﻿THE PRESENT

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that when carefully employed it has the effect of produc-
ing a steady flow of available free funds into the hands
of the Government, there to be as steadily used and dis-
bursed for current expenses on account of salaries and
commodities.”

The actual procedure was a further development
of the systematic use of the credit making power
of the banks in connection with certificate issues in
anticipation of the Fourth Liberty Loan. On June
12, 1918, the Secretary of the Treasury addressed a
new letter to every bank and trust company in the
United States setting forth that the expenditures
of the Government, as nearly as could then be esti-
mated, would require the sale of certificates of in-
debtedness up to November 1, 1918, to an aggre-
gate amount approximately of $6,000,000,000.
This would involve the issue every two weeks of
$750,000,000 of certificates substantially similar in
character to those issued prior to the Third Liberty
Loan except that they were to be of various ma-
turities not exceeding four months. The first of
such issues was to be dated June 25 maturing Oc-
tober 24 with interest at four and a half per cent.,
and similar issues were expected to be made on
Tuesday of every other week thereafter.

The change from optional participation on the
part of individual banks to a manner of moral
pressure, noticed in connection with the issues an-
ticipatory of the Third Liberty Loan, now took the
form almost of administrative compulsion. The
Federal Reserve Banks were to advise all banks and
trust companies in their respective districts of the
amount of certificates which they were to take of