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for 1917. The figures for 1915 partly estimated, and those for 1916 and, of course, 1917, are entirely estimated: RUSSIAN ORDINARY REVENUE AND EX


Revenue. Expenditure. 1913, actual. .$1,759,940,000 $1,593,538,000 1914, actual. 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 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 en

y 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

ressive because she has been able ttle 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:

DEC. 7. 1916

Gold. Silver. Total. England £55,942,730

£55,942,730 *France

146,683,187 £12, 140,360 159,123,817 Germany

........ 125,924,350 821,805 126,746,155 Russia .........

155,880,000 10,202,000 166,082,000 Austria-Hung'y 51,578,000 12,140,000 63,718,000 Spain

48,050,000 29,846,000 77,896,000 Italy

36,647,000 2,908,000 39,555,000 Netherlands 48,716,000 560,400 49,276,400 $Nat. Belgium.. 15,380,000 600,000 15,980,000 Switzerland 12,342,900

12,342,900 Sweden 10,131,000

10,131,000 Denmark

8,340,000 168,000 8,508,000 Norway 6,069,000



Total week.... £721,684,467 £69,686,565 £791,371,032 Previous week. 724,893,662 70,864,420 795,758,082

DEC. 9, 1915

Gold. Silver. Total. England £50,272,748

£50,272,748 *France

197,601,000 £14,260,000 211,861,000 Germany

....... 121,809,850 1,796,050 123,605,900 Russia ......... 160,518,000 2,855,000 163,373,000 Austria-Hung'y. 51,578,000 12,140,000 63,718,000 Spain

33,738,000 30,114,000 63,852,000 Italy

45,251,000 4,427,000 49,678,000 Netherlands 34,756,000 291,200 35,047,200 $Nat. Belgium.. 15,380,000 600,000 15,980,000 Switzerland 9,902,300


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Total Week....£736,774.898 £66,730,250 £803,505,148 Previous week. 734,605,069 66,219,060 800,881,129

*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,

Dec, 12, Dec. 9,

1914. 1916. Central Leather..


110 Distillers

14 43 Erie

22 37 General Motors..

86 750 Inspiration Copper.

16 International Paper...

8 Marine

1 47 Ray Consolidated.

16 Utah Copper.

122 U. S. Steel, (Dec. 19)...


123 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

Allis-Chalmers pf..
American Beet Sugar.
American Can....
American Car & Foundry.
American Smelting.
American Sugar.


8 34 30 25 43 56 104 42


34 90 105 62 76 114 115 644




W: ages have


estimates ranging from 250 to

to have earned fabulous $454,000,000 over the preceding year.

This makes the per capita circulation The United States Steel $39.28 and the gold percentage 50.97, supposed to be earning being the firmest gold basis known in

the history of this or any other country. been increased from 5 to The cash surplus of receipts for expenses 15 per cent., and salaries from 10 to 20 for the year were somewhat in excess of per cent. by many of the larger corpora $55,000,000. tions. The United States Steel Corpor ation made three increases in wages THE

HE United States in the year ended in

1916, aggregating 33 1-3 per cent., Nov. 1, 1916, held in gold coin and and

extending to more than 250,000 bullion $2,700,136,976, an increase of workomen.

$714,597,804 in sixteen months. This is The German peace overtures created a the largest amount of gold held by the semi-panic in the market on Dec. 12, 14, United States or any other country in and 15, prices declining in the three days history. The national , banks held on from 5 to 50 points; but on the 16th the Sept. 12, 1916, in deposits $11,362,341,000. action of Russia in rejecting the overtures caused a substantial recovery.

THE second French national defense

loan was subscribed up to 11,360,HE

000,000 francs, (over two billion dollars) United States for the year ended of which 5412 per cent. is new cash, as June 30, 1916, discloses that the total against 47 per cent. in the preceding Government holdings in gold amounted loan. Sixty-six per cent. of the fresh at that date to $1,803,493,932.83, an in money came from the provinces, and increase during the fiscal year of over cluded many millions in gold coin from $400,000,000, and a circulation increase of the little private hoards of the peasants.


THE, report of the Treasury of the

Great Britain Spending $28,000,000 a Day


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


lish, and Italian detachments. At the day the Russian, Italian, French, and same time two regiments of Greek troops British Ministers called in a body at the of the Athens garrison, with their artil Foreign Office and demanded an explalery, moved from the city. The official nation of the Greek military activity. explanation was that this step was taken The answer, while professing neutrality to prevent a possible conflict with the and alleging that the object was solely allied troops that had been landed; but to preserve order, was unsatisfactory to it was believed by the Allies that the the Allies. On the 11th the British Forreal reason was to move the war muni eign Office let it be known that the tions out of Admiral du Fournet's reach. Entente Ministers would present an ultiBands of reservists paraded the streets matum to the Greek King, which would and the city was in a state of greatest require complete demobilization of the excitement. Numerous clashes occurred, army, restoration of control by the Enand the King finally yielded on the eve tente over the posts, telegraphs, and ning of Dec. 1 and delivered six moun railways, and the release of the Venizetain batteries instead of ten. The allied lists who had been imprisoned during the troops at once withdrew from the city, preceding disturbances. leaving a guard of 300 men at an indus

This ultimatum was formally pretrial exhibition building known as the sented on Dec. 14 and expired at 3 o'clock Zappeion.

on the 15th. The Allies had come to the In the clashes which preceded this conclusion that if King Constantine was there were some bloody affrays, and it not conspiring with their enemies, he at was stated that several hundred were least had not sufficient authority over wounded. The allied troops were fired his armies to prevent their becoming a on from windows and roofs, and it was

menace to the peace and security of the stated that a number were killed. The

allied armies in Macedonia. Their note, casualties were estimated at 200. It was

therefore, had ordered the removal of openly charged that the Greeks began

troops and munitions, as specified in an the firing and were guilty of treachery. accompanying list, these removals to beOn Dec. 7 the Allies blockaded the

gin within twenty-four hours; likewise Port of Athens and placed an embargo they had demanded the immediate stopon all Greek shipping.

page of all movements of troops and war After the fighting on the 1st, just be materials toward the north. The ultifore the establishment of the blockade, matum ended with an express declara- · affairs grew quieter. Meanwhile the

tion that failure to comply would be folAllies procured documentary proof that lowed immediately by war. the Greek authorities had been carrying King Constantine thus found himself on an intrigue with the Germans. The

compelled to choose between peace and Greek police found correspondence be

He and his Government decided tween Deputy Kallimasiotis of Piraeus for peace, and it was announced on the and the German Legation at Athens 15th that the acceptance of the ultialso the Austrian authorities in Vienna matum had been ratified at a meeting giving details of the supplying of Ger of the Grecian Cabinet and Crown Counman submarines in 1915 and 1916, with cil, at which King Constantine presided. other incriminating evidence. Moreover, This restored the status quo prior to after the blockade was established it the advance of the allied troops from was ascertained that the Royalists were Saloniki, and it is believed will remove in wireless communication with the Ger further danger of a flank or rear attack mans and Turks, and German authorities by the Greeks upon Sarrail's army. made public requests to the King to hold The tenuous hold of the Greek dynasout for a while until the German troops ty on the people at large has not been could advance against Saloniki and come improved by the march of events, and to his relief.

in different parts of the kingdom the The blockade was published in an of people in mass meetings have renounced ficial decree on Dec. 6. On the same

allegiance to King Constantine and de


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