The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1915-07-23
Time For Caution

z OR the time being caution is necessary in all
financial transactions Our relations with Ger
many and Mexico are in an exceedingly uncertain
and sensitive stage. The scene shifts daily and so
do the possibilities" writes Henry Clews in his
latest market letter to investors, reviewing the
general war situation as follows:
If those Of ltra-optimistic tendencies have UNI
der-estimated the duration, and the appalling con-
sequences of this war, it follows they have also
underestimate its financial effects. An early end
ing is not yet in sight The Allies are still pre-
pairing on gigantic scale for their supreme effort
which has not yet been attempted. Next autumn
the world will probably find one side materially
weakened by continuous superhuman struggle,
while the other has been strengthened by pro-
longed preparation AS for the end, that cannot
be expected until side the other is thorough
ly exhausted. The best estimates are that the
struggle will cost Europe from $lSOOOOOO,OOO to
$20OO0O00O00 yearly until the finish. Such ter
rifle waste cannot but profoundly affect the worlds
capital markets, and the adjustment of values to
these abnormal conditions is still progressing, and
the most important problem Of the day, financially
considered is the paying of Europes debt to the
United States. If Europe cannot pay in merchan-
disc If we will not take her bonds in large
amounts and if foreign holders are unwilling to
part with their American stocks and bonds, some
such scheme for settlement above suggested will
have to be devised. Foreign holdings of Ameri-
cans have diminished considerably it being esti-
mated that over $2O0O00O00 have already been
returned to this side, and the third selling move
ment this year which is now on will probably
continue until preparations for the British
loan are discounted. Great Brtain's obligations
to this country must be enormous, since shesj
financing not only her war but alsoJgfying
very material financial assistance to her Allies, 1t
is estimated that about $500000OO0 in var orders
have already been received in this market and that
another billion dollars is in prospect. The ship
ments Of these vast amountS'of munitions will
come next autumn, when the outward movement
of our agricultural products is at its zenith. The
effect of the war upon British trade is shown in
the statement that her excess of imports over
ports for the year amounts to about 81 100000 OO
compared with her usual excess of $650yOO0,000.
Britain generally pays for much of her excess inn
ports by her foreign investments; but this means
of adjustment is now shut off, and the enormous
burden which she has shouldered can be appreciat-
ed by the fact that on March 1, 1916, her national
debt will have risen to $646oOOoOOO, at the pres
ent rate Of increase"
4 Il -
Governor Pinkham says that the less said about
the tariff the better. He means the less he says
about the tariff the better, because he certainly
stands in slippery place so far as the tariff is
concerned. We trust that he may be induced to
say enough about the tariff, however, to clear up
that remark about the sugar men of Hawaii having
so much money they don't know what to do with
it. With the rest of Honolulu and Hawaii, The
Advertiser welcomes the Governor home, glad OF
the fact that his trip abroad did his health good