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FED ER AL RESERVE BANK O F N EW YORK Fiscal Agent of the United States Circular No. 6 1 9 1 July 24, 1968 OFFERING OF TWO SERIES OF TREASURY BILLS $1,600,000,000 of 91-Day Bills, Additional Amount, Series Dated October 31, 1967, Due October 31,1968 (To Be Issued August 1, 1968) $1,100,000,000 of 182-Day Bills, Dated August 1, 1968, Due January 30, 1969 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 Treasury Department, by this public notice, invites tenders for tw o series o f Treasury bills to the aggregate amount of $2,700,000,000, or thereabouts, for cash and in ex change for Treasury bills maturing A ugust 1, 1968, in the amount of $2,600,420,000, as follow s: 91-day bills (to maturity date) to be issued August 1, 1968, in the amount of $1,600,000,000, or thereabouts, representing an additional am ount of bills dated O cto ber 31, 1967, and to mature O ctober 31, 1968, originally issued in the am ount o f $1,001,770,000 (additional amounts of $500,170,000 and $1,100,119,000 were issued January 31, 1968, and M ay 2, 1968, respectively), the additional and original bills to be freely interchange able. 182-day bills, for $1,100,000,000, or thereabouts, to be dated August 1, 1968, and to mature January 30, 1969. T he bills o f both series w ill be issued on a discount basis under competitive and noncom petitive bidding as hereinafter provided, and at maturity their face am ount will be payable without interest. T h ey w ill be issued in bearer form only, and in denominations o f $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 D aylight Saving time, M onday, July 29, 1968. Tenders will not be received at the Treasury Departm ent, W ashington. Each tender must be for an even multiple of $1,000, and in the case o f com petitive tenders the price offered must be ex pressed on the basis o f 100, with not m ore than three deci mals, 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 will be supplied by Federal Reserve Banks or Branches on application therefor. Banking institutions generally may submit tenders for account o f 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 ow n ac count. Tenders will be received w ithout deposit from in corporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accom panied by payment o f 2 percent of the face amount o f Treasury bills applied for, unless the tenders are accom panied by an express guaranty o f payment by an incorporated bank or trust company. Im m ediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, follow in g which public announcement will be made by the Treasury D epart ment o f the am ount and price range o f accepted bids. T h ose submitting tenders w ill be advised o f the acceptance or rejec tion thereof. T h e Secretary o f the Treasury expressly re serves 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) o f accepted com petitive bids for the respective issues. Settlement for accepted tenders in a ccord ance with the bids must be made or com pleted at the Federal Reserve Bank on August 1, 1968, in cash or other immediately available funds or in a like face am ount o f Treasury bills maturing August 1, 1968. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value of maturing bills accepted in exchange and the issue price o f the new bills. T he incom e derived from Treasury bills, whether interest or gain from the sale or other disposition o f the bills, does not have any exemption, as such, and loss from the sale or other disposition o f Treasury bills does not have any special treatment, as such, under the Internal Revenue Code of 1954. T he bills are subject to estate, inheritance, gift or other ex cise taxes, whether Federal or State, but are exem pt from all taxation now or hereafter im posed on the principal or inter est thereof by any State, or any o f the possessions o f the United States, or by any local taxing authority. For purposes o f taxation the amount o f discount at which Treasury bills are originally sold by the United States is considered to be interest. Under Sections 454(b) and 1221(5) o f 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 ccordin gly, the ow ner o f Treasury bills (other than life in surance com panies) issued hereunder need include in his in com e tax return only the difference between the price paid for such bills, whether 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 ordinary gain or loss. Treasury Departm ent Circular N o. 418 (current revision) and this notice prescribe the terms o f the Treasury bills and govern the conditions o f their issue. Copies o f 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 Daylight Saving time, Monday, July 29 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 the enclosed envelope marked “Tender for Treasury Bills.” Tenders may be submitted by telegraph, subject to written confirmation; they may not be submitted by telephone. Payment fo r 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 July 25 1968 renre^ntinoadditional amount of bills dated April 25, 1968, maturing October 24, 1968; and 182-day bills dated Tulv 25 1968 maturing January 23, 1969) are shown on the reverse side of this circular. ’ ’ A lfred H a y e s, President. ( over) RESULTS OF LAST W E E K L Y O FFE R IN G OF T R E A SU R Y BILLS ( T W O SERIES T O BE ISSUED JULY 25, 1968) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing October 2 4 ,1 9 6 8 182-Day Treasury Bills Maturing January 2 3 ,1 96 9 Price Approx. equiv. annual rate High ................ 98.671 5.258% 97.294 5.353% L o w ................. 98.659 5.305% 97.281 5.378% Average.............. 98.662 5.293%! 97.287 5.366%! Price Approx. equiv. annual rate 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 5.44 percent for the 91-day bills, and 5.59 percent for the 182-day bills. (68 percent of the amount of 91-day bills bid for at the low price was accepted.) (9 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 October 2 4 ,1 9 6 8 District Accepted Applied for Boston .......... .... $ 26,603,000 182-Day Treasury Bills Maturing January 2 3 ,1 96 9 $ 16,603,000 Applied for $ 3,594,000 Accepted $ 3,594,000 N e w Y o r k ........ .... 2,012,243,000 1,164,940,000 1,612,285,000 810,315,000 Philadelphia............ 32,419,000 20,419,000 13,731,000 5,631,000 33,639,000 33,639,000 22,390,000 17,680,000 25,863,000 21,723,000 18,760,000 10,260,000 48,523,000 36,199,000 28,748,000 12,491,000 415,617,000 130,917,000 387,938,000 136,958,000 21,365,000 Cleveland ......... .... Richmond......... .... Atlanta........... .... Chicago.......... .... St. Louis ......... ... 62,792,000 43,292,000 38,515,000 Minneapolis ........ ... 19,450,000 14,060,000 19,957,000 10,457,000 Kansas City........ ... 38,415,000 34,415,000 28,748,000 22,998,000 Dallas ............ ... 21,993,000 16,993,000 14,974,000 9,974,000 130,815,000 67,713,000 175,660,000 38,387,000 San Francisco...... T o ta l ............... ... $2,868,372,000 $1,600,913,000* $2,365,300,000 a Includes $311,715,000 noncompetitive tenders accepted at the average price of 98.662. b Includes $135,225,000 noncompetitive tenders accepted at the average price of 97.287. $1,100,110,000b
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