Financial Unrest

Review and Herald Publishing Association · Takoma Park Station, Washington, D. C. · Apr 17, 1913

A FINANCIAL panic has been hovering over Europe for some weeks, due to the present war and the fear of a greater one. Germany fears that if ever she should be in a war grapple with England or Russia, France would make an attempt to retake Alsace-Lorraine, and that such a combination against her would require all her resources both of men and of means. France has been giving much attention to her army, and is preparing a great fleet of air-ships, both aeroplanes and dirigible balloons. Germany, in seeking to prepare herself to meet this military increase on the part of France, has had to resort to the unprecedented expedient of putting a graduated tax upon the incomes of the wealthy and well-to-do. France was quick to see what was involved in this, and is planning to meet that move. This feverish preparation has caused the people to feel that they would be better prepared to provide for themselves if they had their money in their own lockers, and they have been withdrawing their deposits from banks, and seeking to realize on what is owing them. With this feeling general throughout the country, the result has been a stringent tightening of money throughout these countries; and when one or two countries are thus affected, the result is felt in all the rest. The people are asking what is the meaning of this state of things in such a country as Germany, one of the wealthiest of Europe’s manufacturing and supply centers. A financial authority, writing in the London Daily Mail, declares that “the rival armament preparations of Germany and France have produced a state of nervous tension of which the gold scarcity is a natural though unpleasant expression.” Since the outbreak of the Balkan war, between $75,000,000 and $100,000,000 in gold has been taken from the banks of Germany alone and hoarded by the people. Withdrawing such an amount of actual gold from circulation can not fail to result in a serious stringency in the money market. There was a real question as to Germany’s ability to secure enough gold to counteract the heavy pressure on the money market. It was done, however, by energetic efforts, and the panic was averted. But as the pressure becomes more and more acute, due to the race for naval and military equipment, the uneasiness of the people will be accentuated and the danger of serious trouble will be more imminent. The burden of actual war could not be much greater than the present burden of war preparation. How long the people will be able to endure it men can not tell. There is quite a general feeling that the backs of the people have about reached the breaking-point under that burden.