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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 rCircular No. 5 8 8 8 T , L October 26, 1966 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,300,000,000 of 91-Day Bills, Additional Amount, Series Dated August 4, 1966, Due February 2, 1967 (To Be Issued November 3,1966) $1,000,000,000 of 182-Day Bills, Dated November 3, 1966, Due May 4, 1967 To All Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve District: Following is the text of a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Daylight Saving time: T h e T reasu ry D epartm en t, by this public notice, invites tenders for tw o series o f 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 N o vem b er 3, 1966, in the am ount of $2,290,053,000, as fo llo w s: 91-day bills (to m aturity date) to be issued N o vem b er 3, 1966, in the am ount of $1,300,000,000, or thereabouts, representing an additional am ount of bills dated A u g u st 4, 1966, and to mature February 2, 1967, originally issued in the am ount of $1,000,684,000, the additional and original bills to be freely interchange able. 182-day bills, for $1,000,000,000, or thereabouts, to be dated N o ve m b e r 3, 1966, and to m ature M a y 4, 1967. The bills of both series will be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at maturity their face amount will be payable without interest. They will be issued in bearer form only, and in denominations of $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (maturity value). Tenders will be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p .m ., Eastern Standard tim e, M o n d a y , O ctob er 31, 1966. T enders will not be received at the Treasury Department, Washington. Each tender must be for an even multiple of $1,000, and in the case of com petitive tenders the price offered must be expressed on the basis of 100, with not more than three decimals, e.g., 99.925. Fractions may not be used. It is urged that tenders be made on the printed forms and forwarded in the special envelopes which will be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions generally may submit tenders for account of customers, provided the names of the customers are set forth in such tenders. Others than banking institutions will not be permitted to submit tenders except for their own account. Tenders will be received without deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of payment by an incorporated bank or trust company. Immediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcement will be made by the Treasury Department of the amount and price range of accepted bids. Those submitting tenders will be advised of the acceptance or rejection thereof. The Secretary of the Treasury expressly reserves the right to accept or reject any or all tenders, in whole or in part, and his action in any such respect shall be final. Subject to these reserva tions, noncompetitive 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 decimals) of accepted competitive bids for the respective issues. Settlement for accepted tenders in accordance with the bids must be made or completed at the Federal R eserve B ank on N o ve m b e r 3, 1966, in cash or other immediately available funds or in a like face amount of Treasury bills m aturing N o ve m b e r 3, 1966. Cash and exchange tenders w ill receive equal treatm ent. Cash adjustm ents w ill be m ade for differences between the par value of maturing bills accepted in exchange and the issue price of the new bills. The income derived from Treasury bills, whether interest or gain from the sale or other disposition of the bills, does not have any exemption, as such, and loss from the sale or other disposition of Treasury bills does not have any special treat ment, as such, under the Internal Revenue Code of 1954. The bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exempt from all taxa tion now or hereafter imposed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority. For purposes of taxation the amount of discount at which Treasury bills are originally sold by the United States is considered to be interest. Under Sec tions 4 5 4 (b ) and 1 22 1 (5 ) of the Internal Revenue Code of 1954, the amount 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 con sideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance companies) 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 sub sequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made, as ordinary gain or loss. Treasury Department Circular N o . 418 (current revision) and this notice prescribe the terms of the Treasury bills and govern the conditions of their issue. Copies of the circular may be obtained from any Federal Reserve Bank or Branch. Eastern Standard time, This Bank will receive tenders for both series up to 1 :30 p.m., Monday, October 31, 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 jor 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 October 27, 1966, representing an additional amount of bills dated July 28, 1966, maturing January 26, 1967; and 182-day bills dated October 27, 1966, maturing April 27, 1967) are shown on the reverse side of this circular. A lfred H ayes, President. ( over) RESULTS OF LAST W EEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED OCTOBER 27, 1966) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing January 26,1967 182-Day Treasury Bills Maturing April 27,1967 A p prox. equiv. annual rate Price Price A p prox. equiv. annual rate H i g h ........................................... 98.680 5.222% 97.209 5.521% Low ........................................... 98.669 5.265% 97.198 5.542% Average ..................................... 98.674 5.246%* 97.201 S.536%1 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 5.39 percent for the 91-day bills, and 5.78 percent for the 182-day bills. (73 percent of the amount of 91-day bills bid for at the low price was accepted.) (10 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) 91-Day Treasury Bills Maturing January 26,1967 District Boston Applied for .......................... ........... $ 26,814,000 182-Day Treasury Bills Maturing April 27,1967 Applied for Accepted $ 15,564,000 $ 16,027,000 Accepted $ 11,027,000 New Y o r k ................... ........... 1,479,185,000 851,607,000 1,656,982,000 773,291,000 Philadelphia................. ........... 26,929,000 14,897,000 13,734,000 5,734,000 Cleveland ...................... ........... 32,621,000 32,086,000 30,849,000 27,024,000 Richmond ................... ........... 15,962,000 14,692,000 21,555,000 6,555,000 A t la n t a .......................... ........... 48,928,000 26,683,000 41,607,000 15,969,000 ........................ ........... 274,422,000 122,230,000 311,948,000 48,248,000 St. Louis ...................... ........... 60,866,000 45,596,000 52,734,000 37,834,000 M in n ea p olis................. ........... 22,464,000 17,894,000 13,155,000 6,805,000 Kansas C i t y ................. ........... 41,796,000 31,751,000 15,648,000 15,137,000 Dallas ............................ ........... 18,223,000 14,223,000 12,637,000 7,367,000 San F r a n c is c o ............. ........... 158,474,000 113,259,000 189,858,000 45,488,000 T otal............... ........... $2,206,684,000 Chicago $1,300,482,000* $2,376,734,000 a Includes $263,189,000 noncompetitive tenders accepted at the average price of 98.674. b Includes $157,128,000 noncompetitive tenders accepted at the average price of 97.201. $1,000,479,000b
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