The Daily News. MONDAY, JULY 19, 1915. GERMANY'S ECONOMIC POSITION.

Taranaki Daily News, 19 July 1915, Page 4

The Daily News. MONDAY, JULY 19, 1915. GERMANY'S ECONOMIC POSITION.

In any attempt to gauge the economic condition of Germany it is necessary to pay no heed to the inspired articles and statements appearing in the press of that country. It would seem that the pursuit of "Kultur" has been accompanied by a corresponding scientific advancemert j of the game of bluff, which has been brought to a remarkable state of efficiency, but while It may succeed in deluding the masses in Germany it is hardly likely to be viewed by the Allies otherwise than with contempt. There are three prime factors that affect a nation in wartime—men, munitions, and foodstuffs, but these are dependent «n money and all that money stands for. As a starting point in the quest for information on Germany's economic position we muat go back to January 18 forty-four years ago, when the King of Prussia left the Palace of Versailles with, the title of German Emperor and with a war indemnity of £200,000,000. This wonderful achievement placed <:n the brows of Germany an emblem of dignity and power; but it created & monomania of self worship which seems to have paralysed the moral perceptions without which even Mightiness cannot walk in safety. That war indemnity was destined to have far-reaching effects on the nations of Europe, for it was the seed from which sprang the desire and intention for world conquest and led to the war that is now taking such terrible toll of life. It is that same indemnity that is now playing an important part in Germany's economic struggle—for struggle it certainly is—for it . lias emerged from its long rest in the war chest at the fortress of Spandau and lias been transferred to the coffers of the Imperial Bank iii order to swell tin reserve of bullion and in some measure justify the abnormal note issue that is flooding the country. It will be remembered that 011 the outbreak of war Germany ceased paying her obligations to British firms and banks, keeping the millions owing by her for the purpose :jf carrying on the war, anil her agents had for some time been extremely eiiergc'.ie in accumulating from abroad large stocks of gold. The position to-day Is that the German note issue is very largely in excess of the stock of gold, and the effect of this is seen in the marked depreciation of German exchange. She can no longer sell her own securities abroad; neutrals are afraid to take them and the London Stock Exchange has been closed to Germans. Her war loan is chiefly paper money; her taxation has reached its limit, an.i even though the people are prepared to make every sacrifice for the Fathorlan 1 they cannot give what they do inL possess. So far as capital is concerned Germany's position is far from being sound. On the other hand her daily expenditure must be enormous, and every day the position must be growing ino.'s acute. Her avenues of trade and commerce arc all practically closed, and it is evident that for such imports us she can obtain from neutrals the price must he extremely high. r*or instance, in London copper is selling at ;C74 per ton, but its price in Germany lias ris'm to nearly £2OO a ton. Willi regard to foodstuffs, there is no doubt tint Germany accumulated large stores in readiness for her intended world conquest campaign, but she certainly nevr reckoned on the complete blockade of her ports or the clearance of her trading vessels from every sea. Iler elaborate system has worked well up to a point, but if the coming harvest fails, or falls much below the average, there will be

a crisis- of. serious- moment. Siiaee the middle of January last all stores an-1 stocks of grain wore taken, over by tlie Government, and have been controlled and. distributed, so that practically the nation has been put on siege rations—from Kaiser to peasant—tlius providing against waste or speculation. It is significant that the Kaiser's statement tint the war would end in Ocober should coincide with the pronouncement made by a deputation of bankers to the Kaiser that if the war lasted'beyond that moiK.h Germany would be bankrupt). This- may or may not be true, but present indications show that the economic strain on Germany is rapidly becoming more insistent, and this is emphasised by the feverish desperation she is at present exhibiting in her operations against the Allies, bath in the east and' in the west, and thoroughly justifies the policy of attrition that the Allies have so successfully adopted. At the right iin-.e they will strike, but not before,' and when they do, the end should not be far off.