﻿THE PRESENT

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rowings, primarily from the member banks of the
Federal Reserve System but to the extent possible
from investors — such floating indebtedness being
liquidated by the issue at intervals of long-term
funded loans. The certificate of indebtedness be-
came thus, not like the contemplated issue of the
Spanish-American War, an initial expedient to put
the Treasury in funds until the proceeds of newly
authorized loans and taxes became available, but an
habitual borrowing device analogous to but not
identical with the treasury bill of English finance.
Giving way periodically to a funding or liquidating
loan, the certificate of indebtedness was resorted to
promptly thereafter in renewal of the borrowing
cycle.

There was no formal statement as to the larger
purpose which the certificate of indebtedness was
designed to serve. The report of the Ways and
Means Committee accompanying the introduction
of the Liberty Loan bill in the House of Repre-
sentatives merely set forth that:

“ In view of the fact that a very large portion of the
taxes now levied and proposed to be levied at a future
date will be payable yearly, and therefore will not be
capable of yielding a continual flow of revenue into the
Treasury, your committee deem it advisable to recom-
mend the authorization of the issuance of $2,000,000,000
worth of certificates of indebtedness, payable within one
year, to the end that the Treasury may at all times have
ample means of securing funds to meet the immediate
needs of the Government.”

This intention was repeated in the announcement
of the Secretary of the Treasury on April 20, 1917,
that: