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Evening Star, Issue 15899, 3 September 1915, Page 4

' A boy who was indulging in the luxury of smoking a cigawjtte in bed was irespon: siblo for some excitement in a 'house in. the city soon after 5 p.m. on Wednesday (says the 'Lytbelton Tunes'). He set fire to the bedclothes, and nearly set fire to the hoase, which has' two stories and nine rooms. The fire brigade were called up, but the fire was put out before any damage was done, except to the bedclothes and mattress^

The cable relative to the state of the, 1 exchanges between AmoFinanciai rica and England, pubBarometer lished in our columns on In the Ist inst., is full of New York, grave significance. It stated that the rate of exchange -was adverse against England—indeed, that in the whole history of the relatione between toe United States and Great Britain the exchange had never been so markedly adverse. Whenever, an English merchant purchases a sovereign's worth of goods from America', he has to pay an extra Is 2d as a mere financial charge. When an American exporter sends goods to London and draws a bill for their price on the English merchant the New York ibank will not purchase that bill from the exporter except on. the terms that it gete a fee of Is 2d on every sovereign which, by purchasing the bill, it obtains the right of collecting in London. This is a heavy burden on the English importer, and a serious embarrassment to the American exporter. The gravity of the position arises from the fact that the rate of exchange indicates that Great Britain is encountering an unprecedented difficulty in paying her j debts in the United States. She has been | buying from them more than she can | pay for at the present. Normally England meets all her obligations to American merchants by exports from her own factories. She pays for the goods she receives by goods that she despatches. Indeed, for the most part up to the outbreak of war she has sent to America more commodities than she has obtained from that country.- The surplus of her exports has gone to the United States as loans and investments in American industries. —Now the order of things is reversed. Twelve months of war has wrought a revolution in the relations between these two great trading countries. From being a creditor nation England lias become a debtor nation. And her indebtedness has become so great that it is clear the Americans are apprehensive about the prospects of payment. Great Britain has neither gold nor goods in sufficient abundance to offer in discharge of her liabilities. Apparently the crisis •has not so far been met by means of obtaining credit in New York by raising loans there. This, of course, would ease the stringency at once. The raising of a loan of £1,000,000 in America has the same immediate effect on the exchanges ae the export there of goods or gold to the value of £1,000,000. The most recent cablegram in reference to the financial crisis would seem to signify that the German influence in America is accentuating the difficulty. A moment's consideration will show the probability •of this. Financiers say that the rate of exchange between any two countries depends upon the relation of the supply and demand of commercial bills. All debts to and by a country when mad© the subject of dealings in the finance market are expressed in. bills. Thus when an American importer buys goods from England his debt is represented by a bill drawn upon him for his acceptance and payment, and when an American exporter sells .goods to England the debt to him is represented by a bill drawn upon an English merchant. Bub a debt of interest owing by a New York municipality to an English money lender may be represented by a bill drawn on the municipality, whilst a debt of interest owing to a New York millionaire by an English manufacturer may be represented by a bill drawn upon the manufacturer. Now, when the holders of these bills desire to convert them into money they present them for discount at banking and financial institutions. The banks, say in New York, cash the bills of American exporters on England; they rely on recouping themselves by being able to sell bills on New York. To put the matter in its simplest form and eliminate all complexities with a view to getting at the eseence of an exchange transaction we may adopt the following explanation : When an American exporter comes to the bank with a bill on England for £IOO, the bank examines its coffers to see if it has a bill on Now York for £IOO to collect. If it has it readily buys the bill on England by in effect selling' the merchant the bill on New York. A New York exporter wants to receive £IOO from England, and a New York importer wants to pay £IOO to England. The New York bank gets both bills and gets the New York importer to pay the New York exporter by means of the Dills. In England the other side of the transaction takes place, the English exporter receiving payment from the English importer. So long as the New York bank has bill for bill, one to sell for every one it has to buy, the exchanges are at par, and when a New York exporter sells a bill on England for £IOO he will get for it 4dol 86 cents per sovereign. But now the state of trade between England and America is such that the New York banks have far more bills to buy than bills to sell, because America is exporting to England far more than she is imparting from her. The consequence is that a New York bank does not have for every £IOO bill offered to it for purchase or discount a bill to sell or collect in New York. Therefore if it buys all the bills that are offered to it it will have to collect some of them in England. But there are only two ways of collecting—that is, by getting gold and bringing it from England to America, or by getting goods. At is happens, the war has put Great Britain in such a position that 6he cannot supply either in adequate quantities. It follows that as the bills on England become disproportionately large and numerous, the New York banks raise their charges for discounting them. Now the disproportion between bills payable by England and those payable to her may be increased by the manipulation of interested financiers. Germans in America might very easily be assiduous 1 in getting into their hands as many bills payable by England as possible, and then rush them precipitately or, the market. At the same time they might conceivably corner bills payable to England for & time with a view to creating such a surplus of bills payable as will make the purchase of them by American financial institutions appear hazardous. Thus German "bears" might force down the rate of exchange so as to make it greatly unfavorable to Great Britain. Such a course is not very easy, but the market for bills may be manipulated like the market for commodities.

In the meantime we have to face the serious position that unless some beneficial change .takes place Great Britain will soon have to reduce substantially her purchases from the United States. This means a measure of embarrassment in the conduct of the war. There is no good blinking the fact; the Mother Country ia being strained to provide those sinews of war which consist in material wealth. When such is the case the need becomes all the more imperative for aid from the colonies. They must mot expect- her to furnish them with wealth, as heretofore in the s&ape of loans. Rather they should be preparing to assist; hex by lending to her of their

(relatively redundant resources. Did our Dominion send moo.'© goods to America and instruct America to pay the debt bysending goods to England, this would relievo the situation. This could only be done through the medium of loans." At any rate, our duty is cleair to send as many goods to Great Britain as possible directly or indirectly, and if by ourvoluminous exports the exchanges between New Zealand and England become adverse to the latter, we must lend to the British Government, so that the time of payment may be postponed.

We assume- that the frequent restatements by the Imperial GovernHlstory ment of quite recent hisAs Taught In tory are' largely intended Germany, as a corrective to the pernicious and scandalous insinuations of the handful of influential domestic fcreasonmongers who have humiliated and shamed their countey as nothing else has done throughout- these past eventmonths of war. The British, presentation, whether made by Lord Haldane, Mr Balfour, Sir Edward Grey, or the Foreign Office, even if published in its entirety and without editoriaP additions, in the German Press would not convince the Germans as a whole, though, even ic Germany, were it certain that they would be given the opportunity of studying for themselves the whole story of the antewar negotiations, good not impossibly might follow. While it is true,to assert in general terms that the German nation is. behind the Kaiser and his policy, it is no* fess time to say that the majority probably are so actuated because they have been taught by Government, Parliament, Press, and Kaiser that Great Britain, or England as the Germans prefer to say, deliberately conspired to isolate Germany, and, when the conspiracy was ripe for action, outrageously attacked her. It wiD be found that this is the belief underlying 93 per cent, of such German opinion as gets itself into pint. There remains, however, a small residuum which, if not in doubt, is at least open to reason. And it is this unknown, silent influence that n/ay not improbably yet prove the leaven that will leaven the whole German nation. In a letter from a Dutchman living in Germany to a friend in Holland, and "subsequently published in reputable British newspapers, the writer says :

Much has been talked and written about the so-called "absolutely united spirit, of Germany and the German people," but he -who has spent the 11 months of this war living in Germany and with the Germans knows that this artificial unity must sooner or later come to an outburst. . . . The fact is that, according to Germany's time-table, the war should bo over now, and the German who has invested his capital in war should now be receiving his first "dividend"— and it is all different. The great danger for Germany will be when the Germans realise to 'its full extent the spirit of the Allies. We are inclined to think that not only are the Kaiser and his colleagues in crime beginning to realise that neither France, nor Russia, nor Britain went into this appalling war, in the words of President Poincare, " just to sign a precarious peace, a "troubled and fleeting trace, interposed "between a shortened war and one more "terrible still," but also that Germany's own position, in epite of its many holidays to celebrate fabulous "victories," being what they know it to be, makes it imperative that the Government should, if possible, convince the outside world that Germany has been the innocent victim of brutal British aggression, in proof whereof they submit their documentary evidence. This latest campaign of diplomacy is foredoomed to failure. With the exception of an influential but unscrupulous party in the United States, there is no nation, not even the better half of Turkey, that has a doubt as to where and on whom rests the responsibility for the guilt of this most wantonly wicked and fiendishly aggressive of ware. The object of the German Government being what it is, the British Foreign Office has, for the benefit of the general mass of the people, published in detail the progress of the consultations and communications that passed between the two Governments prior to the war, with a view to a friendly understanding. These are fairly summarised in the cable message, and their essential meaning and purport are accurately and sufficiently set forth in the words : "Germany's real object was to obtain neutrality in all eventuali"ties." It is indispensable to a just conclusion that Germany's motive—the unconditional neutrality of England—be borne in mind. It is this which constitutes the key to all that was done before the wa T , and of much, including that outrageous outburst of hate, that came afterwards. "England has betrayed us/' "England has played us false," "Down with England," were the cries everywhere raised after that fateful afternoon of August 4 last year. Why? The answer is as simple as it is irrefutable: Because England would not sit still or stand idly by—in other words, be neutral —while Belgium was being ravaged and France bled white, and because- the Imperial Chancellor knew that the entry of England into the war meant the overthrow of Germany's diabolical onslaught on the nghts of mankind. To use Dr Von Bethmann Hollweg's own words "all his efforts m that direction (to be friends with Greatßritain) had been rendered useless "by tins last terrible step, and the policy which ho had devoted himself since "his accession to office had tumbled "down like a house of cards," and what is being preached to-day is that because the statesmen of Britain were neither fools nor scoundrels they were responsible for the war. The "documentary evidence" has only to be examined to make plain, even to the simplest, the purport, object, responsibility, and crime of German, statecraft.

By " documentary evidence " -we do not mean that the German version is exohided. The German and British Foreign Offices submitted certain formulas to each other with a view to reaching a friendly agreement as to the future relations of the two nations, and it was the Berlin insistence that Britain should he neutral under any and every condition that disturbed Germany's policy, and made fruitless the negotiations of 1912. Mr Asquith, speaking at Cardiff on October 2 of last year, set forth with his customary felicity of speech the history of the attempts that they as a Government had made to come to an arrangement with Germany. The Prime Minister then said: Britain declares that she will neither mak© nor join in any unprovoked attack on Germany. Aggression upon Germany is r.ot the subject and forms no part of any treaty, understanding, or combination to which Britain is now a party, nor will she becomo a party to anything that has such an object. But that was not enough for German statesmanship. They wanted, us to go ..farther. They asked us to pledge ourselves absolutely to neutrality in the event of Germany being engaged in war, and this, mind you, at a time when Germany was enormously increasing, both her aggressive and: defensive resources, and especially upon the sea. They asked us, to put it quite plainly, for a free hand;, so fao.- as we were con-

cerned,, when they selected the opportunity to overbear, to dominate the European world. To such' a demand but one answer was possible, and that was the answer we gave. At the end of 12 months and more of the most sanguinary; war in her history Great Britain, through her Foreign Office, again deems it necessary to restate some of the main factors that led to it, partly no doubt because there are, in this her hour of danger,, degenerate and unworthy sons of Britain who are not ashamed to proclaim abroad the possible righteousness of Germany's infamous version. .

The following was > cabled to us from Alexandria this morning:—"19th. All well at Gallipoli.—D. Healy, L. G. Wilson, C. Woodfield, N. C. Swinard, T. GUlman, Wm. Wollock, S. D. White, R,. Robinson, J. M'Crae." A petition is being largely signed in Dunedin for a remission of the remainder ,of the sentence passed on Captain Hender- ! son last month in connection with the Milton Defence cases. Our Parliamentary Reporter wires rhe Minister of Public Health (Hon. G W - Russell), who has just returned from •!t. C , d dietriet » he conferred with tho local bodies as to accommodation for returned soldiers, wounded or oonvalescont informed a Press "representative last night that tho steamer Aparima winch ler-t Suez three days after- the departure of the Tahiti, will make Port Chalmers her first port of call. There are about a hundred men .an tho Aparima, who will be placed on Quarantine Island 101special treatment. Their names arc not available, and it is understood that thev will not be ascertainable." Two persons wero before the Police Court this ?norning on charges of breakin 2 the by-laws by lighting fires in their gardens without the special permission of the Town Clerk. It appeared, as the Magistrate (Mr Bartholomew, S.M.) said, that the obligation of obtaining, permission to burn rubbish rn this way was not generally known or observed. In one case the defendant said that she had followed the practice for 52 years without getting permits. Small fines were imposed. Prank Edward Martin Reid, the second man alleged to be implicated in the thefts from suburban houses that have occurred latterly, was arrested by Detective-ser-geants Connolly and Kemp yesterdav afternoon, and appeared this morning charged wifch,_ on July 17, entering the dwelling of Jennie Hutchison, and stealing two diamond rings and five pounds in money, of a total value of £BS. On the application of Chief-detective Bishop, who said other charges wero pending, accused was remanded till Friday rext. The Unitarian services which have beer, conducted here by the Rev. W. F. Kennedy for the past three years are to "p discontinued for the time being, as Mr Kennedy expects to leave Dunedin shortly _ in order to take up some work, j for which he has volunteered, in connec« j tion with the returned wounded soldiers. The inquest into the circumstances surrcunding the death of Dr F. C. Batchelor }.will not be continued to-morrow as arj ranged, as Mr Bartholomew, S.M., will be otherwise engaged. Dominion Day, which occurs on Mon- | day, September 27, is to be observed as a holiday by the State schools. 1 An unusual accident occurred at Hatdtai (Wellington) on Wednesday, when Mrs Donnelly, a visitor from Hawera, was blown by the force of the wind against a tramcai-. She was knocked down, and sustained injuries to her head and face. She was removed to the hospital. Wairarapa farmers assert that the past ; winter has been one of the best for stock and agricultural pursruts that has ever been experienced. The occasional showers of warm rain, followed by bright, sunny [days, have materially assisted the lambing, and have given the crops an excellent start. Messrs D. A. De Mans and D. M. Mawson, JfcP.s, presided at the Port Chalmers Court this forenoon. John Pans was fined 5s for casting offensive matter, and Frank Stockdale 10s and costs (7s) for riding a motor cycle round the junction of Beach and George streets at other than a walking pace. The ordinary meeting of the Port Chalmers School Committee was held yesterday evening; present—Messrs J. M'Lachlan (chairman), A. R. Sutherland, I. C. [lsbister, R. D Jack, J. Mill, and Rev. VV. M. Grant. Resolved to close the school I next W eek for the spring holidays. The [ Visiting Committee gave a very favorable re P°? t on their inspection of the school? wlxicfa. it was decided to disinfect during the holidays, on account of the prevalence of measles. The rector reported that the average roll for the past month was in the primary department 457, and the average attendance was 426 ; in the secondary department the average roll was 25 and the average attendance 23; the attendance in the infant room and Standard I. was being seriously affected 'by the measles and whooping cough. The attendance shield was held for the month by Standard 11., with 99 per cent., 99 per cent., 99 per cent., and 97 per cent. Mr J. Emerson and Mr I. C. Isbister were appointed a Visiting Committee for the month.

A very interesting feature in connection with Mr Andrew Fisher's retirement from the office of Prime Minister of the Commonwealth of Australia is that it may possibly afford Mr J. C- Watson, an exPrimo Minister, an opportunity of reentering Federal politics. Mr Watson, however, states that he has no intention of re-entering politics. His energies, he stated to a Melbourne ' ATgus' reporter, would be entirely devoted to the establishment of the proposed Labor newspaper in Sydney, the publication of which had been delayed by the war. It is currently rumored in Australia that -Mr Fisher _ will succeed Sir George Reid in the High Oommissionership. . Mr Widdowson, S.M., presided at the quarterly meeting of the Chalmers Licensing Committee to-day. In respect to'the Provincial Hotel at Port Chalmers, the committee approved of the plane of a new building in Brick, to take the place of the present wooden structure, and stipulated thait an additional fire escape bet provided for each story. The license was granted for three months, on the understanding that the construction of the new building be proceeded with at once. At the Port Chalmers Court, this forenoon John Millar was fined 5s for drunkenness, and a similar sum for casting offensive matter. Mr J. Watson was tlie presiding Just? CO. A meeting of the Ladies' Executive of the Queen of Commerce (Miss Downie Stewart) was held in the committee rooms on Wednesday afternoon, Mrs R. Martin presiding. It was proposed to present Miss Stewart with a memento of the carnival, but with her characteristic abnegation she delicately declined a presentation. It is her intention to entertain her committee at an "At Home" at the Savoy Tea Rooms on 'Tuesday afternoon. . _ A Whangarei telegram states that William Woolley, an habitual criminal, was sentenced to three years' reformative treatment for the theft of a portmanteau, valued at £5. He was also convicted and discharged for the theft of a coat, valued at £2. The accused was caught while trying to sell the portmanteau. Sergeant Moore pointed out that the police were not informed of the release of habitual criminals on license. Such persons were allowed to prey on the public without tire police being aware of their whereabouts. Woolley is the second habitual criminal sentenced in Whangarei within a month. A slaughtering license has been granted to the Cfaristohurch Meat Freezing Conv pany in connection witlr the establishment of new works at Wanganui, tenders for which will be called within a fortnights The directors have decided to include a preserving plant in the works, and the machinery has already been ordered from Home. Messrs M'Lean and Oo.'s tender has been, accepted by the company for the erection of an 800 ft jetty from the works at whidj produce will he loaded into Ja to Home boats. —-P.A. wflgjKam.

A Wellington telegram state's that on a charge of selling milk adulterated with water a firm of, milk venders wero fined £2O.

Don't drinK immature spirits. Watson's Np. 10 whisky is fully matured and very mellow. —[Advt.] A glass of -Speight's beer at lunch andsupper is better than all the tea in China.— [Advt.] We have received from Mr H. E. 0. Robinson, map publisher, 221-223 George street, Sydney, an excellent map of the war zonß. The line of contact between the opposing forces is shown very clearly. The map covers all the countries now' at war. Tailoring.—We have now opened up the first of new season's suiting. J. Hendry and Sons, 52 George street.—[Advt.] This evening the. first of a course of eight lectures on the life of the Apostle Paul will be given by the Rev. J. T-. Pinfold, in the Young Men's Christian Association Rooms, The subject is- 'St. Paul's Preparation; Early Environment and Education.' Watson's No. 10 is a little dearer than most whiskies, hut is worth the money.— [Advt.]