Why the U.S. Treasury Began Auctioning Treasury Bills in 1929

[...]This article examines the U.S. Treasury’s decision tointroduce a new financial instrument—Treasury bills—in1929. We show that Treasury officials were willing to committhe resources required to introduce the new security in orderto mitigate several flaws in the structure of Treasury financingoperations, such as:• New debt offerings were chronically oversubscribed. Relianceon fixed-price subscription offerings of new debt duringthe 1920s resulted in chronic oversubscriptions, a clearindication that the offerings were persistently underpriced.• The schedule for new debt sales resulted in negative “carry”on Treasury cash balances at commercial banks. TheTreasury sold new debt only four times a year—on tax.[...]

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Year of publication:	2008-07-01
Authors:	Garbade, Kenneth D.
Institutions:	Federal Reserve Bank <New York, NY>
Published in:	London School of Economics and Political Science - Publications FRBNY Economic Policy Review / July 2008, pp 31-47
Subject:	Finanzinstrument \| Emissionsmarkt \| Finanzmanagement \| financial management

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Extent:	463872 bytes 17 p. application/pdf
Type of publication:	Article
Language:	English
Classification:	History of business administration ; Corporate finance and investment policy. General ; Individual Articles ; No country specification
Source:	USB Cologne (business full texts)