﻿THE MONEY MARKET

121

’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

Call ....... 0 o o 010 S o o 5	2	o

Time 60-90 days. 300004 13	000 o

Time 4-6 months 3	2 19	0 15 40 17	0 o o 11

The same general conditions as to monetary dis-
location during the period of our belligerency are
here disclosed as with respect to monetary strain.
The capital market has been subject to greater dis-
turbance than in the stagnant years succeeding the
panic of 1907; but on the other hand it has appar-
ently suffered less jar than in the more normal years
that followed up to the outbreak of the war, a con-
siderable part of this stability in more recent months
being referable to the deliberate control of the loan
market.

It remains to inquire in how far this absence of
extraordinary strain and dislocation in the money
market is specifically due to the use of certificates of
indebtedness; in how far it is imputable to the credit
mechanism developed by the Treasury, in conjunc-
tion with the Federal Reserve System,— a credit
mechanism utilized indeed in certificate borrowing
but neither peculiar to it nor any less available in
connection with other borrowing methods.

In making hypothetical comparison between the
two essential modes of war borrowing — exempli-
fied in a direct long-term loan on the one hand, and a
series of short-term certificate issues fundable into
or payable out of the proceeds of a long-term loan
on the other hand,— it should be assumed that pay-
ment is made whether for bonds or for certificates
in cash or current exchange, that the banks of the