﻿WAR BORROWING

(F)	No recourse was had to certificates of
indebtedness from the Civil War to the revenue
legislation of the Spanish-American War. The
war revenue act of June 13, 1898, empowered the
Secretary of the Treasury to issue certificates of in-
debtedness in denominations of $50 and multiples,
bearing not more than three per cent, interest nor
of more than one year maturity and limited to a
total outstanding volume not exceeding $100,000,-
000. The obvious intention was that such short-
term borrowing should meet the Treasury’s extraor-
dinary needs until the proceeds of war taxes and
loans became available. As a matter of fact, the
prompt issue and immediate success 20 of the war
loan made it unnecessary to issue any of the cer-
tificates. The enabling act itself however remained
upon the statute books conferring permissive au-
thority upon the Secretary of the Treasury, and be-
came eventually the nucleus of later authorization
of short-term borrowing.

The panic of 1907 was the occasion of the final
issue of certificates of indebtedness prior to the
present war.21 To relieve the acute monetary
stringency, the Treasury transferred to the banks
as public deposits all available funds, so that by the
middle of November the available working balance
had been reduced to approximately $5,000,000,
making impossible further relief from this quarter.
Efforts were now directed to induce the banks —
“ hampered by the scarcity of bonds and the rapid

20	Commercial and Financial Chronicle, July 16, 1898.

21	Report of Secretary of Treasury, 1908, p. 21; Report of
Treasurer of United States, 1908, p. 154.