South Bend news-times. (South Bend, Ind.) 1913-1938, 1917-01-21
Building
The Past Financial Year

I me year Just closed emp naSlzeu
| and continued the remarkable eco
nomic phenomena OF the preceding
twelvemonth. The governing infiu-
ences have been as follows:
o. The war itself; the years
military and naval history being
summed up in Germanys six months
! Of violently aggressive operations
against Verdun which failed COM
/ pletely; in the allied attack on the
German western front. beginning in
midsummer and achieving numerous
minor gains OF territory, but slack
ening before the real objective had
been attained; in Russia's cam
! paign against Austria, with retreat
and decentralization of the Austrian
armies, in the incOnclusive sed
1 fight off Jutland. the first really
great naval battle of the war; in
1 ROumania's declaration of war, her
ill-judged expedition into Transyl-
vania, her disastrous defeat and her
I loss OF Bucharest and a great part
of her kingdom: in the futile con-
troversy between the allies and Sa-
lonica and the Greek king, and be-
tween the king and the insurgent
Venizelist party. Almost at the end
of the year. Germany's peace pro-
posal
CO. Rapidly increasing cost of
the war; bringing the average total
daily expenditure, in the middle OF
1916. to S1O3. 100000, as against
$75, 900, 900 exactly a year before
this increased cost being due both
to the largest area Of active hos
tilities and TO the prodigious use of
artillery AS a consequence, pro-
gressive increase in the war debts:
which, in funded or unfunded form,
have probably doubled in the
course of 1916. the increase for the
four chief belligerents, since the be-
ginning of the war, being now close
TO $50, OOO,OOO,OOO.
Strain on European Finance.
(3.) Further expansion of paper
money issues by banks of the belli-
gerent powers; the maximum in
crease OF 1916, as compared with the
last week of 1915, being $846. 200, 900
in France. $s3, 900 in Germany,
81 200, 900, 900 in Russia, and 1884,
900. 900 in the British treasury notes
ali Of these issues, however, ex-
cept for Russia's being somewhat
reduced in the last months of the
Year. Against these liabilities,
slower increase of gold holdings
than in 1915-the bank OF Ger
many gaining barely $4,000. 900
gold this year; the bank of France,
gaining about 500, 100000 but ex-
porting practically all of it; the
bank of England gaining about $685.
100000 gold, but none being added
10 the reserve against the currency
notes. and the bank of Russia los
ing some 10000 gold up TO its
latest report.
ca AS a consequence largely of
! this arrangement Of the continent
al currcencies Though also in part
because of purchases from Ameri-
ca), further sensational deprecia-
ton in many of the foreign ex-
changes; the New York rate on
Germany falling this month 10 65
SIS cents for four marks, as against
a low rate last year of rs ga and
par of 95 1-2, on Austria to slightly
less than 10 cents, as against a low
OF 1895 last year and par of 20 1-3
. cents. on Russia to % 3-s cents per
ruble as against a low OF 29 "a in
1915 and par of 81 Ia; exchange on
London and Paris being held steady
around last years closing rates by
export of gold and loans in Ameri-
ca. though with temporary sharp
further depreciation of Paris ex-
! change in April.
Our Huge Loans to Europe.
CD Enormous loans by the
American market 10 the outside
world; due partly 10 an OVERLOOKING
supply OF home capital. but Gin the
case of loans 10 the allied govern
ments) TO a virtual extension of
payments on their purchases of ma
terials in America; the total OF such
loans being calculated by the fed
eral reserve board. up 10 December.
at 1881, 900, 900. of which $1,627,
100000 were made TO Europe, the
rest mostly 10 Canada Pledging of
American and other collateral by
the allied powers to secure these
loans. as against the unsecured for
eign public loans OF 1915. Pro-
pOsal by New York agents of the al
lied governments. in December, for
sale to cur banks of "a limited
amount" Of the shOrt-term treasury
bills Of England and France: pub
tic objection by the federal reserve
board 10 such sale. on the ground
that bank funds which should be
available for short credit facilities
10 our merchants. manufactu Nrs.
farmers might be disproportion-
ately absorbed; withdrawal of the
treasury bills for sale: an unfortu-
nately vague and obscure caution by
the board OF private investors that
they should receive full and author
itative data regarding foreign
loans before investing in them.
60 An export trade from this
country which in the II months
ending with November. was larger
by S1.665. 900. 600 than in the same
months OF 1915. and by S2.71O,OOO,