THE KAISER

Kaipara and Waitemata Echo, 2 March 1916, Page 3

THE KAISER

HEADS I WIN, TAILS YOU LOSE

EXAMPLE OF ZION CITY.

MANY people cannot understand how it happens that Germany — a nation nothing- like so rich'as Great Britain —should be able to find all the money she needs. They are uneasy, indeed, that the silver bullets seem to be just as plentiful in Berlin as in London. The explanation is simple, and there is apparently no reason why, so long as the war continues, Germany should not go on producing all the silver bullets she requires. We have to-day in Germany an example on a gigantic scale of what is called the vicious circle. ' Ultimately, of course, ruin must follow the circle, but it is now being practised on such a huge scale that decades might elapse before that ruin overwhelmed the German nation.

The best example of how the circle works, that has come under my notice, was at Zion City, near Chicago, says a writer in Melbourne " Punch." ' At that spot, on the shores of Lake Michigan, Alexander Duwie —self-styled the ■'First Apostle" —had* founded him a city. The faithful gathered round, and there industries were set up. Furniture was made, a sweet factory was erected, lace weaving was started. The products were sold to all the citizens of-the new Zion, and for years all went well. Money was plentiful, everyone was happy and contented, all had • implicit confidence in the prophet and his bank. But at last suspicion awoke. Although the bank paid dividends, regularly —on the money the faithful'had deposited therein for long periods —no balance sheets were published. Worried to death, and knowing the real state of affairs, the prophet fell ill and died. Then came the great awakening. There was no money at all in the bank. Interest had been paid out of principal, no outside money had been pouring in at all, but money had been steadily goingout for necessaries. The people themselves had bought the products they made, had paid each other wages for the work done, but had not been able to sell anything to -the outside world in exchange for what they were obliged to get frg>m it. Sm^sh followed as a matter of course.,

Germany is in a better position than was Prophet Dowie. She need not sell anything to the outside world because she is buying'nothing from it. What happens' is this. The Govern.roent wants meney. It obtains it from the people, It uses this money to buy war material from German firms ; to buy fcod for the army from German farmers ; to buy clothes for the soldiers from German mills. The Getman munition factory spends the money it gets from the.Government in purchasing coal, steel, and other things produced in Germany, and in paying a vast army of workers their wages. The main item of expense in getting the coal is the wages of the miners. To get the steel the main cost again is the workers' wages. The borrowed money goes, too, to pay the farm hands and enrich the farmer, tovpay the factory workers and enrich the manufacturer. When all the borrow.cd money is.spent the Government simply borrows' it again from those to whom it gave it— from1 the people who have been unable to spend a single pfenning of it outside Germany. Money is agiiin given back and borrowed, and so on infinitum. There are leaks, certainly, but in the main they are using the same money over and over again It is, of course, piling up a huge debt, but in time of war no one heeds that. Posterity will have to foot tile bill. No doubt the German Government reasons that if the Kaiser is victorious there will be no difficulty in meeting the colossal liabilities. If he is defeated —well, there will be no attempt to meet them. The entire "war debts will be I repudiated. \ ft