South Bend news-times. (South Bend, Ind.) 1913-1938, 1915-07-03
WARRING NATIONS
FACE BANKRUPT
BANKERS ASSERT
Stock of Gold Far Too Small to
Meet Contracts for Supplies
in u. S. and Currency Falls
to Unprecedented Level.

NEW YORK. July 3. - Several Of
Americas most notable financiers have
this week become so impressed by the
demoralizstion in European money
! that they predict a general collapse il
not far off.
They question whether American
bankers will be justified In financing
unlimited additional shipments of mer-
chandise TO belligerentS unless some
means can be devised for securing
payments
There is not enough gold i'm all Eu-
ropes central banks To pay for the
supplies already contracted for mere.
The currency of every belligerent
has fallen TO an unparalleled level OF
depreciation.
Russian money compared with the
American dollar has lost > , per cent
i'm value. German money is down
more than l. per cent Austria and
Italy are much worse off. French
currency is down fully five per cent
and now England's Is on the toboggan.
1t has declined upward OF two per
cent and payment for her gigantic
orders placed here has not yet begun
in earnest.
Can't Induce sale.
European governments cannot in
duce holders of American securities
there TO sell them and subscribe 10 the
colossal war loans being tloated.
England's stock of gold in ottawa,
il is stated. has been depleted to al
most nothing, so that no further assist
ance can lie looked for from that quar-
ter in settling accounts.
The bank o. Englands reserve has
fallen to near the alarmingly low
level recorded after the first big war
scare-almost TO 16 per cent. 1t used
TO be 40. The great English institu-
ton, once the strongest pillar of the
worlds financial structure, does not
today contain enough gold reserve to
pay for one months merchandise eX-
ports from the United States 10 for
eign countries
1t is well recognized by interna-
tional bankers here that Britain,
France, Germany, Russia, Austria and
Italy are all on "A bankrupt basis al
leady and that every week the war
continues will aggravate the position.
International exchange is expected
10 become much more demoralized
within the next few months.
Can't see Way Out.
How Europe can pay for the billion
dollars worth of grain and cotton
which she will need from the United
States this year is beyond the power
of bankers TO figure, tho state.
u. ~ Thomas the British govern
ment's representative. who will arrive
here Sunday or Monday. is accom-
panied. London reports, bv high treas
ury officials. who will consult bank
ers here with a view TO seeking So
luton Of the problem.
Max May, the noted foreign ex-
change authority. said:
1T is very well for European gov
ernments to declare grandiloquently
that they viii keep up the war two
years or more If necessary.
They can't keep it up-not one Of
them
They are approaching the End OF
their financial resources faster than
they may know.
"All their currencies are depre-
ciated already and the decentralization
like a SNOWFALL running down a hill,
will increase very rapidly.
American investors should stick to
American Investments Europeans
are doing. YOU will notice
Exchange on more than one Euro
pean country is already becoming n
gamble.
when exchange breaks down the
war must quickly collapse"