WHY GERMANY MUST LOSE.

Auckland Star, Volume XLVI, Issue 63, 15 March 1915, Page 6

WHY GERMANY MUST LOSE.

ECONOMIC ASPECTS OF THE WAR. BRITAIN'S BEDROCK FINANCE. W.E.A. LECTURER'S VIEWS.

Economic reasons why the cause ot the Allies must eventually prevail were explained in the course of a hi<rhJv-in-teresting lecture delivered by Mr. Meredith Atkinson, director 'of tutorial classes at the Pydnev University in the Grand Theatre. Auckland, last "evening, under the auspices of the Workers' Educational Association.

i At the outset the lecturer outlined the position of world finance prior to the outbreak of hostilities, pointing out that the Balkan wars and revolutions in Mexico had created an unhealthy condition of finance iv most European countries. Curiously enough, it was Russia that was most prepared for the coming shock, for since the Russo-Japanese war the Russian nation had been steadily accumulating gold reserves preparatory for the great struggle in which Europe might be involved at any time. France, too. fortunately recovered her position in regard to financial stability just before the outbreak of the war, "namely, in the month of June, when the gold reserves of tlie countvv were considerably increased. Thanks to her unique banking facilities, by which she could call upon every banking centre of the world, England was in a position to rapidly recover from the first shock of the declaration of war. Austria was the weakest financial country in the group, and Vienna, was naturally the first money market to feel the full brunt of the war. A DASHING EXPERIMENT. Mr. Atkinson proceeded to describe the terrific shock world finance experienced at the outbreak of the war. For the first time in history the Stock Exchanges closed. The Bank of Emrland rate rose to the unprecedented figure of 10 per cent, and yet—a magnificent exemplification of the stability of British finance—within a few days ft came back to normal. Disaster was only* averted hy tbe British Government taking what "The Nation" described as a "dashing experiment in State Socialism." The British Government made the experiment in State action the world has ever seen, and deserved the utmost admiration for the rapidity of the measures they adopted. The lecturer then dwelt in detail with the effect of the moratorium—a measure which the financial stability of Germany would not permit that country to put forward— of the issuing of Treasury Bills by the Government, of the State guarantee in regard to pre-war bills—a tremendous speculation in finance—and the rapid accumulation of gold in South Africa and Canada. The net result was that the Bank of England met every cill made upon it, the sudden drop in the gold reserve was rapidly built up. while unemployment, which in July wa3 2.S per cent., only rose at the worst period to 7.1, and had now settled down to 4.45. In 190S, a year of trade depression, the unemployed rate was nearly twice as high.

GERMANY'S FATAL WEAKNESS.

In the next phase of his lecture, Mr. Atkinson adduced reasons to show why the economic aspects of the war all indicated that the Allies must win. Contrary to popular conception, the financial position of Germany was not strong. Germany was a country which had only developed within the last sixty years, una consequently, owing to the financing of commercial experiments, wag not iv a. position to meet a crisis. Two vital weaknesses determined the defeat of Germany. First, she was not a creditor nation, and secondly she had not command of the sea. Incidentally the lecturer prophesied that Germany would IHo* feel.the real pinch of food shortage ! until next season, after the harvest was due. and as exemplifying the confidence iOf the neutrals in the ultimate victory lof the Allies, mentioned that English paper money was at a premium in other i countries, whereas Austrian and German [money had dropped respectively by 40 and 20 per cent. Germany's banking system was wretchedly antiquated. She had not even the cheque-book system, which gave banking houses an enormous advantage by enabling them to possess a far larger stable gold reserve. Austria's financial position was the worst of all. not even excepting Belgium. A TERRIFIC COST. Mr. Atkinson observed that it waa impossible yet to estimate the probable cost of the war. Some 20 million men were engaged or in training, and the sum of ten millions a day was being expended. A year of the war would cost the terrific sum of 4.000 millions, and that did not include the horrible wastage of machinery, factories and human life. If the war went 'on for two years, which seemed impossible, the world would have to work probably for a generation to recover what it had cost.

Mr. Atkinson was of opinion that Australia and Xew Zealand would realise a I boom after the war probably quicker than any other countries of the world, i in that all other countries must purchase from them the primary products, wheat,' meat and wool. At the same time we must be prepared to participate in the inevitable slump in trade which must come over the world. It would probably j be found that the recuperative capacity I of the world was infinitely greater than was generally believed to be the case, and that in twenty years' time the world would recover what a century ago would have necessitated" 200 years' hard work, i Speaking of what he alluded to as the ' tremendous danger of demanding crippling indemnities, th e lecturer expressed i the opinion that while Belgium should be handsomely compensated for the desolation brought about by the ruthless I methods of German warfare, we should be chary of inflicting indemnities that would cripple Germany financially, for I its effect would rebound on to her creditors, who were our own customers. Germany had lost more than it had gained by inflicting the big indemnity on France after the war of 1870. OPEN FOREIGN POLICY. In conclusion, Mr. Atkinson forecasted that some of tlie results of the war would probably be to secure the democratisation of foreign policy, and doing away with much of the dangerous secrecy that has hitherto been observed, to bring about a better understanding between the various strata of society, in that fighting side by side, rich man and worker would have learned more j about each others point* of view, and a Inew national pride which should be disItjnct from crude jingoism,