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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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The Primary Market during the Great Depression

The Primary Market during the Great Depression

(p.303) 20 The Primary Market during the Great Depression
Birth of a Market

Kenneth D. Garbade

The MIT Press

Oversubscriptions for fixed-price offerings of coupon-bearing Treasury securities (certificates, notes, and bonds) were commonplace in the 1930s. Oversubscribed offerings reflected an inefficient primary market (because they were a direct consequence of underpricing by Treasury officials) and they were risky: an unexpected decline in secondary market prices during an offering could leave a new issue largely in the hands of investors who had expected to receive much smaller allotments and who might be forced to sell at distress prices. This chapter describes how Treasury officials tried to contain oversubscriptions.

Keywords:   oversubscription, oversubscribed securities, Treasury securities, fixed-price offerings, securities market, secondary market

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