The Great War
IF an able finance minister, foreseeing the outbreak of a great war in which the country might be involved, had made thorough plans to cope with the problems which such a war must bring, he could not have adopted better financial measures than those which by a process of evolution were actually in force on the fateful August 4, 1914.
The Federal Reserve System, co-ordinating the banking resources of the country and stabilizing the currency, had just gone into operation, corporation taxes had become a feature of our fiscal system since 1910, the income tax had been approved in principle and actual collections of revenue therefrom had begun.
Therefore when in 1917 war became inevitable it was only necessary to speed up actually existing fiscal machinery. No time was lost in devising entirely new methods of taxation. There was no necessity or excuse, as there had been at the outbreak of the Civil War, for questionable currency methods because the existing system was impossible. It was unnecessary to beg the banks reluctantly to make wholly inadequate preliminary advances, as Secretary Chase had been compelled to do.
With the experience of the past as a guide, it was possible to devise a simple, scientific method of borrowing, a method which quickly gave the Government the moneys required by