THE  PRESENT

4i

were  met  by  short-term  borrowings  in  the  form  of
six  successive  certificates  of  indebtedness  to  a  nominal ­
  aggregate  of  $2,320,493,000.  Of  these  the  first
three  were  under  the  authority  conferred  by  the
First  Liberty  Loan  act,  and  the  last  three  under
that  conferred  by  the  Second  Liberty  Loan  act.  A
less  evident  but  practically  more  important  distinction ­
  is  that  after  the  first  issue  (August  9,
1917),  the  method  of  payment  by  credit  came  into
increasing  use  by  subscribing  banks  in  settlement
of  certificates  allotted.
(D)  Despite  a  huge  available  balance  consequent ­
  upon  the  heavy  over-payment  of  the  first  installment ­
  on  account  of  the  Second  Liberty  Loan,
the  Treasury  resumed  short-term  borrowings  in  the
last  week  of  November,  1917.  The  expedient  then
adopted  was  a  further  use  of  certificates  of  indebtedness, ­
  this  time  in  anticipation  of  the  proceeds
of  war  income  and  excess  profits  taxes  payable  in
June,  1918.
Authorization  for  this  procedure  had  been  conferred ­
  by  a  provision 18  of  the  war  revenue  act  of
October  3,  1917,  empowering  collectors  of  internal
revenue  to  receive  at  oar  and  accrued  interest  certificates ­
  of  indebtedness  issued  under  the  First  Liberty ­
  Loan  act  in  payment  of  income  and  excess
profits  taxes  for  “  such  time  and  under  such  regulations ­
  as  the  Commissioner  of  Internal  Revenue,
with  the  approval  of  the  Secretary  of  the  Treasury,
shall  prescribe.”
The  reason  formally  assigned  for  this  tax-antici-18
  Section  1010.