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F E D E R A L R ES ER V E BANK O F NEW YORK Fiscal Agent of the United States Circular No. 5 8 2 7 '1 June 27, 1966 J [ OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated April 7, 1966, Due October 6, 1966 (To Be Issued July 7, 1966) $1,000,000,000 of 182-Day Bills, Dated July 7, 1966, Due January 5, 1967 To 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 Daylight Saving 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 e x change for T reasu ry bills m aturing July 7, 1966, in the am ount of $2,304,650,000, as fo llo w s: 91-day bills (to m aturity date) to be issued July 7, 1966, in the am ount of $1,300,000,000, or thereabouts, representing an additional am ount of bills dated A pril 7, 1966, and to mature O ctob er 6, 1966, originally issued in the am ount of $1,001,791,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,000,000,000, or thereabouts, to be dated July 7, 1966, and to mature January 5, 1967. 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 value). T enders will be received at Federal R eserve Banks and Branches up to the closing hour, one-thirty p.m ., Eastern D a yligh t Saving time, Friday, July 1, 1966. Tenders will not be received at the T reasu ry 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 made on the printed form s and forw arded in the special envelopes which will be supplied by Federal Reserve B anks or Branches on application therefor. B anking institutions generally m ay submit 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 enders will be received without deposit from incorporated banks and trust com panies and from responsible and recognized dealers in investm ent securities. T enders from others must be accom panied by paym ent of 2 percent o f the face am ount of T reasury 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 ing which public announcem ent will be made by the T reasury Departm ent of the am ount and price range of accepted bids. T h o se sub m itting tenders will be advised of the acceptance or rejection thereof. T h e Secretary of the Treasury 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 without 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 w ith the bids m ust be made or com pleted at the Federal Reserve Bank on July 7, 1966, in cash or other im m ediately available funds or in a like face am ount of T reasury bills m aturing July 7, 1966. Cash and exchange tenders will receive equal treatment. Cash ad ju st m 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 income 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 Revenue Code o f 1954. T h e bills are subject to estate, inheritance, gift or other excise taxes, whether 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 United States, or by any local taxing authority. F or purposes of taxation the am ount of discount at which T reasury bills are originally sold by the U nited States is considered to be interest. U nder 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 otherwise 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 co m 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 am ount actually received either upon sale or redem ption at maturity during the taxable year for which the return is m ade, as ordinary gain or loss. T reasury D epartm ent Circular N o . 418 (current revision) and this notice prescribe the terms of the T reasu ry bills and govern the conditions of their issue. Copies o f the circular m ay 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, Friday, July 1, 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 T ax and Loan Account. Settlement must be made in cash or other immediately available funds or in maturing Treasury bills. This circular was printed before the results of the bidding for 91-day and 182-day Treasury bills to be issued June 30, 1966, were available; those results will be announced after release by the Treasury Department. A lfred H ayes , President. Closing date for receipt o f tenders is Friday, July 1.
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