Der Deutsche correspondent. [volume] (Baltimore, Md.) 1841-1918, 1916-10-16
GERMAN WAR FINANCE.
BY Professor Moritz Julius Bonn,
President of the Commercial
University Of the City
of Munich.
CContinuation.)
BANKRUPTCY {?

BANKRUPTCY?
If the war came to an end today
Germany would have contracted a
permanent debt of over $8,000,000,-
600 and a floating debt OF perhaps
$4,000, 200 more. Her total debt
would be $4,000, 100000 to Sill
600, 100000 AS to England, she
has borrowed so far:
&987, 100000 permanent loans at
home.
9295,OOO,OOO exchequer bonds
G26,000,000 different small ex-
pedients.
G812.000,OOO treasury bills.
$3.50, 100000 in the United States
without collateral.
She has Just issued $3.50, 100000
more in the United States on collater-
al, repayable after two years.
OF this total 100000, or
per cent, have been borrowed abb
road 80 per cent. are floating debts;
"A per cent. only have been raised
by permanent loans. England has
parted with large part of her in
ternational Investments She has no
doubt merely "swapped" them, for
she has largely invested in the busi-
ness of her Allies. Up to August 1
1916, she has lent them over $4,000
600, 900. She is making advances to
them at the rate of $7,0OO,0O0 a day
In other words, she has got rid of her
first-class foreign investments in ex-
change for $4,000, 100000 Allied
bonds. BY January /, 1917, another
81, 900, 100000 will have been added.
Germany, too, had to part with a
large part Of her foreign securities,
but thanks to England's interference
a goodly share of them has been con-
served. The amount of German
property withheld by the Allies from
its rightful owners has been estimat-
ed at $500, 100000. They will have
to give back these spoils with COM
pound interest when peace is made,
and make good the wanton damage
done. The discussion of the re-
establishment of Belgium will give
the proper atmosphere in which these
questions can be discussed from the
highest point of view for the occupa-
tion Of Belgium will provide Ger
many with the necessary leverage to
exact compensation. The result will
be that Germany's large foreign
assets will be released at the CON
clusion of peace
At that time England will have to
fund her large floating debt before
she can think Of contracting new
loans. Germany has done that fund
ing during the war. If she wants to
borrow money she will have ample
foreign securities to be used as col
lateral.
WARS FINANCIAL BURDENS.
No doubt the burdens OF the war
win be awfully heavy. If peace were
made today the annuities for paying
I interest on the debt would be over
$500, 100000 q year in each country.
! AS the regular expenditure Of Ger
many in 1913 was g. s billion marks,
! or 1857. 100000, her expenditure
would be increased by SO per cent.
AS England's regular expenditure
was much higher-$916,0 900, ,0OO-
though her population is much
smaller. the percentage of the in
/ crease would be smaller, but the bur-
den would be heavier. The cost of
the war to her is getting more ex-
pensive every month. It has risen
| lately from $24,000,000 day to
500, 9,000,0 900, or from S725,000.00 a
month to $50, 100000. AS far as
the piling up of expenditure is con
cerned, time undoubtedly is in favor
/ of the Allies.
Neither Germany nor England will
be broken by the war. At the close
of the Napoleonic wars the annual
debt Of England was G32,500,0OO
($150, 0,000,0O0) She was then
small and a poor country in compar-
ison to what she is today. The war
has not destroyed the national re-
sources Of either country Russia
has devastated East Prussia. A good
deal Of devastation has taken place
In the German colonies, most Of
which are lost temporarily. Even If