112

WAR  BORROWING

avoid,  even  temporarily,  a  derangement  of  the
money  situation,”  and  the  “  accumulation  of  great
cash  payments  within  a  few  days.”  As  to  the  desirability ­
  of  this  procedure,  whereby  subscribing
banks  might  “  gradually  and  without  disturbing  the
money  market,  acquire  exchange  payable  in  the  place
where  subscriptions  are  to  be  paid  ”  so  that  “  the
bank  resources  of  the  United  States  as  a  whole  will
not  be  diminished,  and  the  operation  involve  only  a
shifting  of  credits,”  the  most  impressive  language
was  used:  3
“  The  Secretary  feels  that  he  cannot  too  strongly  urge
upon  the  banks  and  trust  companies  of  the  country  that  it
is  their  patriotic  duty  to  prepare  for  the  payments  which
they  will  have  to  make  on  account  of  the  Liberty  Loan,
first,  by  the  acquisition  of  certificates  of  indebtedness,  and
second,  by  qualifying  under  the  act  so  as  to  be  in  a  position ­
  to  make  payment  by  credit  if  the  subscriptions  by  and
through  them  are  likely  to  amount  to  $100,000  or  more
bonds.”
Early  in  August,  1917,  the  Treasury  resumed  the
issue  of  certificates  —  this  time  in  anticipation  of
the  Second  Liberty  Loan.  The  Treasury’s  announcement ­
  was  merely  to  the  effect  that  the  offerings ­
  were  resumed  “  in  order  to  provide  funds  to
meet  the  requirements  of  the  United  States  for  its
own  expenditures  .and  for  its  advances  to  foreign
Governments  at  war  with  the  German  Government.” ­
  In  the  succeeding  fortnight,  with  the  incorporation ­
  of  two  new  elements  in  the  Treasury’s
borrowing  policy  —  the  maintenance  of  a  larger
3  Treasury  Department  Circulars  No.  79  of  May  16,  1917,  and
No.  81  of  May  29,  1917.