This was well known to Falstaff, who, when he brought the news of Hotspur's rebellion, said "You may buy land now as cheap as stinking mackerel," To most financial institutions, this shrivelling process in the price of their securities and other assets, brings serious embarrassment, for there is no corresponding decline in their liabilities, and if they have not founded themselves on the rock of severest prudence in the past, their solvency is likely to be imperilled. Finance knew that it must suffer. The story has often been told, and though never officially confirmed, it has at least the merit of great probability, that in 1911 when the Morocco crisis made a European war probable, the German Government was held back by the warning of its financiers that war would mean Germany's ruin. It is more than likely that a similar warning was given in July, 1914, but that the war party brushed it aside. And now that war is upon us, we are being warned that high finance is intriguing for peace. Mr. Edgar Crammond, a distinguished economist and statistician, published an article in the _Nineteenth Century_ of September, 1915, entitled "High Finance and a Premature Peace," calling attention to this danger and urging the need for guarding against it. First too bellicose and now too pacific, High Finance is buffeted and spat upon by men of peace and men of war with a unanimity that must puzzle it. It can hardly err on both sides, but of the two accusers I think that Mr. Crammond is much more likely to be right. But my own personal opinion is that both these accusers are mistaken, that the financiers never wanted war, that if (which I beg to doubt) diplomacy conducted in their interests produced the war, that was because diplomacy misunderstood and bungled their interests, and that now that the war is upon us, the financiers, though all their interests urge them to want peace, would never be parties to intrigues for a peace that was premature or ill-judged.

Perhaps I have a weakness for financiers, but if so it is entitled to some respect, because it is based on closer knowledge of them than is owned by most of their critics. For years it was my business as a City journalist, to see them day by day; and this daily intercourse with financiers has taught me that the popular delusion that depicts them as hard, cruel, ruthless men, living on the blood and sweat of humanity, and engulfed to their eyebrows in their own sordid interests, is about as absurd a hallucination as the stage Irishman. Financiers are quite human--quiet, mild, good-natured people as a rule, many of them spending much time and trouble on good works in their leisure hours. What they want as financiers is plenty of good business and as little as possible disturbance in the orderly course of affairs. Such a cataclysm as the present war could only terrify them, especially those with interests in every country of the world. When war comes, especially such a war as this, financing in its ordinary and most profitable sense has to put up its shutters. Nobody can come to London now for loans except the British, or French, Governments, or, occasionally, one of our colonies. Any other borrower is warned off the field by a ruthless Committee whose leave has to be granted before dealings in new securities are allowed on the Stock Exchange. But when the British Government borrows, there are no profits for the rank and file of financiers. No underwriting is necessary, and the business is carried out by the Bank of England. The commissions earned by brokers are smaller, and the whole City feels that this is no time for profit-making, but for hard and ill-paid work, with depleted staffs, to help the great task of financing a great war. The Stock Exchange is half empty and nearly idle. It is tied and bound by all sorts of regulations in its dealings, and its members have probably suffered as severely from the war as any section of the community. The first interest of the City is unquestionably peace; and the fact that the City is nevertheless full of fine, full-flavoured patriotic fervour only shows that it is ready and eager to sink its interests in favour of those of its country.

International Finance Page 27

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