44

WAR  BORROWING

with  the  issue  of  November  30,  1917.  Response
to  the  offering,  although  slower  than  in  the  case  of
the  first  issue,  was  hearty.  The  subscription  books
remained  open  for  some  weeks,  overlapping  the
certificate  offering  of  January  22  in  anticipation  of
the  Third  Liberty  Loan,  and  the  total  allotment
was  $491,822,500.  The  Treasury  offered  further
series  of  tax  anticipation  certificates  on  February
15,  March  15,  April  15,  May  15,  all  due  on  June
25,  1918.  The  arrangement  thus  took  practically
the  form  of  continuous  “  over  the  counter  ”  sale
of  certificates  to  prospective  taxpayers,  with  a  maximum ­
  of  one  month’s  accrued  interest.
The  efforts  of  the  Treasury  and  the  activities  of
the  Federal  Reserve  Banks  were  but  moderately
successful  in  securing  a  large  absorption  of  the
tax  anticipation  certificates  after  the  issues  of  November ­
  30,  1917  and  January  2,  1918.  Of  the
issue  of  May  15,  1918,  the  considerable  sum  of
$183,767,000  was  taken;  but  a  substantial  part  of
this  was  in  immediate  preparation  for  the  payment
of  the  income  and  excess  profits  taxes  become  due
on  June  15,  1918.  None  of  the  other  three  issues
approximated  this  amount.  The  total  volume  of
tax  anticipation  certificates  issued  was  $1,624,403,-500,
  as  compared  with  an  actual  yield  of  the  1918
income  and  excess  profits  taxes  in  the  fiscal  year
ended  June  30,  1918,  of  $2,839,083,585.
(E)  Early  in  January,  1918,  it  had  become  apparent ­
  that  receipts  from  tax  anticipation  certificates ­
  of  indebtedness  would  be  insufficient  to  meet
the  Treasury’s  requirements  and  that  early  recourse