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WAR BORROWING

extent that they cannot make payment in Treasury
certificates of indebtedness.” 31

No information is available as to the extent to
which this restriction may have compelled the tender
of certificates in payment of the first loan install-
ment more than would otherwise have occurred; but
on the whole it does not seem likely that any con-
siderable influence was so exerted. Up to May 28,
1918, only $823,332,600 certificates were used in
such payment — less than the nominal aggregates
of the certificate issues maturing May 9 and 28.
The remaining three certificate issues aggregating
$1,612,085,500 matured in June 18-July 18, and
were in part tendered in later Loan installment pay-
ments, in part redeemed from out the general fund
of the Treasury replenished by (a) the Loan in-
stallments, (b) the receipts from the 1918 income
and excess profits taxes and (c) the proceeds of
the early certificate issues in anticipation of the
Fourth Liberty Loan.

(F)	The almost immediate resumption of an-
ticipatory borrowing after the Third Liberty Loan
flotation may be regarded as dictated by the Treas-
ury’s policy of a heavy working balance. The pre-
liminary announcement was accompanied by no
uncertainty as to the instrumentality to be em-
ployed : 32

“ Experience is again showing the desirability of this
method of anticipating the proceeds of loans, and suggests

31	See text in Commercial and Financial Chronicle, April 6,
1918, p. 1402.

32	Federal Reserve Bulletin, June, 1918, p. 485.