New-York tribune., 1918-04-15
w ea1th Markets I'm r2 sE

crisis and to enable war to be wagcd
on 1. scale never hitherto regarded as
possible. Nor can it be denied that If
tbs Object in view had been the crea-
ton instead of the destruction of
wealth the worlds wcllbeins. could
have been enhanced in Il most re-
markable manner by such vast crca-
ton Of credit
And no one can doubt that the world,
having had such an object lesson in
the possibilities of credit, will seek to
| apply its advantages after the war TO
the production of wealth, and that as y
result Of this wider knowledge and ap
probation of the power and the value
Of credit wealth will increase much
more rapidly in the future when tho
war is over than it did in the p"st.
Future of Money Market
1t is the situation thus created that
renders any forecast Of the future Of
the money market a matter of very
great difficulty.
One thing, however, is clear-that
tlcrc will be no lack Of demand for
banking and Investment money in all
countries, both for the purpose of pur
suing the war and, when peace comes,
carrying out the work of reconstruc-
tion. The proportions of the sum re-
quircd that will be provided by bank
crs and investors respectively cannot
yet be decided. That depends upon
many considerations. Just now in
vcstors in Europe are dspo-ed to
think that the war has entered upon
its last stages and that the economic
pressure upon Germany and Austria
will at last have the desired result,
and arc rather more disposed to allow
their money to accumulate in the hands
of bankers until they can form clear
err idea of how long the war is likely
to last. The consequence of this is to
bring about plethora of banking
money in London and to cause bankers
to reduce the rates of discount and the
government its rate for treasury bills.
But already II greater attractiveness
with bankers deposit rates and treas
ury bills is again cnusing investors to
subscribe to the government loans
more freely.
Fluctuations of this kind ave. Of
course, inevitable and can be more or
less ignored, the essential factors III the
situation being the constant need Of
all the moHey that can be supplied
both by bankers and investors in all
parts of the world until the war is
over.
After the War Conditions
In considering the post war situa
tion account must first be had of the
position that the war will leave. First
Of all, we shall have the TACT that the
bclligcrcnt nations will be heavily in
dcbted to the rest of the world for
produce and foods supplied during the
war, the payment of which they have
been allowed to finance temporarily in
the countries from which the things
have been bought.
Of course, if the countries in which
these temporary loans are incurred
of the money due them very awk
ward situation would arise. But they
are likely to do nothing Of the sort.
In the past these countries have OBJ
tanned very valuable help from France
and Great Britain in the shape of i'm
mcnsc loans of permanent capital for
the development of their resources,
and now that the situation is reversed
they are likely to act with the same
consideration as was shown to them
and to make no demand for payment
which cannot be readily met.
What is likely to happen is that
borrowers and not lenders and need
to import more goods than they can
usually pay for by exports. will, after
the war is over, again begin to go
ahead and will take payment of the
loans they have made to other coun-
tries during the war in the goods they
need for their development. In other
words, they will gradually take back
the capital which they have accumu-
lated abroad during the war from their
great sales of goods and produce and
lands until the money due to them is
liquidated. In this way the balance
OF trade against the bclligerent ma
tlons that has piled up during the
war will be gradually adjusted until
eventually the effect of the war en-
trely disappears and the world re-
sumes business as usual.
The inevitable effect of this situa-
ton will be to maintain prosperity and
the volume of business in the coun-
tries that are now greatly adding to
their wealth and are in position to
ask for payment after the war for the
produce and goods sold to the bolle-
crents during the war. On the other
hand, the need to repay these loans
viii compcl the belligerent nations to
become both economical and efficient
IN order to produce the goods thew
Will require to export in order to re-
deem the debt they have incurred to
other nations as speedily as possible.
Maintaining Present Prosperity
Possibly, but not probably, this tenn
porary debt Will be liquidatcd by sales
OF securities possessed by the warning
countries, whose holdings of foreign
securities alone amount to some eT,-
cou,o00,o00 ($35, 1000 ,00O,o0C). But IN