The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1915-05-15
Business and Money Imitation IN Europe.

How the conclusion of peace in Europe will
affect business in the United States continues to
be the chief topic OF conversation among bankers,
political economists and all classes of business men.
1t is admitted by all hands that while the war is
being carried on, American business receives a
stimulus. But after the the war orders will
cease. Will country then be flooded with ar
ticlcs of European manufacture produced at low
cost and competing with products OF own in
dustrial establishments in vigorous way? So far
as we can observe it is the general idea that this
question must be answered in the affirmative. The
fear, least, is widespread that Europe will i'm
medately undersell in every conceivable direc-
ton the ends. At large meeting
Of bankers and business recently held in
Newark, at which one of the vice presidents of a
great bank in New York City, who is particular
authority upon the question OF foreign exchange,
made the leading address, he confessed himself as
feeling greatly disturbed over the outlook in this
regard. Germany, above all other nations, would
offer everything merchants have to sell
at lower prices than merchants sell and
live. The German and other European manu-
featuring firms would be driven to do this because
OF the necessity of raising money to get along
with after the stress of Is this view sound
We do not think it is and opinion rests,
first, upon the exceedingly strong probability, of
which a great many people in OUR country seem
to be perfectly unaware, and that is that after the
war the finances of most OF the great European
nations, if not all of them, will be swept from a
gold basis, and that business men in these coun-
tries in competing with nations that arc on gold
bass-prncipay the United States-must SUI
fer all the disadvantages which this disability I'M
poses
1t is indeed open to decided question whether
the European nations are standing upon gold
basis even at the present time. Certainly Ger
many our most ruthless competitor is not so
standing Bills of exchange upon Germany are
quoted in the great financial centers. New York
included at discount OF II per cent. In Ger
many itself gold is at a large premium although
no mention is made of the fact in the German
newspapers With docty heretofore unknown
in history, the people OF the country arc binding
themselves to the depreciation of their currency
and are exchanging the paper money issued by
their war banks" and similar financial insttu-
tons for gold But no such blindness exists out
side OF Germany. When the German people want
to buy anything outside OF their country they must
paw this additional price for it. And the financial
condition of the country will he far worse after the
end OF the than it is So Gar can
see the tremendous initiation OF the currency that
is taking place in Germany must sooner later
bring on there "krach OF the first order.
In France and England there is not likely to be
any such collapse. BIT in France the financial
status is at least greatly strained We have not
space to enter into the question in detail but all
those who have studied the matter know in what a
distressed financial state the French nation really
is. The country is undoubtedly solvent and will
pull herself together again after the war by the
exercise of her old time thrift and with the help
of friendly nations like the United States. But for
long time after the France must continue to
get along with the help OF credit money, that is to
say. by means OF an initiation of her circulating
medium. In England the gold standard is main
tanned and undoubtedly will be maintained to the
close of the and after it. But it has only been
maintained by suffcrancc and by the unexampled
foreign credit of the nation In England the cx-
rort oi gold without the permission OF the gov
crnuent is prohibited practically, and the reserve
OF the Bank of England that to say substantially
the entire gold reserve OF the country, is down to
less than IS per cent. England has assumed re-
spon>ihty for the financial burdens OF France
and Russia. far as the is concerned. and
she too has issued a great deal OF paper which is
not fully covered by gold.
What we are DESTROYS OF emphasizing is that
after the the European nations will be under
4 disadvantage in their business relations by the
loss OF their best industrial workers. by the pres
sure OF internal debts almost inconceivably large
and more than anything else by the immense in
fation of their currency. This initiation must cause
a responding advance in wages and in the cost
of everything which their manufacturers produce
and these manufacturers will be crippled they
have never been crippled before in trade competi-
ton with this country. For, be it remembered the
United States is the only country in the world at
present that has been able to continue payments
on gold basis without drawbacks or qualihca-
ton. After the close OF the war Europe will be
suppliant here for such financial aid are
disposed to give to her OF our heaped store of
wealth She will come to with the hands OF a
beggar, not those OF an economic conqueror levy
ing tribute upon people And shall be
glad to help her out and find profit in doing