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FED ER AL RESERVE BANK O F NEW YORK Fiscal Agent of the United States rCircular No. L *1 6180 June 19, 1968 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,600,000,000 of 91*Day Bills, Additional Amount, Series Dated March 28,1968, Due September 26,1968 (To Be Issued June 27, 1968) $1,100,000,000 of 182-Day Bills, Dated June 27, 1968, Due December 26, 1968 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 re a su ry D epartm en t, b y this pu b lic n otice, invites ten ders fo r tw o series o f T rea su ry bills to the a g g reg a te a m ou n t o f $2,700,000,000, o r th ereabouts, fo r cash and in ex ch a n ge fo r T re a s u ry bills m a tu rin g June 27, 1968, in the a m ou n t o f $2,610,998,000, as fo llo w s : 9 1-d ay bills (to m aturity date) to be issued June 27, 1968, in the a m ou n t o f $1,600,000,000, o r thereabouts, rep re senting an addition al a m ou n t o f b ills dated M a rch 28, 1968, and to m ature S ep tem ber 26, 1968, orig in a lly issued in the a m ou n t o f $1,000,527,000, the addition al and o rigin a l b ills to be freely in terch angeable. 182-day bills, fo r $1,100,000,000, o r th ereabouts, to be dated June 27, 1968, and to m ature D e ce m b e r 26, 1968. T h e bills o f b oth series w ill be issued on a d iscou n t basis under co m p etitive and n on com p etitiv e b id d in g as hereinafter p rovid ed , and at m aturity their face a m ou n t w ill be payable w ith o u t interest. T h e y w ill be issued in bearer fo rm on ly, and in den om in a tion s o f $1,000, $5,000, $10,000, $50,000, $100,000, $500,000 and $1,000,000 (m a tu rity v a lu e ). T e n d e rs w ill b e receiv ed at F ed eral R eserve B anks and B ran ch es up to the clo s in g hour, on e-th irty p.m ., E astern D a y lig h t S a vin g tim e, M on d a y , June 24, 1968. T en d ers w ill n o t be receiv ed at the T re a su ry D epartm en t, W a s h in g to n . E ach ten der m u st be fo r an even m ultiple o f $1,000, and in the case o f com p etitive tenders the price offered m u st be exp ressed on the basis o f 100, w ith n ot m ore than three decim als, e.g., 99.925. F ra ction s m a y n ot be used. It is u rged that tenders b e m ade on the printed fo rm s and forw a rd ed in the special e n velop es w h ich w ill be supplied b y F ederal R eserve B anks o r B ran ch es on a pp lication th erefor. B a n k in g in stitu tions g en era lly m a y subm it ten ders fo r a cco u n t o f cu stom ers, p ro vid ed the nam es o f the cu stom ers are set fo rth in such tenders. O th ers than b a n k in g institutions w ill n ot be perm itted to subm it tenders ex cep t fo r their ow n a ccou nt. T e n d e rs w ill be receiv ed w ith ou t dep osit from in corp ora ted banks and trust com p a n ies and from respon sible and recog n ized dealers in in vestm ent securities. T en d ers from oth ers m u st be a ccom p a n ied b y paym ent o f 2 p ercen t o f the face am ou nt o f T re a su ry bills applied for, unless the ten ders are a ccom p a n ied b y an exp ress gu aranty o f paym ent b y an in corp ora ted bank or trust com p a n y . Im m ed ia tely after the clo s in g hour, tenders w ill be open ed at the F ed eral R e se rv e B anks and B ran ches, fo llo w in g w h ich p u b lic a n n ou n cem en t w ill be m ade b y the T re a s u ry D ep a rtm en t o f the a m ou n t and price ra n ge o f a ccep ted bids. T h o s e su b m ittin g ten ders w ill be advised o f th e a ccep ta n ce o r re je ctio n th ereof. T h e S ecreta ry o f the T r e a s u ry e x p ressly reserves the righ t to a ccep t or re je ct a n y o r all tenders, in w h o le o r in part, and his a ction in any such resp ect shall be final. S u b je ct to these reservations, n on com p etitiv e ten ders fo r each issue fo r $200,000 o r less w ith ou t stated p rice fro m a n y on e b idd er w ill be a ccep ted in full at the average p rice (in three d ecim a ls) o f a ccep ted com p etitive bids fo r the resp ective issues. S ettlem ent fo r a ccep ted tenders in a cco rd a n ce w ith the bids m u st b e m ade o r com p leted at the F ed eral R eserve B ank on June 27, 1968, in cash o r oth er im m ediately available fu n ds o r in a like fa ce a m ou n t o f T rea su ry bills m a tu rin g June 27, 1968. Cash and ex ch a n ge tenders w ill receive equal treatm ent. Cash a d ju st m en ts w ill be m ade fo r d ifferen ces b etw een th e par valu e o f m atu rin g bills a ccep ted in ex ch a n ge and the issue p rice o f the n ew bills. T h e in co m e derived fro m T re a s u ry bills, w h eth er interest o r gain fro m the sale o r oth er d isp osition o f the bills, d o e s n ot have any exem ption , as such, and loss fro m th e sale o r o th er d isp osition o f T rea su ry bills d oes n ot have any special treat m ent, as such, under the In tern al R even u e C od e o f 1954. T h e b ills are su b ject to estate, inheritance, g ift o r oth er e x cise taxes, w h eth er F ederal o r State, but are ex em p t fro m all ta x a tion n o w o r hereafter im p osed on the principal o r interest th ereof b y any State, or any o f the p ossession s o f the U n ited States, or b y any loca l ta x in g au th ority. F o r pu rp oses o f taxation the a m ou n t o f discou n t at w h ich T re a s u ry b ills are orig in a lly sold b y the U n ited States is con sid ered to be interest. U n d er S ection s 4 5 4 (b ) and 1221(5) o f the In tern al R e ven u e C od e o f 1954, the a m ou n t o f d iscou n t at w h ich bills issued h ereun der are sold is n ot con sid ered to a ccru e until such bills are sold, red eem ed or oth erw ise d isp osed of, and such bills are exclu d ed fro m con sidera tion as capital assets. A c c o r d in g ly , the ow n e r o f T rea su ry bills (o th e r than life insurance c o m pan ies) issued hereunder need in clude in his in co m e ta x return o n ly the differen ce betw een the p rice paid fo r such bills, w h eth er on origin a l issue or on subsequen t pu rch ase, and the a m ou n t a ctu ally receiv ed either u pon sale o r red em p tion at m atu rity du rin g the taxable yea r fo r w h ich the return is m ade, as ord in a ry gain or loss. T rea su ry D epa rtm en t C ircular N o . 418 (cu rren t re v is io n ) and this n otice p rescrib e the term s o f the T re a s u ry bills and g ov ern the con d ition s o f their issue. C op ies o f the circu la r m a y be ob ta in ed fro m any F ed eral R eserv e B ank o r B ran ch. This Bank will receive tenders for both series up to 1:30 p.m., Eastern Daylight Saving time, Monday, June 24, 1968, 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 sub mitted 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 of Treasury bills (91-day bills to be issued June 20, 1968, representing- an additional amount of bills dated March 21, 1968, maturing September 19, 1968; and 182-day bills dated June 20 1968 maturing December 19, 1968) are shown on the reverse side of this circular. A lfred H ayes, President. (o v e r ) RESULTS OF LAST W EEKLY OFFERING OF TREASURY BILLS (TW O SERIES TO BE ISSUED JUNE 20, 1968) Range of Accepted Competitive Bids 91-Day Treasury Bills 182-Day Treasury Bills Maturing September 1 9 ,1 9 6 8 Maturing December 1 9 ,1 9 6 8 Price Approx. equiv. annual rate Price Approx. equiv. annual rate High............... 98.595 5.558% 97.170 5.598% Low ............... 98.584 5.602% 97.142 5.653% Average............ 98.590 5.578%x 97.152 5.633%! 1 These rates are on a bank discount basis. T he equivalent coupon issue yields ;are 5.74 percent for the 91-day bills, an 5.88 percent for the 182-day bills. (94 percent of the amount of 182-day bills bid for at the low price was accepted.) (60 percent of the amount of 91-day bills bid for at the low price was accepted.) Total Tenders Applied for and Accepted (By Federal Reserve Districts) District 91-Day Treasury Bills 182-Day Treasury Bills Maturing September 19, 1968 Maturing December 19, 1968 Accepted Applied for Boston ................ $ 15,341,000 $ 15,341,000 Applied for $ 2,872,000 Accepted $ 2,872,000 N e w Y o r k .............. 1,776,769,000 1,112,769,000 1,363,095,000 768,595,000 Philadelphia ............ 28,222,000 16,222,000 16,434,000 8,434,000 Cleveland............... 46,661,000 46,661,000 28,027,000 28,027,000 Richmond .............. 19,529,000 17,029,000 9,216,000 8,716,000 46,070,000 36,042,000 34,872,000 25,622,000 Chicago ................ 372,093,000 147,993,000 277,557,000 89,037,000 St. Louis............... 66,76 1,000 56,941,000 49,241,000 41,921,000 Minneapolis............. 22,294,000 21,044,000 21,722,000 20,692,000 Kansas City............. 40,099,000 31,099,000 20,108,000 15,748,000 Dallas................. 27,856,000 17,856,000 17,764,000 8,764,000 San Francisco........... 128,050,000 81,101,000 127,027,000 81,827,000 Atlanta................ T o ta l ................................ $2,589,745,000 $1,600,098,000a a Includes $283,964,000 noncompetitive tenders accepted at the average price of 98.590. b Includes $142,208,000 noncompetitive tenders accepted at the average price of 97.152. $1,967,935,000 $1,100,255,000b