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THE MONEY MARKET	113

Treasury balance and the extension of payment
by credit from bond to certificate purchases — the
money market argument came into greater prom-
inence as a necessary reinforcement of the fiscal pur-
pose. In conjunction with the certificate issue of
August 28, 1917, and the proposed redeposit of pro-
ceeds with subscribing banks — the Treasury an-
nounced that “ it is expected that certificates of in-
debtedness will be issued from time to time some-
what in advance of the immediate requirements of
the United States,” and added an explicit statement
in explanation:4

“ The primary object of this is to avoid the financial
stress which would result from the concentration of the
payments for a great bond issue upon a single day (which
cannot be avoided wholly by provision for payment by
installments as a great proportion of subscribers prefer
to make payment in full on one day as a matter of con-
venience). Those who acquire certificates of indebted-
ness, in advance of the bond issue, gradually, without dis-
turbing the money position, purchase exchange payable
where the bond subscriptions must be paid (that is, at the
Federal Reserve Banks), in advance of the date when the
payment is to be made, and meanwhile secure a substantial
return upon their money.”

This statement as to “ the primary object ” re-
appeared in the announcement of the certificate issue
of September 17, 1917, and in substance repeatedly
thereafter, and may be regarded as fairly represent-
ative of the Treasury’s subsequent emphasis upon
the stabilizing effect of certificate borrowing.5 The
same note was struck in connection with the cer-

4	Federal Reserve Bulletin, September, 1917, p. 664.

5	Federal Reserve Bulletin, November, 1917, p. 830.