The Way to Win by William Le Queux

Author:William Le Queux [Queux, William Le]
Language: eng
Format: epub
ISBN: 9781465562142
Google: S4gPaKgpbnIC
Publisher: Simpkin
Published: 1916-01-15T16:04:48+00:00

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Chapter Seven.

Germany’s Bankrupt Future.

I have no hesitation in saying that from our point of view one of the most encouraging features of the whole situation is the extraordinary collapse of German credit—extraordinary, I mean, in comparison with her apparent successes in the campaign on land. The heavy decline in the value of German and Austrian money in neutral countries is an absolutely unmistakable sign that the finances of our enemies are, after eighteen months of War, reaching a condition which before long must prove a source of the gravest embarrassment to the Central Powers.

As I write, the exchange value of the sovereign in the United States is about two per cent, below normal, and the same condition exists in Holland and Scandinavia. Considering how much we have been buying abroad, such a trifling depreciation in our credit is a wonderful testimony to the stability of British institutions. But if we turn to German and Austrian currency we find that it has declined in value from twenty to thirty per cent. In other words, neutral countries are beginning to show themselves unwilling to take German money; and as Germany can now buy only from neutral countries, it is quite obvious that she not only has a difficulty in paying for her purchases, but that she has also to pay an exceedingly inflated price for them.

My readers will remember the sensation that was caused when, owing to our heavy purchases of food and war material from America, the value of the sovereign dropped something like six per cent. That meant that for every hundred pounds we paid to America for goods bought we were losing six pounds owing to the fall in the exchange; and when it is recalled that our purchases were on a scale which involved hundreds of millions, it will be seen that the decline was a very serious matter for us. But so good was our credit that there was no difficulty in floating a huge loan in America, and the result was that the value of the sovereign at once appreciated, and it has never seriously dropped since; in fact, it has steadily risen. The process was helped by selling American securities, of which we hold huge sums. We can repeat both processes as often as we like in reason, because our credit is good, and our holdings of American securities are still enormous. Germany can do neither—firstly, because her credit is utterly impoverished, and, secondly, because, whatever she may sell, she and those with whom she would like to deal have no security that the goods would have more than a very slender chance of getting through the British blockade. Here, again, we see how our overwhelming sea power is helping the cause of the Allies. In spite of the huge sums we are spending, Germany is infinitely worse off than we are, and there is every reason to believe that the tremendous fall which her money is now experiencing means that her credit abroad is rapidly nearing the exhaustion point.

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