Kenneth D. Garbade
- Published in print:
- 2012
- Published Online:
- August 2013
- ISBN:
- 9780262016377
- eISBN:
- 9780262298674
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262016377.003.0019
- Subject:
- Economics and Finance, Econometrics
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 ...
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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.Less
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.
