It was roughly estimated toward the end of 1918 that the total governmental indebtedness of all belligerent states, which had been $27, 000,000,000 in 1914, had risen to $180,000,000,000. These enormous requisitions were partly facil itated through virtual prohibition by govern ments of any other issues of new securities in their markets. Since as much as $1,300,000,000 had been thus invested in all sorts of miscel laneous securities at London during a single year in the period before the war, this con servation of investment capital naturally helped. But when the war ex, ,diture subsequently got as high as $12,480,110,000 in England for the fiscal year ending 31 March 1918, with $24,000,000,000 planned for the fiscal year 1919 in the United States, other resources had to be discovered.
Some nations, notably France and Russia, borrowed heavily from the national banks on security of new government obligations; the Bank of France reporting at one time $4,000, 000,000 in loans thus outstanding to the govern ment. But in the main, the loan flotations were effected through the immense number of in dividual subscribers who drew to the extent of their ability on their own accruing income and other accumulated savings. In the first Ameri can war loan 4,000,000 separate subscriptions were received; in the second loan, 9,400,000; in the third, 18,308,000.
In cases where certain governments were unable to raise the necessary loans, or where their purchases of war material in foreign countries made payment through exchange a practical difficulty, advances were made by one belligerent government to its own allies on a scale never imagined in the period of ePitt's subsidies.' Such advances by the English and United States governments had by the autumn of 1918 exceeded $7,000,000,000 apiece. Along with the raising of loans came a wholly un precedented increase in taxes; the United States raising one-third of its war costs in that way; England something like 16 per cent of them. Even Germany, after endeavoring during the first year or two of war to finance its whole war expenditure through loans, was driven to a similarly rapid increase in the taxes.
The paper currencies of the belligerent states were enormously increased. In France, largely through issue of notes against new government obligations, outstanding circulation Increased from $1,330,000,000 at the of the war to $6,000,000,000 in 1918. That of
the Bank of Russia rose from $1,160,000,000 on 30 July 1914 to $9,100,000,000 at the time of the Bolshevik revolution in the autumn of 1917; How much was issued tinder the Bolshevilci is a matter of pure conjecture.
The Imperial Bank of Germany's note is sues increased from $470,000,000 in 1914 to $3,200,000,000 in the middle of 1918, and in addition, the German loan bureaus established for the war issued $2,500,000,000 of their own notes. In. England a special issue of paper money through the banks, known as *currency notes,' reached in the autumn of 1918 a total of $1,358,000,000. In the case of England, a. gold reserve was maintained against these note., though the total amount of that reserve did not change after 1915, and the Bank of Eng land continued to issue its notes only against an equivalent reserve of gold. Gold payments were suspended entirely by belligerent states on the European continent_ But both Germany and France made special appeals to their people in 1915 to turn over gold to the government in exchange for notes; with the remarkable result of adding some $250,000,000 to the gold reserves in the hands of each nation.
In all belligerent countries, the problem of the rise in prices for materials was met through establishment of maximum prices by the gov errunent; this policy being strenuously applied in the case of materials bought by government for war purposes, and in the case of food Generally, these prices were adjusted some where near the figures reached through the rise of nearly 100 per cent in average prices on the markets during the early years of They were designed primarily to prevent further speculative advance in prices and to obstruct the withholding of products by the producers themselves with a view to a higher price.
Even in the United States, maximum price thus established for wheat and steel, for in stance, were higher than any prices reached those markets for any length of time betwec the Civil War period and the outbreak of thn war. Along with this fixing of maximum prices, all belligerent nations and many of the neutrals adopted systems of restricting the dis tribution of supplies of such materials. This policy was adopted most stringently in the case of fuel; the general view being that the gov ernment's needs must first be absolutely en sured, and that thereafter the needs of pnvate consumers should be equitably adjusted.