex­
change for Treasury bills maturing February 11, 1965, in the
amount of $2,101,787,000, as follows:
91-day bills (to maturity date) to be issued February 11,
1965, in the amount of $1,200,000,000, or thereabouts,
representing an additional amount of bills dated
November 12, 1964, and to mature May 13, 1965,
originally issued in the amount of $1,000,317,000, the
additional and original bills to be freely interchange­
able.
182-day bills, for $1,000,000,000, or thereabouts, to be
dated February 11, 1965, and to mature August 12, 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
Standard time, Monday, February 8, 1965. 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 com­
petitive 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 in the special envelopes which will
be supplied by Federal Reserve Banks or Branches on applica­
tion 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 own 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 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 Department
of the amount and price range of accepted bids. Those sub­
mitting tenders will be advised of the acceptance or rejection
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 each issue for
$200,000 or less 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 completed at the Federal Reserve Bank on February 11, 1965,
in cash or other immediately available funds or in a like face
amount of Treasury bills maturing February 11, 1965. Cash and
exchange tenders will receive equal treatment. Cash adjust­
ments 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
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 of the possessions of the United
States, or by any local taxing authority. For purposes of
taxation the amount of 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 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 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
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 Standard time, Monday, February 8,
1965, 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 weekly offering of Treasury bills (91-day bills to be issued February 4, 1965, representing
an additional amount of bills dated November 5, 1964, maturing May 6, 1965; and 182-day bills dated February 4,
1965, maturing August 5/1965) are shown on the reverse side of this circular.




A lfred

H ayes,

President.
(

over)

RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES
TO BE ISSUED FEBRUARY 4, 1965)

Range of Accepted Competitive Bids
91-Day Treasury Bills
Maturing May 6, 1965

182-Day Treasury Bills
Maturing August 5, 1965

Approx. equiv.
annual rate

Price

Approx. equiv.
annual rate

99.023a

3.865 %

97.998

3.960%

Low ......................

99.016

3.893%

97.992

3.972%

Average ................

99.017

3.888% 1

97.994

3.968% 1

Price

High

....................

a Excepting two tenders totaling $3,350,000.
1 On a coupon issue of the same length and for the same amount invested, the return on these bills would provide yields
of 3.98 percent for the 91-day bills, and 4.11 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.

(77 percent of the amount of 91-day bills
bid for at the low price was accepted.)

(30 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 May 6, 1965
Applied for

District

Boston ..........................

$

17,250,000

182-Day Treasury Bills
Maturing August 5, 1965
Applied for

Accepted

$

16,343,000

$

33,855,000

Accepted

$

4,655,000

1,540,864,000

777,009,000

1,812,141,000

836,350,000

................

24,703,000

12,703,000

16,657,000

5,304,000

Cleveland ......................

23,562,000

22,362,000

98,304,000

34,006,000

Richmond

....................

11,957,000

11,957,000

10,651,000

5,441,000

Atlanta

........................

31,061,000

22,546,000

17,738,000

11,239,000

Chicago

........................

285,060,000

128,864,000

277,418,000

58,823,000

St. Louis ......................

53,882,000

47,137,000

12,722,000

6,822,000

Minneapolis

................

22,247,000

13,902,000

8,819,000

3,619,000

Kansas City ................

28,657,000

25,657,000

19,014,000

14,229,000

D a lla s............................

29,754,000

19,754,000

12,272,000

6,712,000

San Francisco ............

156,017,000

103,163,000

151,039,000

17,359,000

$2,470,630,000

$1,004,559,000

New Y o r k ....................
Philadelphia

T otal

..........................

$2,225,014,000

$1,201,397,000 b

b Includes $229,332,000 noncompetitive tenders accepted at the average price of 99.017.
c Includes $90,643,000 noncompetitive tenders accepted at the average price of 97.994.





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102