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F E D E R A L R E S E R V E B A N K O F N EW Y O R K Fiscal Agent of the United States r Circular No. 5 7 8 6 1 U March 16, 1966 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated December 23, 1965, Due June 23, 1966 (To Be Issued March 24, 1966) $1,000,000,000 of 182-Day Bills, Dated March 24, 1966, Due September 22, 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 reasu ry bills to the aggregate am ount of $2,300,000,000, or thereabouts, for cash and in exchange for T reasu ry bills m aturing M arch 24, 1966, in the am ount of $2,208,747,000, as fo llo w s: 91-day bills (to maturity date) to be issued M arch 24, 1966, in the am ount of $1,300,000,000, or thereabouts, representing an additional am ount of bills dated D ecem ber 23, 1965, and to mature June 23, 1966, originally issued in the am ount of $1,003,298,000, 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 24, 1966, and to mature Septem ber 22, 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 w ill 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 w ill be received at Federal R eserve Banks and Branches up to the closing hour, one-thirty p.m ., Eastern Standard time, M on d ay, M arch 21, 1966. T enders will not be received at the T reasu ry D epartm ent, W a sh 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 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 thers than banking institutions will not be permitted to subm it tenders except for their own account. T en ders will be received without 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 w ill be opened at the Federal R eserve Banks and Branches, follow in g which public announcem ent w ill be made by the T reasu ry 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 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 m ade or com pleted at the Federal R eserve B ank on M arch 24, 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 24, 1966. Cash and exchange tenders w ill receive equal treatment. Cash adjustm ents will be made for differences between the par value of m aturing bills accepted in exchange and the issue price o f 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 biils, 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, whether Federal or State, but are exem pt from ail 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 n d er Sections 4 5 4 (b ) and 1 22 1 (5 ) of the Internal Revenue 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, 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 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 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 21, 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 o f T reasury bills (9 1 -day bills to be issued M arch 17, 1966, representing an additional amount of bills dated Decem ber 16, 1965, maturing June 16, 1966; and 182-day bills dated M arch 17, 1966, maturing September 15, 1966) are shown on the reverse side of this circular. A lfred H ayes , President. ( over) R ESU LTS OF L A S T 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 BE ISSU ED M ARCH 17, 1966) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing June 16,1966 Price A p prox. equiv. annual rate 182-Day Treasury Bills Maturing September 15,1966 Price A p prox. equiv. annual rate High ......... ............................ 98.813 4.696% 97.519a 4.907% Low ........... ............................ 98.805 4.727% 97.513 4.919% ............................ 98.807 4.718% 1 97.515 4.915% ! Average a Excepting one tender of $50,000. 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 4.84 percent for the 91-day bills, and 5.11 percei for the 182-day bills. (69 percent of the amount of 91-day bills bid for at the low price was accepted.) (4 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) 182-Day Treasury Bills Maturing September 15,1966 Applied for District Boston 91 -Day Treasury Bills Maturing June 16,1966 ........................ ............. $ 24,142,000 Accepted $ 13,592,000 Applied for $ 9,209,000 Accepted $ 4,009,000 New Y o r k ................. ............. 1,498,124,000 751,572,000 1,853,179,000 616,671,000 ............. ............. 35.544,000 17,049,000 21,462,000 7,197,000 Cleveland ................... ............. 30,685,000 28,541,000 116,474,000 53,374,000 Richmond ................. ............. 13,839,000 13,836,000 16,152,000 5,202,000 Atlanta ..................... ............. 50,327,000 28,603,000 43,886,000 9,562,000 Chicago ..................... ............. 426,983,000 295,646,000 359,473,000 149,342,000 St. Louis ................... ............. 64,319.000 40,399,000 36,474,000 12,074,000 Minneapolis ............. ............. 20,889,000 13,767,000 12,283,000 6,883,000 Kansas C i t y ............... ............. 27,260,000 25,120,000 15,037,000 12,751,000 Dallas .......................... ............. 25,904.000 14,504,000 15,152,000 10,002,000 San F r a n c is c o ........... ............. 102,281,000 58,135,000 268,778,000 115,726,000 ...................... ............. $2,320,297,000 Philadelphia T otal $1,300,764,0001’ b Includes $281,601,000 noncompetitive tenders accepted at the average price of 98.807. c Includes $138,317,000 noncompetitive tenders accepted at the average price of 97.515. $2,767,559,000 $1,002,793,000c