man- agement bills. These bills were issued on August 31, 1999 at a bank dis- count rate of 5.18% and matured on September 15, 1999. Cash management bills are issued to bridge seasonal fluctuations in the Trea- surys cash position. Owing to their variable issuance and maturity, cash management bills can mature on any business day. Since August 1998, all Treasury securities are sold and transferable in increments of $1,000. Previously, Treasury bills were available in mini- mum purchase amounts of $10,000. Treasury bills are issued in book- entry form. This means that the investor receives only a receipt as evi- dence of ownership instead of a paper certificate. The primary advantage of book entry is ease in transferring ownership of the security. Interest income from Treasury securities is subject to federal income taxes but is exempt from state and local income taxes.       THE TREASURY AUCTION PROCESS   The Public Debt Act of 1942 grants the U.S. Treasury considerable latitude in deciding on the terms for a marketable security.3An issue may be sold on an interest-bearing or discount basis and may be sold on a competitive basis or other basis, at whatever prices the Secretary of the Treasury may estab- lish. However, Congress imposes a restriction on the total amount of bonds outstanding. Although Congress has granted an exemption to this restric- tion, there have been times when the Congress failure to extend the exemp- tion has resulted in the delay or cancellation of a Treasury security offering.   Auction Schedule As noted, the U.S. Treasury maintains a regular and predictable schedule for their security offerings. Deviations from normal borrowing patterns are announced ahead of time so that market participants can digest the news. The Treasury believes its borrowing costs will be less if it provides buyers of Treasury securities stable expectations regarding new issues of its debt. The current auction cycles are as follows. There are weekly 4-week (1-month), 3-month, and 6-month bill auctions. With the exception of holidays and special circumstances, the 4-week bill offering is announced on Mondays and is auctioned on Tuesdays. Correspondingly, 3-month   3Nonmarketable Treasury securities are issued directly to U.S. Government accounts and trust funds.     and 6-month bill offerings are announced on Thursdays and are auc- tioned the following Monday. All bills are issued on Thursday. Because of holidays, the maturities of each bill may be either longer or shorter by one