3°

WAR  BORROWING

ternational  situation.” 8  In  the  succeeding  fortnight ­
  history  moved  swiftly.  On  March  21,  1917,
President  Wilson  had  called  Congress  in  special  session ­
  two  weeks  earlier  than  originally  proposed  “  to
receive  a  communication  concerning  grave  matters
of  national  policy.”  On  April  6,  1917,  a  joint  resolution ­
  was  passed  by  Congress  declaring  that  a  state
of  war  with  the  Imperial  German  Government  had
been  forced  upon  the  United  States.
In  these  weeks  the  policy  of  the  Treasury  with
respect  to  the  huge  borrowings  which  were  then  immediately ­
  imminent  may  be  supposed  to  have
crystallized.  No  information  is  available  as  to  the
manner  in  which  the  determination  was  reached,
and  we  are  left  in  doubt  in  how  far  the  counsels  of
the  Federal  Reserve  Board,  intent  upon  avoiding
monetary  strain,  prevailed;  in  how  far  the  fiscal  experiences ­
  of  the  Allies  were  considered;  in  how
far  an  independent  program,  inspired  by  the  sheer
course  of  events,  was  formulated.  Certainly  the
procedure  adopted  can  fairly  be  described  in  the
light  of  our  own  financial  history  as  a  new  policy,
approximating  from  the  outset  the  European  and
notably  the  English  rather  than  the  American  system ­
  of  funding  and  tending  with  the  progress  of
borrowing  to  conform  more  and  more  closely  to
English  practice  —  then  still  in  vogue  but  destined
soon  to  be  abandoned.
The  characteristic  feature  of  this  new  policy  was
the  supply  of  treasury  funds  by  the  systematic  use
of  certificates  of  indebtedness  for  short  term  bor-9
  Commercial  and  Financial  Chronicle,  March  31,  1918,  p.
1209.