Evening star., 1915-06-20
FINANCIAL-LOCAL AND OTHERWISE
BY I. A. FLEMING.

| that s4S.000, 900 st. Paul As were sold in
Paris 1t is believed that the bulk OF
these bonds are still held as originally
placed.
1t is reported that the French govern
ment is offering 81 for the Pennsylvan mia
lords and 80 for the St. Paul issue, with
the object as before stated
American bankers would welcome the
opportunity of negotiating a loan Oh such
security.
1t was also suggested recently in the
English parliament that a board be au-
! thorized to purchase American securities
! from English holders, in exchange for
government script. the securities to be
either sold or used as the basis for fur
ther credit in the United States.
The one serious objection will be found
in the disposition of owners to hold on
To the tangible, Immediately available
asset. one not likely to suffer from any
of the ravages of war
Foreign governments cannot afford to
export their gold-they have little enough
to protect their currency as it is.
Large sales of securities on the
American market would be welcomed
by bankers, in maintaining the foreign
exchange situation. now suffering from
the large surplus of bills.
The War Burden After the War.
In this connection the following
article in recent issue of the Wall
Street Journal is decidedly interesting,
having to do with the ability Of for
eign debtors to make payments after
the war-and rehabilitate:
"CneasineSs is expressed here and
there in regard to the ability of the
European belligerents to support the
heavy burden of debt under which they
will labor after the war These appre-
tensions are probably premature If
months, the great recuperative powers
of modern industry and of the credit
system would enable the chief coun-
tries involved to distribute their per
maneht Ioans. and to increase taxation
sufficiently to meet the charges Of the
public debt. II, however, the conflict
should continue for another year or
two, at the present rate of expenditure,
the problem of the capacity of the bel :
hgerents to stand uu under the burden
might become a serious one
So far as the effect of the war upon
the distribution of wealth is concerned
the axiom Of John Stuart Mill should
not be overlooked, that the waste in
would in any case be consumed within
snort season leaves no permanent ef-
feet in the diminution Of national
wealth. 1t simply shifts the benefits Of
consumption and imposes hardships
upon certain persons for the time
being
Permanent capital remains unim-
paired so long as farmhouses, mills and
factories. with their machinery. stand
intact. and roads. railways and bridges
been destruction Of this sort during
the present war. 1t probably amounts
after all. to only a few hundred mill
lions and can soon be replaced The
real financial difficulty arises from per-
manent borrowings in order to obtain
the largest output of war supplies to
be consumed or destroyed in the pres
ent. while leaving them to be paid for
as burden upon the future.
1t is conceivable that il the depre-
citation of exchange in Germany, Aus
tria, Russia or Italy should pull down
the gold value of their monetary unit
permanently it might be found prudent
to adopt a new unit correspondine to
itself, such readjustment is in accord
with the best economic opinion. be-
cause 1t accepts the scale of values
and prices which have grown up under
simply gives legal recognition to losses
which have already been spread al
most imperceptibly over the whole
community.
The readjustment of currency stand
ards In this manner is not among tha
probabilities. however II the war is
soon brought to an end, because the
rall In the continental exchanges has
not gone FAR enough to prevent pulling
up the rate without difficulty to it's
old level
The readjustment of the currency
does not in itself involve reputation
or writing down Of bonded debt in
CURED in the old monetary unit. While.
therefore. the problem of nationa i
bankruptcy may have to be faced at
some time in the future by some of
the countries involved in the war. II
cannot be considered as a serious men
ace under present conditions"