136

WAR  BORROWING

after  which  the  regulations  of  that  date  governed.
Such  deposits  comprised  with  respect  to  bond  subscriptions ­
  cash  and  credit  items  throughout;  with
respect  to  certificate  borrowings,  only  cash  items
figured  to  any  considerable  extent  until  the  issue  of
August  28,  1917,  when  payment  by  credit  was  first
generally  used.  The  deposits  were  distinguished  as
to  source  in  the  general  account  of  the  Treasurer
as  “Deposits  in  Special  Depositaries:  (a)  Account
of  sales  of  certificates  of  indebtedness,  (b)  Liberty
Loan  Deposits”—until  April  26,  1918,  when  the
two  accounts  were  merged  in  a  general  entry  to
which  eventually  redeposited  receipts  from  income
and  excess  profits  taxes  were  added.
In  connection  with  the  early  borrowings  it  had
been  necessary  for  the  banks  to  make  application  and
to  be  designated  as  depositaries  each  time  they  subscribed ­
  to  certificates  and  bonds  and  desired  to  pay
for  them  by  credit.  Subsequently  a  general  qualification ­
  was  permitted,  whereby  banks  duly  qualified
as  government  depositaries  might  make  payment
by  credit  and  might  receive  deposits  on  account  of
their  subscriptions  to  any  one  or  all  of  the  various
issues  of  bonds  and  certificates  of  indebtedness,
without  the  necessity  of  new  application  and  designation ­
  in  each  instance.
Stimulated  in  this  manner,  the  number  of  government ­
  depositaries  increased  rapidly.  At  the  close
of  business  on  November  13,  1917  —  the  eve  of
the  flotation  of  the  Second  Liberty  Loan  —  1903
national  banks  and  1343  state  banks  and  trust  companies ­
  had  been  so  designated,  and  a  month  later
the  annual  report  of  the  Secretary  of  the  Treasury