﻿THE PRESENT

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fied by Federal Reserve bank, but if qualification is not
completed by Sept. 17, payment must be made in ordinary
way, in which case the unexpended proceeds of the certi-
ficates will be re-deposited as promptly as qualification can
be completed. Full details of the procedure for qualifying
depositaries and all matters in such connection may be
obtained from the Federal Reserve banks, fiscal agents of
the United States.” 17

On September 24, 1917, the Second Liberty Loan
bill became law. It provided that in addition to the
other obligations therein authorized the Secretary
of the Treasury might borrow “ for the purpose of
this act and to meet public expenditures authorized
by law, such sum or sums as, in his judgment, may
be necessary ” by the issue of certificates of indebted-
ness, at not less than par nor for more than one
year term subject to prior redemption. There were
three distinctive provisions as to the issues so au-
thorized: (a) no maximum limit was put upon the
rate of interest to be paid, the Secretary of the
Treasury being empowered to borrow by the issue
of certificates “ in such form or forms and subject
to such terms or conditions and such rate or rates of
interest as he may prescribe ”; (b) the total amount
of such certificates, which might at any time be
outstanding including those authorized in connec-
tion with the First Liberty Loan, was increased
from $2,000,000,000 to $4,000,000,000; (c) the tax
exemption enjoyed by the new certificates, as of the
new bonds, was made inapplicable not only to
estate or inheritance taxes, but to graduated addi-
tional income taxes (“surtaxes”) and to excess
77 Commercial and Financial Chronicle, September 8, 1917, p.