BROADLY PUT, THIS thesis is a study of monetary and debt-management policies during the years 1940-55. The main point of focus is the controversy between the Treasury and the Federal Reserve. The thesis is divided into three parts. Part I covers the development of monetary and debt-management policies up until the time of the "accord." First of all, an attempt is made to show how events in the financial sector of the economy which took place in the late 1930's influenced wartime monetary and debt policies. This is followed by a discussion of the over-all financial policy of the war years, the primary aim of which is to demonstrate how wartime policy contributed to the postwar monetary dilemma (i.e., whether or not, in the face of a vastly altered public debt structure, to proceed to a flexible monetary policy). Against this background, the major policy positions adopted and actions taken by the Treasury and the Federal Reserve between the end of the war and the "accord" are analyzed in quite some detail. The main conclusion of this section is that the Treasury erred in opposing for so long the System's desire to raise short-term interest rates but that its position on long-term rates was essentially sound. Perhaps the most interesting aspect of the discussions of the postwar monetary problem was the development of the so-called "new theory" of credit control (sometimes referred to as the "Roosa" or "availability doctrine"), the aim of which was to demonstrate the compatibility of flexible monetary policy and the existence of a large public debt. Part II of the thesis is devoted to an examination of this doctrine. First, the new theory is outlined; then it is interpreted in terms of the categories of supply and demand; and, finally, its formal properties are considered. The most important conclusion of Part II is as follows: (1) That so long as market imperfection (i.e.,