THE  TREASURY

97

for  the  Treasury  to  adjust  borrowings  to  needs
with  far  greater  precision  than  in  the  case  of  infrequent ­
  bond  issues.  In  neither  of  these  particulars ­
  were  the  maximum  possibilities  realized.
Only  in  the  case  of  the  ante-bellum  issue  of  March
31,  1917,  was  the  interest  rate  —  two  per  cent.—
notably  less  than  the  presumable  cost  of  funded  borrowing. ­
  With  succeeding  issues  the  differential
between  the  certificate  rate  and  the  Liberty  Loan
rate  steadily  declined  until  the  advantage  lay  in  the
other  direction.  Of  the  four  issues  in  anticipation,
of  the  First  Liberty  Loan,  the  first  two  bore  three
per  cent,  and  the  remaining  two,  three  and  a  quarter
per  cent.—  as  compared  with  the  three  and  a  half
oer  cent.  Loan  rate.  Of  the  six  issues  in  anticination
  of  the  Second  Liberty  Loan,  the  first  three  bore
three  and  a  half  per  cent,  and  the  remaining  three,
four  per  cent.—  as  compared  with  the  four  per  cent.
Loan  rate.  Of  the  six  issues  in  anticipation  of  the
Third  Liberty  Loan,  the  first  two  bore  four  per  cent,
and  the  remaining  four,  four  and  a  half  per  cent.—
as  compared  with  the  four  and  a  quarter  per  cent.
Loan  rate.  All  seven  issues  in  anticipation  of  the
Fourth  Liberty  Loan  bore  four  and  a  half  per  cent,
as  compared  with  the  four  and  a  quarter  per  cent.
Loan  rate.
The  conspicuous  economy  of  short-term  borrowing ­
  lies  theoretically  in  the  means  it  offers  of  supplying ­
  the  Treasury  with  the  funds  to  be  raised  by
credit  at  the  precise  time  and  to  the  exact  amount  desired ­
  —  due  regard  being  had  for  the  maintenance
of  such  adequate  working  balance  as  prudent  fin ­