The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-08-01

Cost of Wa Almost Equals Entire
National Debts of Fighting Countries
European Economists Hint at
General Bankruptcy as Re-
suit Of Great Conflict.

Va
nous debt Of Great Britain. including
consols and the an per cent. war loan.
upon a ~ per cent. interest basis. the
Details Of the extent Of conversion have
not been made public az yet. but the
statement was made In Parliament that
subscriptions aggregated about $4,000
oo0.o 600. This Is understood to be fresh
money.
France First Saw Danger.
Between the outbreak Of the war and
the beginning Of February the French
Government relied upon three sources OF
revenue to meet It's wal bill. namely. n
an per cent. redeemable loan. advances
from the Bank Of France and an issue
Of national defence bonds. France had be-
cone alarmed over the bullying attitude
Of Germany long before the other Powers
OF Europe awakened to the situation.
She determined long before the war
upon an elaborate ava and military
programme and raised the period OF
compulsory service in the army from
cost France authorised a az per cent.
redeemable loan for $3.50. 1000. 900. and
this was in process Of fotation when
hostilities were declared.
National defence bonds were author
ICED on September IS last, and the
holders OF the original an per cent.
redeemabls loan had the privilege Of
converting their issue into the new de-
fence bonds. and a large majority Of
investors have availed themselves Of
this privilege. France has also author
ised an issue Of national defence stock.
which bears h attractive rate Of 5it
per cent. These issues are on prac-
tically continuous sale and ave been
bringing in about 5000. 000. 900 a month.
The expenditures Of France. like those
Of England. have risen enormously. For
the first Ave months Of the war to
December 81. the cost Of the contest
was reckoned at $263, 900. 900 a month.
II rose to an average Of s323. 900. 900 a
month during the first half Of the pres
ent year and a recent calculation ema-
mating from the Chamber OF Deputies
puts the necessary outlay for the three
months from July to September at $685.
900 900 a month, or on a scale Of $4.-
356,o0o.o0 annually.
Heavy DeAcit In France.
Although subscriptions have been com
llit INV INV IitiFNi AiNa1di N I NtN i"NN
OF 5000. 00o. 900 monthly. the expanding
costs Of the conflict have resulted in a
heavy deficit. which has been met by ad-
vances from the Bank OF France. That
institution has been authorized to lend
the Government up to a limit OF 81, $780,
900. 900. OF which. according to the Bank
| Of France statement Of July 10, $1,24o..
| 900, 900 has been advanced. In addition
France has negotiated loans both In
London and in New York secured by
short term notes n obtained also a
banking credit Of I 1000. 900 here las,
J September. The recent credit OF $20..
900, 900 secured by a pledge Of Amer!.
can railway bonds 10 a transaction oil
French and American bankers and does
not concern the Government.
Germany met the expenses Of wal
for the hrst seven weeks by advances
from the Reichsbank and later through
Treasury note issues. Early in Septem-
Der the irst Of the large German wal
loan vas offered for public subscription
II took the form Of a 5 per cent. bono
at 97L1. or an interest basis Of sag pei
cent. The loan. which oun q
sl.il5.0 900. was readily subscribed
and occasioned much enthusiasm In Ger
man. and among German sympathizer
here and elsewhere. But Germany's on
ponents have asserted hat the subscrip
tions were in part OF forced character
To important banks. large manufactur
ers and mercantile concerns. particu
larry such as had Government contracts
were assigned certain portions OF tn
loan. and they were compelled to PARTED
pate in II under the fear, Il Is said, o
mourning the displeasure of the authori
, ties.
As a matter Of fact all German Gov
eminent loans are substantially OF tn
above character; that Is. the Govern
ment expects all institutions Of a quas.
public character TO subscribe. n In
general way assigns the amounts o
their participation. The present fiota
lions have been facilitated by the or
ganixation Of loan banks which Ger
many established for the purpose o
making advances against securities an
merchandise with the avowed object O
aiding trade and Government financing
These institutions issue a new variety G
money in the shape Of a oan bank note
which is accepted in payment at tn
Reichsbank, although It does not cal
for gold.
German Paper Money Expands.
To what extent the first German loa.
was taken up In fiat money is a matte
u uaSpbtN. Sii6isoi anu Va'' ''i'''
cial critics have been insisting that III
printing presses played the most impor
tant part In the success OF the Germa
issue. and 1t is an incon;estable fact tina
Germany's paper emissions have ex
banded enormously. Berlin, on the othe
hand, insists that only about II pc
cent. OF the hrst war loan was take
up In the loan bank notes.
I The fiotation Of a second Germa
! issue amounting to s2,2s5. 00o, 900. G
considerably In excess OF the firs, loai
: was started in the late spring at 3s1.
! It also bears 5 per cent. interest and |,
hotation was facilitated In the sam
I manner as the original issue throug
! the loan banks. In addition. German
was able TO arrange for a 100000
nine months note issue in this covrnt-,
: Austria's irst loan amounted TO s6uO
600 900 in 5h per cent. bonds. whic
were offered at 97ia. or on a $40 n
I cent. interest basis. This loan was mad
= very easy for subscribers Credit wa
= extended upon a liberal scale and onl
r small amounts of cash were required.
= Is asserted that stocks n securities I
e practically all kinds were accepted
payment. Austria did somewhat bett'
= with her subsequent loans and has or
in progress at present. But she hs
( been forced to pay for money the higl
E est rate Of any Of the belligerents. ar
the prospects Of national bankruptcy
s repudiation Of Indebtedness are mo
NEARLY possible with Austria than Wi