The Dominion TUESDAY, JULY 20, 1915. FINANCIAL STRAIN AND PEACE TALK

Dominion, Volume 8, Issue 2518, 20 July 1915, Page 4

The Dominion TUESDAY, JULY 20, 1915. FINANCIAL STRAIN AND PEACE TALK

Recent cable messages reveal the fact that there has been a. revival of peace talk in Europe and America. It is stated that Germany is making tentative, proposals through tho United States, and a New York financial journal of high standing asserts that it is possible that the war will be over by October, as Germany is both beaten and bankrupt. It is quite impossible to say how much fact there is behind these rumours. They may not be entirely without foundation; but the Allies cannot allow themselves to be diverted in,any way from their great task of defeating their enemies thoroughly and overwhelmingly by vague reports of the possibility of an early peace. It would be a disastrous mistake to delude burselves with the idea that Germany is beaten in the military sense, though it is quite possible that the end of_ her_ financial resources may be coming in 6ight. But if she is on the verge of bankruptcy, that would bo an additional reason why we should increase the power behind our blows, and give her no respite or breathing time whatever. It has been stated that tho Kaiser recently informed a deputation of anxious German bankers that the war would end in October. The bankers had warned him that the financial posi-' tion was so serioita that another winter campaign would be attended by grave risks. But it may be taken for granted that Germany is going to fight on to the bitter end. If the war is indeed going to end in October—which does not seem at all likely—then we may expect the fighting during ■ the next two or threo months to be fiercer than at'any previous time since the beginningof the war. It is no time for Britain and her Allies to pay attention to peace rumours which are possibly being circulated by the Germans for their own purposes. Mr. Asquith was undoubtedly right in refusing the request of a member of tho House of Commons that he should considor tho advisability of ascertaining the terms of peace which Germany • would entertain. Such a step would be regarded as a sign of _ weakness by our enemies. ' The Allies must resolutely refrain from discussing the terms of peace until they are in a position to dic.tato them. In the' meantime our business is to fight, and the beating of our enemy is a big enough task to occupy all our time, all our thought, and all our strength. • It would, of course, be very gratifying if we had reasonable grounds for believing that Germany is beaten and bankrupt as the Wall Street Journal assures us she is. Hardly* less optimistic is the view of Mr. J. M. Robertson (formerly Secretary to the Board of Trade), who thinks that Germany will bo bankrupt in six months, and that she cannot endure the strain of war as long as some of the military experts have prcdiefcccL It would, however, be most unwise to plaoe reliance on the rumour that a German financial collapso is imminent. No such hope was held out at the meeting of London financiers and business men. referred to in tho cablo columns' of .yesterday's-Dominion. The - note struck at that meeting was the need for inoreased thrift, in order that the nation may be - tho better able' to bear the great financial burden which the war has placed upon it. The wonderful success of Britain's latest war loan is a most impressive proof of her superiority to Germany as regards thtf financial side of the struggle. It is, 1 however, quite certain that the Gorman Government will resort to every conceivable scheme and device in-order to finance the war, and there is nothing to be gained'by blinking tho fast that the German people have shown themselves ready to make enormous sacrifices. Tho Kaiser and his advisers are no doubt well aware that if Germany does not emerge victorious from this war nothing can avert national bankruptcy. There may be a good deal of truth in the statement that the German bankers have informed the Kaiser that if the conflict is prolonged Germany will become utterly bankrupt; but if the financial situation is as serious as this we may'expect the Germans to redouble their efforts in the desperate hope of gaining & decisive victory, and of securing a peace whioh may help to lessen their financial losses. In an article in the Nineteenth GentuTij 'on "The Economic Strain on England and on Germany," Mr. Arthur Steel-Maitland, M.P., states that a nation may make itself temporarily self-supporting in a time of emergency by not making capital replacements in industry.

She may for the time-being be able to supply herself with necessities and yet keep up' the supply of men ami munitions, for the army. But a country in this condition is like a bear living on its own fat. It may so continue for a longer, or shorter period, but sometime tko stores of fat will come to an end, and it will be forced to go for its sustenance to outsido sources.

Mr. Steel-Maitland goes 011 to say that as soon as a country's consumption of articles outruns its production, or as soon as it needs certain articles which it cannot produce itself, and which it cannot fully pay for by exports, then the economic change is rofleoted by t.ho inoreasing difficulty of financing operations.- For Germany this difficulty, has now become acute. Britain,' of course, is_ importing large quantities of munitions and other articles, but her accumulated investments abroad are so large and her position at the start was so strong that she has been able to stand the strain far better than Germany; How near breaking-point the strain on Germany has now become it is impossible to say, but the reports of financial troubles combined with the revival of peace talk may not bo without significance. Our business, however, in any case, is to hit harder and oftener than ever. It would be the height of folly to speak of peaCe, or oven to think about it ,at such a moment. Lot our foes sue for it.