﻿THE TREASURY

97

for the Treasury to adjust borrowings to needs
with far greater precision than in the case of in-
frequent bond issues. In neither of these par-
ticulars were the maximum possibilities realized.
Only in the case of the ante-bellum issue of March
31, 1917, was the interest rate — two per cent.—
notably less than the presumable cost of funded bor-
rowing. With succeeding issues the differential
between the certificate rate and the Liberty Loan
rate steadily declined until the advantage lay in the
other direction. Of the four issues in anticipation,
of the First Liberty Loan, the first two bore three
per cent, and the remaining two, three and a quarter
per cent.— as compared with the three and a half
oer cent. Loan rate. Of the six issues in anticina-
tion of the Second Liberty Loan, the first three bore
three and a half per cent, and the remaining three,
four per cent.— as compared with the four per cent.
Loan rate. Of the six issues in anticipation of the
Third Liberty Loan, the first two bore four per cent,
and the remaining four, four and a half per cent.—
as compared with the four and a quarter per cent.
Loan rate. All seven issues in anticipation of the
Fourth Liberty Loan bore four and a half per cent,
as compared with the four and a quarter per cent.
Loan rate.

The conspicuous economy of short-term borrow-
ing lies theoretically in the means it offers of sup-
plying the Treasury with the funds to be raised by
credit at the precise time and to the exact amount de-
sired — due regard being had for the maintenance
of such adequate working balance as prudent fin-