﻿THE PRESENT

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must be had to some more productive source. This
took the form of certificate borrowing in anticipa-
tion of a Third Liberty Loan, then definitely con-
templated but not yet formally authorized nor even
specifically determined. On January 17, 1918, the
Treasury offered the first issue of certificates of
this kind, to the amount of $400,000,000, dated
January 22, 1918, payable April 22, 1918 and bear-
ing four per cent, interest.

Three weeks later, the Treasury announced a
comprehensive plan for short-term borrowing in
anticipation of the Third Liberty Loan — the ac-
tual flotation of which it was desired to postpone
“ until conditions will insure a wide distribution of
the bonds throughout the country.” 22 Instead of
issues of certificates of indebtedness at irregular in-
tervals and of unequal amounts, it was proposed
to offer at fortnightly intervals beginning February
8, 1918, six series of $500,000,000 each of not
more than ninety days maturity. As theretofore,
the certificates were to be distributed by the Fed-
eral Reserve Banks and to be absorbed by the banks
of the country — national, state and trust com-
panies ; non-member as well as member — as short-
term investments in their own behalf and for their
customers. Moreover instead of relying on vol-
untary optional response, the Treasury urged uni-
form proportionate contribution from every nat-
ional bank, state bank and trust company, in the
form of one per cent, of its gross resources to be
set aside weekly for investment in the certificates.

22	Text of announcement in Federal Reserve Bulletin,
March, 1918, p. 161.