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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 before World War I

Treasury Debt Management before World War I

(p.29) 3 Treasury Debt Management before World War I
Birth of a Market

Kenneth D. Garbade

The MIT Press

This chapter describes the characteristics of Treasury debt and the primary and secondary markets for Treasury bonds in the decades prior to World War I. The market for U.S. Treasury bonds before World War I differed from the postwar market in two respects. First, bonds were issued to finance specific projects: to replenish Treasury gold stocks, to finance a war, and to build a canal. Second, the requirement that national banks pledge Treasury bonds against their currency issues and public deposits led to a strong demand for Treasury bonds by national banks: 80 percent of all outstanding Treasury bonds were pledged as collateral in 1914.

Keywords:   Treasury debt, Treasury bonds, secondary market, primary market, debt management, monetary policy, national banks

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