purposes of exchanging goods the notes were in excess. Inconvertible,
they must go to a discount with gold or with the money of outside
countries using gold. But in order to get imports from other nations,
like Holland, Scandinavia, and Denmark, Germany must either send goods,
or gold, or securities. German industries, except those making war
supplies, were not producing over 25 per cent. of capacity, and many
were closed. The Siemens-Schuckert Works, even before the Landsturm was
called out, lost 40 per cent. of their men on mobilization. The Humboldt
Steel Works, near Cologne, employing 4,000 men, were closed early in
August, as were nearly all the great iron works in the district between
Düsseldorf and Duisburg. Probably 50 to 75 per cent. of the workers
were called to the colors. The skilled artisans were in the army or in
munition factories; the railways were in the hands of the military; and
the merchant marine was shut up in home or foreign ports. There were
said to be 1,500 idle ships in Hamburg alone. Few goods could be
exported. Gold was refused for export, of course. A serious liquidation
in foreign securities had been going on long before the war. Some
foreign securities must have still remained. However that may be, a
claim to funds in Germany (i.e., a bill drawn on Germany) was not
redeemable in gold, and it fell in price. In normal times a bill could
not fall below the shipping point in gold, (par with us for 4 marks is
95-1/4 cents in gold;) but, since gold could not be sent, exchange on
Germany could fall to any figure, set only by a declining demand.
Already bills on Germany have been quoted in New York at 82, showing a
depreciation of German money in the international field of about 13 per
cent. Likewise, as early as the first week of September, the Reichsbank
notes were reported at a discount of 20 per cent., and as practically
non-negotiable in a neighboring country like Holland.
The inevitable consequence of a depreciated currency must be a rise of
prices, usually greater than the actual percentage of depreciation. To
meet this situation there came a device possible in no other commercial
country. The Government fixed prices at which goods could be sold. This
mediaeval device could be enforced only in a land where such State
interference had been habitual, and, of course, could give to the notes
the fictitious purchasing power only inside the country. After the
Christian Science fashion, one had only to believe the notes were of
value to make them so; but in the cold world outside German jurisdiction
their value would be gauged by the chances of getting gold for them.
Here, then, we find Germany in all the mazes of our ancient
"greenbackism," but still in possession of a large stock of gold. As
soon as the war ends she may be able to return to gold payments at an
early date--very much as did France after the ordeal of the
Franco-Prussian war of 1870-1871.
In the present war conditions, however, largely cut off from other
countries, (except some small trade with Switzerland, Holland, Denmark,
and the like,) all ordinary relations which would influence German
credit and industry must be counted out. There is no comparison of her
prices and money with those of other countries in a free market, or with
even a limited transportation of exports and imports. All commercial
measurements are suspended for the time. Trade and credit are holding
their breath. How long can they do it? Germany may have food enough; but
how long can the stoppage of industry go on?
Moreover, attention must be called to one momentous thing. We are seeing
today, under military law, the greatest experiment in socialism ever
witnessed. All wealth, income, industry, capital, and labor are in the
direct control and use of a military State. Food, everything, may be
taken and distributed in common. I think never before in history have we
had such a gigantic, full-fledged illustration of socialism in actual
operation.
In the meanwhile, even though food may be provided, the reduction of
industry in general has cut incomes right and left. That is, fewer goods
are produced and exchanged. But goods are the basis of all credit. The
less the goods exchanged, the less the credit operations. Nevertheless,
the extraordinary issues of banknotes, the increase of deposits, as a
result of quintupling the loans, means that former commitments in goods
and securities cannot be liquidated. That is, the enormous increase of
bank liabilities, to a considerable and unknown percentage, is not
supported by liquid assets. These assets are "canned." Will they keep
sweet? There is no new business, no foreign trade, sufficient to take up
old obligations and renew those which are unpayable. Lessened incomes
mean lessened consumption and lessened demand for goods. Hence the
credit system is based on an uncertain and insecure foundation,
dependent wholly upon contingencies far in the future which may, or may
not, take the non-liquid assets out of cold storage and give them their
original value.
Moreover, apart from definite destruction of wealth and capital in the
war--which must be enormous, as represented by the national loans--the
losses from not doing business in all main industries during the whole
period of the war (except in making war supplies) must be very great. As
it affects the income and expenditure of the working classes, it may be
roughly measured by the great numbers of unemployed. If they are used on
public works, their income is made up from taxes on the wealth of
others. Luxuries will disappear, and not be produced or imported.
Incomes expressed in goods, or material satisfactions, have been
diminished--which is of no serious consequence, if they cover the
minimum of actual subsistence. The prolongation of the war will, then,
depend on the ability to provide the supplies for war.
The need for a medium of exchange is oversupplied. The lack is in the
goods to be exchanged. The enormous extension of German note issues does
not, and can not, diminish. In this country the expansion of credit and
money immediately after the war (manifested by the issue of Clearing
House certificates and emergency banknotes) has been cleared away by
liquidation. In Germany the "canned" assets behind the depreciated
currency cannot be liquidated until the end of the war. And their worth
at that time will depend much on the future course of the war and the
terms of peace. If German territory should be overrun and the tangible
forms of capital in factories and fixed capital be destroyed, much of
the liquidation might be indefinitely prolonged. Whatever of foreign
trade is permanently lost would also increase the difficulties.
In a great financial emergency nearly every country has, at one time or
another, been tempted to confuse the monetary with the fiscal functions
of the Treasury. To borrow by the issue of money seems to have a
seductive charm hard to resist. Lloyd George established a new precedent
for Great Britain by issuing nearly $200,000,000 of Government currency
notes, but this was done to provide notes for the public instead of coin
(£1 and 10s.) and made unnecessary any emergency issues by the Bank of
England, and a large gold fund has been accumulated behind them so that
they are convertible. In Germany it does not seem likely that the
Treasury notes will be largely used (having increased from $16,500,000
to about $200,000,000) as a means of borrowing, since the new loans are
being issued in terms of longer maturities.
J. LAURENCE LAUGHLIN.
LETTERS FROM WIVES
[By Cable to The New York Tribune.]
London, March 8.--Edward Page Gaston, an American business man long
resident in London, has just returned from Belgium, and brought with him
many sad and touching relics of the battlefields in that distressful
country, chiefly from the neighborhood of Mons. These pathetic memorials
include letters from wives, sweethearts, and friends at home and letters
written by soldiers now dead and never posted.
Turning these letters over, one comes across such an expression as this:
"I congratulate you on your promotion. It seems too good to be true.
Good-bye and God bless you, dear. God keep you in health and bring you
safely back."
Alas! the soldier who got that letter came back no way at all to his
sweetheart or his friends.
"If you don't come back, what shall I do?" is the cry that comes from
another woman's heart, and he did not come back.
Mr. Gaston is going to put himself into communication with the War
Office with regard to the fate of the relics, and as far as possible,
they will be sent to the rightful owners.
"WAR CHILDREN."
[Special Cable to THE NEW YORK TIMES.]
Paris, Feb. 24.--Professor Pinard of the Academy of Medicine contributes
an article to the Matin showing that "war children" are stronger and
healthier than their predecessors, and that France is rapidly repairing
her battle losses.
An analysis of the Paris statistics for the last six months reveals a
diminution of the death rate among mothers and children and a decrease
in the number of children born dead.
Dr. Pinard further asserts that an extensive comparison of living
children with those born earlier shows that the average weight of "war
babies" is considerably higher than it used to be. This he considers due
to the giving of natural instead of artificial nourishment by the
mothers in consequence of the more serious attitude they take to their
duty to the State.
This, says the professor, is one more instance of the spirit of
regeneration animating France.
No Premature Peace For Russia
Proceedings at Opening of the Duma, Petrograd, Feb. 9, 1915
[From The London Times.]
PETROGRAD, Feb. 9.
The main impression left upon all who attended today's proceedings in
the Duma may be summed up in a few words. The war has not shaken the
determination of the Russian people to carry through the struggle to a
victorious end.
Practically the whole House had assembled--the few vacant seats were due
to death, chiefly on the field of battle--and the patriotic spirit
permeating the proceedings was just as deeply emphasized as it was six
months ago. The debates were several times interrupted by the singing of
the National anthem, thunders of applause greeted the speeches of the
President, the Premier, and the Foreign Minister, and the ovation to the
British and French Ambassadors was, if anything, warmer and more
enthusiastic than on the previous occasion.
I noticed that members applauded with special emphasis the words in
which the President expressed his firm conviction that all efforts to
disunite the Allies would prove fruitless.
In the course of his address the President eloquently and eulogistically
referred to the rôle of Russia's allies in the present war. Speaking of
England, he said:
Noble and mighty England, with all her strength, has come
forward to defend the right. Her services to the common cause
are great, their value inestimable. We believe in her and
admire her steadfastness and valor.
The enemies of Russia have already frequently attempted to sow
discord in these good and sincere relations, but such efforts
are vain. The Russian truth-loving national soul, sensitive of
any display of mendacity or insincerity, was able to sift the
chaff from the wheat, and faith in our friends is unshaken.
There is not a single cloud on the clear horizon of our
lasting allied harmony. Heartfelt greetings to you, true
friends, rulers of the waves and our companions in arms. May
victory and glory go with you everywhere!
These remarks were constantly interrupted by outbursts of tremendous
applause and by an ovation in honor of Sir George Buchanan, who bowed
his acknowledgments.
Alluding to temperance reform, the orator fervently exclaimed:
Accept, great monarch, the lowly reverence of thy people. Thy
people firmly believe that an end has been put for all
eternity to this ancient curse.
The terrible war can not and must not end otherwise than
victoriously for us and our allies. We will fight till our
foes submit to the conditions and demands which the victors
dictate to them. We are weary of the incessant brandishing of
the sword, the menaces to Slavdom, and the obstacles to its
natural growth. We will fight till the end, till we win a
lasting peace worthy of the great sacrifices we have offered
to our fatherland. In the name of our electorate, we here
declare, "So wishes all Russia."
And you, brave warrior knights in the cold trenches, proudly
bearing the standard of Russian imperialism, hearken to this
national outburst. Your task is difficult. You are surrounded
with trials and privations, but then you are Russian, for whom
no obstacles exist.
A scene of indescribable enthusiasm ensued, the House rising and singing
the national hymn.
The President's peroration was in part as follows:
The Premier, in the opening sentences of the speech which followed,
said: "Our heroic army, the flower and the pride of Russia, strong as
never before in its might, notwithstanding all its losses, grows and
strengthens." He did not fail to remind his hearers that the war is yet
far from ended, but he added that the Government, from the first, had
soberly looked the danger in the face and frankly warned the country of
the forthcoming sacrifices for the common cause and also for the
strengthening of the mutual gravitation of the Slavonic races. He
briefly referred to the Turkish defeat in the Caucasus as opening before
the Russians a bright historical future on the shores of the Black Sea.
The Premier alluded to the tremendous change wrought in the national
life by the abolition of the liquor traffic, which he designated a
second serfdom vanishing at the behest of the Czar. After a few years of
sober, persistent labor, we would no longer recognize Russia. The war
had further raised the question of the creation in the world's markets
of favorable conditions to the export of our agricultural products, and
a general revision of conditions calculated hereafter to guarantee to
Russia a healthy development on the principle of entire independence of
Germany in all branches of the national life. In this direction the
Government had already drafted and was preparing a series of elaborate
measures. He concluded with the expression of his conviction that, if
all fulfilled their duty in the spirit of profound devotion to the
Emperor and of deep faith in the triumph of the country, the near future
would open before us perhaps the best pages in Russian history.
The speeches of a peasant Deputy and a Polish representative were
particularly impressive and well received. The Socialist leader's demand
for peace called forth a smart rejoinder from a member of his own party.
M. SAZANOF'S SPEECH.
This afternoon the session of the Duma was opened in the presence of the
whole Cabinet, the members of the Council of the Empire, the Diplomatic
Corps, and the Senators. The public galleries were filled.
M. Sazanof began his speech by recalling that six months ago in that
place he had explained why Russia, in face of the brutal attempt by
Germany and Austria upon the independence of Serbia and Belgium, had
been able to adopt no other course than to take up arms in defense of
the rights of nations. Russia, standing closely united and admirably
unanimous in her enthusiasm against an enemy which had offered
provocation, did not remain isolated, because she was immediately
supported by France and Great Britain and, soon afterward, by Japan.
Passing in review the events of the war, the Minister said that the
valiant Russian troops, standing shoulder to shoulder with their allies,
had secured fresh laurels for their crown of glory. The Russian arms
were marching steadfastly toward their goal, assured of final victory
against an enemy who, blinded by the hope of an easy victory, was making
desperate efforts, having recourse to all kinds of subterfuges, even the
distortion of the truth.
To the relations of good neighborliness, faithfully maintained by
Russia, Germany had everywhere opposed resistance, seeking to embroil
Russia with neighboring countries, especially those to which Russia was
bound by important interests.
All this [continued M. Sazanof] is sufficient for us to judge
the value of German statements regarding the alleged
envelopment of Germany by the Triple Entente. Equally
worthless are the assertions that it was not Germany who began
the war, for irrefutable documents exist to prove the
contrary. Among the malevolent German inventions figure
reports of Jewish pogroms which the Russian troops are alleged
to have organized. I seize this opportunity of speaking in the
parliamentary tribune to deny this calumny categorically, for,
if the Jewish population in the theatre of war is suffering,
that is an inevitable evil, since the inhabitants of regions
where hostilities are proceeding are always severely tried.
Moreover, eyewitnesses are unanimous in stating that the
greatest devastation in Poland is the work of the Germans and
Austrians.
The German Ambassador in Washington has zealously spread these
reports in the attempt to create in the United States a
feeling hostile to us, but the good sense of the Americans has
prevented them from falling into the clumsily laid snare. I
hope that the good relations between Russia and America will
not suffer from these German intrigues.
The "Orange Book" recently published proved that the events on
the Bosporus which preceded the war with Turkey were the
result of German treachery toward the Ottoman Empire, which
invited German instructors and the mission of General Liman
von Sanders, hoping to perfect its army with the object of
assuring its independence against the Russian danger
insinuated by Berlin. Germany, however, took advantage of this
penetration into the Turkish Army to make that army a weapon
in realizing her political plans.
All the acts of the Turks since the appearance of the Goeben
in the Dardanelles had been committed under the pressure of
Germany, but the efforts of the Turks to evade responsibility
for these acts could not prevent them from falling into the
abyss into which they were rolling. The events on the
Russo-Turkish frontier, while covering Russian arms with fresh
glory, will bring Russia nearer to the realization of the
political and economic problems bound up with the question of
Russia's access to the open sea.
Passing to the documents relating to reforms in Armenia recently
distributed among members of the Duma, M. Sazanof said:
The Russian Government disinterestedly endeavored to alleviate
the lot of the Armenians, and the Russo-Turkish agreement of
Jan. 26, 1914, is a historical document in which Turkey
recognizes the privileged position of Russia in the Armenian
question. When the war ends this exclusive position of Russia
will be employed by the Imperial Government in a direction
favorable to the Armenian population. Having drawn the sword
in the defense of Serbia, Russia is acting under the influence
of her sentiments toward a sister nation whose grandeur of
soul in the present war has closely riveted the two countries.
After referring with satisfaction to the gallantry of Montenegro in
fighting as she was doing in the common cause, M. Sazanof proceeded to
speak of Greece. The relations of Russia with this tried friend of
Serbia, he said, were perfectly cordial, and the tendency of the
Hellenic people to put an end to the sufferings of their co-religionists
groaning under the Ottoman yoke had the entire sympathy of the Imperial
Government.
Passing to Rumania, M. Sazanof said that the relations between Russia
and Rumania retained the friendly character which they acquired on the
occasion of the visit of the Czar to Constanza. The constant Russophile
demonstrations in Bucharest and throughout the whole country during the
Autumn had brought into relief the hostile feelings of the Rumanians
toward Austria-Hungary. He continued:
You are probably waiting, gentlemen, for a reply to a question
which interests the whole world, viz., the attitude of those
non-combatant countries whose interests counsel them to
embrace the cause of Russia and that of her allies. In effect,
public opinion in these countries, responsive to all that is
meant by the national ideal, has long since pronounced itself
in this sense, but you will understand that I cannot go into
this question very profoundly, seeing that the Governments of
these countries, with which we enjoy friendly relations, have
not yet taken a definite decision. Now, it is for them to
arrive at this decision, for they alone will be responsible to
their respective nations if they miss a favorable opportunity
to realize their national aspirations.
I must also mention with sincere gratitude the services
rendered to us by Italy and Spain in protecting our
compatriots in enemy countries. I must also emphasize the care
lavished by Sweden on Russian travelers who were the victims
of German brutality. I hope that this fact will strengthen the
relations of good neighborliness between Russia and Sweden,
which we desire to see still more cordial than they are.
Referring to Russo-Persian relations, M. Sazonof said:
Before the war with Turkey, we succeeded in putting an end to
the secular Turco-Persian quarrel by means of the delimitation
of the Persian Gulf and Mount Ararat region, thanks to which
we preserved for Persia a disputed territory with an area of
almost 20,000 square versts, part of which the Turks had
invaded. Since the war the Persian Government has declared its
neutrality, but this has not prevented Germany, Austria, and
Turkey from carrying on a propaganda with the object of
gaining Persian sympathies. These intrigues have been
particularly intense in Azerbaijan, where the Turks succeeded
in attracting to their side some of the Kurds in that country.
Afterward Ottoman troops, violating Persian neutrality,
crossed the Persian frontier and, supported by Kurdish bands,
penetrated the districts where our detachments were in
cantonments and transformed Azerbaijan into a part of the
Russo-Turkish theatre of war.
I must say in passing that the presence of our troops in
Persia is in no way a violation of neutrality, for they were
sent there some years ago with the object of maintaining order
in our frontier territory, and preventing its invasion by the
Turks, who wished to establish there an advantageous base of
action against the Caucasus. The Persian Government,
powerless to take effective action against this aggression,
protested, but without success. I must state that
Anglo-Russian relations in regard to Persian affairs are more
than ever based on mutual and sincere confidence and
co-operation, which are a guarantee of the pacific settlement
of any eventual conflict.
Passing to the Far East, M. Sazanof said the agreements signed in 1907
and 1910 with Japan had borne fruit during the present war, for Japan
was with them. She had driven the Germans from the Pacific Ocean, and
had seized the German base of Kiao-chau. Although Japan did not sign the
agreement of Aug. 23, yet, since the Anglo-Japanese alliance contained
an undertaking that a separate peace should not be concluded, therefore
the German Government could not hope for peace with Japan before she had
concluded peace with Great Britain, Russia, and France. Consequently,
their relations with Japan gave them a firm friend. The demands
addressed by Japan to China contain nothing contrary to our interests.
As for Russo-Chinese interests, he could state their constant
improvement. The _pourparlers_ in regard to Mongolia, though slow, were
friendly, and he hoped to be able to announce shortly the signature of a
triple Russo-Chinese-Mongolian treaty, which, while safeguarding the
interests of Russia, would not injure those of China.
In conclusion, M. Sazanof expressed the hope that the close union of all
Russians around the throne, which had been manifested since the
beginning of the war, would remain unchanged until the completion of the
great national task.
Speakers of the Progressist, Octobrist, and Nationalist Centre Parties
agreed that a premature peace would be a crime against their country and
humanity, and that therefore Russia was prepared to make every sacrifice
so that Germany might be definitely crushed.
At the end of the sitting the following resolution was unanimously
adopted:
_The Duma, saluting the glorious exploits of our soldiers, sends to the
Russian Army and Navy a cordial greeting and to our allies an expression
of sincere esteem and sympathy. It expresses its firm conviction that
the great national and liberating objects of the present war will be
achieved, and declares the inflexible determination of the Russian
Nation to carry on the war until conditions shall have been imposed on
the enemy assuring the peace of Europe and the restoration of right and
justice_.
TO THE VICTORS BELONG THE SPOILS!
By MADELEINE LUCETTE RYLEY.
[From King Albert's Book.]
The Victor true is he who conquers fear,
Who knows no time save now--no place but here.
Who counts no cost--who only plays the game.
To him shall go the prize--Immortal Fame!