The Washington herald., 1912-11-30
ABOUT The SINEWS OF
WAR

loosely tndI the strongest reason why IN
the face Of what looks to outsiders an
almost inevitable big. war In Europe, the
principal markets of the world have re-
Elected the doubt and uncertainty Of
\ such a situation only by brief and spas
modic declines usually followed by a
quick rally. Stranger still is the reason
for this apparent indifference to an ap-
parently impending catastrophe. which II
L actually came and continued for any
great length OF time, would probably
lead to the most remarkable slaughter
Of security prices that the financial
world has ever seen.
The reason for this apparent indiffer-
\ ence is a purely financial one All the
money lenders Of the world realize fully
| that II Germany, Austria, and Italy on
the one hand and Russia, France, and
England on the other were to become in
i Yolved in a great war and this war were
to continue as long as similar wars in
history have continued the result 50 far
as finance is concerned would be almost
Unreasonable. These same financial
leaders, however, are strong in their con-
victiOn that such a war. even II IT start
ed, could not last as long as other wars
| in the past have lasted, for the simple
reason that some of the contending par
ties would be plunged almost imme-
diately into financial ruin.
This is particularly true, II is said, OF
Germany and Italy. Germany is a coun-
try that has grown very rapidly and that
has financed its growth not on its none
tsry resources. but by extremely heavy
ard widely scattered borrowing. London
and Paris. as a matter of fact, hold the
pursestrings Of Europe, and London and
Paris are very heavy lenders OF money
to Germany and German industries. The
great Swiss banks are also heavy lend
ers. When the Agadir incident took place
and 1t appeared not unlikely that war
in which Germany would be a partici-
pant was about to be provoked by Ger
many itself, only one of these three big
creditors called loans on the Germans.
This one was Switzerland. Paris
and London simply sat tight so far
as Germany was concerned. but init
mated very clearly that the time might
come when German bills would not be so
acceptable as they were few weeks or
months before. Franco, however, took a
direct hand in the game by calling loans
on banks in Switzerland, and intimated
that more loans OF this sort would be
called from time to time, so Switzerland
promptly took action which curtailed
credit upon which German industry was
! being built and brought a quick and
complete reconsideration Of the situation
at Berlin.
Now it is stated to-day that If Ger
many were to go to war in support OF
the Austrian contentious on the Adri-
attic, Paris could bankrupt Germany in
| ten days by calling all loans that were
callable and refusing to renew loans
that matured. The London market is
place where trade bills from all over
are discounted. which means that Lon
don is a city in which commercial as
sets from all over the civilized world
are converted into credit and become
mobile and useable in the commercial
markets. II London were to stop dis
counting commercial bills, she would
draw gold from all the rest Of the
world at the rate ,of about a quarter
of billion dollars a month.
1t takes no financial genius to see
that the most powerful armies of Eng
land and France are modified not on
the fields OF battle, but in the banking
quarters of Paris and London, and that
against these invisible forces, the great
tangible armies of Germany would be
likely to fight in vain. Germany is a
commercial nation and is hardly likely,
according to the most thoughtful stu
dents of the situation. to invite sudden
bankruptcy and sudden commercial
collapse on account of political or even
national desire to serve the interests
OF Austria in the field.
The financial experts. too. are conf
dent that neither the German people
nor the italian people desire war.
There is no race of traders who meas
ure the chances OF commerce much
better than the Germans. and in this
case, with a crisis facing an almost
inevitable collapse Of the German I'm
perial Bank. in case the credits of Lon
don and Paris were curtailed. the COM
mercial leaders OF Germany are power
fully opposed to war. and the people
of the nation, as a whole. take their
cue nowadays from the captains of in
dustry and of finance rather than from
the BiSmarcks of the day.
II any American investor feels shaky
on account OF the prospects of war in
Europe, II is good sense to figure that
even IL in the temper Of the moment
Austria should send her troops into
Servia and Germany should appear
either in arms or otherwise as an ac-
tive ally OF Austria and even II war
involving two or three of the great
powers should break out. II Is consid-
cred by all the financial experts to be
absolutely impossible that such a war
could be long continued.
Therefore, any disturbance of values
that might take place would almost
certainly be followed within a reason
able time by a recovery to former VAL
ues or better; because the Balkan sit
uation has for more than q generation
contained the elements OF great Euro
pean war. and II the Balkan uprising
passes without such a war. II may be
assumed that the great menace to the
peace of Europe has heen removed per-
1aus for good and all.
The war that Is now going on Is not
expected TO last beyond three-month
period. The writer has talked within
the past month with an exceedingly
well informed Greek fnancier. who
seemed to know exactly how much
money Is available in the treasures of