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FED ER AL RESERVE BANK O F NEW YORK Fiscal Agent of the United States r Circular No. 6 2 1 1 *1 L September 4, 1968 J OFFERING OF TWO SERIES OF TREASURY BILLS $1,600,000,000 of 91-Day Bills, Additional Amount, Series Dated June 13,1968, Due December 12,1968 (To Be Issued September 12, 1968) $1,100,000,000 of 182-Day Bills, Dated September 12, 1968, Due March 13, 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: The Treasury Department, by this public notice, invites tenders for two series of Treasury bills to the aggregate amount of $2,700,000,000, or thereabouts, for cash and in exchange for Treasury bills maturing September 12, 1968, in the amount of $2,600,777,000, as follows: 91-day bills (to m aturity date) to be issued September 12, 1968, in the amount of $1,600,000,000, or thereabouts, representing an additional amount of bills dated June 13, 1968, and to mature December 12, 1968, originally issued in the amount of $1,100,121,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,100,000,000, or thereabouts, to be dated September 12, 1968, and to mature M arch 13, 1969. The bills of both series w ill be issued on a discount basis under competitive and noncompetitive bidding as hereinafter provided, and at m aturity their face amount w ill be payable without interest. T h e y 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). Tenders w ill be received at Federal Reserve Banks and Branches up to the closing hour, one-thirty p.m., Eastern D aylight Saving time, Monday, September 9, 1968. 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 competitive tenders the price offered must be expressed on the basis of 100, w ith not more than three decimals, e.g., 99.925. Fractions may not be used. I t is urged that tenders be made on the printed forms and forwarded in the special envelopes which w ill 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 w ill not be permitted to submit tenders except for their own account. Tenders w ill 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. Im m edia tely after the closing hour, tenders w ill be opened at the Federal Reserve Banks and Branches, following which public announcement w ill be made by the Treasury Departm ent of the amount and price range of accepted bids. Those sub m itting tenders w ill 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 reservations, noncompetitive tenders for each issue for $200,000 or less without stated price from any one bidder w ill 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 w ith the bids must be made or completed at the Federal Reserve Bank on September 12, 1968, in cash or other immediately available funds or in a like face amount of Treasury bills maturing September 12, 1968. Cash and exchange tenders w ill receive equal treatment. Cash adjustments w ill be made 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 Intern al Revenue Code of 1954. The bills are subject to estate, inheritance, g ift 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 Sections 454(b) and 1221(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 consideration as capital assets. Accordingly, the owner of Treasury bills (other than life insurance com panies) 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 subsequent purchase, and the amount actually received either upon sale or redemption at m aturity during the taxable year for which the return is made, as ordinary gain or loss. Treasury Departm ent Circular No. 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 Daylight Saving time, Monday, Septem ber 9, 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. Treasury bills. Settlement must be made in cash or other immediately available funds or in maturing Results of the last weekly offering of Treasury bills (91-day bills to be issued September 5, 1968, representing an additional amount of bills dated June 6, 1968, maturing December 5, 1968; and 182-day bills dated September 5, 1968, maturing March 6, 1969) are shown on the reverse side of this circular. A lfred H ayes, President. (o v e r ) RESULTS O F LAST W E E K L Y O F F E R I N G O F T R E A S U R Y BILLS ( T W O SERIES T O B E ISSUED S E P T E M B E R 5, 1968) Range of Accepted Competitive Bids 91-D ay Treasury Bills 182-Day Treasury Bills Maturing December 5 ,1 9 6 8 Maturing March 6 ,1 9 6 9 Price Approx. equiv. annual rate H i g h ....... .......... 98.693 5.171% 97.354a 5.234% Low ..... ........... 98.680 5.222% 97.343 5.256% Average ... .......... 98.687 5.194%! 97.346 5.250%! Price Approx. equiv. annual rate a Excepting one tender of $50,000. 1 These rates are on a bank discount basis. The equivalent coupon issue yields are 5.34 p ercen t for the 91-day bills, an 5.47 percent for the 182-day bills. (41 percent of the amount of 91-day bills bid for at the low price was accepted.) (46 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 182-Day Treasury Bills Maturing December 5 ,1 9 6 8 Maturing March 6 ,1 9 6 9 Applied for District ......... $ 28,642,000 Accepted $ 18,216,000 Applied for $ 17,955,000 Accepted $ 3,890,000 N ew Y o r k ...... ........ 1,958,808,000 1,156,258,000 2,053,020,000 764,046,000 Philadelphia ... ........ 26,334,000 18,384,000 13,920,000 3,722,000 ........ 28,712,000 28,712,000 26,597,000 12,241,000 ........ 8,208,000 8,208,000 4,042,000 3,442,000 ........ 46,075,000 34,075,000 25,336,000 8,384,000 Chicago ....... ......... 112,296,000 108,296,000 136,735,000 17,241,000 St. Louis....... ......... 70,796,000 59,911,000 53,726,000 33,222,000 Minneapolis ... ......... 23,981,000 22,772,000 21,165,000 5,565,000 Kansas City ... ........ 18,720,000 17,720,000 18,282,000 9,380,000 Dallas ........ ......... 26,951,000 17,361,000 20,477,000 9,173,000 San Francisco ... ........ 142,099,000 110,622,000 314,630,000 229,733,000 ___ ......... $2,491,622,000 T otal $1,600,535,000b $2,705,885,000 b In clu d es $242,347,000 n on com p etitiv e ten ders a ccep ted at the average price o f 98.687. c In clu d es $103,737,000 n on com p etitiv e tenders a ccep ted at the average price o f 97.346. $1,100,039,000c
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