PLIGHT OF GERMANY.

Taranaki Daily News, 15 February 1916, Page 6

PLIGHT OF GERMANY.

"INEVITABLE : BANKRUPTCY." 'i' MINISTER FOR FINANCE QUOTES . ; :, , , FIGURES. ■ ■ ■ . (From Our qsjjm Correspondent). | Wellington, February 12. The decline in the prices of colonial stocks on the London market was mentioned again by the Minister for Finance (Right Hon. Sir Joseph Ward) yesterday. The Minister had said a few days previously that the fall in prices was the natural outcome of the heavy borrowing of the Mother Country at increased rates of interest, and yesterday he made an interesting analysis of the effect of the war upon the stock of the enemy countries. He showed that the decline in the prices of Imperial Consols and Dominion stocks was small in comparison with the fall in the value of German and Austrian stocks. "Information placed before the London Stock Exchange at the end of Deleembei)," said the 'Minister, "showed that Austrian 4>/> per cent, stocks, which stood at £0! before, the. war, had gone down to £SB. and that Prussian 3% per cents, had fallen to £SO. Prussian 3 per 'cent, had fallen to £4B, and German 3 per cents, to £4!). British 2% I ■per cent. Consols stood at £SB 10s on ' tlie day on which the Austrian and German prices were quoted. It has to bo remembered that these Consuls were at a particularly low price before the war, and that when they were quoted at £SB 10s they were not protected by any 'minimum price.' A comparison of exchange rates between Berlin and New York tells of the weakened finance of the enemy in another way. In normal times the exchange rate was about 95% dollars for 400 marks. But at the end of December 400 marks brought only 77% dollars, a drop in value of lfl per cent. "There can be no <loubt, in the face o F these financial indications, that the day of reckoning, when i t comes, is going to be a difficult one as far as Germany i s concerned. Great Britain has raised millions of* extra revenue by taxation and has maintained the gold basis, thus financing the war on sound lines. The German Government has relied upon the issue of paper to the German people, and the rate at which this paper is going out must in the long run mean bankruptcy to the country. The Germans have relied upon receiving a huge indemnity at the close of the war to cover their paper, but the Allied countries know that any indemnity will be paid by Germany herself. . The basis of settle7ncnt in the ordinary course of events, so far as human foresight can judge, must include the payment of very large indemnities by Germany.

"It is quite evident that with their import and expovt trade cut off, and with their stocks declining in the way indicated, the conduct of the war for another year without the victory that we know they cannot win means for the German people inevitable bankj ruptcy.'