The Monticellonian., 1918-10-11
GALLEY FIVE ---- GERMAN WAR LOAN METHODS. James w. Gerard Explains Why the
 Huns Are Able to Continue Strug-
 gle Through Enforced Loans.


 How vitally 1.ecessary it is, for the Allies and American 70 fight the war to real enJine with a decisive Ger man defeat wa5 revealed the other day by James ". Gerard, the Ameri- can Ambassador to Germany at the outbreak of tiie war, in conversa- ton with reporter. Despite all or the assertions of German diplomats and state officials that Germany wishes TO indennities, Mir. Gerard re- veals that the whole German policy of financing the war is based on the very definite plsn of demanding all possible indemnities.
 The taxes had not been very ma terially increascd-not even the in- come tax when Mir. Gerard left the country. Germany was simply doing as she is now doing-fi.ancing the war with hugh loans which were ex- acted from the people but they were funded and fnsnced in such a way that they created a vast and con- stantly increasing public debt-all in convenient shape to be taken up out of the proceeds from indemnities.
 "A German subscribes say 100000 marks to a German War Loan," said Gerard, He then takes the bonds which he receives to his bank and re- ceives from the bani. credit of 80 percent of their value which is loaned to him upon the understanding that he will subscribe therl to the follow ing German Loan. And so it contin- ues until low point is reached. Thus an enormous national debt is built up which is carried by the paper money of the country since in Ger many they can issue paper against property.
 "The high authorities in Germany have repeatedly stated that they were planning to finance the war on the basis of certain German victory; they would exact the last penny in indemnities and make some other nation or nations pay for the war; So it is quite apparent that the Huns are prepared to fight on as long as they are able The insincerety Of their peace pleas becomes apparent in the light of their war financing. The best observers, in the light of the dis closures regarding their war fnan- cine assert that the Hun merely want9 peace to prepare for continu- ing the war after a breathing space.
 Another decidely interesting point was developed by Mir. Gerard. When the United States issues a Liberty Loan the country is asked to sub scribe freely but there is no con- pulsion. That the people may be fully informed upon all points per taining to bonds and the Liberty Bonds in particular and that they may fully realize the necessity of backing up their government, the Liberty Loan Committee organizes a far-reacking campaign. The best ex- perts in publicity advertising, sales manship and finance give of their brains freely. The whole country is a'eo supplied with all information which may in any way aid them in having sufficient data on which to  base conclusions.
 But in Germany the war loans go forward very quickly. There is no oampaign, no publicity department, no corps of expert bond salesmen, no orators. no Liberty Theatre, no Liber- ty Fell, no Liberty Bank. The gov- elnment simply notifies banks and large insurance and industrial cor porations that they &re expected to subscribe such and such amount. This is handed precisely as the individual subscriptions are.
 The banks leEd to the corporations % percent of their subscriptions with the provision that this SO percent must be put into the succeeding loan.