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Birth of a MarketThe U.S. Treasury Securities Market from the Great War to the Great Depression$
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Kenneth D. Garbade

Print publication date: 2012

Print ISBN-13: 9780262016377

Published to MIT Press Scholarship Online: August 2013

DOI: 10.7551/mitpress/9780262016377.001.0001

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Evolution of the Primary Market and the Introduction of Treasury Bills

Evolution of the Primary Market and the Introduction of Treasury Bills

(p.199) 14 Evolution of the Primary Market and the Introduction of Treasury Bills
Birth of a Market

Kenneth D. Garbade

The MIT Press

In the early 1920s, the primary market for Treasury securities evolved from a wartime market, where the Treasury sold unlimited quantities of securities in fixed-price offerings, into a peacetime market, where it sold limited quantities of securities on a regular quarterly basis and scaled allotments in favor of small investors and investors rolling over maturing investments. This chapter discusses the emergence of, and the solutions to, the allocation problem created by fixed-price offerings of underpriced securities; the substitution of War Loan deposits for more expensive borrowings; and the introduction of Treasury bills in 1929.

Keywords:   Treasury securities, War Loan deposits, Treasury bills, securities market

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