58

WAR  BORROWING

“  The  man  who  buys  Treasury  certificates  to  the  amount
of  the  taxes  he  will  have  to  pay,  and  thereby  anticipates
their  payment,  will  do  a  wise  and  helpful  thing  not  only
for  himself  but  for  his  country,  and  will  contribute  in  a
most  definite  and  patriotic  way  to  the  triumph  of  America
in  her  mortal  combat  with  the  enemies  of  liberty  and
democracy  —  the  Kaiser’s  legions  of  lust  and  license  —
and  share  in  the  new  glory  of  America’s  vindicated  ideals
of  justice  and  humanity.”
The  result  was  gravely  disappointing.  Between
August  20  and  November  6  the  total  amount  of
such  certificates  sold  was  only  $157,552,500.
Whatever  other  reasons  may  have  operated,  the
low  interest  rate  of  the  series  doubtless  played  a
considerable  part  in  checking  sales.  With  the
money  market  “  pegged  ”  at  six  per  cent,  and  the
four  and  a  half  per  cent,  loan  anticipation  certificates ­
  in  direct  competition  there  was  little  warrant ­
  for  expecting  a  large  absorption  of  the  four
per  cent,  tax  series. 36
There  have  thus  been  emitted,  in  conjunction
with  our  war  borrowing,  thirty-one  issues  of  certificates ­
  of  indebtedness  to  an  aggregate  amount  of
$12,692,559,500.  Of  these  the  initial  issue  was
nominally  in  anticipation  of  the  proceeds  of  the
1917  income  tax;  six  subsequent  issues  were  in
anticipation  of  the  proceeds  of  the  1918  income  and
excess  profits  taxes,  and  one  in  similar  anticipation
of  1919  taxes  —  the  latter  two  groups  however  partaking ­
  of  important  characteristics  of  the  loan  an-38
  On  November  6,  1918,  the  Treasury  discontinued  the  sale
of  the  four  per  cent,  tax  anticipation  certificates  and  offered  in
lieu  thereof  a  four  and  a  half  per  cent,  series  bearing  date  of
November  7,  1918,  and  maturing  March  15,  1919.