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Evening Star, Issue 15909, 15 September 1915, Page 6

Attention has lately been drawn to the commercial difficulties of Financial the United Kingdom as Expedients evidenced by tho state In Cermany. of the exchanges with America. It is well to face facts, no matter how unpalatable. British people are never afraid of the truth, and if anything err on the side of their own disparagement. The financial disarrangements in Britain are as nothing, however,. compared to the upset in Germany, and it 'must be remembered that Germany started with an initial advantage. There were debts due to London by Germany to the amount of £70,000,<)00, which tho outbreak of war enabled the latter country to repudiate. This was equivalent to supplies for the first sir weeks of hostilities. Practically it meant that during that trying period England furnished her enemy with the sinews of war. But Germany's troubles soon commenced. 'Hostilities had not proceeded more than a few months when the American exchanges had fallen no less than 12 per cent, against the German merchant. More eloquent -"still of our enemy's distresses have been the methods to which she has been compelled to resortto raise funds. At the beginning of August last year the Reichsbank suspended specie payments and issued a large number of inconvertible notes. Furthermore, Government loan agencies, called Darlehenskassen, were scattered, throughout the country, with instructions to issue paper money up- to a maximum amount of £150,000,000 against securities of all kinds. It was a gigantic effort to convert property into money. The object was that the money or paper should then be lent to the Government. By this means tho purchasing power of the country would be concentrated in tho hands of the Government. - It was really a roundabout way of enabling the State to commandeer the wealth of the people for war purposes. The people have been induced to a large extent to place their wealth as security for paper money issued to them, and then to purchase Government bonds with the money. Tho State, in short, has furnished the people with money to invest in State securities. The indirect result i 6 that the'wealth passes under control of the Government, and the people hold promises of repayment in the future. If the Germans are defeated —and no one outside Germany believes otherwise—the bondholders will no doubt have to submit to repudiation. It must, nevertheless, be confessed that tho immediate effect is to strengthen Germany for war. It is only a,disguised form of a State seizure of tho property of private individuals unless redemption is secured by indemnities from' the Allies. At one stroke the ownership of private property has practically passed to the State. It is perfectly clear that Germany has not prepared for Hie inevitable defeat. Her •financial expedients are such as to render rehabilitation" difficult in the maximum degree'. Contrast the position in Great Britain. She has certainly been compelled to make bank notes legal, tender. She has also issued Treasury notes of denominations of £1 and 10s. But her stupendous loans have been raised under conditions which give .complete security to the lenders. There has been not the slightest depreciation of the currency. "Were peace restored to-morrow the energies of the Empire would run back into the normal channels with the minimum of friction. It is beyond question that Great Britain has not, so far, been compelled to mako the enormous drafts upon her 'financial resources that have been made by Germany. To a limited extent it is true that our adherence to the principle of " business as usual" is a matter for condemnation rather than approval. We are far too slow in the effective mobilisation of our material resources. Unfortunately the warnings of Mr Lloyd George are insufficiently heeded. Notwithstanding, let us take the comfort out of this fault to which wo are entitled. The German designs have been frustrated up to tho present, and yet tho war has' not reached the point of straining the resources of our Empire. When wo think of the .resources in (reserve the most despondent must gather confidence. Germany is much nearer exhaustion than the British Empire. Let us beware, however, of being lulled into a sense,of security. Germany is not yet exhausted, and is powerful to inflict immeasurable additional misery upon'us unless wo cast off every incumbrance and .gird ourselves as for a life-and-death struggle. Multitudes of lives will be saved if wo speed up our efforts in collecting and swinging all our energies upon our enemy. v