104 WAR BORROWING to the principal of the funded loan, and there is a popular growing appreciation of the fact that under the prevailing system a Liberty Loan is actually spent before it is subscribed. Fiscally valid though such procedure may be, it can hardly be doubted that the reaction upon the public mind will be to some extent unfavorable. A second danger to which any sound fiscal provision ­ for the immediate future may be conceivably exposed by certificate borrowing is closely connected with the inherent defect of the short-term loan as an habitual device in war financing — descent to renewal and refunding. As long as the anticipatory ­ issues are completely funded into or redeemed out of the succeeding Liberty Loan, the way is left clear for a renewal of the process. If however the popular absorption of the Loan falls short of the volume of outstanding certificates of indebtedness, the Treasury is compelled either to renew or refund maturing certificate issues or to load up the banks with long-term obligations or to have earlier recourse ­ to another Loan. Similarly, if the proceeds of the Loan be applied to current expenditures rather than to the redemption of certificates the anticipatory ­ issues partake of the nature of independent ­ short-term loans that must upon maturity either be renewed, or be liquidated from other sources. In both of these respects the actual experience of the Treasury, while up to the present exempt, has at least shown tendencies that may not be safely neglected. In the Fourth Liberty Loan not only was the ratio of outstanding certificates to the nom ­