New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-09-16

Germany, but such payments abroad
form but an infinitely small part o.
Germany's obligations.
As the blockade made it undesirable
for Germany 10 float loans abroad, she
has remained a creditor nation. enc
| kent some of her investments abroad
She profits more by the dividends than
she ever did before, for $50 dividend
nets her almost 260 marks. while before
the war il netted only 208 marks. II
she wants to sell the securities she can
make a special profit. A $1,000 bond
bought for 4,l60 marks, VIII now realize
5.175 marks. or rise of over 20 per
cent. A German could sell per cent
Missouri Pacific at above 55, for which
he paid 10, without being loser. SINH
larlv, foreign subscribers have been at
tracted TO buy German and Austrian
loans. They get a 1,OOO-mark bond for
$3.50. while its par value is s2376O.
No doubt, a speculative element enters
such investments, in so far as further
fall in the exchange might depreclate
the annual dividend, which is paid IN
marks, but investors know that such a
decline is purely temporary, while IN
the end the bonds will be repaid at
time when the par has been recovered,
and they will be in fair way OF max
ing a big profit. Allied fnanciers have
lately been using this argument IN the
hope OF inducing Americans to subscribe
largely TO French and Russian bonds,
as one can buy a 1,000-ruble bond for
$500, while their par value Is 5000. IL
has not been pressed from the German
point Of view, for Germany so far has
not been very eager TO become indebted
to foreign countries. But whenever
payments from foreign countries 10
Germany are due the unfavorable ex-
change is OF great advantage TO her.
The Germans and the Austrians who
send money home gain % per cent and
more on their remittances. II their
savings amount TO s50,00O,OOO, their
relatives at home will get 4O0,OOO,oOO
crowns instead of 24S 100000.
Selling for Dear Money.
Moreover. the decline of the ex-
change has favored German exports. II
Germany sells steel rails 70 Holland az
100 marks a ton, she gets rs forms TOT
them at par: at present rs forms are
not 1870 marks, but III marks. Ger
MANY is enabled 70 sell her goods
abroad at a handsome profit to herself
while the price she has asked for them
Is not unreasonable. Her industries
are favored. but speculation is hsndi-
canned. As German payments abroad
are made more expensive, German spec
ulators are discouraged from buying
goods abroad, which they cannot ship
Immediately, but for which they have
10 nav. As long as Germany Is partly
isolated and mainly selfsupporting, the
low exchange il no serious handicap 70
hor. That is the reason why she has
done very little TO regulate the price
If her currency abroad She has enacted
legislation regulating the sale OF ior-
eign exchange at home, so as 10 make
short sales difficult, but she has re-
Trained from taking steps similar to
those of the Allies. She has undouot-
edlv sold many Of her foreign securl-
ties and made an extra profit on them
on account of the fall in foreign ex-
change. But she has not thought 1t
necessary to contract loans for the reg
ulation of her foreign exchange. II she
wanted 10 do so, it could have been
done easily. At present her foreign
trade is comparatively small; the for
eign credits necessary for the operation
would be very small. Loans could be
easily raised in Holland and Scandi-
navia, and even in tne United states
The amount of foreign securities held
by Germany is large enough to serve as
excellent collateral for any loan that
might be needed. Ger any has little
inducement for borrowing money
abroad. for her situation is different
from that Of the Allies. England alone
has imported from the United States
about 81. 500, 900 900 in merchandise. II
her exchange fell By 20 per cent the
cost of these imports would be Sl,sOO,-
600 900. II she borrowed S500,0OO,oO0
at s per cent to regulate the exchange,
that will cost her only s3o,oOo,OOO
year. Even il the war went on for
some years, paying interest would be
cheaper to her than a dropping ex-
change. As Germany Is not dependent
on imports from abroad to any consid-
cradle degree, tho sums at stake are
not big enough to justify an increase
Of her foreign obligations. She can az
ford a decline of her exchange. for the
exces, Of her purchases over her sales
4, not large. She need not try to dress
her balance sheet in order to make
good financial impression on the neut-
rails, for she does not intend to rifle
their money chests. She can let the
Allies proclaim the paradox all over
the world that the German exchange
is dropping on account Of the blockade,