THE TREASURY 
85 
which certificates may be used in loan payment 
obviously stands in relation not only to the aggre 
gate amount of the payment but also to the volume 
of outstanding certificates. The facts here were 
favorable to a larger use of certificates in Novem 
ber than in June. At the time of the First Liberty 
Loan there were outstanding $868,205,000 certifi 
cates or 43 per cent, of the loan principal; at the 
time of the Second Liberty Loan there were out 
standing $2,320,493,000 or 61 per cent, of the loan 
principal. Moreover, if we make the reasonable 
assumption that the investment absorption of cer 
tificates does not proceed at equal pace with the 
volume emitted, but that the larger the amount 
outstanding the larger will be the amount of certifi 
cates taken by the banks on their own account, it 
would follow that a larger proportion of certificates 
should have been tendered by subscribing banks in 
connection with the Second than in connection with 
the First Liberty Loan. 
As a matter of fact, assuming that the entire issue 
of $300,000,000 certificates maturing on November 
15, 19x7, were among the certificates tendered on 
that date on account of the Loan installment, there 
would have been only $169,000,000 of later ma 
turities likewise tendered, as compared with a 
further outstanding amount of $1,851,000,000 that 
might have been but were actually not so used. To 
this extent the flotation again resulted in a plethora 
of available funds at the expense of an unliquidated 
floating debt. 
The Treasury thus emerged from the Loan flo 
tation with an embarrassing surplus and a large