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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  Reserve ­
  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  immediate ­
  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  provision ­
  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  can29 ­
  Commercial  and  Financial  Chronicle,  October  19,  1918,  pp.
1521-2.  To  such  institutions  as  had  not  qualified  as  depositaries ­
  a  “  follow-up  ”  letter  was  sent  on  October  11,  1918  {ibid.,
P-  1S22).  „