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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 E W YO R K Fiscal Agent of the United States r Circular No. 5 8 8 4 T. 1 October 19, 1966 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated July 28, 1966, Due January 26, 1967 (To Be Issued October 27, 1966) $1,000,000,000 of 182-Day Bills, Dated October 27, 1966, Due April 27, 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., Daylight Saving time: Eastern T h e T reasury D epartm en t, 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 e x change for T reasu ry bills m aturing O ctob er 27, 1966, in the am ount of $2,301,043,000, as fo llo w s : 91-day bills (to m aturity date) to be issued O ctob er 27, 1966, in the am ount of $1,300,000,000, or thereabouts, representing an additional am ount of bills dated July 28, 1966, and to m ature January 26, 1967, originally issued in the am ount of $1,001,781,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,000,000,000, or thereabouts, to be dated O ctob er 27, 1966, and to mature A p ril 27, 1967. T h e bills of both series w ill be issued on a discount basis under com petitive and noncom petitive bidding as hereinafter provided, and at m aturity their face am ount w ill 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 D a yligh t Saving time, M on d ay, O ctob er 24, 1966. Tenders w ill not be received at the T reasury D epartm ent, W ash in g ton . E ach tender m u st be for an even m ultiple of $1,000, and in the case of com petitive tenders the price offered m u st be expressed on the basis of 100, w ith 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 w hich will be supplied by Federal R eserve Banks or B ranches on application therefor. Banking 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 ow n account. T enders w ill be received w ithout deposit from incorporated banks and trust com panies and from responsible and recognized dealers in investm ent securities. T en ders from others m ust be accom panied by paym ent o f 2 percent of the face am ount of T reasury bills applied for, unless the tenders are accom panied by an express guaranty o f 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 epartm ent of the am ount and price range of accepted bids. T h o se sub m itting tenders w ill be advised of the acceptance or rejection thereof. T h e Secretary o f the T reasury 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. S ubject 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 respective issues. S ettlem ent for accepted tenders in accordance w ith the bids m u st be m ade or com pleted at the Federal R eserve Bank on O ctob er 27, 1966, in cash or other im m ediately available funds or in a like face am ount of T reasu ry bills m aturing O ctober 27, 1966. Cash and exchange tenders will receive equal treatm ent. Cash ad just m ents w ill 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 fro m the sale or other disposition of T reasury bills does not have any special treat m ent, as such, under the Internal Revenue 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 ta xa 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 o r purposes of taxation the am ount of discount at w hich 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 2 2 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 reasu ry bills (other than life insurance co m panies) issued hereunder need include in his incom e 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 w hich the return is m ade, as ordinary gain or loss. T reasury D ep artm ent Circular N o . 418 (current revision) and this notice prescribe the term s o f the T reasury bills and govern the conditions o f 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 Daylight Saving time, Monday, October 24, 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 the Treasury Loan Account. immediately Settlement must be made in cash or other credit through Tax and available funds or in maturing Treasury bills. Results of the last weekly offering of Treasury bills (91-day bills to be issued October 20, 1966, representing an additional amount of bills dated July 21, 1966, maturing January 19, 1967; and 182-day bills dated October 20, 1966, maturing April 20, 1967) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST W EEK LY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED OCTOBER 20, 1966) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing January 19,1967 182-Day Treasury Bills Maturing April 20,1967 Price A p p rox. equiv. annual rate Price A p prox. equiv. annual rate H i g h ........................ ................. 98.635 5.400% 97.152 5.633% L ow ........................ ................. 98.626 5.436% 97.137 5.663% Average .................. ................. 98.629 5.424% x 97.143 5.651% ! 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 5.58 percent for the 91-day bills, ai 5.90 percent for the 182-day bills. (63 percent of the amount of 91-day bills bid for at the low price was accepted.) (28 percent of the amount of 182-day bills bid for at the low price was accepted.) T otal Tenders A p p lied fo r and A ccepted (B y Federal Reserve Districts) 91-Day Treasury Bills Maturing January 19,1967 Applied for District 182-Day Treasury Bills Maturing April 20,1967 Accepted $ 11,899,000 Applied for $ 22,812,000 Accepted $ 12,812,000 ................. 1,621,581,000 876,641,000 1,277,580,000 672,757,000 P hiladelphia........... ................. 34,279,000 16,999,000 15,785,000 7,785,000 27,910,000 34,035,000 23,635,000 ................. 25,243,000 19,743,000 11,957,000 10,907,000 A t la n t a ...................................... 50,709,000 31,179,000 41,836,000 21,336,000 ................. 279,520,000 103,860,000 247,879,000 138,869,000 St. Louis ................. ................. 68,708,000 47,608,000 48,462,000 19,762,000 M in n ea p olis............. ................. 17,523,000 12,468,000 13,605,000 11,605,000 Kansas C i t y ............. ............... 26,325,000 26,288,000 19,480,000 19,480,000 ............... 27,811,000 17,811,000 17,446,000 17,446,000 San F r a n c is c o ......... ............... 236,086,000 108,576,000 145,735,000 43,650,000 T ota l........... ............... $2,438,479,000 $1,300,982,000a a Includes $283,602,000 noncompetitive tenders accepted at the average price of 98.629. b Includes $189,965,000 noncompetitive tenders accepted at the average price of 97.143. $1,896,612,000 $ 1,000,044,000b
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