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WAR BORROWING

avoid, even temporarily, a derangement of the
money situation,” and the “ accumulation of great
cash payments within a few days.” As to the de-
sirability of this procedure, whereby subscribing
banks might “ gradually and without disturbing the
money market, acquire exchange payable in the place
where subscriptions are to be paid ” so that “ the
bank resources of the United States as a whole will
not be diminished, and the operation involve only a
shifting of credits,” the most impressive language
was used: 3

“ The Secretary feels that he cannot too strongly urge
upon the banks and trust companies of the country that it
is their patriotic duty to prepare for the payments which
they will have to make on account of the Liberty Loan,
first, by the acquisition of certificates of indebtedness, and
second, by qualifying under the act so as to be in a posi-
tion to make payment by credit if the subscriptions by and
through them are likely to amount to $100,000 or more
bonds.”

Early in August, 1917, the Treasury resumed the
issue of certificates — this time in anticipation of
the Second Liberty Loan. The Treasury’s an-
nouncement was merely to the effect that the offer-
ings were resumed “ in order to provide funds to
meet the requirements of the United States for its
own expenditures .and for its advances to foreign
Governments at war with the German Govern-
ment.” In the succeeding fortnight, with the in-
corporation of two new elements in the Treasury’s
borrowing policy — the maintenance of a larger

3	Treasury Department Circulars No. 79 of May 16, 1917, and
No. 81 of May 29, 1917.