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The Evening Star MONDAY, DECEMBER 28, 1914.

As we anticipated. Mr f. E. Stallinm declines to jit ,-s A " Trua Sport." member for Dunedin Central until ho is satisfied he < '.miiiands a majority of the vole< in tiiai. electorate. His decision t.) resign, and by so doing to subordinate Party to I'rinei|:li'. will, wo feci sure, bo acclaimed by every right-minded pera;ii not only in the constituency but throughout tlio Doininion. The proceedings before the Stinep.di.iry Magistrate demon stratod beyond dispute; that the greater number of the invalidated ballot papers cast at the Caversham booth were in Mr Munro's favor, and under these cireunirtanees Mr Stat ham, had he retained the seat, would have had to face the taunt thai lio was the representative, of the minority, which would have been a mo 4 undesirable position—one that no genuine sport like himself would nccupy for a moment. He prefers that, the electors fhould have the opportunity of savin'\ undisturbed by extraneous whether he or Mr Munio is the better qualified to voiee their political aspirations i'l Parliament. And we venture ro prophesy that they will on the next occasion make their wishes known with no uncertain bound. The present situation is that, there being no Speaker, the letter of resignation must go to the Clerk of the Writs, and upon receipt the < lovernor-in-Counci! will cause police thereof to be inserted in the ' Gazette,' probably on Thursday next. The Clerk of the Writs will thereupon issue a, fresh writ, which is made returnable within 21 days. For sufficiently obvious reasons the campaign need not occupy anything like a fortnight; the sooner the choice of the electorate is made the better for all concerned, since tho views of the two contestants are perfectly well known to the electors. We say the •'two contestants" advisedly, because tho issue should be restricted, under the peculiar position that has arisen, to Messrs Statham and Muuro. The law allows any '•free and independent" (who is so minded) to be nominated, but this is a case where the leaders of all political sections should maintain an honorable truce against all outsiders. The fight must be between Mr Munro and Mr St.ithp.iii alone, and tho political "ring" must be kept perfectly clear for them and a, square run given to both.

I A few days ago we wore notified by cable that the German Government wero issuing large quantities of paper money. This is significant of financial pressuro, and deserves more than passing notice. There have, been few great wars in which paper- money did not figure prominently. Of all expedients for providing for tho necessities of an embarrassed exchequer, it is the most fatally easy. When a. country is at tho end of its resources, when its credit is so far impaired that it cannot borrow, and when its people are so poor that they can't pay more taxes, tho only refuge for a distressed State is paper money. Tho operation of this device of bankruptcy is worthy a little attention. One can readily imagine the plight of the German Treasurer. He has an unprocedentedly large army to sustain en a war footing. Millions of pounds a week are being blown away from tho cannon's mouth. Accompanying tho enormous growth of expenditure is an unexampled shrinkage of the sources of revenue. Millions of men who by their ordinary pursuit* make revenue are now merely consumers of it. Factories that produced taxable commodities are closed. Customshouses that collected millions of pounds sterling a year yield nothing, for the import trade has suffered collapse. Large incomes havo dwindled to small ones, and small ones havo disappeared. The most abundant fountains of revenue aro drying up at a hundred points. But so important is money to a belligerent nation that it has been described a 6 the sinews of war. Not only havo soldiers to bo paid, but vast supplies of ammunition, of puns, of clothing, of food have to be daily purchased. Only by the possession of an adequate quantity of money can, a {state fill the stomachs of its fighters and fill the barrels of their rifles. Without money an army starves; without money howitzers cannot be charged. The United Kingdom, with tho highways of commerce open, with her export and import trade wonderfully well maintained, can borrow between 3CO and 400 millions with which to finance the prosecution of the great European conflict. Germany lias no such means available, and yet her expenditureof money per day must he many times greater than that of our own Empire. With all legitimate avenues of money raising closed, our mighty foe is driven to the last resource of financial instability. Inconvertible paper money wii! at any rate enable the Emperor to pay his .-.oldiers, purchase commodities, and pay his debts, and save him from the disaster of a sudden stoppage of the financial machinery. All that the supremo legislative authority has got to do is to make State notes legal tender, then they must be accepted in discharge cf commercial obligations, and any creditor refusing them would find that legally the. debt to him was cancelled. This step taken, the State printing press is set to work, and paper money is manufactured" in such quantity as is desired. Tho way in which the money gets into cireu- ] lation is very simple. Suppose the Government on a particular day have debts to the amount of £IOO,COO to meet, they print £IOO,OOO of notes, and the creditors are compelled to take them in payment, because they aro legal tender. The notes will probably cost less than 100,000 pence, and they will have cancelled £IOO,OOO of debt. Hero is a magic way of making millions of indebtedness- to disappear like before the rising sun. But in reality | what has taken place is a forced loan. The army has not been eating State notes for breakfast or making bullets out of them, but they have been cunningly used by the Government as a, means of making the people, of Germany contribute commodities and- munitions ot war to the value of £IOO.OOO. Inconvertible paper money ; s a device of insolvent Governments to obtain the auxiliaries of war without paying for them. It may naturally be asked : How will the. injury of this money show itself to the German people? The index of the weight of its oppression will be the rise in the price of goods. As the paper money in circulation increases up will go prices correspondingly. Every additional note, will represent an added demand fur goods, but it will not represent an increased supply of Thus, because the Kaiser is paying his debts in paper every artisan in Germany will find that his wages procure for him less of the things he desires to consume. Xow that Germany, in default of tho possibility of sound finance, has embarked upon the perilous sea of inconvertible money, the time may soon come when it will take a wai'-on load of money to purchase a waggon load of provisions. Such was the experience of America before and during the Avar with Great Britain. Such a condition, too. bffell Trance during the great Involution. At one time. whenever (he State of Connecticut wanted to mak'i a payment sh:> printed a piece of paper and made hpr creditor accept if. Issue after Tmi* followed in ouick succession. Tn consequence, mm'cpg rose, or n oticy depreciated. more and more. Tn 1710 an ounce of silver was worth Ss m naper, in 1721 it was worth 15s, in 1739 265, in 1714 325, in 1749 60s. in 1755 83= The experience of Rhode 1.-land -nat; stil! voise. Tn 17C6 £lB5 of paper money in the State i'- :lf worth £IOO in London." In | 1749. after enormous ir-wes of paper, £IOO | in London wruld purchase as much a.-: £I.OOO of"r money in tho State. The disasters which fell upon tho American States through the isnie of inconvertible paper monr\v were so great that, under the Constitution of t!u United States, the irsuo of paprr money of any kind by the individual States is prohibited. The calamities which foliou" Ovei'-isstle of money were still more marked in the case of (he French areignats. These, pieces ot* paper actually represented propcity. They were issutd j against ecclesiastical property which the Government had confiscated. The property was assigned as r-eenrity for the notes. But it makes tin difference whether notes havo property behind them or not. , Tn either <asn over-it=sue will bring about ' the same result. As tho millions of rotes wcro poured into < irculation the depreciation went on apace, although the money was based " unshakeebly" on tho only real property, "the (="|e source of produc- i Hon, the soil on which wo trend." Tiie factories of the country were closed and vast numbers of workmen wcro thrown out. of employment, yet hundreds of millions of pounds of money were put in cireu- I lation yearly. The trouble wns that capitalists dared not embark in industry ; the changes in price were so sudden and extreme. '' Cornmerca was der.d : betting took its place." An msignat professed to hj» worth £L M the last it, would not purchase as. much as could be purchased od before assignats were issued. In the light of those past experiences the movement of event*, with respect, to the issue of paper money in Germany will bo watched -with interest. To us it. is deeply significant of tremendous economic pressure.

Financial Pressure In Cermany.

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The Evening Star MONDAY, DECEMBER 28, 1914., Issue 15686, 28 December 1914

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The Evening Star MONDAY, DECEMBER 28, 1914. Issue 15686, 28 December 1914

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