this amount by nearly five billions. Of
the funds needed for financing the war, the Government planned to raise
about a third by taxation, and the remainder by the sale of bonds and
certificates maturing in from five to thirty years. It would have proved
the financial statesmanship of McAdoo had he dared to raise a larger
proportion by taxation; for thus much of the inflation which inevitably
resulted from the bond issues might have been avoided. But the Government
feared alike for its popularity and for the immediate effect upon
business, which could not safely be discouraged. As it was, the excess
profit taxes aroused great complaint. The amount raised in direct
taxation represented a larger proportion of the war budget than any
foreign nation had been able to secure from tax revenues.

In seeking to sell its bonds the Government, rather against its will, was
compelled to rely largely upon the capitalists. The large popular
subscriptions would have been impossible but for the assistance and
enthusiasm shown by the banks in the selling campaign. Wall Street and
the bankers of the country were well prepared and responded with all
their strength, a response which deserves the greater credit when we
remember the lack of sympathy which had existed between financial circles
and President Wilson's Administration. Largely under banking auspices the
greatest selling campaign on record was inaugurated. Bonds were placed on
sale at street corners, in theaters, and restaurants; disposed of by
eminent operatic stars, moving-picture favorites, and wounded heroes from
the front. Steeple jacks attracted crowds by their perilous antics, in
order to start the bidding for subscriptions. Villages and isolated
farmhouses were canvassed. The banks used their entire machinery to
induce subscriptions, offering to advance the subscription price. When
during the first loan campaign the rather unwise optimism of the Treasury
cooled enthusiasm for a moment, by making it appear that the loan could
be floated without effort, Wall Street took up the load. The first loan
was oversubscribed by a billion. The success of the three loans that
followed was equally great; the fourth, coming in October, 1918, was set
for six billion dollars, the largest amount that had ever been asked of
any people, and after a three weeks' campaign, seven billions were
subscribed. Quite as notable as the amount raised was the progressive
increase in the number of subscrib