THE  PRESENT

37

subscription  on  June  28,  1917,  as  to  any  amounts
not  paid  in  Treasury  certificates  of  indebtedness  “  by
credit  on  their  books  to  the  account  of  the  Treasurer
of  the  United  States.”  This  procedure  had  been
foreshadowed  in  the  mode  of  payment  used  by  the
Federal  Reserve  Banks  for  the  ante-bellum  certificate ­
  issue  of  March  31,  and  had  been  actually  employed ­
  with  results  of  the  utmost  significance  in  connection ­
  with  the  overpayment  of  the  installment  of
June  28,  1917,  on  account  of  the  First  Liberty  Loan.
The  device  of  permissive  payment  “  by  credit  ”
was  apparently  extended  by  administrative  tolerance ­
  of  the  Treasury,  to  settlement  for  certificates
of  indebtedness  acquired  by  or  through  incorporated ­
  banks  and  trust  companies  after  August  28,
1917  —  that  is,  with  respect  to  the  issue  of  August
29,  1917,  and  succeeding  issues.  Thenceforth
qualified  depositaries  were  permitted  to  make  payment ­
  “  by  credit  ”  for  certificates  allotted  to  them
for  themselves  and  their  customers  up  to  the  amount
for  which  each  had  qualified.  Subscribing  banks
not  fully  qualified  as  depositaries  were  required  to
make  payment  for  certificates  by  cash  and  current
exchange;  but  in  such  instances  the  Treasury  undertook ­
  to  re-deposit  unexpended  proceeds  in  proportion ­
  to  subscriptions,  as  promptly  as  depositary
qualification  was  completed.
This  modification  in  procedure  —  invested  with
possibilities  and  indeed  attended  with  results  both
fiscal  and  economic  of  very  great  importance  —  was
effected  without  public  discussion  and,  it  may  be
ventured,  without  public  comprehension.  The
Treasury  announcement  as  to  the  issue  of  August