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F E D E R A L R E S E R V E BA N K O F NEW YO R K Fiscal Agent of the United States /•Circular No. 5 7 8 IT L February 23, 1966 J OFFERING OF TW O SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated December 2, 1965, Due June 2, 1966 (To Be Issued March 3, 1966) $1,000,000,000 of 182-Day Bills, Dated March 3, 1966, Due September 1, 1966 To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal R eserve D istrict: Following is the text o f a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard tim e: The tenders am ount change am ount T reasury D ep artm en t, by this public notice, invites for tw o series of T reasury bills to the aggregate of $2,300,000,000, or thereabouts, for cash and in e x for T reasu ry bills m aturing M arch 3, 1966, in the of $2,201,257,000, as fo llo w s : 91-d a y bills (to m aturity date) to be issued M arch 3, 1966, in the am oun t of $1,300,000,000, or thereabouts, representing an additional am ount of bills dated D ecem ber 2, 1965, and to mature June 2, 1966, originally issued in the am ount of $1,000,153,000, the additional and original bills to be freely interchange able. 182-day bills, for $1,000,000,000, or thereabouts, to be dated M arch 3, 1966, and to m ature Septem ber 1, 1966. T h e bills of both series will 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 v a lu e). T enders will be received at Federal R eserve B anks and B ranches up to the closin g hour, on e-th irty p.m ., E astern Standard tim e, M ond ay, February 28, 1966. T enders will not be received at the T reasu ry D epartm ent, W a s h in g to n . E ach tender m ust be for an even multiple 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 decim als, e.g., 99.925. Fractions m ay not be used. It is urged that tenders be m ade on the printed form s and forw arded in the special envelopes which will be supplied by Federal R eserve B anks or Branches on application therefor. B anking institutions generally m a y subm it tenders for account of custom ers, provided the nam es o f the custom ers are set forth in such tenders. O th ers than banking institutions will not be perm itted to subm it tenders except for their ow n account. T en ders will be received w ithout deposit from in corporated banks and trust com panies and from responsible 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 reasu ry bills applied for, unless the tenders are accom panied by an express guaranty of paym ent by an incorporated bank or trust com pan y. Im m ediately after the closin g hour, tenders w ill be opened at the Federal R eserve B anks and Branches, follow in g which public announcem ent will be m ade by the T reasu ry D ep artm ent of the am ount and price range of accepted bids. T h o se sub m ittin g tenders will be advised of the acceptance or rejection thereof. T h e Secretary of the T re asu ry expressly reserves 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 each issue for $200,000 or less w ithout stated price from any one bidder will be accepted in full at the average price (in three decim als) of accepted com petitive bids for the respective issues. Settlem ent for accepted tenders in accordance with the bids m ust be m ade or com pleted at the Federal R eserve Bank on M arch 3, 1966, in cash or other im m ediately available funds or in a like face am ount of T reasury bills m aturing M arch 3, 1966. Cash and exchange tenders w ill receive equal treatm ent. Cash adjustm ents will be m ade for differences betw een 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 reasu ry bills, w hether interest or gain from the sale or other disposition of the bills, does not have any exem ption, as such, and loss from the sale or other disposition of T reasu ry bills does not have any special treat m ent, as such, under the Internal R evenue Code of 1954. T h e bills are subject to estate, inheritance, gift or other excise taxes, w hether Federal or State, but are exem p t from all taxa tion now or hereafter im posed on the principal or interest thereof by any State, or any of the p ossessions of the United States, o r by any local taxing authority. F or purposes of taxation the am ount of discount at w hich T re asu ry bills are originally sold by the U nited States is considered to be inter est. U n d er Sections 4 5 4 (b ) and 1 22 1 (5 ) of the Internal R evenue Code of 1954, the am ount of discount at w hich bills issued hereunder are sold is not considered to accrue until such bills are sold, redeem ed or otherw ise disposed of, and such bills are excluded from consideration as capital assets. A c c o rd ingly, the ow ner of T reasury bills (other than life insurance com panies) issued hereunder need include in his incom e tax return only the difference betw een 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 w hich the return is made, as ordinary gain or loss. T reasu ry D epartm ent Circular N o . 418 (current revision) and this notice prescribe the term s of the T re asu 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. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, February 28, 1966, at the Securities Department o f 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 fo r the Treasury bills cannot be made by credit through the Treasury T ax 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 24, 1966, representing an additional amount of bills dated November 26, 1965, maturing May 26, 1966; and 182-day bills dated February 24, 1966, maturing August 25, 1966) are shown on the reverse side of this circular. A lfred H ayes, President. (o v e r ) RESULTS OF LAST W EEK LY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED FEBRUARY 24, 1966) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing M ay 26, 1966 Price A p p ro x . equiv. annual rate 182-Day Treasury Bills Maturing August 25,1966 Price A p p rox. equiv. annual rate H igh .............................. 98.817 4.680% 97.532 4.882% Low ................................ 98.810 4.708% 97.523 4.900% Average .......................... 98.813 4.696% 1 1 T h ese rates are on a bank discount basis. and 5.09 percent for the 182-day bills. 97.527 4.892% 1 T h e equivalent coupon issue yields are 4.82 percent for the 9 1-day bills, (15 percent o f the amount o f 91-day bills bid for at the low price was accepted.) (3 percent o f the amount o f 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 M ay 26, 1966 Applied fo r District Boston ............................ ......... $ 26,166,000 182-Day Treasury Bills Maturing August 25,1966 Accepted $ 14,316,000 Applied fo r $ 27,373,000 Accepted $ 17,373,000 New Y ork ...................... ......... 1,555,437,000 751,437,000 1,389,124,000 668,709,000 ................. ......... 31,690,000 17,140,000 16,282,000 3,282,000 Cleveland ........................ ......... 30,410,000 29,810,000 52,596,000 27,896,000 ..................... ......... 14,137,000 14,137,000 3,804,000 3,804,000 Atlanta ............................ ......... 40,270,000 26,260,000 35,489,000 14,297,000 .......................... ......... 340,519,000 209,984,000 321,461,000 107,361,000 St. Louis ........................ 52,090,000 31,585,000 22,873,000 9,873,000 Minneapolis ................... 16,973,000 12,698,000 9,293,000 6,323,000 Kansas C i t y ................... 27,892,000 26,392,000 11,314,000 10,029,000 Dallas .............................. 21,722,000 12,872,000 11,802,000 6,832,000 237,039,000 155,022,000 193,343,000 124,673,000 Philadelphia Richmond Chicago San F ran cisco ............. ........ T otal ............................ $2,394,345,000 $1,301,653,000* $2,094,754,000 a Includes $238,835,000 noncom petitive tenders accepted at the average price of 98.813. b Includes $105,484,000 noncom petitive tenders accepted at the average price of 97.527. $1,000,452,000b
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