The Taihape Daily Times TUESDAY, JULY 27, 1915. MONEY IN WAR.

Taihape Daily Times, Volume 7, Issue 263, 27 July 1915, Page 4

The Taihape Daily Times

TUESDAY, JULY 27, 1915. MONEY IN WAR.

and waimabino advocate.

(With which ia incorporated The Tal* hape Post una Wnimalinw News.)

The explanation of Germany's terrific thrust for Warsaw is contained in what took place when a deputation of German bankers waited on the Kaiser a few weeks ago, and pointed out to him that th e country's financial position was not equal to the conduct of a. protracted war. Truthfully, or otherwise, the Kaiser assured the men of money that th e war would be over in October. The matter had been discussed in various places, as indicated by cable for some time past. He had evidently decided that the Russian front provided th e most vulnerable spot on which to break through and staked practically Germany's all in a thrust on Warsaw with a view to a peace that would only stem her determination upon a German hegemony of th e world for a time. Whether this thrust is to b e successful yet remains to be seen, but, apparently the balance is in favour of Russia. Successful or unsuccessful, Germany must have mor e gold and yesterday we were [ told by cable, statesmen, and the war party are watching most anxiously the trend of events, as faliur e will add to the difficulties of getting- a war loan through the Reichstag, which is ah argent necessity. Of course th e German financial aspect is tolerably well known to: leading financiers' of the world and; in fact, England's greatest effort is to mak« ; the war more one of finance than of life.. T he question has been discussed in tke Bewspapers of

all countries and it is only a shor

time ago tiiat a great neutral finance:

went into the question luily, and in a businesslike way. in the columns of the London '-Times.'' He described German methods of financing the war and dwelt upon the extreme need for gold; this was shown in the extraordinary steps taken by the Government tor collecting gold wherever it was to be found, regardless of form. Cnildren at school wer e urged to collect it from their

parents, women were persuaded to give up all their gold ornaments, trinkets, and small articles of personal adornment. If they would not give without some return, paper money was willingly exchanged for it, gold had to come in. Some months prior to war Germany drained every gold coin, and every ingot of gold possible from London banks, and when war did commence the Imperial Bank of Germany set to work in a systematic way to garner all th e gold it could possibly lay hands upon, making use of private banks and business firms as collectors. This neutral correspondent gives as a fact that mor e than £50,000 was collected in the secondary schools of Berlin alone. The bank was relieved of its obligation to pay gold in exchange for its notes, so that a clean sweep was made of the gold of the whole German Empire into Imperial Bank chests, which was further augmented by the historic gold from the Julius Tower at Spandau,amounting to over ten millions. W e ar e assured that this German gold store was added to steadily up to the end of last year, when a turn set in of a marked character until May, when the influx became quite insignificant. The position of the Imperial Bank, Ave are told, at th e beginning of June was, while its gold holding had nearly doubled —it being then £266,000,000—its own note issue had increased 300 per cent. And as this war is one of money as well as of life it is just as well that we should take both aspects into consid- I eration when estimating the present position. It must be borne in mind that war loans raised by Germany hav e all been subscribed to with j>aper, a method that can only be justified on th e ground of final victory. With the loss of all her gold and with all her shipping communication with the outside world cut off Germany can only prosecute the war so long as she can raise everything she needs internally, and for which sh e can pay with paper money. Her overseas trading revenue is entirely cut off and she is now living entirely, and conducting the war entirely on what she has stored, and what she can produce without any external assistance. What she has saved, and what! she has gathered in the shape of gold is fast going—going at the rate of millions a day. It is obvious that two hundred millions is not going'to last long, and as it has been drawn upon for sometime already.the world is not surprised that Berlin-is desperately anxious for a win against Russia, so that a further loan may be raised without fear of revolution. The writer referred to says that unless Germany can bring this war to a speedy termination she must continue to so exhaust her domestic resources for a long time to come. While Germany's industries, primary and otherwise, can maintain enormous armies at the front equipped, paid and fed, paper currency •vill serve its purpose; but once it is nicble to so support them, and "the cf defeat looms' near, then financial disaster is inevitable. It is the haunting fear of failure on the Russian front that is now troubling the Kaiser. His prophecy that war would end in victory in October was intended to quieten, and reassure the people, and to keep open the money channels. The consensus of opinion

is, among neutral, as well as most other financiers, that Germany must conquer speedily, or se e her finances follow in the fate of her overseas trade.