Der Deutsche correspondent. [volume] (Baltimore, Md.) 1841-1918, 1916-10-13
GERMAN WAR FINANCE.
BY Professor MOritz julius Bonn,
President of the Commercial
University of the City
of Munich.

(Continuation.)

THE DEPRESSION OF THE MARK
EXCHANGE.
The depreciation Of the German
mark measured in the currency of
other countries, is held up by British
critics as the surest proof Of Ger
many's bankruptcy. If such test
were true, not only Russian currency,
about which is not worth talking, but
the currency Of France, Italy, nay,
as the Scandinavian exchange shows,
even the British currency, is deprec-
lated This argument could be
pressed much farther. In August,
1914, six American dollars had to be
paid for the sovereign, the value OF
which is but S4S6. What is the ex-
PLANTATION? Was America bankrupt?
Was her currency deprecated? Was
she suffering from imitation? Moth
ing of the sort What did happen
was this: At that time America had
to make heavy payments in England
and France. She could not send
goods and she could not send gold,
FOR communications were interrupted.
AS she wanteo to act the part of the
honest debtor, her merchants strove
madly to get hold Of sterlings and
with the object OF liquidating their
debts, though their own assets were
withheld from them through the
moratorium
NOTHING TO PAY OUT
The commercial relations between
Germany and oversee countries are
cut at present. Germany cannot send
goods to the United States, except by
submarines She cannot get imports.
Harpily for her, she is not indebted
to them Her interned ships, it is
true. cost certain amount of money
Some goods were bought in this
country which had to be paid by Ger
many, though they could not be
shipped. The marooned Germans get
some support from home. German
loans have been subscribed over
here, and from time to time interest
is due on them. Some private credits
have been opened for German firms;
they have to be paid back when they
fall due. The regular obligations Of
Germany in this country can scarcely
average a few million dollars. On
the other hand, there are quite con-
siderable assets. There are German
concerns in this country which re-
turn payments regularly. Even now
a considerable amount of American
securities is held in Germany, paying
handsome dividends. Dividends from
South America are transmitted via
tho United States. American resi-
dents in Germany get their remit
tances, provided the British Govern
ment does not intercept them. Ger
man charities. the Red Cross and the
Jewish charities have transmitted
large sums. Germans living in this
country have sent support to their
relatives. Large sums 60 to Austria
from the Austrian emigrants--they
have been estimated at $50,000,000
to $80,000,000 Securities have been
sold, loans have been subscribed
For Notwithstanding all efforts, the
British censor cannot stop the wire
less. Broadly spoken, there is not
tho slightest doubt that the balance
OF payments in America is in favor
of the Central Powers The demand
for marks for direct American con-
sumption ought to be much larger
than the demand for dollars for di-
rect German consumption. If that Is
the case, the mark ought to be at a
premium. AS ii is, the mark is de-
preciated. -Four marks can be bought
with 95 cents in normal times; today
they can be had for 20 cents Is that
not a proof that America objects to
marks on account Of their heavy de-
probation? That is not the explana
tion. America would not mind a bit
whether marks are deprecated or
not, provided she could pay her
obligations in Germany with those
marks
If Germany was nearly as isolated
by the blockade as the Allies pretend
her to be no large demand for dollars
could exist, either directly or in
directly There would be no exports
from America to Germany and there
could be no important demand for
dollars. as there are no imports from
Germany The dollar market in Ber-
lin and the mark market inNew York
would be merely nominal markets as
far as direct transactions are con-
cerned. That, no doubt, Is true to
some degree Transactions in marks
in New York are small. That is one
reason why fluctuations are violent.
THROUGH THE BLOCKADE.
But the blockade is not complete
The Allies have fairly well succeeded
in coercing the neutral nations Of
Europe into placing an embargo on
all re-exports of goods imported from
oversee. Up to now these countries
have not consented to stop the export
of their own products. The Allies
have tried very hard to prevent Hol-
land from exporting cheese, Norway
from exporting fish, Denmark from
exporting butter and milk. It is not
likely that they will succeed in this
respect These countries are depen-
dent. on Germany for many articles.
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