The Wanganui Chronicle. "Nulla Dies Sina Linea." FRIDAY, OCTOBER 25, 1912. WAR AND FINANCE.

Wanganui Chronicle, Issue 12856, 25 October 1912, Page 4

The Wanganui Chronicle. "Nulla Dies Sina Linea." FRIDAY, OCTOBER 25, 1912. WAR AND FINANCE.

Not the least important aspect of the I Balkan blaze, so far as the world at largo is concerned, is the effect of the outbreak upon the money markets. The clash of arms has already cost Europe dearly, and it must inevitably cost a groat deal more even if the great Powers succeed in keeping out of the turmoil. Apparently European opinion as ' a whole has taken the outbreak of hostilities very seriously, for finance everywhere has been thrown into confusion. The influence of the disturbance has be^u felt across tho Atlantic, for early in the struggle heavy sellings of foreign .securities wero reported from New York, with presumably heavy loss to holders of the stock relinquished. At the same time, also on the American side of tho Atlantic, a sharp rise occurred in the price of wheat, thus directly penalising j many millions of people for a quarrel j in which they have no part, and con- j corning tho rights and wrongs of which; most of them are altogether ignorant. I It is. of course, only natural that the Continental Bourses should "become nervous and excited, at .the mere echo of the first gun, if only for the reason that j they exist in an environment of militar- j ism. Consequently while the . London Stock Exchange has manifested unmis-; takable signs of depression, the finan-; ciai panic on the Continent has been j much more pronounced. This, as a Sydney contemporary points out, has been particularly the case in Germany, whero investors have already lost large sums on account of their fear that tho great Powers are going to 'bo involved in the struggle. > Paris has had as bad a timo as Berlin, though the Tenorted losses of over £16,000,000 are probably an exaggerated estimate. St. Petersburg nas felt the immense strain also, more particularly in that the holding up of Russian grain is likely to bring that country directly into the conflict. This last item of the debit balance against war will alone account for a loss of many millions sterling. Speaking generally, the writer says: —"This financial aspect 4>f war as it affects investment values is one that we are apt not to take sufficiently into account, but there can be little doubt that, ruinous as the first cost of a war is, that cost bears only a small proportion to the economic losses inflicted not merely up- [ on the combatants, but upon tho world at large. Commerce and finance have been internationalised, and a fall on any important exchange is invariably re-' fleeted all ov.cr Europe and America. It is, unfortunately, too often the smalt holder who so feverishly rushes to sell out as. soon as he perceives a decline in stocks, and many thousands of such people find themselves hopelessly ruinod after every financial panic. Our cables have told us that this has already been the case on the present occasion, and no doubt wo are only at the beginning of the evil. If the detention of the ; Greek vessels carrying Russian grain, for example, leads Russia to intervene, there is no saying what Austria would i take the chance to do; and if French' threats of interference should come to anything it is quite certain that Ger- : many would do a great deal. Tho panic \ on the exchanges is, therefore, not un- i justified. But even the immediate loss- ; •eg of investors are only the beginning of the generalised cost of war; for after that come the inevitable shrinkage of , capital and the inevitable shrinkage of j trade. It takes only a few hours to j destroy financial confidence. It may j tak-9 a decado to restore it, and that is ! perhaps the most severe Nemesis laid upon tho nations by war."