The Federal Reserve Amendments of 1917: The Beginning of a Seasonal Note Issue Policy.

The Federal Reserve adopted a policy of smoothing the seasonal behavior of interest rates after the amendments of 1917. These amendments reduced the "collateral" requirements for notes issued and thereby increased note issue capability. Notes in circulation more than doubled from June to December 1917. These amendments were passed to assist with war-related financing as their timing coincided with the entry of the United States into World War I. The smoothing of interest rates seasonals between 1914 and 1917 was not due to the founding of the Federal Reserve System, but rather to trade-related gold flows. Copyright 1991 by Ohio State University Press.