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A WAR OF EXHAUSTION.

ENDURANCE AND SELFSACRIFICE CALLED FOR. IF WE ARE TO WIN THE WAR. STATEMENT BY MR. HAROLD . BEAUCHAMP, I Welington, Yesterday. At the half-yearly meeting of 'the Bank .of Xew Zealand to-day, the chairman of directors (Mr. Harold Beauchamp) said:— Everything continues to be dwarfed and overshadowed by the great European conflict which is still in progress, and which day by day becomes more and more acute. All the circumstances seem now to point to the conclusion that the war is to be a war of exhaustion, and that victory .ultimately will be on the side of the combination possessing the greater capacity for endurance. The financial might of Britain lias been a theme of constant encouragement and confidence when we have speculated upon the final issue of the war. Most of us recognise that, in a tost of endurance, the side whieli controls tlie longest purse i 9 in a position of immense superiority. But we must not close our eyes to the fact that a measure of advantage will also lie on the side which, by rigid economy and caution in both private and public expenditure, maintains itself in a position to support its people and prosecute the war at a substantially lower cost than its enemies. The application of the old adage, "a penny saved Is a penny gained," becomes at once apparent, and it is quite possible by the exercise of extreme care in the private and national outlay, that our enemies may in great measure counterbalance the superiority we possess in the way of more ample financial resources. In this respect, Germany, particularly, boil gre mal gre, has been forced to economise through the effective blockade of her ports by our Xavy. } While our enemies themselves have admitted the serious handicap under which they labor—that is, viewing their position from the financial standpoint—and while we freely recognise Britain's preeminence and vast financial resources, it will nevertheless he prudent that eacli constituent part of the Empire should take stock of the position, for it is to be feared that an overweening confidence in our financial supremacy may encourage, nay, is encouraging, a recklessness and prodigality in expenditure which may, if not checked, expose the Allies to a risk of that first exhaustion which is to be the determining factor in the struggle, I hope I shall not be classed as pessimistic or unpatriotic, for I assure you I am neither the one nor the other, but I am persuaded that, at the preseht juncture, the greatest optimist and the truest patriot is one who proclaims, in no uncertain tones, the supreme importance of the utmost care in the conservation of the national resources.

Unless the source of supply be limitless, it is plain that it is only a question of time, and of rate of outlay, when the end of even the most ample resources must be reached. This obvious fact is the one which, at the present time, the British Empire stands most in need of realising. Owing to the segregation of the Allies, and the distances which separate the component parts of our own far-flung Empire, the cost of marshalling the Allies' forces, and placing them at the points where they are required to engage in hostilities, is in itself enormous. This is an expense from which our enemies are almost entirely free. The contiguity and compactness of their territories, and the completeness of the'r strategic lines of railways, enable them to move their forces in large numbers with great facility and at a minimum of expense. Therein our enemies have a decided advantage over us. But these are not the only advantages they enjoy, for we- have to admit that our entire outlay is on a vastly more costly Scale than theirs. Our soidiers are better paid, better clotlier, better fed, and better cared for. This superiority of conditions, though most commendable, is purchased at a very great price". Again, instead of being, ;y> our enemies largely are, self-contained and self-de-pendent, producing within our own borders the greater part of what we require for our support and for the prosecution of the war, and discharging our internal obligations by means of a paper currency, we are drawing supplies, civil and •military, from almost every quarter of the Globe, and paying our debts in coin. This, of course, involves us in enori.aoua additional expense, for the price demanded by the foreign manufacturer or producer has to be paid in gold, and transit tfjarges added. Generally, therefore, it is a ease of making war on a basis that is calculated to straiiv our financial resources to the uttermost.

This cursory review of the position will readily convince even the moist superficial thinker that the outgo of the Allies war purposes must be enormousii in excess of that of their enemies. It would be well that we should all keep this substantial disadvantage to ourselves prominently in view, because, if victory is to crown the arms of the side which can the longer endure the process of exhaustion, it is obviously desirable that we, who, in the matter of expenditure, are so unfavorably placed as compared with our enemies, should economise and husband our resources in every possible direction. Our foes are, I, am sure, keenly alive to this, and they are consequently wielding the economic weapon with the same skill and intensity of purpose as they handle their actual implements of war. They are "living" as well as "fighting" the battle. The civil population, as well as the military, are performing their own peculiar part—spinning out the thread of the national resources to the last finest strand and to the utmost extent of human and economic endurance, that they have been able to thus far prolong the conflict. Life in the Austro-German confederate States must, at the present time, be anything but pleasant. The truth, under such jealously guarded censorship as prevails in Germany, is difficult to get at, but information' which leaks out from time to time gives a sufficient index to the true position. The iron ring of the 'British F!«t lias closed in upon the enemy's seas, and his external supplies have dwindled practiIcally to the vanishing point. Having j failed on his military fronts and feeling the unsupportable pressure of his internal necessities, our foe is now enI gaged, with the assistance of Bulgaria,

in an endeavour to force a passage through Servia to Constantinople with the object of opening up a channel of supply through Asia Minor. The Allies are evidently alive to thi*, and are bent upon frustrating his design. Nevertheless, assuming that the effort is, as we hope, doomed to failure, it has been shown that Austro-Gennany's internal national resources are so considerable, and the capacity of her people for endurance and self-sacrifice in what they conceive to be the intersts of 1 their Fatherland so great, that it is impossible to predict the Idngth to which their ingenuity and devotion may enable them to protract hostilities. ( It behoves us, therefore, to face our own economic problems in the spirit in which they confront theirs, and to set our own affairs in the best possible order with the least possible delay. If the resources of the Empire arc to be conserved to the extent necessary to enable them to meet the demands that will in all probability be made upon them before this war is brought to the conclusion that the interests oi humanity and freedom necessitate, the civil population of the Empire will have to do their part by instituting a regime of much sterner personal economy and a wider range of personal industry than have so far been practised. This point was stressed by the British.'P-rime Minister in an address at the Guildhall delivered on 29th June last.

Hitherto supplies have been largely drawn from outside—particularly from the United States of America—but, while outside supplies may have been right enough at the commencement of the war pending organisation of our own productive capacities, it would be suicidal to go 011 relying upon them because it is patent that they may, in the event of the war being much further prolonger, to be closed to us by our inability to pay for what we require. Therefore, we should increasingly make it our aim, to produce as far as practicable within the Empire's own borders all that is necessary to supply its needs.

Many of you will doubtless have noticed in the press, within the last few months, references from time to time in regard to the abnormal state of the exchange between Great Britain and the United States of America. Some of you, who have had business dealings with America, have had the significance of the conditoin of the exchange brought home to you very forcibly, by your personal experience in discovering that your British pound has converted into a much smaller number of American dollars than has ever before been the case. At one time the rate fell as low as 4.48 dollars per pound, as against the par of exchange, 4.867 dollars. This is equivalent to a loss in British money of £7 ISs 4d per cent., so that for every £IOO paid by Great Britain at that time for American good she was receiving goods to the value of only £92 Is Bd. If, therefore, with the exchange market in such a position, she had bought £100,000,000 of American good.-, she would have lost roughly about £8,000,0000 through tlie transaction, in consequence o'f the adverse state of the Exchange. This unfavorable position was created through the necessity that arose for Britain to place such enormous orders for munitisns 'and goods with America. There was no immediate prospect of the huge balance in favor of America being adjusted, either by exports to America (these having shrunken to small figures since the commencement of the war), or by a settlement in coin, which would have been disadvantageous to both countries, if not altogether impracticable, and the exchange rate fell persistently until it reached the ruinous level I have mentioned.

An Anglo-French Commission visited America with a view to discussing remedial measures, and it was finally arranged that Britain and France, should raise a joint loan in New York for as large an amount as possible. A billion dollars was talked of in the first place, but the amount was ultimately fixed at .W0,000,000 dollars (about £100,000,000, sterling). The issue was made In 5 per cent, notes at £9B having a currency of Ave years, with an option of conversion at maturity into 15-25 year 1% per cent, bonds. The whole loan'was underwritten by a New York syndicate at £9G. The terms are i sufficiently onerous, the cost to the borrowers being, at £96, about £5 19s per cent., and at £9B about £5 9s 3d per cent. The effect of the raising of the loan has been to improve the Exchange rate somewhat. It stood on the -20 th ultimo at 4.69% dollars, but, unless the Empire can reduce her demands for American supplies by increasing lier own internal productiveness, it is almost certain to recede again before long, and the borrowing operation will in that case have to be repeated, probably upon even more disadvantageous terms .than those exacted in this instance.

This contingency will stress what I already mentioned with regard to the need for production, within our own borders, of all the essentials of national subsistence and munition supplies. It will further emphasise what I have said upon the subject of economy in individual expenditure, for it is an indisputable fact that every purchase of American goods by New Zealanders has gone to swell the balance of the huge indebtedness of London to New York, and helped to intensify the exchange difficulty to which I have just referred. Britain's outlay connetted with the wax is, as already indicated, of a steadily increasing character. ' Commencing, at tlie beginning of the war, with about £750.000 per day it has now, the British Prime Minister informs us, reached the enormous total of £5,000,000 per day, or say £1,825,000,000 per annum. Of this, probably at least £1,500,000,000 per annum will have to be raised by way of loan; and in addition to providing for her own outlay Britain has, to a large extent, to finance the requirements of her Allies both in money and munitions.

In view of the present rate of expenditure, it cannot he long before another Imperial War loan"must be placed on the market, and the increase of the Treasury Bill rate seems to indicate that when the time arrives, at least 5 per cent; interest will have to be offered.

In this connection, it is interesting to note that, just prior to tlie commencement of the war, the British National Debt amounted to £700,154,110. On 31st March, 1915, it stood at £1,161,951,702; and by the 31st March, 1016, it is estimated that it will have reached the stupendous total of £2,200,000,000. It is sad to think that such vast liabilities should have been incurred in a policy of destruction. In this Dominion our Government is inflexible in itg determination to assist the Motherland to prosecute the war to a successful termination, and, with that end in view, will, if necessary, send every man of military age and fitness to the front. Recently here, as in the case of Australia, a war census has been taken, with the object of ascertaining how many men are still available for this purpose. So far, no difficulty has been experienced, under the voluntary system, in obtaining ample supplies of eligible men to make trood the ''wastage" that

has occurred since the despatch of our Main Expeditionary Forces. If, however, later on, there be any failure to respond to the call to arms, I am satisfied tliat neither the Commonwealth nor the 'Dominion Government will hesitate to takesuqi steps as will compel every man, of. miltary age, to perform his duty to the Empire.

Permanent link to this item
Hononga pūmau ki tēnei tūemi

https://paperspast.natlib.govt.nz/newspapers/TDN19151204.2.8

Bibliographic details
Ngā taipitopito pukapuka

Taranaki Daily News, 4 December 1915, Page 3

Word count
Tapeke kupu
2,339

A WAR OF EXHAUSTION. Taranaki Daily News, 4 December 1915, Page 3

A WAR OF EXHAUSTION. Taranaki Daily News, 4 December 1915, Page 3

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