Busted auction. Hard to imagine today, if for very different reasons, in March 1920 the Treasury Department found itself without enough bids for its overgrown needs. Intending to raise between $300 and $350 million, princely sums for that age, the 4.75% coupon stapled to the 1-year notes being offered came up woefully inadequate. According to contemporary accounts, purchase orders were submitted for only $201,370,500 even though the government had left the subscription books open for a reported two additional weeks.
The wartime demands of fighting men and destructive material behind it, the Treasury Department still needed to keep up its debt payments incurred as a result of the United States’ entry into the Great War. The bill had been steep; the government up through 1918 had to raise about $21 billion. That was twentytimes the national debt before 1917, and seven times more than what had been borrowed to defeat the Confederate insurrectionists just a half century before (still within living memory).
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