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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 r Circular No. 5 7 8 4 1 L March 9, 1966 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated December 16, 1965, Due June 16, 1966 (To Be Issued March 17, 1966) $1,000,000,000 of 182-Day Bills, Dated March 17, 1966, Due September 15, 1966 T o A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal R eserve D istrict: Following is the text of a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard tim e: T h e T reasu ry D epartm ent, by this public notice, invites tenders for tw o series of T reasury bills to the aggregate am ount of $2,300,000,000, or thereabouts, for cash and in exchange for T reasury bills m aturing M arch 17, 1966, in the am ount of $2,206,604,000, as fo llo w s: 91-day bills (to m aturity date) to be issued M arch 17, 1966, in the am ount of $1,300,000,000, or thereabouts, representing an additional am ount of bills dated D ecem ber 16, 1965, and to mature June 16, 1966, originally issued in the am ount of $1,000,503,000, 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 17, 1966, and to mature Septem ber 15, 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 w ithout 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 B anks and B ranches up to the closing hour, one-thirty p.m ., Eastern Standard time, M on d ay, M arch 14, 1966. T enders w ill not be received at the T reasury D epartm ent, W a sh in g to n . Each 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 decimals, 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 Banks or Branches on application therefor. B anking 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 institutions will not be permitted to subm it tenders except for their own account. T en ders will be received w ithout deposit from in corporated banks and trust companies 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 pany. Im m ediately after the closing hour, tenders will be opened at the Federal R eserve Banks and Branches, follow in g which public announcem ent w ill 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 w ill be advised of the acceptance or re jection thereof. T h e Secretary of the T reasu 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 w ill be accepted in full at the average price (in three decim als) of accepted com petitive bids for the re spective issues. Settlem ent for accepted tenders in accordance with the bids m ust be made or com pleted at the Federal Reserve Bank on M arch 17, 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 17, 1966. Cash and exchange tenders will receive equal treatm ent. Cash adjustm ents w ill be made 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 reasury 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 reasury bills does not have any special treat ment, 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 pt from all taxa tion 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 reasu ry bills are originally sold by the U nited States is considered to be inter est. U nd er Sections 4 5 4 (b ) and 1 22 1 (5 ) of the Internal Revenue 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, redeemed or otherw ise disposed of, and such bills are excluded from consideration as capital assets. A cco rd in gly , the ow ner of T reasury bills (other than life insurance com panies) issued hereunder need include in his income tax return only the difference betw een the price paid for such bills, w hether 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 made, 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 reasury 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, March 14, 1966, 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 March 10, 1966, representing an additional amount of bills dated December 9, 1965, maturing June 9, 1966; and 182-day bills dated March 10, 1966, maturing September 8, 1966) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) R ESU LTS OF L A ST W E E K L Y O FFE R IN G OF T R E A S U R Y BILLS (T W O SER IES TO B E ISSU ED M ARCH 10, 1966) Range of Accepted Competitive Bids 91 -Day Treasury Bills Maturing June 9,1966 182-Day Treasury Bills Maturing September 8,1966 Price A p p rox. equiv. annual rate Price A p prox. equiv. annual rate High . . . . .................................. 98.841 4.585% 97.580 4.787% Low .................................. 98.827 4.640% 97.557 4.832% Average .................................. 98.832 4 .62 0% 1 97.565 4.816% ! 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 4.74 percent for the 91-day bills, and 5.01 percent for the 182-day bills. (48 percent of the amount of 182-day bills bid for at the low price was accepted.) (54 percent of the amount of 91-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (B y Federal Reserve Districts) 91-Day Treasury Bills Maturing June 9,1966 Applied for District Boston ................... ................. $ 25,165,000 182-D ay Treasury Bills Maturing September 8,1966 A pplied for Accepted $ 15,165,000 $ 5,963,000 Accepted $ 5,963,000 N ew Y o r k ............. ................. 1,419,517,000 844,937,000 1,231,952,000 699,332,000 ......... ................. 27,627,000 15,627,000 15,938,000 7,938,000 Cleveland ............... ................. 33,698,000 33,698,000 39,984,000 32,984,000 ............. ................. 13,142,000 13,142,000 6,370,000 6,370,000 Atlanta ................. ................. 48,408,000 39,224,000 30,402,000 16,202,000 Chicago ................. ................. 163,927,000 131,061,000 140,474,000 82,873,000 St. Louis ............... ................. 56,406,000 48,106,000 25,778,000 19,278,000 ......... ................. 23,666,000 21,114,000 10,272,000 9,012,000 Kansas C i t y ........... ................. 27,723,000 27,723,000 12,700,000 12,700,000 Dallas ...................... ................. 24,717,000 16,257,000 13,900,000 9,900,000 San Francisco . . . . ................. 144,099,000 94,099,000 108,013,000 97,813,000 ................. $2,008,095,000 Philadelphia Richmond Minneapolis T otal .............. $ 1,300,153,000* a Includes $258,155,000 noncompetitive tenders accepted at the average price of 98.832. b Includes $128,232,000 noncompetitive tenders accepted at the average price of 97.565. $1,641,746,000 $1,000,365,000b
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