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WAR BORROWING

available by a judicious curtailment of credits asked for
nonessential purposes.”

Despite the intent of such injunction there was
no apparent lessening of the pressure upon the
financial institutions of the country to qualify as
government depositaries and to employ credit in
payment for subscriptions to the Fourth Liberty
Loan. On September 26, 1918, the Federal Re-
serve bank of New York advised the banks of the
District that: 29

“If you have already received your designation as a
depositary for Government funds, it will not be necessary
for you to qualify again unless you desire to increase your
present designation. If, however, you have not already
applied and qualified as a depositary, we beg to express
the hope that you will communicate with us at once in this
regard so that you may receive such designation promptly
and be placed in position to pay by book credit in full or
in part for the bonds allotted to you, thus cooperating to
the fullest extent in the Government’s plan for effecting
payments and stabilizing money conditions. Your imme-
diate attention to this matter will be greatly appreciated.”

In the same spirit the mandatory restriction as to
the use of payment by credit, present in the Third
Liberty Loan, was replaced by a discretionary pro-
vision in the administrative regulation issued as to
the payment of subscriptions to the Fourth Liberty
Loan:

“ The right is reserved to require that qualified depositaries
make payment by credit only to the extent that they can-

29	Commercial and Financial Chronicle, October 19, 1918, pp.
1521-2. To such institutions as had not qualified as deposi-
taries a “ follow-up ” letter was sent on October 11, 1918 {ibid.,
P- 1S22).	„