The Washington herald., 1914-11-27
A Wonderful Financial Machine.

The round world has been kept informed for
many years of the superiority of the German fight
ing machine over all other man-devised destruc-
tive agencies, and has accepted that estimate as
fnality. 1t is only recently, however, that it has
been made evident that another German machine
one, too which is quite important in the Kaser's
scheme of territorial extension in full opera
ton as military tness-is in excellent working or
der. The attention of those outside the war zone
has been fixed so intenty upon the tragedy at the
front that the question, how long the German En-
pire endure the financial strain, which its pres
ent military activity involves, has only recently be-
come matter of general interest.
In plain speech, how long can Germany go on
as she is going now? For upward of three months
her huge machine has been in full operation in
Belgium, France, and Russia against three of the
most powerful nations in the world. The drain
upon her financial resources has been unparalleled
in the history of the nation 1t is not difficult to
recall that before the good deal was said and
written about the financial weakness of Germany.
The process of attaining superlative military eff
cheney was known to be costly, and there was
widespread impression-in this country at least
that the German miltarists were getting the en-
pire into serious financial tangle through their
frequent raids the national treasury 1t is little
wonder that anxious eyes all over the world, some
hostile others friendly, began to scan the German
horizon for signs of financial weakening.
We know now that Germany has met with at
least two rather serious disappointments resulting
from financial miscalculation before she went to
war. 1t favorite theory of the imperial fnan-
cia experts that the capitalists of the empire should
be urged to make large investments in foreign Sc
curties that in the event of the nation could
provide itself with abundant capital for war pur-
hvS tbece fbeiro
markets. 1t was clever scheme, but an unfore-
seen turn in affairs-the closing of the stock ex-
changes at the very beginning of hostilites-made
it utterly ineffective.
For several years, also, Germany had been
boarding foreign exchange in huge amounts with
the purpose of drawing gold from abroad if war
should come. Here again, she met with disappoint-
ment. This foreign exchange drawn chiefly
upon England, and the latter proceeded at once to
prohibit by law the payment of debts to the citi-
zens of countries with which she was at war. Thus
the large capital which had been put aside as it
Here for war was locked up, and no one in the
German Empire is in possession of the open
sesame"
Deprived of these means of securing money the 4
German financial machine has resorted to plan
or raising the wind" for military purposes which
las revealed the astounding wealth which has been
If commercial prosperity enjoyed by the empire |
Turing the past two three decades. At the Au-
gust session of the Rechstag, measure was adopt
d which authorized the opening of loan banks un-
Ter the control of the Reichsbank. Within twenty
our hours after the passage of this law, $50 Of !
hese loan banks were ready for business. They |
ssue currency which is legal tender for all public
lues but not for private debts Almost anything |
If value is taken collateral-gold and silverware
WOOL, cotton and raw sugar, and even alcohol and
potash. These notes taken over by the Reichs-
'ank and become part of the legal covering for
is own ordinary issues.
AS financial achievement this brilliant per-
ormance of the Reichsbank has no counterpart in
he history of modern banking. During the early
Teeks of the war, this bank discounted treasury !
ills aggregating $5ooooo,ooo. Meanwhile, Ameri-
an bankers have been rather less successful in
their financial equanimity, even under
he reassuring chaperonage of Secretary McAdoo.