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FED ERA L R E SE R V E BANK OF NEW Y O R K Fiscal Agent of the United States f Circular No. 6 2 1 2 ”1 L September 11, 1968 .J O FFERIN G OF TW O SERIES OF T R E A SU R Y BILLS .,600,000,000 of 91-Day Bills, Additional Amount, Series Dated June 20, 1968, Due Dec. 19, 1968 (To Be Issued September 19, 1968) $1,100,000,000 of 182-Day Bills, Dated September 19, 1968, Due March 20, 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 Departm ent, b y this public notice, invites tenders for two series o f Treasury bills to the aggregate amount o f $2,700,000,000,or thereabouts, for cash and in exchange for Treas ury bills maturing September 19,1968, in the amount of $2,600,531,000, as follows: 91-day bills (to m aturity date) to be issued September 19, 1968, in the am ount o f $1,600,000,000, or thereabouts, rep resenting an additional am ount o f bills dated June 20, 1968, and to mature D ecem ber 19, 1968, originally issued in the am ount o f $1,100,851,000, the additional and original bills to be freely interchangeable. 182-day bills, for $1,100,000,000, or thereabouts, to be dated September 19, 1968, and to mature M arch 20, 1969. The bills o f both series will be issued on a discount basis under com petitive and noncom petitive bidding as hereinafter provided, and at maturity their face am ount will be payable without interest. T h ey will 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 (m aturity 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 on da y, Septem ber 16, 1968. Tenders will not be received at the Treasury D epartm ent, W ashington. Each tender must be for an even multiple o f $1,000, and in the case o f com petitive tenders the price offered must be expressed on the basis o f 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 forms and forwarded in the special envelopes which will be supplied b y Federal Reserve Banks or Branches on application therefor. Banking institutions generally may subm it tenders for account o f customers, provided the names o f the customers are set forth in such tenders. Others than banking institutions will not be permitted to subm it 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 must be accom panied by paym ent o f 2 percent o f the face am ount of Treasury bills applied for, unless the tenders are accom panied by an express guaranty o f paym ent b y an incorporated bank or trust com pany. Im m ediately after the closing hour, tenders will be opened at the Federal Reserve Banks and Branches, following which public announcem ent will be made by the Treasury D epartm ent o f the amount and price range o f accepted bids. Those sub mitting tenders will be advised o f the acceptance or rejection thereof. The Secretary o f 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 will be accepted in full at the average price (in three decimals) o f accepted com petitive bids for the respective issues. Settlem ent for accepted tenders in accordance with the bids must be made or com pleted at the Federal Reserve Bank on Septem ber 19, 1968, in cash or other im m ediately available funds or in a like face amount o f Treasury bills maturing September 19, 1968. Cash and exchange tenders will receive equal treatment. Cash adjustments will be made for differences between the par value o f maturing bills accepted in exchange and the issue price o f the new bills. T h e incom e derived from Treasury bills, whether interest or gain from the sale or other disposition o f the bills, does not have any exem ption, as such, and loss from the sale or other disposition o f Treasury bills does not have any special treat ment, as such, under the Internal Revenue C ode o f 1954. The bills are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exem pt from all tax ation now or hereafter imposed on the principal or interest thereof by any State, or any o f the possessions o f the United States, or b y 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 o f 1954, the amount o f 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 o f 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, whether on original issue or on subsequent purchase, and the am ount actually received either upon sale or redem ption at m aturity during the taxable year for which the return is made, as ordinary gain or loss. Treasury D epartm 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 m ay 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, September 16, 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 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 September 12, 1968, representing an additional amount of bills dated June 13, 1968, maturing December 12, 1968; and 182-day bills dated September" 12 1968, maturing March 13, 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 OFFERING O F T R E A S U R Y BILLS ( T W O SERIES T O BE ISSUED S E P T E M B E R 12, 1968) Range of Accepted Competitive Bids 91-Day Treasury Bills Maturing December 12, 1968 Price 182-Day Treasury Bills Maturing March 13, I960 Approx. equiv. annual rate Price Approx. equiv. annual rate High................. 98.682 5.214% 97.352a 5.238% Lo w .................. 98.665 5.281% 97.314 5.313% Average............... 98.674 5.246%* 97.332 5.277%* a Excepting one tender of $385,000. 1 These rates are on a bank discount basis. 5.50 percent for the 182-day bills. T he e quivalent coupon issue yields are 5.39 percent for the 91-day bills, (52 percent of the amount of 182-day bills bid for at the low price was accepted.) (32 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) 182-Day Treasury Bills 91-Day Treasury Bills Maturing December 12, 1968 Boston...... ...... $ 27,156,000 Applied for Accepted Applied for District Maturing March 13, 1969 $ 17,156,000 $ 3,799,000 Accepted $ 3,799,000 New York... ...... 2,154,541,000 1,119,621,000 1,608,710,000 817,550,000 Philadelphia.... ..... 32,746,000 22,746,000 16,375,000 16,375,000 Cleveland.... 34,214,000 34,214,000 34,949,000 33,949,000 15,257,000 15,257,000 5,700,000 5,700,000 Atlanta...... 53,183,000 47,007,000 19,144,000 15,144,000 Chicago..... 187,652,000 185,112,000 129,868,000 104,620,000 St. Louis..... 54,527,000 38,187,000 28,917,000 25,917,000 Minneapolis.... 30,981,000 30,981,000 21,426,000 21,426,000 Kansas Citv.... 43,638,000 43,638,000 20,112,000 20,112,000 Dallas....... 27,743,000 20,063,000 20,293,000 16,293,000 San Francisco. 77,415,000 26,415,000 59,163,000 19,163,000 $1,968,456,000 $1,100,048,000' Richmond... T otal. .. ... $2,739,053,000 $1,600,397,000b b Includes $322,881,000 n oncom petitive tenders accepted at the average price o f 98.674. c Includes $128,730,000 noncom petitive tenders accepted at the average price o f 97.332.