Birth of a Market

Birth of a Market

The U.S. Treasury Securities Market from the Great War to the Great Depression

By Kenneth D. Garbade

The evolution of “a marvel of modern finance,” the market for U.S. Treasury securities, from 1917 to 1939.





The evolution of “a marvel of modern finance,” the market for U.S. Treasury securities, from 1917 to 1939.

The market for U.S. Treasury securities is a marvel of modern finance. In 2009 the Treasury auctioned $8.2 trillion of new securities, ranging from 4-day bills to 30-year bonds, in 283 offerings on 171 different days. By contrast, in the decade before World War I, there was only about $1 billion of interest-bearing Treasury debt outstanding, spread out over just six issues. New offerings were rare, and the debt was narrowly held, most of it owned by national banks. In Birth of a Market, Kenneth Garbade traces the development of the Treasury market from a financial backwater in the years before World War I to a multibillion dollar market on the eve of World War II.

Garbade focuses on Treasury debt management policies, describing the origins of several pillars of modern Treasury practice, including “regular and predictable” auction offerings and the integration of debt and cash management. He recounts the actions of Secretaries of the Treasury, from William McAdoo in the Wilson administration to Henry Morgenthau in the Roosevelt administration, and their responses to economic conditions. Garbade's account covers the Treasury market in the two decades before World War I, how the Treasury financed the Great War, how it managed the postwar refinancing and paydowns, and how it financed the chronic deficits of the Great Depression. He concludes with an examination of aspects of modern Treasury debt management that grew out of developments from 1917 to 1939.


$53.00 X ISBN: 9780262016377 408 pp. | 7 in x 10 in 16 b&w illus., 67 figures, 61 tables


  • This book will become a standard reference on US Treasury management of debt and cash during the first half of the 20th century.



  • Kenneth Garbade knows more about how the markets for treasury securities work today and how they evolved than anyone else. Garbade's history of these markets will be valuable to historians, policy makers, and business people. This is, clearly, a book with 'long legs.' Fifty years from now historians will still be pulling this book from the shelf (or electronic device) to find out how Secretary Mellon did things in the 1930s: A timely and timeless book.

    Hugh Rockoff

    Department of Economics, Rutgers University