THE  TREASURY

95

war  financing,  least  of  all.  In  the  matter  of  certificate ­
  borrowing  the  obvious  plausibility  of  the
operation,  added  to  the  technical  difficulty  of  tracing ­
  its  ultimate  effects  has  encouraged  popular
acquiescence.  Certainly  without  the  remotest  approach ­
  to  suppression  or  concealment,  the  Treasury
has  been  able  to  effect  its  end  unhindered  by  popular
disfavor  or  resistance.
Not  only  has  it  been  possible  to  secure  prompt  and
easy  authorization  for  certificate  borrowing,  but  its
actual  administration  has  probably  involved  less
initial  effort  and  smaller  preliminary  cost  on  the
part  of  the  Treasury  than  any  alternate  procedure
productive  of  like  amount  would  have  entailed.
This  is  a  result  of  the  dual  character  of  the  operation— ­
  (a)  the  placing  of  the  certificate  issues  and
(b)  the  flotation  of  the  liquidating  loan.  It  is  possible ­
  that  the  combined  cost  in  trouble  and  outlay
has  been,  if  anything,  more  considerable  than  that  of
a  direct  bond  issue.  But  of  this  total  only  a  very
minor  part  has  been  associated  with  the  first  stage
•—  certificate  borrowing  proper.  The  effective  machinery ­
  of  the  Federal  Reserve  System  has  permitted ­
  economical  allotment  and  remittance.  As
in  the  case  of  bank  credits  or  demand  notes,  the
charges  of  administration  if  not  constant  certainly
have  not  varied  directly  with  the  amount  borrowed.
Finally  the  mechanism  of  distribution,  once  established ­
  and  regularized,  has  been  capable  of  re-use
and  larger  use  with  increasing  efficiency  and  diminishing ­
  cost.
Understanding  by  “  certainty,”  the  capacity  of  a
borrowing  device  to  supply  the  exchequer,  without