The Stratford Evening Post WITH WHICH IS INCORPORATED THE EGMONT SETTLER MONDAY, OCTOBER 25, 1915. THE POWER OF FINANCE.

Stratford Evening Post, Volume XXVIII, Issue 47, 25 October 1915, Page 4

The Stratford Evening Post WITH WHICH IS INCORPORATED THE EGMONT SETTLER MONDAY, OCTOBER 25, 1915. THE POWER OF FINANCE.

If lite "silver bullet" is not everything in this {rreat war. it is certainly a great factor, for the financiers of today hold tremendous power in their hands. The "Spectator" not long ago, in the course of a review of Ellis T. Powell's hook on the growth of the power of finance, remarks that when the primitive savage of the economic text-hooks left off bartering deerskins for arrow-heads, and took to exchanging goods for cowry-shells and cowryshells for goods, he little thought that the mechanism and development of the cowry-shell business, or its modern equivalent, would one day produce some of the most important questions that civilisation has to solve. Hut so it has come about, and in these modern days monetary centres, whose staple. industry is the production of credit, easily overshadow in wealth and power the towns and districts in which the real wealth of the world, the goods that feed it and clothe and warm and comfort it, are turned out.l financiers wax Fat very much faster,i as a rule, than the growers and makers and carriers of the stuff on which we all have to live. After stating this view of a peculiar development, the "Spectator" goes on to say: "It is a curious feature of our civilisation which will some day lie the theme of miany volumes from philosophic New Zealanders who rake over its ashes," and so probably had in mind Macauley's New Zealander musing on Loudon Bridge. Mr Powell, in his book, takes the year l,"Wo a s his-start-ing point and traces the growth and concentration of financial power . i through the goldsmiths, the private bankers, the Bank of England, aivii the great joint stock hanks into the co-ordinated whole which he now regards as triumphantly established on a • sure basis. But with this the reviewer hardly agrees, contending that, after all, finance is only a wheel in the vast machinery of production and distribution, and it is because so many of us mistake the wheel for the machine that we are slow in getting down to real problems. The commentator contests tlie author's suggestion that the present financial system of Britain is an achievement of perfection, and points out, from his own pages how it is the result of much past groping and blundering. The Bank of England itself is shown to have for many years pursued a dog-in-the-manger policy, insisting on the denial to any othei

bank of the. right of note issue, and yet refusing to establish provincial!; branches. It is also that, the Hank of England steadfastly ob-i fttructed the formation and growth of the concerns which, by n process of elimination and amalgamation. Were eventually to become the great joirrfr- ■ stock banks IHhV giving it much'of its .strength .by keeping' their balances with it. "It is a mighty systenji that lias been evolved," says the Spectator, "and in many respects it is tne\ wonder and envy of the world. Tint, in fact, it owes most of its strength not to any inherent virtue of its own, hut to the wondi-ous productive power of British industry and the Free Trade policy which has opened wide Britain's gates to the trade of all mankind. A bill on London is taken readily in any commercial centre in either hemisphere, not so much because of any superiority in our banking system. *as because all the world trades with Britain, and everywhere there Ls..,some one who has payments to make to Britain and so wants to buy a bill on London. Finance is a pretty mechanism, but it is the trade behind it that makes it go round." Just now..there would have to be some modification of this, in view of German commercial perfidy, in so far as the Huns 'are concerned at least. Mr Powell very rightly pays great tribute to the manner in which British financiers met the crisis of 1914. It is due to their foresight and ability very largely that at the end of 1915, notwithstanding the tremendous strain, we are "still going strong."