Ill 
THE TREASURY 
Short-term borrowing is an accredited expedient 
of war financing. The Treasury must be put in 
ready command of large funds immediately upon 
the declaration of hostilities; and for the consid 
erable time elapsing before sources of extraordi 
nary revenue — war taxes and funded loans — be 
come productive there is likely to be need of an 
ticipatory borrowing. The excesses to be avoided 
are (i) undue reliance upon temporary loans in 
lieu of definitive revenue, with the possibility of em 
barrassing refunding operations at perhaps critical 
intervals; and (2) entry upon a policy of short 
term borrowing with insufficient banking machin 
ery, with the danger of descent to bills of credit 
and fiat notes. These conclusions may fairly be de 
scribed as in conformity with accepted fiscal theory 
and as realized in familiar fiscal practice. 
As employed by the United States in the present 
war, short-term obligations in the form of certifi 
cates of indebtedness have served a larger purpose. 
They have indeed been used in the traditional way, 
at the outset and to a very limited extent, to bridge 
over the initial interval until war loans and war 
taxes should become productive. But much beyond 
this, certificates of indebtedness have been continu- 
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