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FEDERAL RESERVE BANK OF N E W YORK Fiscal A gent o f the United States I" Circular No. 6 0 6 5 "I L November 22, 1967 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,500,000,000 of 91-Day Bills, Additional Amount, Series Dated Feb. 28,1967, Due Feb. 29, 1968 (To Be Issued November 30, 1967) $1,000,000,000 of 183-Day Bills, Additional Amount, Series Dated May 31, 1967, Due May 31, 1968 (To Be Issued November 30, 1967) To A ll Incorporated Banks and Trust Companies, and Others Concerned, in the Second Federal Reserve D istrict: Following is the text of a notice issued by the Treasury Department, released for publication today at 4 p.m., Eastern Standard time: The Treasury Department, by this public notice, invites tenders for tw o series of Treasury bills to the aggregate amount of $2,500,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing N ovem ber 30, 1967, in the amount of $3,801,885,000, as follow s: 91-day bills (to maturity date) to be issued N ovem ber 30, 1967, in the amount of $1,500,000,000, or thereabouts, representing an additional amount of bills dated F eb ruary 28, 1967, and to mature February 29, 1968, origi nally issued in the amount of $901,029,000 (additional amounts of $500,040,000 and $1,001,441,000 were issued May 31, 1967, and A ugust 31, 1967, respectively), the additional and original bills to be freely interchangeable. 183-day bills (to maturity date) to be issued Novem ber 30, 1967, in the amount of $1,000,000,000, or thereabouts, representing an additional amount of bills dated May 31, 1967, and to mature May 31, 1968, originally issued in the amount of $900,146,000 (an additional $500,686,000 was issued A ugust 31, 1967), the additional and original bills to be freely interchangeable. Im m ediately after the closing hour, tenders w ill be opened at the Federal R eserve Banks and Branches, follow ing which public announcem ent will be made by the Treasury D epartm ent of the amount and price range of accepted bids. T hose sub m itting tenders w ill be advised of the acceptance or rejection thereof. T he 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 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. Settlem ent for accepted tenders in accordance with the bids m ust be made or completed at the Federal R eserve Bank on N ovem ber 30, 1967, in cash or other im m ediately available funds or in a like face amount of Treasury bills maturing N ovem ber 30, 1967. Cash and exchange tenders will receive equal treatment. Cash adjustm ents w ill be made for differences betw een the par value of maturing bills accepted in exchange and the issue price of the new bills. The bills of both series w ill be issued on a discount basis under com petitive and noncom petitive bidding as hereinafter provided, and at maturity their face amount will be payable w ithout interest. T hey w ill 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 (m aturity value). T he incom e 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 R evenue Code of 1954. The 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. 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 Sections 454(b) and 1221(5) of the Internal Revenue Code of 1954, the amount of discount at which bills issued here under 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 ccordingly, the owner of Treasury bills (other than life insurance com panies) issued hereunder need include in his incom e tax return only the difference between the price paid for such bills, w hether on original issue or on subsequent purchase, and the amount actually received either upon sale or redemption at maturity during the taxable year for which the return is made, as ordi nary gain or loss. Tenders will be received at Federal R eserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern Stand ard time, Monday, N ovem ber 27, 1967. Tenders w ill not be received at the Treasury Department, W ashington. 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 form s and forwarded in the special envelopes which w ill be supplied by Federal R eserve Banks or Branches on application therefor. Banking institutions generally may submit tenders for account of customers, provided the names of the custom ers 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 w ithout deposit from incorporated banks and trust companies and from responsible and recognized dealers in investm ent securities. Tenders from others m ust be accompanied by paym ent of 2 percent of the face amount of Treasury bills applied for, unless the tenders are accompanied by an express guaranty of paym ent by an incorporated bank or trust company. Treasury D epartm ent 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. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Standard time, Monday, November 27 1967, 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. Paym ent for the Treasury bills cannot be made by credit through the Treasury T a x and Loan Account. Settlem ent m ust 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 November 24, 1967, representing an additional amount of bills dated August 24, 1967, m aturing February 23, 1968; and 181-day’bills dated Novenv ber 24, 1967, m aturing May 23, 1968) are shown on the reverse side of this circular. A lfred H a y e s, President. Please note th a t the Treasury bills m aturing May 31, 1968, will be 183-day bills. (o v e r ) RESULTS OF L A ST W E E K L Y O F FE R IN G OF T R E A S U R Y BILLS (T W O SERIES TO B E ISSU ED NO VEM BER 24, 1967) R ange of A ccepted C om petitive Bids 91-Day Treasury Bills M aturing February 23,1968 181-Day Treasury Bills M aturing M ay 23,1968 Price Approx. equiv. annual rate H i g h .......................... ............. 98.751 4.941% 97.255a 5.460% .......................... ............. 98.735 5.004% 97.204 5.561% Average ................... ............. 98.739 4.989% 1 97.226 5.517%! Low Approx. equiv. annual rate Price a E xcepting one tender of $6,000. 1 T hese rates are on a bank discount basis. T he equivalent coupon issue yields are 5.14 percent for the 91-day bills, and 5.77 percent for the 181-day bills. v,;v k_..: (15 percent of the amount of 91-day bills bid for at the low price was accepted.) (49 percent of the amount of 181-day bills bid for at the low price was accepted.) T otal Tenders A p p lied for and Accepted (B y Federal Reserve Districts) 91-Day Treasury Bills M aturing February 23,1968 ........... $ 17,641,000 Applied for Accepted Applied for D istrict 181-Day Treasury Bills M aturing M ay 23,1968 $ 7,641,000 $ 16,707,000 Accepted $ 16,707,000 2,237,449,000 1,095,881,000 1,685,899,000 708,459,000 35,021,000 13,021,000 15,604,000 5,804,000 57,992,000 15,992,000 34,308,000 32,308,000 19,918,000 12,068,000 13,019,000 6,019,000 32,781,000 22,518,000 21,710,000 21,410,000 265,963,000 63,626,000 213,142,000 49,842,000 41,213,000 29,313,000 22,018,000 21,318,000 22,997,000 11,197,000 17,112,000 8,592,000 Kansas City ................. 17,330,000 17,330,000 10,821,000 10,721,000 Dallas 24,054,000 14,054,000 18,146,000 10,636,000 ............. 265,554,000 197,754,000 220,944,000 108,194,000 ...................... $3,037,913,000 Chicago .......................... Minneapolis ................. ............................ San Francisco T otal ........ $1,500,395,000b $2,289,430,000 b Includes $199,417,000 noncompetitive tenders accepted at the average price of 98.739. c Includes $122,083,000 noncompetitive tenders accepted at the average price of 97.226. $1,000,010,000c