Слике страница
PDF
ePub

mates for 1917. The figures for 1915 are partly estimated, and those for 1916 and, of course, 1917, are entirely estimated:

RUSSIAN ORDINARY REVENUE AND EX

1913, actual..

1914, actual.

PENDITURE

Revenue. Expenditure. .$1,759,940,000 $1,593,538,000 1,492,470,000 1,507,405,000 1915, preliminary.. 1,455,905,000 1,580,020,000 1916, estimate..... 1,561,480,000 1,692,805,000 1917, estimate..... 2,058,970,000 1,923,010,000

Russia's achievement in doing away with the vodka evil, which was a State monopoly, yielding in 1913 38 per cent. of the total ordinary revenue, excited the admiration of the world. Its financial results are observed in the increase in the deposits in the savings banks, those of the State Savings Banks alone having increased nearly $775,000,000 from the outbreak of the war up to the middle of last August, while some $558,000,000 worth of securities were placed with these banks for safekeeping during the same period. There has been, in consequence, a large increase in direct taxation. It is estimated that the return to the Government in this form of revenue I will be about double in 1917 what it was before the war.

Germany's Position

The financial position of Germany in the great struggle is unique. There are not lacking those who maintain that it is stronger than that of the Entente Allies, because she has not been able to spend any money beyond her own borders except with her own allies. Her adherents claim that when the war is over Germany, having practically no external debt, will be in much better case than her enemies. Her debt will be entirely to her own people, and she can repudiate or not, as she sees fit.

Her borrowings since the beginning of the war have totaled some $13,000,000,000, which, added to her pre-war debt of $5,200,000,000, makes her present indebtedness some $18,200,000,000.

Germany's achievement in maintaining her reserves of gold is not less notable than that of her enemies, but it is far less impressive because she has been able to do little else than store it up. As in

the case of the other great European banks, the Reichsbank has been permitted to issue notes without reference to its gold reserves, and these notes have been accepted freely by the people. At the close of the war Germany's gold reserves will doubtless be of great value to her in restoring her national credit and re-establishing normal rates of exchange, but it has availed her little during the struggle. On the other hand, Great Britain, acting as the financial leader for the Allies, has not only maintained astonishing reserves of the yellow metal, but has helped to pay her way with this, the only form in. which money has any real currency between nations. Since Aug. 1, 1914, she and her allies have shipped to this country about $1,100,000,000 in gold, either direct or through Canada.

Without dwelling on the financial fate of Austria-Hungary, which will, of course, depend upon that of her great ally, or upon that of Turkey, which is not of such vital interest to American readers, it is interesting, while we are still considering the subject of gold, to study the following table from The Commercial and Financial Chronicle of Dec. 9, 1916, showing the increase in the gold holdings of the principal European banks during the past year:

[merged small][merged small][merged small][merged small][ocr errors][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small]
[ocr errors]
[blocks in formation]

Total week....£736,774,898 £66,730,250 £803,505,148 Previous week. 734,665,069 66,219,060 800,884,129 Gold holdings of the Bank of France this year are exclusive of £55,407,438 held abroad.

The gold holdings of the Bank of Russia for both years in the above statement have been revised by eliminating the so-called gold balance held abroad.

July 30, 1914, in both years.

§Aug. 6, 1914, in both years.

From the early days of 1914, when the determined efforts of the great European banks to build up their gold reserves caused constant drains upon our supply of the yellow metal-a signal which should have warned us of the trouble to come-the gold accumulations in the European banks have been astonishing in their proportions.

Few doubt the ability of Germany to meet her obligations after the war. An empire and a people with such vast resources as hers, a Government which has been enabled to maintain such an expensive war military establishment as

Germany has built up within the last twenty years, should not find it more difficult than any other European power to meet its interest charges and the other obligations caused by the war, especially if the terms of peace should provide for disarmament in any degree.

Nothing has been said in this article about indemnities, because, as the war progresses, one hears very little conjecture of any kind about them, and it is the opinion of most well-informed men that there will be no war indemnities.

This, however, belongs to the field of pure conjecture, as do, indeed, not a few of the points touched upon in this brief and of necessity sketchy outline of certain phases of war finances. The subject is a tremendous one, but the time is not yet come when any writer can speak with decision, or even precision, regarding most of its angles.

NOTE.-The word billion is used in this article in the sense which obtains in the United States, one thousand millions, and not in the English sense, which is one million millions.

Aspects of War Finance

THE New York Stock Exchange was

reopened to restricted trading Dec. 12, 1914, after having been closed for four months, but was not entirely free until some weeks later. A glance at the changes in the prices of stocks in the two years that have intervened reveals the profound effect of the war on certain industries. In some cases the advances have been justified by the increased profits, but with others the advance has been sentimental.

A few of the more active stocks which were traded in two years ago, and which have shared in the advance since then, are shown below, with their last prices, fractions being dropped from both sides: Dec. 12, Dec. 9, 1914. 1916. 8

Allis-Chalmers Allis-Chalmers pf..

34

34 90

[blocks in formation]
[blocks in formation]

Large profits have been made by ordnance works; on Dec. 12 the E. W. Bliss Company announced an extra dividend of 100 per cent., making 300 per cent. in 1916, in addition to the regular dividend. This excessive profit, however, is unusual even for war stocks. Industrials that paid no dividends have been put on a 5 or 6 per cent. dividend basis; the metal stocks have increased their dividends to 6, 8, and 10 per cent.; the International Mercantile Marine, which is in a receiver's hands, is said to have earned over 80 per cent. on its stock in the last year, and the powder companies

are supposed to have earned fabulous sums, the estimates ranging from 250 to 500 per cent. The United States Steel Corporation is supposed to be earning about 20 per cent.

Wages have been increased from 5 to 15 per cent., and salaries from 10 to 20 per cent. by many of the larger corporations. The United States Steel Corporation made three increases in wages in 1916, aggregating 33 1-3 per cent., and extending to more than 250,000 workmen.

The German peace overtures created a semi-panic in the market on Dec. 12, 14, and 15, prices declining in the three days from 5 to 50 points; but on the 16th the action of Russia in rejecting the overtures caused a substantial recovery.

[blocks in formation]
[blocks in formation]

Great Britain Spending $28,000,000 a Day

T1

HE British House of Commons on Dec. 14 took measures to raise 1,000,000 more men of all ranks for the army service during the present fiscal year, making a total of 5,000,000 men for the war. The Chancellor of the Exchequer, Bonar Law, moved a new war credit of $2,000,000,000, in discussing which he said:

We cannot continue at the present figure indefinitely. All we can hope for is that we can keep at that figure long enough to beat our enemies, and I believe we can go on long enough to make sure that it will not be from financial causes if we fail to secure victory.

Following debate the vote of credit was adopted unanimously. It is the fourteenth since the outbreak of the war, and brings up the total thus far for the present financial year to £1,750,000,000, ($8,750,000,000.)

In his discussion of the matter of finances, Bonar Law stated that the total expenditure of Great Britain since the

outbreak of the war was £3,852,000,000, ($19,260,000,000.) This total included expenditures of £1,650,000,000 over and above the votes of credit. The Chancellor commented on the total he mentioned:

That figure taxes the imagination. It is a colossal figure, but I do not think it is an appalling figure.

The daily average expenditure of Great Britain in the war, he went on, had risen to £5,710,000, ($28,550,000.) Assuming that the rate of expenditure would continue as at present, the vote would carry them until Feb. 24. An additional £200,000,000 would be required from that date to last until the end of the fiscal year. This would bring the total votes for the year to £1,950,000,000, or £350,000,000 in excess of the estimate made some months ago by the former Chancellor, Reginald McKenna.

The reason for this excess of expenditure, Bonar Law said, was the great increase in the munitions output and the

additional loans to Great Britain's allies and to her dominions.

As to the increase in munitions, the Chancellor said that if he could give the figures of June, 1915, and those of today the difference would seem almost incredible. Considering the nature of this country and how entirely its energies had been devoted to peace, he went on, it was marvelous to consider how she had been organized for war. No more striking proof of the vitality of the country, from an industrial point of view, was found than in the extent by which the output of munitions had increased during the year.

Referring to the increase in loans, the Chancellor said it would be gratifying to the House to know that it had gone largely to Great Britain's allies, the dominions having been able to finance their expenditures. These advances were just as much war expenditure, he said, as the amount expended on the British troops. These loans were now amounting to $2,000,000 daily.

In the course of his speech he said: Two great advantages are possessed by the Germans. One is their preparedness for war.

They have today another advantage-that is, that circumstances have so fallen out that the control of all the resources of our enemies is practically in one hand. One of the drawbacks of our alliance, as of every alliance, is that it is very difficult to get this central control. To secure it has been the object not only of this Government but of the Governments of our allies, and a great deal has been done in this direction during the last year, and particularly during the last six months.

In my belief, success in this war and the rapidity with which we can bring it to a victorious conclusion must depend upon the extent upon which the resources of the Allies in men, money, and munitions can be pooled and thrown into the common cause.

Reginald McKenna congratulated former Chancellor Bonar Law on his speech, thus showing the entente cordiale between the old and the new Governments. He continued:

We are bound to supply munitions to the full extent of our capacity, and we are bound likewise to meet all the demands of our allies, so far as we are able. The extent of our ability to meet those demands is enormous, but there is one restriction, namely, that it will not be easy to convert sterling wealth into dollars wealth. We must pay in dollars for what we buy now, not only in America, but all over the world, and that is the limit of our power to help the Allies.

Greece and the Entente Ultimatum

T

A Month of Swift Events

HE relation of Greece to the European war has undergone kaleidoscopic changes in the last month or two, at times taking on the aspect of actual war against the Entente Allies, at other times seeming to promise civil war; the situation was clarified to some extent, however, when the stern demands of the Allies, supplemented by a complete blockade of Greek ports, were submitted to by King Constantine and his Government on Nov. 15. By this action the King has saved his throne, at least for the present.

Events moved swiftly in late November. The diplomatic representatives of the Central Powers were ordered by the Entente to leave Greece, and they departed under protest on Nov. 21. On the 24th the Allies delivered an ultimatum

to the Greek Government, demanding that it hand over the rifles and guns belonging to the Greek Army, the first delivery to consist of ten batteries of mountain guns by Dec. 1.

Athens seethed with excitement. The Government let it be understood that it would refuse the demands for the surrender of arms and munitions, and on Nov. 28 the Crown Council voted to support the Government in this position. On the 29th war vessels of the Allies loaded with troops arrived at Piraeus and moored alongside the quay. On Dec. 1 the King publicly rejected the Allies' demand and resumed control of Post Offices and telegraph lines in Athens. The same day Admiral du Fournet, the French commander of the allied fleet in the Mediterranean, landed French, Eng

lish, and Italian detachments. At the same time two regiments of Greek troops of the Athens garrison, with their artillery, moved from the city. The official explanation was that this step was taken to prevent a possible conflict with the allied troops that had been landed; but it was believed by the Allies that the real reason was to move the war munitions out of Admiral du Fournet's reach. Bands of reservists paraded the streets and the city was in a state of greatest excitement. Numerous clashes occurred, and the King finally yielded on the evening of Dec. 1 and delivered six mountain batteries instead of ten. The allied troops at once withdrew from the city, leaving a guard of 300 men at an industrial exhibition building known as the Zappeion.

In the clashes which preceded this there were some bloody affrays, and it was stated that several hundred were wounded. The allied troops were fired on from windows and roofs, and it was stated that a number were killed. The casualties were estimated at 200. It was openly charged that the Greeks began the firing and were guilty of treachery.

On Dec. 7 the Allies blockaded the Port of Athens and placed an embargo on all Greek shipping.

After the fighting on the 1st, just before the establishment of the blockade, affairs grew quieter. Meanwhile the Allies procured documentary proof that the Greek authorities had been carrying on an intrigue with the Germans. The Greek police found correspondence between Deputy Kallimasiotis of Piraeus and the German Legation at Athensalso the Austrian authorities in Viennagiving details of the supplying of German submarines in 1915 and 1916, with other incriminating evidence. Moreover, after the blockade was established it was ascertained that the Royalists were in wireless communication with the Germans and Turks, and German authorities made public requests to the King to hold out for a while until the German troops could advance against Saloniki and come to his relief.

The blockade was published in an official decree on Dec. 6. On the same

day the Russian, Italian, French, and British Ministers called in a body at the Foreign Office and demanded an explanation of the Greek military activity. The answer, while professing neutrality and alleging that the object was solely to preserve order, was unsatisfactory to the Allies. On the 11th the British Foreign Office let it be known that the Entente Ministers would present an ultimatum to the Greek King, which would require complete demobilization of the army, restoration of control by the Entente over the posts, telegraphs, and railways, and the release of the Venizelists who had been imprisoned during the preceding disturbances.

This ultimatum was formally presented on Dec. 14 and expired at 3 o'clock on the 15th. The Allies had come to the conclusion that if King Constantine was not conspiring with their enemies, he at least had not sufficient authority over his armies to prevent their becoming a menace to the peace and security of the allied armies in Macedonia. Their note, therefore, had ordered the removal of troops and munitions, as specified in an accompanying list, these removals to begin within twenty-four hours; likewise they had demanded the immediate stoppage of all movements of troops and war materials toward the north. The ultimatum ended with an express declaration that failure to comply would be followed immediately by war.

King Constantine thus found himself compelled to choose between peace and war. He and his Government decided for peace, and it was announced on the 15th that the acceptance of the ultimatum had been ratified at a meeting of the Grecian Cabinet and Crown Council, at which King Constantine presided. This restored the status quo prior to the advance of the allied troops from Saloniki, and it is believed will remove further danger of a flank or rear attack by the Greeks upon Sarrail's army.

The tenuous hold of the Greek dynasty on the people at large has not been improved by the march of events, and in different parts of the kingdom the people in mass meetings have renounced allegiance to King Constantine and de

« ПретходнаНастави »