The Washington times., 1916-08-11
GERMAN FINANCES
. NOT YET IN DANGER
Lord NorthcIiffe Responsible for
Publication Of Discussion Of
Question.


finances collapse in the autumn
Lord Northcliffe, who Is responsible
for the publication OF the following
article, writes: II have reasons fo
attaching great importance to thii
article which has reached me, and
shall be glad to see It published"
Lord Northcliffe Is In q position Il
obtain first hand reliable information
from Germany and 1t Is certain tha
the facts here set out are substan
The economic collapse Of German,
may come soon, and we have II in oui
power to hasten the day by q more
stringent application Of our com.
refusing the use of London as the
financial center OF the world to In
ternational fnanciers financing car
goes for the benefit Of Germany.
But the economic collapse must not
be confused with the financial col
lapse. 1t Is probably this confusion
Of thought which induces the delusivs
ton none %,ss hs sns%y fs% mon;hs sms
People Of an optimistic turn OF mind
assure their friends that the financial
position Of Germany will not allow the
nnd as this sort of talk tends to en-.
courage us to relax our efforts 1t
should not rest unchallenged.
When the war ends and Germany
seas co%modiss TO Ra fe'S viii fHr BRING
mendous strain on her resources, put
we must not mistake the after-the-
war situation for the situation today:
organisation, is able to exist 50 LONG
as the German people have confidence
in the stability Of the state.
Huge Burden of Debt.
It is possible the financial figures
which Germany publishes to tho
world may be 'doctored." and we
%Ssn ss %s ssf USE n the ns pubissed $ d0ses ss:tes
as the basis OF argument.
siderable controversy; but II we ad-
whether there is anything In Ger
many's borrowings to foreshadow the
Feasibility of German financial col.
lapse IN the autumn. we are bound
Up to June. Germany had borrowed
1000 millions under votes of credit
granted since the outbreak of ear.
WI ns r:sd GSn Sy war aeGS a IL.
portion of which may be repaid at
the convenience Of the government.
the BALANCE Of Isl millions being
As Germany has already received
powers to borrow another 500 mil
lions. she should be able to liauida.c
ons fhsss Me5au she5t date sred.s 81 isI mil
the proceeds of the next loan.
Putting off the repayment OF this huge
burden Of debt to a distant future may
Important point is that Os the capacity cit 'of Of
Germany to carry on war for many
months is not diminished.
OF the 1000 millions borrowed by Ger
able when Germany chooses. Therefore,
Germany Is involved in mn no 'i immeddfaptts; NM dffpt;
Just under lss millions Of treasure
bondb have been issusd, and are re-
payable at various dates ranging from
1913 at the earliest to 1888 at the latest.
There Is nothing in these borrowings TO
cause Germany to look with concern to
the autumn.
Short Term Credits.
Until the new war loan is noated Ger
term credits or borrowings from bank
ers In the nature of treasury bills.
which she will repay. together with the
lsl millions, out Of the proceeds Of the
new loan. There is no reason to think,
then. that she will have any trouble in
satisfying her financial requirements
until the end Of the year which dis-
poses Of the financial collapse in the
1t is contended that tho very fact that
Germany is deferring the raising of
her new loan until September argues
q strained financial position. The truth
most is that toSepn, September - and March are the
for In September the harvest will have
been gathered and the agricultural
community will be in q better position
Are the German banks sound? wc
hear a great deal Of talk about the
failure OF German banks. II there was
aunything nnsonnd IN the position Of the
{1arman ha Pon
might be something in the suggestion
that the financial collapse Of Germany
is imminent.
When war broke out the discounts
ana advances OF the Reichsbank rose
from ~ millions to 1yS millions; on juno
! OF this year they were 2s2 millions On
the other hand, the notes In circulation
rs ana August 7, 1874; on June OF this
year they were 33b millions The notes
or the Reichsbank were secured a week
before the war by III OF gold; on Au-
2, 1916. by 31.S or gold.
Not Payable In Gold.
We must remember that the notes OF
the Feichsbank are not now payable in
gold, which is a great protection against
collapse, and we must not confuse the
rise in prices which Is brought about by
flooding the country with paper money
with the possibility of imminent tinan-
cial collapse. Germany can go on In
creasing the issue OF Reichsbank or
other notes as long as the German peo-
pie continue to be satisfied with the
cover.
hut n there were any serious drain on
Germany's gold reserve. then the posi-
tion would undoubtedly be n serious
one. What do we find? On July 23. 1914.
the Reichsbank held 6S millions in gold
on August q, 1914, "A millions. and on
nf
is the argument for financial collapse In
the autumn?
Saves Ashes of Money.
CHICAGO. Aug. 1l.-When Mrs. Kath-
Ill A.I... MN