In numerous years following the war, the Federal Government ran a heavy surplus. It could not (however) pay off its debt, retire its securities, because to do so meant there would be no bonds to back the national bank notes. To pay off the debt was to destroy the money supply.
"Money: Whence It Came, Where It Went". Book by John Kenneth Galbraith. Chapter VIII, "The Great Compromise," p. 90, 1975.
