m 
82 
WAR BORROWING 
with $410,432,295 in May, then recovering from 
an enforced restraint of $277,500,000 in June, to 
$452,500,000 in July, and to $478,000,000 in 
August. Our own expenditures, including interest 
on public debt, were less in outright amount but far 
more ominous in swift progression — $114,102,- 
809 in May, $134,304,040 in June, $208,299,031 in 
July, $277,438,000 in August. 4 The last of the 
outstanding certificates had matured on July 30, and 
the Treasury was for the first time since the out' 
break of the war entirely free from short-term 
obligations. But on the other hand the Treasury 
balance dropped below $309,000,000 early in 
August and substantial reinforcement became im 
perative, confirming the unwisdom of the Treas 
ury’s rejection of the entire over-subscribed part 
of the First Liberty Loan. 
II 
The second cycle of our war financing began on 
August 9, 1917. With a reduced Treasury balance 
at the outset, with the receipts from the First 
Liberty Loan exhausted, with a relatively incon 
siderable revenue from war taxation, with Allies’ 
requirements of undiminished magnitude, with our 
own expenditures for the national defense mounting 
progressively, with a second funded loan in con 
templation and with no outstanding short-term 
obligations — the Treasury in pursuance of the 
policy now definitely established undertook to meet 
4 “ Monthly Summary of Foreign Commerce of the United 
States,” February, 1918, p. 93.