74

WAR  BORROWING

ously  employed  thereafter  to  keep  the  Treasury  in
funds  for  war  expenditure,  by  issue  in  anticipation ­
  of  the  proceeds  of  funded  loans  and  extraordinary ­
  taxes.  In  short,  the  war  has  been  largely
financed  by  resort  to  short-term  borrowings,  periodically ­
  liquidated  from  the  proceeds  of  long-term
loans  and  to  a  less  extent  from  the  proceeds  of  war
taxes.
Assuming  that  certificates  of  indebtedness  are  a
valid  device  for  effecting  the  initial  borrowing  incident ­
  to  war  financing,  it  remains  to  inquire  whether
the  larger  and  continuous  use  to  which  the  certificates ­
  have  been  put  has  been  justified  by  direct  fiscal
result.  In  succeeding  chapters  examination  will  be
made  of  the  collateral  results  which  have  attended
such  use,  in  relation  to  the  business  world  and  to
general  well  being.
With  respect  to  the  direct  part  played  by  certificates ­
  of  indebtedness  in  our  war  financing,  the
course  of  Treasury  operations  from  the  period  just
before  our  entry  into  the  war  up  to  the  present  time
may  be  distinguished  into  thirteen  periods,  as  follows ­
  :
Period  Date  Treasury  Operations
1917
1.  March  sx-April  21  certificate  issue  in  anticipation
of  1917  income  taxes
2.  April  25-June  8  certificate  issues  in  anticipation
of  First  Liberty  Loan
3.  June  15-June  30  First  Liberty  Loan
4.  June  30-August  9  reliance  on  net  proceeds  of
First  Liberty  Loan
5-  August  9-October  24  certificate  issues  in  anticipation
of  Second  Liberty  Loan