The Goldfield news and weekly tribune. [volume] (Goldfield, Nev.) 1911-1947, 1917-12-29
GERMANY'S FINANCES

Tho roicbstao in a few DAVIS is expected to authorize a war
credit of i5OOO,OOOO00 marks to continue the war, whhch VIII
make a total of $iO9,O 100000 marks voted by the relchstas'
That money has all been spent, together with more. In addi-
ton TO the SlO9OOO 100000 marks voted by the relchstag, the
German war barons have spent the Spandau gold chest and
about 5000 100000 marks collected as fines" from Belgium,
Poland, Rumania, France and Serbia. Germanys method OF
financing the war is to buy materials and spend money, and
then go to the reichstag for authorization to pay.
Seven war loans have produced 74,OOOOO,UU marks. Spe-'
cal war taxes have netted between 5,OOOO0O,OO0 and 6,OOO.-
100000 marks in Germany. Germany does not believe III tax
ing herself to pay for war. She expects to collect indemnities.
So here are SOOOO,OO0OO0 raised by Germany. But she has
spent 100 OOO,OOO,OOO marks. Or rather, technically, the reich
stag will have authorized payment, of 1O9,UUOWOWU marks; but
more has been spent.
How has Germany raised the extra 29,OooOoo,Wo marks?
About S5OOOOONO marks have been raised by imperial bank
notes, fiat paper money. The note circulation has expanded
from 1890 $4,000 marks as of July %, 1914, to 1O,3o9,774oO
marks reported as of November IS, 1917. Here is an increase
of S,46Sy 100000 marks in paper money. This is fiat paper, I'M
backed.
The gold reserve of the imperial bank has increased from
l.722 $4,000 marks to but 2,40l, 305OOO marks in that time, in
Guiding the absorbed Spandau war chest and the absorbed Wen
ia Reichsbank gold reserve. Against an insignificant gold re
serve of %6S2o0oooo marks, paper has increased s,f6s,OooOoo
marks. And that assumes that Germany's gold figures are re-
ported correctly by the imperial bank.
Since Germany floated her seventh war loan of 100000
600 marks in September her gold reserve has not increased.
Her unsecured note circulation has increased 1,O0O,OOOyOO0
marks.
BY mid December of 1913 Germany's business men would
be holding 80 OO,OOOOOO marks of secured government bonds,
bearing an average of about five per cent interest. They
would hold 5Uy5UO,UOUUUOm marks OF unsecured temporary loan
certificates, bearing five per cent interest. They would hold
20OOOOO0,OOO of fiat paper money, bearing no interest.
On the 149,5OO,OOO,OOO marks of bonds and Understanding
L. q. US she would pay 1915, 100000 marks interest yearly.
Her soldiers insurance and indemnites bill would approximate
at least 4,5OO,OOOOOO marks yearly by that time. 1t is almost
that now. Here are practically 12,Q0O,OOO,OOO marks a year
fixed charges.
The most money Germany ever raised in one year was
3,94OOO0,OM marks in the fiscal year 1913, just before the
war, and that included a special budget appropriation of 1,OOO,
100000 marks for special army maneuvers and equipment.
How significant that expenditure a year before 1914 now ap-
pears with regard to the question who started the war!
To raise capital that will pass as lawful money in the mar
kets of the world after the war, German business men will have
to sell those bonds and loan certificates, and the only way they
can sell them honestly is for Germany to guarantee interest
not necessarily five per cent, let us say two per cent. That
would make the interest item 4,fS5OOO,0OO marks a year, or g.,
0~O0OOO,OOO marks including pensions. The bonds would not be
worth 60 cents on the dollar.
With such a minimum burden of 9O0OyOO0,OOO marks fixed
charges a year German competition after the war is scarcely
to be feared. Whether or not initiation continues after the war,
it appears not improbable that general prices of commodities
including labor will be on a higher plane than before the war.
New York Commercial.