The Alaska daily empire., 1914-08-12
FAMOUS FINANCIAL
 AUTHORITY ON WAR


 African war stimulated business or this country. But 1t must be remem. bered also that war raises the cost or cap,tal enhances interest rates, and does not in the end facilitate business If is similar to a trade boom, and then reaction.
 T,ast wear we had considerable bus ness in this country from the Balkan war but both the South African war and the Balkan war raised prices ana increased the cost of living in this country and absorbed capital which could have been better employed in wages to labor for development in this country.
 "A general war will of course para lyze the shipping of the world. But fortunately. outside of the Internation- al Mercantile Marine, our shipping Is coastwise. and would not be molest' ed. The International Mercantile Marine is represented by it's bonds which are now selling at less than 50 cents on the dollar. The entire sell ing value of this security is less than $50. .OOO, ,OOO. and a devasting war could not destroy more than half of this.
 No financial troubles in this coun- try need be feared. The danger has been avoided by the closing of the security exchange. We cannot stand up and suddenly receive back into this country and pay gold for billions of American securities that are owned abroad.
 "A Boston friend of mine visited London to answer for himself the ques- tion of what would be the effect if Eng land suddenly tried to sell, as in the case of war. all her American invest ments-New York Central, Pennsyl' vania Railroad and other securities. Investigation showed clearly that the fact was she could not sell them. The prices would fall so rapidly as to make the sacrifice too great.
 "The closing of all the security ex- changes in the world will likewise as sist the general settlement or the To- calization of the war. The funds can. not be secured to prosecute the war.
 "The only bankers in the world who are prepared for war are the German bankers. For three years, under i'm perlal direction, they have been pay ing their debts and bringing their re- serves within their own country. A year ago this month was in Hamburg and was told that the great house of Warburg, for probably the first time in century, did not owe dollar out. side of Germany. This house Is prob ably 200 years old.
 q asked at the Deutsche Bank in Berlin if Germany was curtailing be- cause over-extended, or was preparing for war. The response was: Tt makes no difference. The orders would be the same in either case. and nobody can tell but the Kaiser
 "The Kaiser, through the German chancellor. is the head of the Reichs- bank, in which Is centralized all Ger. man finance. It has 500 branches and does business throughout the empire. It touches vitally all private banks and unifles the banking system of Ger. many more effectively than elsewhere in the world.
 After two years of retrenchment the German Reichstag a year ago last June called for $250.OOO,OOO, or a bil. lion marks. to be paid right of the capital account of every citizen in the empire from the Emperor down, to in- crease the army. The reserve in the Spandau tower was also doubled. This is only cash reserve, of gold and sil- yer, which would last few weeks, while the country was expected to be in a financial panic. and when money is not available unless you have it in your pocketbook.
 German bankers and the German military program go hand in hand. About four years ago the German Elm. peror sent his gunboat Panther to Az. adir in violation of the treaty of AL geciras. This was French territory. but it was the British Lion that grow. | el. Germany had to back down. Ger man loans were called all over the world.
 "The German emperor then told the business men and banking interests of Germany that when he called again he wanted a different response. and would expect them to be prepared. They are now prepared.
 50 likewise are Russia and France, both with men and gold reserves. Eng. land will fight on the ocean, and need not strengthen her gold reserves. She does not owe the outside world.
 "The situation is simply this: The Germans for more than ten years have been toasting Der Tag that is, the lay which is to arrive when Germany will assert her supremacy on land and sea.
 "The day has now arrived. She is 'eady as never before. But everybody else is pretty we'll ready for her, She s So caged about that she cannot fight on land and sea against majority of Europe. She must fight 'n tre defensive, sacrifice her com. nerce, and let the other nations ex. laust themselvs. It is difficult to see low anybody can then gain any ad. 'antage.
 It is really contest of Pagan war md Christian civilization and anyone 'an take his choice according to his aith."