ank as Class I. loans could be made up
to 60 per cent. of their value as of July 31; as Class II., 40 per
cent.; on the other German securities bearing a fixed rate of return,
50 per cent.; on other German securities bearing a varying rate of
return, 40 per cent.; on Russian securities, a lower percentage. These
institutions, therefore, took up some of the burden that would otherwise
have fallen on the loan item of the Reichsbank. Hence the Reichsbank
account does not show the whole situation.

To this point the methods followed were much the same as in London. Then
came unusual happenings. In London for a few days the banks had wavered
as to maintaining gold payments, but only temporarily. In Berlin drastic
measures were undertaken to accumulate gold in the Reichsbank. Vienna
reports it to be well known that Germany had been for eighteen months
before straining every nerve to obtain gold. Whatever sums of gold were
included in the so-called "war chest" in Spandau (said to be
$30,000,000) were also deposited with the Reichsbank. Gold was even
smuggled across the borders of Holland on the persons of spies. Urgent
demands were made upon the people to turn in gold from patriotic
motives. In this way over $400,000,000 of gold was gathered by July,
1914; and by the end of the year, after five months of war, it had risen
to $523,000,000. Was Germany to maintain gold payments as well as Great
Britain?

Evidently not. Gold was not given for notes on presentation. For
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
Duesseldorf 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 we