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Evening Star, Issue 15968, 23 November 1915, Page 4

With painfully impressive iteration .the responsible Ministers of American the Imperial Govern-

Securities. nient keep the British public mindful of the critical financial condition of the United Kingdom. Not long- ago Mr Asquith pronounced it- to be very •serious. Now Mr Bonar Law gives the Empire an equally .solemn and grave warning'. The war expenditure is enormous, but. says the erstwhile Leader of the Opposition. " it cau"nof be curtailed even at- the, risk of "national bankruptcy/' Mr Bonar Law did. not mean to imply that there was any risk of bankruptcy, but he did intend to convey the urgency of rigorous, economy. Further emphasis upon the gravity of tiie financial problem is supplied by yesterday's cable announcing the buying up of American securities by the British Government. Tho securities being bought are those held by private persons in the United Kingdom. As is well known.. British financiers have for generations been investing in the stock of American railroads and of every variety of American enterprise. These investments were" estimated at the opening of the war at several hundreds of millions of pounds. We know that many of these securities that have been maturing since the outbreak of hostilities have been liquidated by the American debtors. British financier's for the most part found that the war made money of more service to them than securities. The British merchants buying in America, were hard pressed for means of payment, and were able to offer terms to the investors in American securities which made it. profitable for the latter to use their money in financing imports from the United States instead of renewing American securities,

But whilst seli'-interest- induced the surrender to the American people of a large, quantity of American securities, it has been left entirely to self-interest, unfortunately, to determine the quantity surrendered. The British Government made no attempt to organise the matter. Furthermore, no organised effort'-was made for the sale to Americans of securities that had not matured. The Government now find that to leave the dealing with American securities entirely to the control of private individuals is unsatisfactory. The nation is urgently in need of using the.-debts Americans .owe to the British as a. means of ■paying the debts that the British are incurring to the Americans. Great Britain wants to make her past advances of money to America pay for the goods she is presently purchasing from America. H is unnecessary to tell over again the tale of Britain's heavy purchases from the United States. The latter country being the. only considerable country in the world ■that is neutral, she is naturally (he most coveted market for the supply of munitions and foodstuffs. Financial in,genuity has been exercised in maintaining our Empire's purchasing power there. It has been one long battle, against an. adverse exchange arising; from the persistent and ever-increasing excess of imports over exports. The exchange between 'London and Xow York had become intolerable, when the Anglo-French Commission journeyed to the latter city to raise a loan. Their mission was attended with success,, and the, biggest loan ever floated in Amp-' rica was raised, .'it provided a new sensation for the Americans. The flotation represented practically the first appearance of foreign countries upon the Xew York exchange as borrowers. There had been in times pa-st occasional small sums raised by the sale of Treasury hills. But. most of these sales had occurred since the war. At one bound the United States passed from a borrower among the nations to a -gigantic lender. And the terms were particularly gratifying- to Uncle Sam. He realises 5£- per cent. in tares*. on £ioo,coo;oco. Apparently this huge credit is exhausted now, or within measurable distance of exhaustion. What is to be done? There are four alternatives. The first one is to stop buying the requirements of -war from America.- This is impossible, and can bo dismissed at once. We are not playing at fighting, ami we simply must get all the supplies that are needed. The second alternative is to enforce a Spartan economy on the British people so that they will completely discontinue the purchase of luxuries and comforts from America. This is eminently desirable, but the British Government apparently hesitate to do more for the time being than put a little extra taxation on. imported luxuries.

.Something much more drastic is required if that measure of economy is to be realised which will materially ease the exwith America. The third alternative is to raise a new loan in America. Tho objections to this course are, obvious. Wo can borrow only upon onerous terms. Besides, some care must be exercised in cheeking the growth of indebtedness to the. United States. The last alternative is that adopted by the British Government—namely, the buying up of American securities from British private investors and using these securities as a moans of payment for imports. The Government are asking tho investors to sell or lend. If the investors lend their securities the Government will givo them per cent, interest more than they are at present receiving from the American debtors. '

We cannot help expressing our regret at the failure of the wealthy people" of England to follow Mr Asquith's advice of economy in their private expenditure. Neither can we' forbear from expressing our disappointment at the hesitation of the Imperial Government to adopt such measures of coercion as will enforce economy.