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WAR BORROWING

“ The man who buys Treasury certificates to the amount
of the taxes he will have to pay, and thereby anticipates
their payment, will do a wise and helpful thing not only
for himself but for his country, and will contribute in a
most definite and patriotic way to the triumph of America
in her mortal combat with the enemies of liberty and
democracy — the Kaiser’s legions of lust and license —
and share in the new glory of America’s vindicated ideals
of justice and humanity.”

The result was gravely disappointing. Between
August 20 and November 6 the total amount of
such certificates sold was only $157,552,500.
Whatever other reasons may have operated, the
low interest rate of the series doubtless played a
considerable part in checking sales. With the
money market “ pegged ” at six per cent, and the
four and a half per cent, loan anticipation cer-
tificates in direct competition there was little war-
rant for expecting a large absorption of the four
per cent, tax series.36

There have thus been emitted, in conjunction
with our war borrowing, thirty-one issues of cer-
tificates of indebtedness to an aggregate amount of
$12,692,559,500. Of these the initial issue was
nominally in anticipation of the proceeds of the
1917 income tax; six subsequent issues were in
anticipation of the proceeds of the 1918 income and
excess profits taxes, and one in similar anticipation
of 1919 taxes — the latter two groups however par-
taking of important characteristics of the loan an-

38 On November 6, 1918, the Treasury discontinued the sale
of the four per cent, tax anticipation certificates and offered in
lieu thereof a four and a half per cent, series bearing date of
November 7, 1918, and maturing March 15, 1919.