War borrowing

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Monograph

Identifikator:: 101124439X

URN:: urn:nbn:de:zbw-retromon-21219

Document type:: Monograph

Author:: Hollander, Jacob H. http://d-nb.info/gnd/136924867

Title:: War borrowing

Place of publication:: New York

Publisher:: The Macmillan Company

Year of publication:: 1919

Scope:: 1 Online-Ressource (215 Seiten)

Digitisation:: 2018

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: The past

Collection:: Economics Books

IO WAR BORROWING power was perhaps the most important factor in preventing outright prohibition. The final phras ing was a compromise acceptable to both elements — the one believing that resort to such an expedient was possible if occasion required under the general borrowing power; the other convinced that the omission of specific authorization would “ shut and bar the door against paper money.” This hostility to paper emissions was fully shared by Alexander Hamilton. As a policy, he maintained that “ the wisdom of the Government will be shown in never trusting itself with the use of so seducing and dangerous an expedient.” In practice, he relied on temporary bank loans in an ticipation of established revenue to extricate the new Treasury from its inherited difficulties. The same deep-rooted association in the public mind of bills of credit or treasury notes with the excesses of paper money continued for a generation to dis courage the use of negotiable instruments in connec tion with temporary borrowing. Not until the War of 1812 was recourse had to short-term obliga tions. A funded loan to cover the war deficit had met with disappointing public response, and Gallatin sought authority to issue treasury notes for the un subscribed amount. In the congressional debate which preceded the passage of the act, the plan was opposed “ as engrafting on our system of finances a new and untried measure,” and many of the criticisms which the subsequent use of the device aroused were anticipated. 8 But the situation was deemed critical and the act was passed and ap- 8 Bayley, pp. 343-5.

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