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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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Treasury Debt Management during the Great Contraction

Treasury Debt Management during the Great Contraction

(p.260) (p.261) 18 Treasury Debt Management during the Great Contraction
Birth of a Market

Kenneth D. Garbade

The MIT Press

This chapter traces the evolution of Treasury debt management actions between 1930 and early 1933. It first examines the outlook for debt management in the second half of 1930. It then describes how unforeseen events complicated, and then derailed, the refinancing program that Secretary Mellon and Under Secretary of the Treasury Ogden Mills had mapped out, and how those officials fashioned innovative responses. When faced with unexpected financing requirements in the first half of 1931, they introduced a program of regularly refinancing maturing Treasury bills with new bills, thus turning bills from their originally intended use as an instrument of cash management into an instrument of debt management. The last section describes how Mills, who became Secretary of the Treasury in February 1932, funded the activities of the Reconstruction Finance Corporation in 1932 and early 1933.

Keywords:   Treasury debt, debt management, fiscal policy, refinancing program, Ogden Mills, Treasury bills, Reconstruction Finance Corporation

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