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WAR BORROWING

long delayed. Early in August the Treasury bal-
ance had fallen below $300,000,000, with substan-
tial requirements in sight and no extraordinary
revenue available.

In the six weeks elapsing until the passage of the
Second Liberty Loan act, the Treasury allotted
three issues of certificates: $300,000,000 on August
9, payable November 15; $250,000,000 on August
28, payable November 30; and $300,000,000 on
September 17, payable on December 15. The inter-
est rate of the new issues was raised to three and a
half per cent., corresponding to the yield of the
First Liberty Loan. The certificates were specifi-
cally made acceptable at par and interest if ten-
dered in payment of the first installment on account
of the Second Liberty Loan, and each series was
subject to redemption as a whole upon ten days
notice on or after the date set for the payment of
such first installment.

In mode of issue, the emission of August 9 was
identical with those that had preceded. Payments
for certificates allotted were made by subscribing
banks to the Federal Reserve Banks in cash or
current exchange, and the proceeds were there-
after redeposited with subscribing banks duly quali-
fied as government depositaries. In connection
with the flotation of the First Liberty Loan, the
Treasury “ to avoid, even temporarily, a derange-
ment of the money market ” had on May 16, 1917,
authorized banks and trust companies having pay-
ments to make on account of subscriptions for
$100,000 or more bonds, and duly qualified as
public depositaries to make payment upon such