GOLD LEAVES GERMANY PEEUNG THE PINCH.

Evening Post, Volume XC, Issue 80, 2 October 1915, Page 13

GOLD LEAVES GERMANY PEEUNG THE PINCH.

(HIOM-OUB OWN COMBSPONDHNT.) LONDON, 13th August. The City Editor of the Daily Mail says that although the stoppage of imports means that Germany has not so much to pay for in gold, yet the finan cial strain must soon make itself felt. Apart from borrowing in her money market, she has raised £676,000,000 in two war loans, and she is preparing to issue a third in September ; but much of these loans are paid in in Government paper I money, for which there is not sufficient gold backing. That is shown by the fact that German currency is quoted at a discount all over \ the world. In the United States it is difficult to get any quotation at all now. The latest quotations from various cen- | tres show that money which Germany I herself regards as worth £100 is regarded by the rest of the world as not worth £75. This depreciaated paper has to be accepted by the German farmer, for instance, at its face value in exchange for the foodstuffs with which he supplies the troops. That he will not go on accepting it, having regard to its continued depreciation, seems to the Mail's financial authority certain. The farmer will begin to see that there is grave doubt of his ever getting the money for the paper which is forced upon him. The city authority finds it impossible to believe that the large gold reserve which Germany boasts in her Reichsbank returns really exists, in spite of all the scraping together of gold which she is practising at home and abroad — she evidently gets much of the gold leakage from this country. In his expert eye, the returns, with their steady increase week after week in gold holding, prove too much ; such a steady increase is impossible. For one thing, the neutral countries with which Germany can still trade now demand gold and get it, as the returns of their banks show. A year ago the Bank of the Netherlands held 13 millions sterling of gold ; it now holds 30 millions. Sweden and Norway held 8 millions ; they now hold nearer 10. Switzerland held 7 millions ; she now holds 9, and 60 on. The increase must be due to German payments of gold, and yet her gold holding goes on steadily increasing — according to her own returns. She has had to begin to pay out gold, and when once an outflow of gold begins it has a habit of assuming large proportioos.