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  dislocation ­
  during  the  period  of  our  belligerency  are
here  disclosed  as  with  respect  to  monetary  strain.
The  capital  market  has  been  subject  to  greater  disturbance ­
  than  in  the  stagnant  years  succeeding  the
panic  of  1907;  but  on  the  other  hand  it  has  apparently ­
  suffered  less  jar  than  in  the  more  normal  years
that  followed  up  to  the  outbreak  of  the  war,  a  considerable ­
  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  conjunction ­
  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  —  exemplified ­
  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  payment ­
  is  made  whether  for  bonds  or  for  certificates
in  cash  or  current  exchange,  that  the  banks  of  the