Here is the way it works out:  in ordinary times a 4000 mark bond which would be the equivalent of a $1000 American piece, costs about $960.  At the present low rate of exchange the same German bond costs $690.00 in American money and therefore shows a profit on the exchange basis alone of $270.00 or over 28 per cent.  Austrian Bonds show even a larger profit.

Summarise our war lending and you get a total of all loans to belligerent Governments since the outbreak of the war that aggregate $1,828,600,000, which is nearly one-third of the whole cost of the Civil War.  Add to this our loans of $185,000,000 to Canadian Provinces and Cities and $8,200,000 to the City of Dublin and to the City of London for water works improvements, a grand total of $2,075,800,000 is rolled up.  Of this sum $156,400,000 in obligations have matured and been paid off, which leaves a net debt to us of $1,919,400,000.  It divides up as follows: 

Great Britain                          $858,400,000
France                                  656,200,000
Russia                                  167,200,000
Italy                                    25,000,000
Dominion of Canada                      120,000,000
Canadian Provinces and Municipalities   185,000,000
Germany                                  20,000,000

Having taken this financial plunge into European financial waters, Uncle Sam has got the foreign lending habit and has loaned $117,000,000 to Latin-America, mainly to Argentina and Chili:  $39,000,000 to neutral European nations, including Switzerland, Norway, Greece and Sweden.  Not desiring to play any race favourites, he has speeded China on her way to enlightenment to the extent of $4,000,000.

In buying foreign war bonds—­a procedure which in war time naturally involves sentiment—­it is wise for the investor to watch his step.  Patriotism is all right in its place but unless you can afford to contribute money for purely emotional reasons, a cold business estimate of the situation is advisable.  This applies especially to the man or woman with savings who cannot afford to take chances.  He or she will find it a good rule to stick to external bonds except under exceptional conditions.

One objection to the average internal bond is that with the exception of England the native money has greatly depreciated in international value.  Of course, if all these countries finally get back to their old standards of wealth, these investments will yield a very large profit.  To reap this benefit, however, it will be necessary to hold the securities for a considerable period because it will take the warring countries a long time to “come back.”  Another fact in connection with internal bonds well worth remembering is that while belligerent countries will scrupulously respect their obligations held by a great neutral like the United States whose good will and resources will be very necessary after the close of hostilities, there is the possibility, remote though it may be, that repudiation of home issues may come in the shock of readjustment.