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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 New Deal

Treasury Debt Management during the New Deal

(p.279) 19 Treasury Debt Management during the New Deal
Birth of a Market

Kenneth D. Garbade

The MIT Press

This chapter examines Treasury debt management during the New Deal, from the spring of 1933 to mid-1939. Treasury Secretary Morgenthau accomplished two debt management objectives that were most clearly evident at the start of the New Deal: lengthening the maturity of the debt and refinancing the last two Liberty Loans. He also recognized the importance of introducing a more flexible policy at the interface between Treasury cash management and Treasury debt management, and he developed a bond auction initiative to address that need. When the initiative failed, he fell back on the program of issuing tax date bills. In mid-1939 the two most significant shortcomings of Treasury debt management were the continued reliance on fixed-price sales of notes and bonds; and the failure to offer bonds with predictable maturities.

Keywords:   debt maturity, refinancing, cash management, bond auction, tax date bills, Treasury bonds

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