“Let’s Raise the Limit”


“Let’s Raise the Limit” (July 1939)
by Milton Rawson Halladay (1874-1961)
14 x 17 in., ink on board
Coppola Collection

Halladay was a native of Vermont and a noted political cartoonist for the Providence Journal (Rhode Island) for nearly fifty years (1900-1947). His cartoons were published in countless other newspapers and magazines. He has been called “one of the deans of American political cartooning.” His cartoon commemorating the death of Thomas A. Edison was a runner-up for the Pulitzer Prize.

His great-great grandson is carrying on the artistic family tradition!

Before 1939, Congress explicitly imposed no limit on the aggregate amount of federal debt outstanding. Instead, it restricted issues of individual securities or sets of securities and gave the Secretary of Treasury little authority to conduct debt management operations.

In March 1939, President Franklin Roosevelt and Secretary Morgenthau asked Congress to eliminate separate limits on bonds and on other types of debt. The House approved the measure (H.R. 5748) on March 23, 1939, and the Senate passed an amended version on June 1. On July 14, the amendment was withdrawn in the Senate after the House had disagreed, thus clearing the way for President Franklin Roosevelt’s signature. When enacted on July 20, the law (P.L. 76-201) created the first aggregate limit ($45 billion) covering nearly all public debt. Combining a $30 billion limit on bonds with a $15 billion limit on shorter-term debt, while retaining the $45 billion total limit in effect, enabled Treasury to roll over maturing notes into longer-term bonds. This measure gave the Treasury freer rein to manage the federal debt as it saw fit. Thus, the Treasury could issue debt instruments with maturities that would reduce interest costs and minimize financial risks stemming from future interest rate changes.

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