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STATE CREDIT AND BANKING.
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French political economist, Professor HKNRT HA USKIU who has written the best book
on German peaceful penetration,* remarks that "Germany's finances, which antiquated and
complacent tradition told UB were fragile, have answered the great test as well as, and perhaps
at first better than, those of old States accustomed to the manipulation of gold: it required
.an unforeseen prolongation of the war to shatter them." Thus he raises the question whether
Great Britain has already got the best possible banking system under the Act of 1844, or
whether there is anything to be learnt from later systems in which the State co-operates,
and which arc more elastic' than any system can be which depends in emergencies upon the
command of gold.
Is it true, as alleged, that, the German and American systems are capable of giving
longer credit than the British system,' and thus can advance safely on financial assets which
can .be sold only spasmodically, or
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over long periods, and therefore are unsuitable collateral
for London banks? Financial, as distinguished from commercial, assets now form much the
larger proportion of banking assets taken as a whole. t Has London been outstripped by other
banking centres 'in dealing with financial assets by means of long loans? Secondly, is ''money"
in Lombard Street more capricious, more variable as to rate of interest, more liable to be called
suddenly, and therefore more dangerous to borrowers than money in some other centres