﻿THE TREASURY

99

The actual advantage which the Treasury has de-
rived on this score from certificate borrowing has
been considerably less than the maximum theoretical
possibility. This has been in consequence of what
might be described as the policy — deliberately
adopted or insensibly developed — of a mounting
Treasury balance.

The “ net balance ” of the Treasury may be re-
garded as that amount which a conservative finan-
cial policy deems it necessary to keep on hand ready
for the prompt payment of public charges and
advances. In ordinary times the balance is a part
of the formal budgetary plan — not exposed to ex-
traordinary requisition, and subject to marked in-
crease or reduction only to the extent that estimated
revenue or expenditure vary. It is likely thus, on
the one hand to be more stable; but, on the other
hand, if deranged, to be less easy of restoration to
the accustomed level.

In war time these conditions are reversed. Sub-
ject not only to a heavier continuing out-got but to
more frequent and more irregular demands, the
working balance must by virtue of this instability
be larger. Opposed to this tendency, is the facility
afforded by certificate borrowing for quick and easy
replenishing of a depleted balance. Under such
conditions the Treasury might be supposed to estab-
lish or accumulate a larger working balance at the
outset, but thereafter to keep it within such bounds
or at most to subject it to a moderate progression
with increasing public expenditure.

The actual course of the Treasury balance since
our entry into the war has been, contrary to the fore-