﻿WAR BORROWING

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tificate issues in anticipation of the Third and
Fourth Liberty Loans and of the 1918 and 1919 in-
come and excess profits taxes, and it has been echoed
and re-echoed in financial journals and banking pub-
lications.

The need for some equilibrating device in the
money market during the period of our war financ-
ing has obviously been great. The four Liberty
Loans, the war taxes on incomes and excess profits
and the enormous expansion of quasi-governmental
industries have involved such huge and such abrupt
requisitions upon the available capital and credit of
the nation, that continuing strain and recurrent jar
— verging upon dislocation and convulsion —
would seem to have been inevitable.

And yet as indicated by the general experience of
the business community and as evidenced by the
actual course of the money market there has been
neither business derangement nor monetary disloca-
tion. Stringency has prevailed; but it has been
largely of a kind and to a degree at first sanctioned
and subsequently imposed by administrative policy
with a view to the conservation of credit, the
restraint of non-essential production, and the preven-
tion of banking over-expansion.

The relative number of business failures in the
country is at all times an insufficient index of mone-
tary conditions, and this inadequacy is very much
more pronounced when normal business tendencies
have been deflected and controlled in many direc-
tions by the exigencies of war-time. But the facts
as to a lower business mortality rate during the per-