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

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: The present

Collection:: Economics Books

6o WAR BORROWING the entire ante-bellum issue of March 31, 1917, sub sequently withdrew from the role of direct investors and confined themselves to the functions of distribu tion and remittance, with only such temporary in vestment service as was made necessary by admin istrative convenience, by the insufficiency of the banks’ subscriptions, and by the desirability of aid ing wider distribution of certificates among the banks. The provision in the war revenue act of October 3, 1917, effective December 1, 1917, im posing a tax of two cents per $100 or any frac tional part thereof on promissory notes was subse quently held to include collateral notes tendered for discount to Federal Reserve Banks. This penalty upon banking operations in conjunction with cer tificate borrowing and loan flotations was avoided by the use of “ resale ” or “ repurchase agree ments,” whereby the Federal Reserve Banks ac quired and held temporarily Liberty bonds and cer tificates of indebtedness until taken over by sub scribing banks. By the enactment of the War Finance Corporation bill on April 5, 1918, prom issory bills secured by United States war obligations were no longer subject to stamp taxes, and Fed eral Reserve Banks instead of temporarily acquir ing such securities under “ repurchase agreements ” reverted to the practice in vogue before December 1, 1917, of accepting from the member banks United States war obligations as collateral for promissory notes. 38 assets had invested 4.7 per cent, of their resources in the same manner {Federal Reserve Bulletin, October, 1918, p. 953). 38 Federal Reserve Bulletin, May, 1918, p. 360.

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