New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-11-21
Cermany's Financial Stability.

In his article, written for The Tribune,
DR.. Won Glasenapp, vice-president OF the
board of directors Of the German Reichs-
bank, drew an encouraging picture OF
financial conditions in Germany. Several
things about the situation in Germany were
made entirely clear Credit is easy. The
government has borrowed vast sums
25.663 10000 marks in all-without diff
ficulty. Industry is active and wages are
rising. Here are many surface indications
of economic strength and stability.
On the other hand, there are indications
that the tranquility and stability which DR..
Won Glasenapp reports are more or less
artificial. The ordinary laws Of economies
have been suspended. Germany is a shut
In, dependent on her own resources ana
free to use them unhampered by any OF
the automatic checks imposed by foreign
intercourse and international exchange.
The governments fiat is the only economic
law which counts any longer inside vast
beleaguered fortress.
Dr. Helfferich, the Secretary Of the I'M
perial Treasury, said in his speech OF
August 20 last: To-day all available
money belongs to the Fatherland." That
is literally true; everything that the peo-
pie Of Germany own is at the service OF
the government. All German wealth has
been put into one pot. That simpliies
things for everybody. But credit and
money lose their ordinary significance
under such regime. The government can
afford to spend money-real or Of the credit
variety-with free hand. The labor
which remains at home will be kept busy
and wages will go up. Money may become
more and more plentiful as the wealth of
the empire is consumed by war. Yet so
long as Germany is shut in and can regu-
late her own exchanges there will still be
an appearance of tranquility and stability.
Conditions can be made fairlysstable In a
vacuum 1t 10 only when the air is let in
again that the upset comes.
II the sense of helping to maintain a
financial equilibrium in Germany the AL
lied blockade may possibly be described as
a Course changed into a blessing" Ger
many does not have to stay on a gold
basis; she does not have to worry about
exchange except in a small way in her
trade with Holland, Denmark and
Sweden. With her own people she can
put off reckoning as long as the war
lasts. But she is rapidly wasting her
resources in non-productive effort. The
big domestic loans she is putting out rep
resent capital that has been wiped out.
In this she may be no worse off than her
enemies are But they are at least finan-
cling their losses in the worlds market
as they go along. They are still on gold
basis and maintain exchanges with the
neutral nations. They are meeting war
charges in part with new taxes, not mere
ly issuing future promises TO pay. Great
Britain's merchant marine is earning
money and many of her producers are
also making money in the foreign trade.
There is a point beyond which block
AIDED manufacturing country like Ger
many cannot 90 on living upon itself.
The fewer cares it now has of an eco
nomic and financial nature the greater
cares it will have when the period of iso-
lation is ended. The Southern Confeder-
acy did not know how bankrupt it was
until the Civil War was over. It had
plenty of money in circulation and was
not worried at all about money, but only
about getting enough to eat. The Teutonic
alliance Is many times stronger than the
Confederacy. But it is also consuming its
resources, impoverishing itself on a
gigantic scale That is the process which
counts most to-day in Germany. 1t can
20 on doing its fatal work, even though on
the surface credit is cheap, money is easy
and an appearance Of financial soundness
Ia still maintained.