After much discussion and more or less unnecessary and dangerous delay, especially in the Senate, Congress authorised the borrowing, at the discretion of the administration, of not more than $100,000,000 at one time on Treasury certificates and of an amount not to exceed $400,000,000 on 10-20 bonds at 3 per cent. Nominally, therefore, the Secretary of the Treasury had in his hands for the necessities of war during the first six months of its duration :

Practically, he was limited by the fact that all of this money had not been appropriated, and it would have been folly to raise more than he had authority to spend. Including the $50,000,000 appropriated before the war broke out, the total war appropriations made by Congress before it adjourned amounted in all to $361,788,095.11.

Surplus on hand

. $ 25,000,000

War revenues .

. 75,000,000

Temporary loans

. 100,000,000

Bonds . .

. 400,000,000

Total .

. $600,000,000

This sum covered the most generous estimates of the probable cost of the war. But the Secretary did not deem it necessary to raise at once a sum equalto the total appropriations. It was estimated that the expenses for the first six months would notexceed $175,000,000, or about one-half of the appropriations. The new taxes would probably yield about $75,000,000 toward these necessities, and a loan of $100,000,000 would possibly have sufficed to meet all the demands. But the Treasury raised $200,000,000 by the sale of 3 per cent 10-20 bonds, obtaining a total of $275,000,000, or nearly $100,000,000 in excess of the probable actual expenditure. The accumulation of this surplus was not in any sense an extravagant or useless piece of financiering. As has already been explained, the Treasury must be prepared to meet any demand that may arise, instantly and amply. That is the imperative necessity. As the early close of the war could not have been foreseen, the fiscal preparations were necessarily liberal. Indeed, the amplitude of the funds available was one of the most potent causes of the success of the war. The excess raised was not larger than was necessary to insure the instant readiness of the Treasury to meet all possible demands. Had the war continued and the demands equalled the appropriations, the Treasury would again have been obliged to use its power of borrowing which the fortunate termination of the war rendered unnecessary.