THE  MONEY  MARKET

129

should  not  in  any  case  “  exceed  the  amount  withdrawn ­
  from  any  such  bank  or  trust  company  and
invested  in  such  bonds  or  certificates  of  indebtedness ­
  plus  the  amount  so  invested  by  such  bank  or
trust  company.”  18  Only  moderate  use  was  made
of  this  privilege  in  connection  with  the  four  certificate ­
  issues  in  anticipation  of  the  First  Liberty
Loan,  134  national  and  100  state  banks  and  trust
companies  in  six  Federal  Reserve  Districts  making
application  and  being  duly  designated  as  depositaries ­
  for  such  funds.  17
The  number  of  banks  qualifying  as  government
depositaries  increased  rapidly  with  the  adoption  of
payment  by  credit  in  conjunction  with  the  flotation
of  the  First  Liberty  Loan.  On  May  14,  1917,  the
Secretary  of  the  Treasury  invited  subscriptions  to
the  First  Liberty  Loan. 18  Two  weeks  later  announcement ­
  19  was  made  in  outline  of  the  payment
by  credit  plan  —  the  introduction  of  which  has
heretofore  been  discussed  and  the  immediate  anticipation ­
  of  which  may  be  sought  in  the  mode  of  payment ­
  used  by  the  Federal  Reserve  Banks  for  the
ante-bellum  issue  of  certificates  of  indebtedness  of
March  31,  1917.  In  order  “to  avoid,  even  temporarily, ­
  a  derangement  of  the  money  situation,”
the  Secretary  of  the  Treasury  “  earnestly  requested  ”
all  incorporated  banks  and  trust  companies  which
had  or  expected  to  have  payments  to  make  for  themselves ­
  or  for  others  on  account  of  subscriptions  to
16  Section  7.
17  “Report  of  the  Secretary  of  the  Treasury,  1917,”  P-  25.
18  Treasury  Department  Circular  No.  78,  of  May  14,  1917.
19  Treasury  Department  Circular  No.  81,  of  May  29,  1917.