The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1915-05-25
Total .$o,6l3,4oo,OoO

- lOtdl ....,.... .9S,olo,fOO,UOO
This GOO, SO far beyond any credit operations
known before that it would be very interesting to
know just how it has been accomplished Where
have these funds been found and how much more
can be had in the same quarters or by the same
means:
There are only three sources from which they
have been forthcoming, current savings, sales of
securities in foreign markets and the pyramiding
of credit meaning by the latter the pedging of
Prkate: bhtorporate credit as a basis for govern
ment credit. The public capital Aotations on the
London market for the first quarter of 1914 ag-
gregated $+85 100000, but this amount was ex-
ceptOnally large the average for the first quarter
in the ten years ending with 1914 being about
$3OOOOOOOO at the rate of about ST 200 100000
per year. In addition to the public subscriptions
considerable sums of BIRTHS income have been in
vested abroad by direct purchases or loans, and
of course there has been an important volume of
direct investment at home The annual savings
of Great Britain in recent years have been calcu-
lated at about $2,OO0OOOOOO. During the first
quarter of 1915 the fotations on the London mar
ket for other than war purposes we're less than
$lOOOOOOO Investments abroad have practically
ceased and there has been considerable liquida-
thermore construction Work at home is practically
suspended except in connection with the war in
dustries, so that nearly all savings may be assum-
ed to be available for investment in the war issues
As to whether individual savings are greater or
less than in times of peace is a question. The
population is now more fully employed than in
peace, the rates of pay and probably of profit are
higher than usual, some people at least are prac-
Using unusual economies, and while there is an
other side to it ALL it may be that the aggregate
savings are larger than usual. OF course, if true
this would not mean that England was getting
richer by means of the war, but merely that some
thing was being saved out Of the war expendi-
lures.
: Less information is available about the other
belligerent nations but it is doubtless true that
trade and industry have been much more disturb
ed with them than in England very important
part OF France has been put out of business, and
the foreign trade of Germany has been largely cut
off, Nevertheless including the war industries
which are financed by the loans there is large
amount Of business going on, and current profits
evidently considerable factor in absorbing
the loans.
The diversion OF business from the usual lines
to the production OF war supplies has released a
large amount of liquid capital ordinarily employ
cd in financing trade, and enabled it to be diverted
to government finance. In other words, since the
governments have become the principal purchasers
in the markets trade is being largely financed
through the credits created by the governments
Capital heretofore employed in trade finding little
demand in customary channels, has an outlet in
the government issues. In London large amount
OF capital has been employed in financing the
worlds trade, and the slump that this has suffered
has contributed to the phenomenal ease of that
market
1t is to be remembered that while trade loans
are self hquldatmg, government loans are not and
one of the questions OF the future is how capital
will be supplied for trade when it returns to nor
NAL channels. However, after credit has been
stretched to the limit in war perhaps it can be
stretched little further in peace