8 4

WAR  BORROWING

approximately,  $2,787,000,000  —  constituting  73
per  cent,  of  the  total  issue,  as  compared  with  72.9
per  cent,  in  the  case  of  the  First  Liberty  Loan.
The  composition  of  the  payment  was  as  follows 5  :
Cash  $  841,000,000
Credit  1,477,000,000
Certificates  469,000,000
Total  $2,787,000,000
The  striking  fact  in  the  payment  was  the  relatively ­
  small  use  of  certificates  and  the  correspondingly ­
  large  use  of  credit.  This  was  not  apparently
in  consequence  of  any  formal  administrative  restraint. ­
  Subscribers  were  permitted  to  make  payment ­
  on  November  15,  1917,  in  certificates  of  any
maturity;  whereas,  for  the  later  installments  of
December  15,  1917,  and  January  15,  1918,  only  the
maturities  of  the  corresponding  dates  were  eligible.
The  minor  role  played  by  certificates  becomes  even
more  evident  if  the  composition  of  the  first  installment ­
  payments  in  the  case  of  the  two  Liberty  Loans

be  compared:

First  Loan

Second

(per  centum)

Certificates

38

17

Cash

30

Credit

5'3

100

100

It  thus  appears  that  the  relative  parts  of  the  two
modes  of  payment  underwent  inverse  change,  the
percentage  of  credit  payment  doubling  and  that  of
certificate  payment  being  cut  in  half.  The  extent  to
5  Federal  Reserve  Bulletin,  December,  1917,  p.  919.