Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1914-09-25

"The financial condition of the
world was set topsy-turvy by the war,
1t will continue upsidedown during the
war and will take time to readJust IT.
self when the crash of battle ceases,
was the way very careful banker
put it.
"The credit relationship of the world
has grown to be very close. Each OF
the great powers at war had an M
innate interlocking of extensive
credits. and this situation prevailed
between each of the belligerent ma
tions and the neutral nations. This
credit relationship was at first demor-
allied and is now suspended. Alex
ander Dana Noyes, the financial
writer, has said:
/" Tt must first be kept in mind thai
in the present day all the great mar
kets of the world are bound together
as never before in a network OF IN
terlacing credit Berlin bankers carry
deposit balances in London to the ex-
tent of hundreds of millions sterling;
so does Paris, and so also does New
York. This Indebtedness is not all
one-sided; an enormous mutual IN
debtedness exists on all these mar
kets. constantly maturing, constantly
being paid off in the ordinary pro-
cesses of exchange, and constantly
subject to renewal
$50 the first result of the war has
been to wreck the international credlt
system by means of which interna-
tional business has been carried on
That system is the growth OF years
of experience ana endeavor and It
probably cannot be quickly restored.
The longer the war lasts the more
difficult will 1t be to restore 1t.
"This intricate and delicate system
of international credits Is based on
gold and a large part of the world s
stock of minted or coined gold and
bullion securing note-money mas been
taken out of the channels in which 1t
normally flows for the support and en-
couragement of trade and commerce
and turned into channels where 1t
supports and encourages the trade OF
war. The railroads of Europe are be-
! ing used for war. Merchant ships are
either tied up or are being used for
war. Powder plants and gun fac
tories are being run with the gold
with which the worlds proper BUSH
ness was being done and with which
| IT must be done, and other boards of
gold are being spent to buy rations
| for men engaged in the wholesale
slaughter of other men and the burn
| ing of villages and cities, the desola-
ton of productive tracts of country
and the dislocation of population.
1.-THE whole thing Is cataclysmic
and catastrophe and throws the
world out of gear Nobody is wise
| . br Efyt
this world war has been written about
and talked about for many years, the
men acquainted with the trading
business and banking ways of the
world believed that such a thing was
limpossible. 1t was unbelievable anC
Uncomfortable. Great bankers hat
often been asked the question as t
what would happen to the world 1.
the big nations should become en-
tangled in a mighty war and salts
factory answer was never forthcom
ing, because the results of such {
titanic smash simply staggered thu
business imagination.
LAS have said, large part of thu
worlds stock of gold money, o.
money gold, is not performing its Gus
tomary function. The gold production
Of the world for the eighteen months
ending June 80, 1914, was about sos,
600, 600. OF this amount about 5000,
900, 900 is required for the arts ant
$780, 900 went to British I.ldia. Thi
left about 1855 200, 900 to the applied t,
monetary uses, and the whole of thi
amount was absorbed by the foul
great central banks of Germany
France, Russia and Austria Hungary
1.-THE great American gold-produc
ing centres are California. Colorad,
and Alaska. The production of Cali
fornia is running now at about $40,
000, 900 a year, Colorado is mining
about $1S,00O,000 and Alaska abou
SIS 000, 900. Despite the discovery o.
invention of cheaper and cheapenint
processes of gold recovery the gols
output of the world is declining.
New gold is being produced. or a
least is being brought to the surfac,
of the earth, but 1t will be absorbe,
for war purposes. Nations will b.
putting heavy mortgages on thei
production and producers for gener
atoms to come and will be making
heavy drafts on gold to pay war debt
or the interest on these debts.
THE production of new gold ma.
decline, for though the great produc
ing regions are not directly affecte'
by the war, there will be much indi
rect influence exerted. Thus, in tn
Transvaal and Rhodesia there may b
difficulties in the way of securing sup
plies and new machinery needed; TO
instance. the supply of cyanide. Othe
1 reasons may be found In a diversiol
of men from the mining industry an