Bisbee daily review. [volume] (Bisbee, Ariz.) 1901-1971, 1915-10-07
FINANCIAL BOOT STRAPS.

Germany is the financial wonder Of the world even
more than the military wonder Her financing of her
great war is so something absolutely without precedent
or analogy She has spent money than any other
Great Britain is exceeding
scale of expendure-and yet fifteen months OF in
crediby costly struggle she to have money
than ever
No money, or scarcely any is coming into Germany
And yet she has raised without the difficulty three
great domestic loans aggregatng s7OOOOoOOoO the
officers Of the imperial profess their faith that
Germany can obtain another popular loan of three
billions and another and another long the need
lasts
Such Astounding prosperity in conjunction with the most
costly in history to overthrow all hitherto
accepted doctrines Of economics and finance. 1t
posed that Germany, bottled up, with her industries
throttled and foreign credit destroyed could not
fight her economic battle for year Yet she con
tnuay stronger She performing the financial miracle
Of lifting herself by her own boot straps
Is this feat real or illusory?
The vast sums expended are all expended in Germany
Thus the government raises big loan and pays it all
supplies soldiers wages, pensions, interest etc
The money quickly trckles back the bankers and in
vestors it came from. Then they invest in another
loan That loan likewise spent and distributed and
goes back to the people They reinvest it, again
again-as long they have left enough money to
pay their necessary living expenses And with wages
high food fairly plentiful and standards frugal may
be long time.
With their S7OOOOOOOOO invested in government bonds,
and the prospect investing other billions the German
people feel very prosperous They are getting per cent
mr. more nm their sovinos nucb moro than
bonds usually pay. Those engaged in civil work are
making more money and saving than ever before.
Millions of Germans see themselves emerging from the
comfortable circumstances than ever before
For they are assured that the high wages will continue
the government will meet its interest payments and re-
tire the principal there will be full compensation for the
dead and wounded from the imperial treasury Germany
will the war and there will follow great industrial
and commercial expansion
But has actually succeeded in lifting him
self by his bootstraps though he may give pasmodic
imitation of doing so No bear can live indefinitely on
its fat. There is no perpetual motion machine, in
finance any more than in mechanics. There must be
fallacy somewhere in this amazing procedure
It does not seem to occur to the German people in
their wild enthusiasm, that when they turn all their
wealth government bonds they are simply borrowing
the money from themselves Those bonds viii have tC
be carried and paid by taxes and the population thai
Owns them will have pay the taxes Thus while they
piling up the pyramid of bond investment they ar,
imply obligating themselves to pay more and more prn
cipa and interest The nation will have all its usua
axes to pay for governmental purposes and on top
them all the needed to carry and eventually retire
the vast war debt
And all those billions win have been utterly destroyed
the bonds Represent real. material wealth wasted
war.
The German statesmen Of course, and the big banker
and business men, know this. The populace does not
Those who do think of believe hope that German
may exact from her foes a war Indemnity sufficient t.
pay her debt But that hope is fading even in OF
tmistic minds Germany hardly defeat her eneme
without completely crushing them And if She crushe
them, how they pay the s2OOOO00OOOO or NOR
which would be needed even if Germany borrowed n
more billions to pay her interest and debt care fo
the families of dead disabled soldiers and repair tn
material rayage of the war?