GERMAN FINANCE

Southland Times, Issue 17658, 16 February 1916, Page 3

GERMAN FINANCE

EMBARRASSMENT AHEAD. SIR JOSEPH WARD’S VIEWS. The heavy depreciation reported in foreign countries as a result of the war was referred to by Sir Joseph Ward, Finance Minister, at Wellington on Friday. “The pressure of the war,” he said, "is having a much more severe effect upon German stocks than those of either Britain or the oversea dominions, or any of the Allied countries. In the information of the London Stock Exchange at the end'of December, it is shown that the Austrian 4% per cent, stocks that stood at £9l before the war had gone down to £SS, the Prussian 3 Vi’s had fallen to £SO, the Prussian S’s to £4B, and the German S’s to £49. A comparison shows in a very marked way the strength of the British finances. The closing quotation for British Consols, which carry only 2Vi Per cent, interest, was at the same date £58%. This is the more remarkable because the market was not protected by what is known as the ‘minimum.’

"A comparison of the exchange between Germany and New York shows the weakening .tendency of German finance. In normal times the exchange rate was 95Ud01. for 400 marks. At the end of Doc ember it was 77 '/idol. It shows a drop in value of nearly 19 per cent. It is quite apparent that in a vital pol l ion of the German fabric the effect; of the blockade and of the prolonged war are very apparent. Another fact shows that the day of reckoning will be a bitter one, so far as Germany is concerned. Britain is providing for the whole financial situation during the war by taxation, while Germany is standing off, and for the loans she has had up till now is relying upon the issue of paper to her own people, which at the rate at which it is going up must in the long run spell bankruptcy for the country. It is quite evident from various sources that the reliance placed by Germany upon receiving a huge indemnity from the opposing belligerent Foiiers has been the principal

ground on whicli she has based her appeal to lur people to support the war. Tim struggle will be a titanic one, bat, so ’fur as human foresight can judge, there Is little chance of Germany receiving financial relief from indemnities. On the contrary, the basis of settlement in the ordinary course of events must demand large indemnities from Germany. With the import and export trade, upon which Germany has relied in the past for a large portion of her business, cut off in till directions, and the indications disclosed by the depreciation of her own stocks the carrying on of the war without .success for another year looks like inevitable bankruptcy for Germany."