﻿THE PAST

7

from some convulsion that has made normal financ-
ing impossible, the certificate of indebtedness is now
being used as a recurrent device for effecting short
time borrowing from the banks and to some extent
from investors in anticipation of the proceeds of
loans and taxes, being thereafter funded into or
extinguished out of the proceeds of such loans and
taxes.

But withal, there are incidents in our earlier use
of short-term obligations that offer instruction in
the present juncture. We are still far from the
time wherein it will be possible to estimate inde-
pendently the full effect of our present fiscal policy.
Until then the procedure actually adopted by the
Treasury in this particular can profitably be ex-
amined with regard to what has heretofore tran-
spired, even though present conditions and require-
ments are very different.

The use of the term “ treasury certificate of in-
debtedness ”— in preference to “ treasury note,”
“ treasury bill,” “ bill of credit,” “ United States
note”—to designate an instrument of short-term
borrowing is a matter of statutory designation and
administrative practice rather than of judicial pre-
cision or text-book definition.4 With regard to
fiscal service and economic effect as well as to actual
employment in the financial experience of the

* Even in the present financing the terms “certificate of in-
debtedness,” “ treasury certificate of indebtedness,” and
“ United States certificate of indebtedness ” have been used
more or less indiscriminately in the administrative texts. On
the whole “ ‘ treasury certificate of indebtedness ’ is probably
the term most commonly used by the treasury officials ”— and
there has been increasing disposition to formalize this term.