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FEDERAL RESERVE BANK OF N EW YORK Fiscal Agent of the United States r Circular N o. 6 2 0 4 "1 L A ugust 21, 1968 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,600,000,000 of 92-Day Bills, Additional Amount, Series Dated May 31, 1968, Due November 29, 1968 (To Be Issued August 29, 1968) $1,100,000,000 of 182-Day Bills, Dated August 29, 1968, Due February 27, 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 T re a su ry D epa rtm en t, b y this p u b lic notice, invites tenders fo r tw o series o f T rea su ry bills to the a ggreg a te am ou nt o f $2,700,000,000, o r thereabouts, for cash and in exch a n ge for T re a su ry bills m aturing A u g u s t 29, 1968, in the am ou nt o f $2,600,474,000, as fo llo w s : 92-day bills (to m aturity date) to be issued A u g u st 29, 1968, in the am ou nt o f $1,600,000,000, or thereabouts, rep resen tin g an addition al am ou nt o f bills dated M ay 31, 1968, and to m ature N o v e m b e r 29, 1968, origin a lly issued in the am ou nt o f $1,099,821,000, the additional and origin a l bills to be freely in terch angeable. 182-day bills, fo r $1,100,000,000, or thereabouts, to be dated A u g u s t 29, 1968, and to m ature F eb ru a ry 27, 1969. T h e bills o f b oth series w ill be issued on a discou n t basis under co m p etitive and n on com p etitiv e b id d in g as h ereinafter p rovid ed , an d at m aturity their face am ou nt w ill be payable w ith ou 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 va lu e). T e n d e rs w ill be receiv ed at F ederal 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, A u g u st 26, 1968. T en d ers w ill not be receiv ed at the T rea su ry D epartm en t, W a s h in g to n . E ach tender m ust be fo r an even m ultiple o f $1,000, and in the case o f com p etitive tenders the price o ffered m ust be exp ressed on the basis o f 100, w ith n ot m ore than three decim als, e.g., 99.925. F raction s m a y n ot be used. It is u rged that tenders be m ade on the printed form s and forw a rd ed in the special e n velop es w h ich w ill be supplied b y F ed era l R eserve Banks or B ra n ch es on a pp lication th erefor. B a n k in g institutions g en era lly m ay subm it tenders for a ccou n t o f cu stom ers, p rov id ed the nam es o f the cu stom ers are set forth in such tenders. O th ers than bankin g institutions w ill n ot be perm itted to subm it tenders ex cep t for their ow n accou n t. T e n d e rs w ill be received w ith ou t dep osit fro m in corp ora ted banks and trust com pan ies and from respon sib le and re cog n ized dealers in in vestm ent securities. T e n d e rs fro m oth ers m ust be a ccom p a n ied b y pa ym en t o f 2 percen t o f the face a m ou n t 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 pa ym en t b y an in corp ora ted bank or trust com p a n y . Im m edia tely after the clo s in g hour, tenders w ill be open ed at the F ed eral R e se rve B anks and B ran ches, fo llo w in g w h ich pu blic 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 ran ge o f a cce p te d bids. T h o s e su b m ittin g tenders w ill be advised o f the a ccep ta n ce or re je ctio n th ereof. T h e S ecreta ry o f the T rea su ry e x p ressly reserves the righ t to a ccep t or re je ct any or all tenders, in w h ole 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 for each issue fo r $200,000 or less w ith ou t stated price from any on e b idder w ill be a ccep ted in full at the a verage price (in three d ecim a ls) o f accep ted com p etitive bids for the resp ective issues. S ettlem en t for a ccep ted tenders in a ccord a n ce w ith the bids m ust be m ade or com p le te d at the F ed eral R eserve B ank on A u g u s t 29, 1968, in cash or oth er im m ediately available fun ds or in a like face am ou nt o f T rea su ry bills m aturing A u g u s t 29, 1968. Cash and ex ch a n ge ten ders w ill receive equal treatm ent. Cash a d ju st m ents w ill be m ade fo r d ifferen ces b etw een the par valu e o f m aturing b ills a ccep ted in exch a n ge and the issue p rice o f the new bills. T h e in com e derived fro m T rea su ry bills, w h eth er interest or gain fro m the sale or oth er d isp osition o f the bills, d oes n ot have any exem ption , as such, and loss fro m the sale o r oth er d isp osition o f T rea su ry bills d oes not 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 bills are su b ject to estate, inheritance, g ift o r oth er excise taxes, w hether F ed eral o r State, but are ex em p t fro m all ta x a tion n ow or hereafter im p osed on the principal or interest th ereof b y any State, or any o f the p ossession s o f the U n ited States, o r b y any loca l ta x in g authority. F o r pu rp oses o f taxation the a m ou n t o f d iscou n t at w h ich T re a s u ry bills are origin 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 Internal R even u e C od e o f 1954, the am ou nt o f d iscou n t at w h ich bills issued hereun 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 o f, and such bills are exclu d ed from con sidera tion as capital assets. A c c o r d in g ly , the ow n er o f T rea su ry bills (o th e r than life insurance c o m panies) issued hereunder need include in his in com e tax return o n ly the difference b etw een the price paid fo r such bills, w h eth er on original issue or on subsequen t pu rch ase, and the am ou nt a ctu ally receiv ed either upon sale or red em p tion at m aturity du rin g the taxable year fo r w hich 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 isio n ) and this n otice p rescrib e the term s o f the T re a s u ry bills and g o v e rn the con d ition s o f their issue. C opies o f the circu lar m ay be ob ta in ed fro m any F ed era l R eserv e B ank or B ran ch. This Bank will receive tenders for both series up to 1 :30 p.m., Eastern Daylight Saving time, Monday, August 26, 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 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 August 22, 1968, representing an additional amount of bills dated May 23, 1968, maturing November 21, 1968; and 182-day bills dated August 22 1968, maturing February 20, 1969) are shown on the reverse side of this circular. A lfr e d H ayes, President. ( oveb ) RESULTS OF LAST WEEKLY OFFERING OF TREASURY BILLS (TWO SERIES TO BE ISSUED AUGUST 22, 1968) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing Ntjvember 21,1968 182-Day Treasury Bills Maturing February 20,1969 Price Approx. equiv. annual rate H i g h ...................................... 98.713 5.091% 97.380 5.182% Low ...................................... 98.699 5.147% 97.352 5.238% Average ................................ 98.705 5.123%! 97.361 5.220%! Price Approx. equiv. annual rate 1 T h e se rates are on a bank d iscou n t basis. T h e equivalent cou p on issue yields are 5.26 percen t fo r the 91-day bills, and 5.44 p ercen t fo r the 182-day bills. (81 percent of the amount of 91-day bills bid for at the low price was accepted.) (49 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 November 21,1968 Applied for District Boston .......................... .......... $ 23,693,000 182-Day Treasury Bills Maturing February 20,1969 Accepted $ 23,693,000 Applied for $ 13,237,000 Accepted $ 12,237,000 New Y o r k .................... ........... 1,792,857,000 1,206,877,000 1,621,454,000 846,034,000 Philadelphia ................ .......... 25,877,000 13,877,000 12,419,000 4,419,000 .................... .......... 20,630,000 20,630,000 33,663,000 25,663,000 Richmond .................... .......... 20,768,000 14,768,000 9,394,000 3,394,000 ........................ .......... 41,383,000 32,123,000 30,235,000 19,735,000 Chicago ........................ .......... 139,042,000 132,212,000 107,468,000 66,388,000 St. L o u is ...................... .......... 40,188,000 27,208,000 20,750,000 11,410,000 ................ .......... 20,418,000 19,728,000 18,257,000 17,237,000 Kansas City ................ .......... 24,809,000 22,114,000 23,059,000 13,049,000 .......................... .......... 22,563,000 13,563,000 20,106,000 10,106,000 ............ 108,965,000 73,385,000 123,293,000 70,343,000 ...................... $2,281,193,000 Cleveland Atlanta Minneapolis Dallas San Francisco T otal $1,600,178,000a $2,033,335,000 a In clu d es $254,130,000 n on com p etitiv e tenders a ccep ted at the average price o f 98.705. b Includes $117,556,000 noncompetitive tenders accepted at the average price of 97.361. $1,100,015,000b