﻿THE PRESENT

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subscription on June 28, 1917, as to any amounts
not paid in Treasury certificates of indebtedness “ by
credit on their books to the account of the Treasurer
of the United States.” This procedure had been
foreshadowed in the mode of payment used by the
Federal Reserve Banks for the ante-bellum certifi-
cate issue of March 31, and had been actually em-
ployed with results of the utmost significance in con-
nection with the overpayment of the installment of
June 28, 1917, on account of the First Liberty Loan.

The device of permissive payment “ by credit ”
was apparently extended by administrative toler-
ance of the Treasury, to settlement for certificates
of indebtedness acquired by or through incorpor-
ated banks and trust companies after August 28,
1917 — that is, with respect to the issue of August
29,	1917, and succeeding issues. Thenceforth

qualified depositaries were permitted to make pay-
ment “ by credit ” for certificates allotted to them
for themselves and their customers up to the amount
for which each had qualified. Subscribing banks
not fully qualified as depositaries were required to
make payment for certificates by cash and current
exchange; but in such instances the Treasury un-
dertook to re-deposit unexpended proceeds in pro-
portion to subscriptions, as promptly as depositary
qualification was completed.

This modification in procedure — invested with
possibilities and indeed attended with results both
fiscal and economic of very great importance — was
effected without public discussion and, it may be
ventured, without public comprehension. The
Treasury announcement as to the issue of August