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  reiterated ­
  to  the  degree,  it  might  be  almost  objected,  of
under-emphasis  upon  the  real  end  which  the  certificate ­
  issues  were  designed  to  serve  —  the  maintenance ­
  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,  accompanying ­
  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  receipts ­
  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  payment ­
  of  the  corporation  and  individual  income  taxes
due  in  June,  1917”—with  no  intimation  of  other
service.
The  further  purpose  which  certificate  borrowing ­
  was  designed  to  serve  might  be  regarded  as  foreshadowed ­
  in  the  First  Liberty  Loan  act  in  the  increase ­
  in  the  authorized  volume  of  certificates  of  indebtedness ­
  from  $300,000,000  to  $2,000,000,000  —
a  sum  obviously  in  excess  of  what  was  needed  to