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WAR BORROWING

graph showing the course of the daily “ net bal-
ance ” of the Treasury during the period under
review.1,

I

The three months that preceded our entry into
the war were marked by a steady excess of dis-
bursements over receipts. Starting with a net bal-
ance of $113,597,985 on January 2, 1917, the avail-
able funds of the Treasury declined practically with-
out arrest. On February 23, 1917, there was for
the first time an actual deficiency as compared with
the authorized but undrawn amount to the credit of
disbursing officers, and a week earlier the “ daily
statement ” had begun to note that “ the income
tax, constituting a large part of the Government’s
revenue, is not collected until June,” and to present
the estimated amount payable at that time.

The Treasury balance touched its low point on
March 15, 1917, at $52,951,594. For the next two
weeks some restraint was apparently put upon dis-
bursements ; but on March 30 the nominal deficiency
as against disbursing officers’ credits was nearly
$10,000,000, with a further immediate requirement
of $25,000,000 in settlement of the Danish West
Indies purchase. The provision of additional
funds could not be delayed, and on March 31, 1917,
the Treasury, in anticipation of the income taxes
payable in June, borrowed $50,000,000 from the

1 See frontispiece. I am indebted to Mr. Leopold Olceowski
of Washington, D. C., for the transformation of my own
rough graph into the finished chart.