Der Deutsche correspondent. [volume] (Baltimore, Md.) 1841-1918, 1916-10-02
GERMAN WAR FTNANCE.
BY Professor Morit2 Julius Bonn,
President of tho Commercial Uni
versity of the City OF Munich.
THE PRINCIPLES or WAR
FINANCE.

Ever since the success Of the first
German war loan English spea kers
and writers have taken lot of
trouble in running down German
finance. Their attitude was quite
intcllisible as long as Great Britain
had hopes of winning the war by the
financial and economical exhaustion
Of the enemy These hopes have
gone long ago. England has real
lied that the road to victory leads
over battle fields Whilst her sol
diers are doing manfully their duty
in the service OF their country she.
is compelled to borrow money
abroad, in order to finance the huge
army she must have. Her financial
experts go on trying to beguile the
neutrals with stories of the immi-
nent economic and financial collapse
of the enemy. They do not seem to
see how criminal it would be TO
sacrifice the lives of so many thou
sand brave men In the trenches il
there really was a short cut to sue
cess by blockade and starvation
They boast about the great achieve
ments or the blockade which, accord
Ing TO their views, has cut off the
Central Powers from the rest Of the
world. At the same time they are
trying hard to undermine Germany's
foreign credit forgetting evidently
that country as completely block
AIDED as Germany is supposed to be,
is Independent of foreign credits.
They are taking great trouble in inn
pressing their views on the neutrals
by stopping almost completely the
influx of German newspapers, not OF
war news only, but of financial and
economic news as WE'LL Evidently
the collapse Of German credit is not
yet visible in Germany. If Germany
was likely to appear as a competitor
for loans in the American market
this attitude could be easily explain
ed. AS this is not likely to hap
pen, II is difhcult to understand these
methods. Even if Allied authors
could show the American public
that German bonds are not worth a
cent, this would not prove that Rus
sian, French or even British bonds
are good investments, especially
when the latter are offered whole
sale. whilst no German bonds are
forthcoming.
DOMESTIC FINANCE.
German war finance today is
mainly demostic finance. One small
loan it is true, of $10,00O,000 has
been contracted in the United States.
1t was paid back in January OF this
year; so far IL is the only example
OF war loan abroad which was
taken up when it fell due. Perhaps
$25, 900 have been subscribed
in the United states to loans issued
in Germany; perhaps $4,000, 900
more in other neutral countries. The
total requirements for interest
abroad on German government
loans may be $2,000,000 year. The
total requirements OF the Allies
must be over S50,000,000. If credit
facilities given by banks were in
cluded the Allies financial obliga-
tions abroad would be very much
greater.
The cost of the war to Germany
has risen from $3.50, 100000 a month
to between S500,000, 900 to $780,
100000 month Apart from the
surplus Of the regular budget. which
was partly due to the fact that the
expenditure for the army and navy
was transferred to the war budget,
the main cost Of the war has been de-
frayed from domestic loans. The
first loan issued in September, 1914,
was subscribed by the public at
97H, the second loan in February,
1915. at 9SI5, the third loan in Au-
gust. 1915, at 80, the fourth loan in
March, 1916, at 9812.
The results of these loans were:
1st loan. ..$1,061,905,0O0
I'd loan. 49, 2.157, 100000
Sd loan. 49,. 2,881,190.000
4th loan. .. $3.50, ,475,000
a total amount Of 96,4OO,OOO.0OO
marks or SS,G50,950, 1000, has so far
been collected by these loans.
Besides these permanent loans the
Imperial Treasury has placed short
term treasury bills with the banks,
md egppcially with the Tmneriol