﻿no

WAR BORROWING

debtedness upon the volume of credit and the level
of prices will be studied.

The avoidance of monetary dislocation has been
an avowed purpose of the Treasury in the use of
certificates of indebtedness in conjunction with its
borrowing policy. This intention has been reiter-
ated to the degree, it might be almost objected, of
under-emphasis upon the real end which the certifi-
cate issues were designed to serve — the mainte-
nance of the Treasury balance.

At the outset of our war financing there was no
such expressed purpose. The report of the Ways
and Means Committee of March 3, 1917, ac-
companying the war revenue bill recommended an
increase in the authorized volume of certificates of
indebtedness on the score that “ under the present
system of taxation a considerable portion of the re-
ceipts are not due and payable until the last month
of each fiscal year.” Similarly, the ante-bellum
issue of $50,000,000 certificates offered on March
27, as well as the contemplated additional issue of
like amount to be emitted before the end of the fiscal
year, were described as “ in anticipation of the pay-
ment of the corporation and individual income taxes
due in June, 1917”—with no intimation of other
service.

The further purpose which certificate borrow-
ing was designed to serve might be regarded as fore-
shadowed in the First Liberty Loan act in the in-
crease in the authorized volume of certificates of in-
debtedness from $300,000,000 to $2,000,000,000 —
a sum obviously in excess of what was needed to