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WAR BORROWING

passed the revenue act of March 3, 1917, em-
powered the Secretary of the Treasury to borrow
from time to time “ such sum or sums as, in his
judgment, may be necessary to meet public ex-
penditures, and to issue therefor certificates of in-
debtedness in such form and in such denominations
as he may prescribe.” The rate of interest to be
paid might not exceed three per cent.; the period
of maturity, one year; and the sum at any time out-
standing, $300,000,000. The provision limiting
the denomination of the certificates to a minimum
of $50 present in the older acts of 1898 and 1909 —
a curious reminder of the lapse of the certificate of
indebtedness into a circulating bill of credit in times
past — was omitted; but there seems no reason to
suppose that this omission, fraught with hypotheti-
cal possibilities, had in view any other purpose than
the wider discretion of the Secretary of the
Treasury.

Under this authority, “ in anticipation of the cor-
poration and individual income taxes due in June,
1917,” the Treasury on March 27, 1917, borrowed
$50,000,000 from the twelve Federal Reserve Banks
by an issue of two per cent., ninety days certificates
of indebtedness. The operation was carried out by
direct purchase on the part of the Banks as fiscal
agents of the Government summoned to invest in
short-term obligations issued in anticipation of
revenue. The total amount subscribed was $66,-
650,000, of which $50,000,000 was actually allot-
ted.6

0 See Commercial and Financial Chronicle, March 31, 1917,
p. 1209, for text of offering.