The Taranaki Herald. (DAILY EVENING.) WEDNESDAY FEBRUARY 25, 1915. GERMAN FINANCE.

Taranaki Herald, Volume LXIII, Issue 144666, 28 April 1915, Page 2

The Taranaki Herald. (DAILY EVENING.) WEDNESDAY FEBRUARY 25, 1915. GERMAN FINANCE.

When the German Minister of Finance, Dr. Helfferieh, asked the Reichstag: a few weeks ago for ■a further war credit of £500,000,000, to finance the war until the late autumn, he contrasted the position of Germany with that of the Allies, much, of course, to the latter's disadvantage. (formal) banks and savings hanks, he declared, had discharged their obligations without delay; ' No general moratorium had been required. The national credit stood better than that of cither France or Great Britain. The current financial year would probably even show a modest surplus, and at the moment there was no pressing need for the imposition of new taxes. Germany was financing her war requirements exclusively by loans and the issue of notes, and while*the demands upon tire Reichsbank had again approached the culminating point the bank would be relieved by the second war loan. Everything, in fact, was going on just, as nicely as the military operations. Of their enemies, the Minister went on to say, only Great Britain had any noteworthy success with her loans, hut oven there the .operations had not been entirely successful, while F.rprice's incapacity for decisive fuuuleial action was astonishing’. Apparently France could only raise £80,000,000, and the conferences • regarding the joint loan desired by France and Russia had miscarried on essential points. Among the note banks he claimed that the Gorman Roickshauk showed I he best record wilh a continual influx of gold, while the -Savings bank in January had an influx of £19,500,000. The Bank of England’s increase of gold, he declared, was due to an inroad on the Indian gold reserve, the appropriation of gold from the. National Bank of Egypt, .and the Belgian National Bank, and other similar measures. A writer in the Sydney Morning Herald analyses Hr. Hellferich’s statements and shows that his conclusions are not home out by facts. It is true that the gold held by the Imperial Bank rose from £67,84-3,000 just before the wax; Broke put to £114,680,000 on

March 1, an increase of about'. £47,000,000 sterling, against which, however, must he set a decrease in the silver holdings Ironu £1ti,727,000 to £2,078,000, leaving a net increase in the metallic hacking for notes in circulation of £32,000,000. Simultaneously the note circulation increased from !£95,546,000 to £245,-357,000, so -that while the gold represented 71 per cent, of the note circulation in July last it only represented 46 per cent, at the beginning of March. The Bank of England, on the oUier hand, held gold to the value of £38,131,544 at the end of July last against notes in circulation to the amount of £20,706,250. At the beginning of March the gold had increased to £59,877,000 and the. notes to £34,206,000. In addition £27,500,000 in gold had been set aside for the Treasury currency notes, of which about £37,000,000 was outstanding. Altogether the notes of both denominations came to £71,296,000 against an actual gold stock of £87,377,000. That is to say, the gold backing to the notes in circulation was 120 per cent, in the case of the Bank of England as against only 40 per cent, in the case of the Imperial Bank of Germany. The increase in the British gold supplies has come from the ordinary and-legitimate operations of commerce, from England's position as a creditor nation, while in Germany some £12,000,000 came from the unlocking of the war chest at Rpandau, the balance being drawn from internal circulation. Here it may bo noted that the gold from Spandau is finding its way to England, largo numbers of bright unworn sovereigns of 1872 having reached there through Scandinavia, in the original canvas bags in which the sovereigns were supplied to Germany fortythree years ago, suggesting that the sovereigns have been used by Germany to purchase supplies from Scandinavia. Another significant fact which Ur. llelfl’erich did not mention is that neither French nor English hank notes have fallen to a discount, while German paper has depreciated considerably. Again, while England is able to obtain its war loans at less than four per cent., Germany is asking' for a five per cent, loan of unlimited amount at a discount. Thus it is clear that England is in a far stronger financial position than Germany.