The Oregon daily journal., October 11, 1914, Page 56, Image 56

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THE OREGON SUNDAY JOURNAL, PORTLAND, SUNDAY MORNING, OCTOBER 11, 1914.
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SOME PROBA
WAR
ECONOMIC
n
if-
if.
EFFECTS OF THE
ISLE
IH' HI WW !!' 'J" .-J-ir-k-JL. -1 U-UjI'J I- " i' ' '--.JU-IJ J - - ...
By Professor Irving Fisher,
Yale University.
WHE the future bisterlatr
cfmwrle the ' facts of the
present great world struwgle
sndf attempt to analye Itt
eirmfes am effects -the econoittTo losses,
gains, ttftfs and1 dislocations will
firm an Important part of the story.
It !, of course, ftulte Impossible at
this time to know. In any detail, what
alt tne economic results, will be. Much
Will depend en how long the war lasts,
Ttew many people and how mucn prop
erty are destroyed, what financial de
Vices are resorted to In order to fi
nance It and which side Is finally vic
torious. the most palpable and the most
fundamental effects will be a partial
stoppage Of earnings in the nations
Arectly concerned 1. e., a reduction
in the "teal income" which consists
ef Aijoyeble goods. All the otner im
portant results follow from this. .
"The cost, however reckoned, la sure'
to be etupendeous. Prof. Rlchet la
quoted as reasoning It at 160,000,000
Hay. this Is probably more than
fta.it the tolai Income of all the Inhabi
tants of thfe warring countries The
hrgbest astlmates of the total .ncome
f ihe United Kingdom, France and
Germany, estimates of Bowley, 1a
vetge and Bucher respectively, total
MP less than J70.000.000 a day.
Prof. Irving
Shall
Fisher,
Be the
of Yale, Says If We; Keep
Only Great Nation Whose
Our Heads We
Economic
Relations Have Not Even Been Strained.
RiMtsla hftd Austria are poor coun
tries pet capita, and would scarcely
-trrtng th grand total to $100,000,000
ay. Moreover, the loss of cal ln
oome to Europe Is, I Imagine, In re
ality, much greater than Rlchet's es
timate, chiefly because he takes little
count of the indirect costs, which
nay well be the greatest of all. The
ot tp th fiscal departments of gov
ernment lprobably only a small part
vt the total t t which the people will
have to bear. The killing and dis
abling of the men engaged will cut off
tbe financial support of European fam
ilies to the tune of hundreds 't mil
lions of dollars per year. The physical
destruction of capital through- the de
.vwtatlo of crop, the burning and
demolishing of merchant ship and
building, the crippling of Industry
through the audden withdrawal of la
bor, raw materials, the Introduction
of new trade riaks, and the butting
off of transportation, both internal and
foreign, make, up a sum of items which
cannot be measured but which may
sceed those which can. Last, but not
least, ia the impairment of that ub
tle but vital basis of bustnes com
mercial Credit.
In short, the central effect la a vast
impairment of Europe's current in
come and of the capital from which
her future Income will flow. It means
a veritable Impoverishment of vast
populations. The great burden will
bear heaviest, of cdurse, on the poor.
It will impinge very unequally and
will cause a great redistritxu'ion of
wealth. As always happens, soma peo
ple, mostly lucky speculators, will
come out of the melee wealthier than
before. This fact will not serve to
lessen the discontent of the masses
which their impoverishment is sure to
create. Food prices will be high, the
earnings of labor will be low; and,
after the war, unemployment will ba
great, due to the Impossibility of quick
absorDtlon into the industrial system
qf returned soldiers as well as other
maladjustments, which the war Is sure
to bring.
The Victor may secure indemnity for
part of the loss, but not far all; he
will, la spite of himself, be a net loser.
Taxes will be a . crushing burden,
merely to secure funds with wnlch to
pay high Interest on vast new war
debts, to say nothing of fun-Is with
which to purchase new armaments-
if again the nations are forced, by
lack of international control, to re
sume the stupendous folly of racing
each other in military equipments.
Bankruptcy and Revolution.
It may well ba that among the eco
nomic consequences of the war there
will be some national bankruptcies,
and that among the political conse
quences will be revolutions High
prices, high taxes, low wages and un
employment make an ominous combi
nations We may .be sure that dis
content will be profound and wide
spread. This discontent is pretty
sure to lead, especially in the defeated
nations where there is no compensat
ing "glory." to strong; revolutionary
movements Just a was the case in
' Jlussia after her defeat by Japan.
Whether or to what extent these
movements, in which "Socialism" in
the various meanings of that word la
sure to play a part, will succeed, de
pends oh the relative strength of op
posing tendencies which cannot yet
be measured. One possible if not
probable result may be, as I sug
gested In The Journal several weeks
ago. some international device to se
cure disarmament and to safeguard
peace, N
Though part of the losses to Europe
will bd permanent, her chief loss will
be Odtermlnoue with the war. She
will, therefore, seek ways and means
to fill in this immediate hole in her
Income in order to "get by." To do
thi she must borrow; that is she
most secure her present bread and
butter from us and other nations and
strange to repay later out of th fruits
of peace. She can stint herself, but
not enough to meet the situation. She
must borrow. And in -one way and
another she will satisfy this necessity
by borrowing in the United States.
lldst of the strange- and unprece
dented phenomena which we have wit
nessed In the last month, in rapid suc-
'J' 'l .
cession, are due to this pressing neces
sity of the belligerent peoples to cash
in now and trust to good fortune to
pay later. As soon as the war became
even probable, Europe tried to cash
In on our securities. The pressure for
our gold pushed it toward Europe
faster than it could move. Exchange
Jumped to the gold shipping point of
$4.89 per and did not stop. In some
cases it reached 17. This was partly
due to the desire to get our gold and
bolster up a credit structure tottering
before the deadly blow of war; but it
was also partly due o the need of
ready money for supplies of all kinds.
This need applies not only to
the governments, but to the indi
vidual people. To obtain this ready
money they threw back on us the se
curities they had purchased of us in
former years. They wanted us to take
back these titles to future Income and
give them instead titles to present
income. Had they secured our gold
their next step would have he en to
upend part of it for supplies and this
would have caused any foreign deal
ers to whom they applied to place or
ders with us. The gold then might
have turned the exchanges and have
been brought back to us In return for
our wheat and other products.
This double transaction Is in es
sence one, a barter of present Income
in the form of our wheat to Europe
for future income in the form of In
vestment securities. It was interfered
with by the refusal of the lnmrance
companies to insure the gold and by
the closing of stock exchanges against
the inundating flood of securities.
The first difficulty, as to transporting
gold, has been largely removed by ar
ranging for drafts against stocks of it
kept on both sides of the Atlantic
This will save the need of sending it
on risky voyages back and forth, and
any final net balances can be liquidated
after the war. The second obstacle,
the closure of the stock exchanges, is
more formidable but cannot completely
or permanently prevent the transac
tions which so many people on both
sides are anxious to consummate. Curb
markets and limited cash sales on the
exchanges themselves are doing some
of rhis business, and, soon et dr. later 'i
much more will be 'done, whether the
exchanges are open or not. Europe
needs our wheat and cannot pay for it
except with securities, partly because
her own industry Is paralysed, partly
because ocean transportation is diffi
cult. What Dumping Securities
Means.
Few people seem to realize that the
dumping of securities on our stores
and the efforts of foreign governments,
such as France and Switzerland, to
borrow money in our markets are at
the bottom very much the same thing.
They are simply two forms of securing
present supplies from America in re
turn for future supplies, the dividends
and interest on securities, from Europe.
It does not much matter whether we
buy government bonds or other eecurl
ties. If we buy of French capitalists
their holdings in American railway e-"
curlties we simply provide them with
the wherewithal to take the French
government loans themselves. They
virtually, become, without our knowl
edge, the go-between through which we'
lend, as it were, to the French govern
ment, In spite of ourselves. It is
doubtless well, as a matter of policy,
to refuse to loan directly to France, but
we must not for a moment conclude
that France or any other nation will
have to finance the war without our
aid. We shall not be consciously help
ing any particular nation, but we shall
be actually helping any nation which
can trade with us. Evidently England
will get more of our help than any
other nation because her shores are
more accessible. Qermaty is more iso
lated. Unless she possesses a larger
food stock than commercial statistics
indicate she will be pressing for our
food supplies, which may reach her in
directly, we selling to Holland and Hol
land to Germany, also reversely, via
Holland or via Austria and" Italy, Ger
many may sell a stream of securities
the other end of which we receiev.
Whether directly or by devious routes
there will inevitably be. so far as I
can see, a vast exchange of commodi
ties passing to Europe for securities
coming from Europe. In this inter
change will be found the dominant eco
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rill
of
short time loans may fluctuate gTe&t
ly. The rise in the rate of Interest on
long time investments is one of the
most vital and far reaching effects of
the war. At bottom interest always
arises from the exchange of present
and future goods. The rate of interest,
as I have tried to show jin my book of
that title, is simply the crystallization,
in a market rate, of trie impatience of
the human race for its bread and but
ter. War has now produced such im
patience in populations of hundreds of
millions. It is this impatience which
dumps the securities upon us, sends
down their price, and sends up the rate
of interest. As Byron W. Holt has
said, there is no moratorium for hun
ger. The fall of securities In Europe
produces the like fall in this and other
countries.
One of the consequences to America
of being forced to play the role of
money lender and one of the conse
quences of the rise in the rate of in
terest here, or what amounts to the
'same thing, the fall in the prices of
bonds, will be an increased difficulty
of financing our own enterprises.
Only the most promising enterprises
will be able to sell their securities.
This means that we 6hall be neglect
ing, to some extent, our own enter
prises to finance the European war in
stead. This general depreciation of invest
ment securities will doubtless lead to
many bankruptcies, If not to a genu
ine crisis. It will, also give tempting
opportunities to investors. The like
lihood of a genuine panic is lessened
by the fact that everyone recognizes
the real cause of the disturbance and
that Insolvency is not suspected.. Ac
cording to the best .commercial ob
servers, the previous liquidation had
been fairly well completed. Unless
they are mistaken, disaster will not be
likely to follow.
We repeat that since the necessi
ties of Europe have forced her to buy
our food In return for her invest
ments. It is evident that during the
war food prices will be high and
SCARE ABOUT FOOD SUPPLY NEEDLESS
By a Veteran Gram Man.
THE whole country has been placed
in s, state of nervous anxiety
about its food supply, and the
high prices which it may have to pay
in the future for its food owing to
the European war. Household after
household has laid in stocks of
flour, sugar, etc, in fear that much
higher prices would have to be paid
Jn the near future. Those who usual
ly buy 25 pounds of flour at a time
have, when able and sufficiently
scared, bought a barrel or several bar
rels. .
This has produced an unusual and
sudden demand of large extent, which
naturally has reacted on the grocer
and miller and has thus created an
abnormal fear lest this demand last
through the crop year.
The farmer also, in many sections,
has a most exaggerated idea of the
high price he is sure to obtain for his
wheat and other grain. This idea
causes him to hold back bis supplies
when able to do so, but most farmers
are obliged to sell great quantities
of their grain soon after harvest in
order to meet their necessities, which
per cent of our present consumption
in the food supplies of our country
can. be saved. .This is an immense
total but we have acquired such
B.ut' It Would Be a
i ti . . if A total, but we have acquirea sucu
UOOU 1 nlng It Amen- wasteful habits of high living, that we
have added an immense total to the
cans Learned Not to ctofUvlng- , . Aln
We. as a people, are equal to seeing
WaSte FOOdStUffS. XZrgXJkX rJl'lo?V -ted in snots, u. th. other part, of
to remedy the evil until forced to it our innusinai mscmnfry.
by compulsion. If it requires the en- Important dislocations will be felt rn
or living,
security prices, especially bonds, i
be low. These are the two facts
greatest economic significance to us.
To the country as a whole, they defer
some of our pleasures till after the
war. Uncle Sam will cut down for
.the present on his eating and drink
ing, his clothes, sheltec and amuse
ments in order to share his rations
with Europe. Instead of the pleasures
foregone he will invest not in new en
terprises at home, but in old ones
American and possibly European also
purchased of Europe. We can never
have our cake and eat It, too. In this
case we shall let Europe eat some of
it on condition that she in turn scares
hers with us after the war. Moreover,
we shall trade oft a relatively small
piece of our present cake for a rela
tively large piece of Europe's future
cake. In other words, Europe will fill
up the great breach in her income
now Impending by inducing us to
make a small breach in ours. The
result will be that the course of our
real income, that Is, economic satis
factions or enjoyitble consumption, will
imitate In some degree that of Europe.
This Is, reduced to its lowest terms.
the chief economic result of the war.
But to many the question Is. do we
gain or lose, as compared with what
might have been the case if there had
been no war? I do not tMnk any one
can answer that question with cer
tainty. Europe is willing to mortgage
its future to us on terms very advan
tageous to us; but when the future
comes. the purchasing power of
money will probably be so much less
ened as to have absorbed all our ad
vantage. Probably we shall lose
slightly, on the whole. Bat It Is not
economically Impossible that, there
will be a net gain. In either case the
net effect will. I believe, be small.
Of more importance will be the vari
ous effects on various classes. v Cer
tain people will be greatly benefited
by the rise in food prices, and the fall
in security prices. The farming
classes will profit by the former; the
Investing classes by the litter. Those
who have the good fortune to belong
to both classes will grow rich. The
farmer who Is in a position to save
money will both make more money to
save md be able to invest it more ad
vantageously after he has saved it.
If he lends to his neighbors he will
find the market rate of Interest high.
Even If he buys more land the pur
chase price will be restrained from
the great rise we might expect from
the prosperity of farming by the fact
that the "number of years purchase,"
as the phrase is In England, will be
small, or. In other words, that the In
terest basis, which enters into every
land price. Will be high.
Labor Will Not Suffer Much.
On the other hand, the general con
sumer of farm products win suffer
from another advance in that part of
his cost of living, while the debtor
classes will suffer from the fall In
bonds or rise in interest. Many specu
lators on the stock exchange, those
who have speculated for a rise, are
in effect undoubtedly ruined already
and many borrowers at banks on col
lateral security win feel the pinch
from the depreciation of their property
and the-hard terms of renewing their
loans.
And the laboring man. who forms the
majority, what of him? It seems im
probable that he will be greatly af
fected, that is, on the average. He will
have to pay more for his food and
food constitutes more than a third of
his budget But some articles he boys
will probably fall and he may secure
higher wages because of the "with
drawal of competing laborers. Some
labor may rise, especially In the in
dustries benefited by the war, such as
for instance, farming and other food
industries, canning, flour mills, sugar,
etc., the automobile industry and per
haps ammunition and steel. In other
industries thrown out of gear for lack
of foreign markets or for lack of
foreign raw material, the wage earner
may lose In wages and employment.
In other words, labor will be dlslo-
com pared with, our internal jtf&mmerce.
The. internal commerce palifi for by
money and checks annuail in 'this
United States amounts to noirly fivo
hundred billions f dollars ifwhlch Is
more than a hundred timea much
as our combined exports 'f, and Im
ports, ij
Almost all of what has bff1 said so
far had grown . out of thi proapect
that the prices of foods andjtber ma
terials needed in Europe wR be hiah.
while the prices of MCuftfJes which
Europe does not need and -Usnot mi'
ford, will be low. Other jpMces will
rise or fall according to elal cir
cumstances. Like a bombshWt, the ef
fect of the war will be to Asperse or
scatter prices at all anglj of rises
and falls. The prices of chemicals
will be raised. The same 4ticle will
fall in price in one" counttf' and rise
in another if the transportation from
the former to the latter iif Interfered
with. This is true today b cotton.
There has already been ai Speculative
movement to anticipate thrift changes
and arbitrarily to mark swjne prices
up and some prices dow But as
this is guess work and wilbe subject
to frequent revision, one i$ the strik
ing phenomena will doubjtles be an
increase in the variability if prices.
The general level of prlcfri; will tend
to rise. The rise will ' probably be
greatest in little countrifj tike Bel
gium, which are In the wit jsone, and
largely dependent on forgn trade.
The rise wtH he less In Entpprid and in
the United States than onMhe conti
nent. In fact It is conceivable that In
England the hoarding ofjhoViey and
the shock to credit, whicfigils as pre- .
dominant there as It is hpf r may ac
tually lower the general leKfiil fef prices
during the war. especially! Ui e eotld
include in the Index numbe the prices
of securities, luxuries and ;articles of
English internal trade. If 'any nation
tries the old experiment eM paying its
bills In irredeemable paper-hohey, that
desperate expedient will ha the same
result that It did with uff during the
Civil war. Inflation of fte currency
will expel gold from thatfeonntry and
raise us price level nighgr man eiee-
where.
After the war is overYrlces will
probably not retreat, buiciwill move
upward even faster than before. There
may then come the famiiar "boom"
period, which may rulmtriie In a com
mercial crisis In a few ytjtSra after the
close of the war. as watj; true after
the Crimean war. the Ajir1i,an Civil
war, and the Franco-PfisslAn war.
The rebound, will prObatli: he fastest
In England. Statistical Wlf curves
of many nations usually! io an up
ward turn when war begins and an
other when It ends. The'j-af will thus
aggravate a rise of prls already In
prospect.
It would take considiiijabl space to
give, completely, the ressns for these
prognostications, hut I ijfiaVe tried to
Justify them in a brief; fhddendum to
a book recently Issued ofhf "Why Is the
Dollar Shrinking?" ij J
The sudden lightning fholt of war
produced as one of its ?lMt economic
effects a general dlelocstlloh of credit
machinery In Europe anSJto some ex
tent in this country. ?ve heard at
once that letters of eredifc of travelers
in Europe were uncalhaiJe. Gold wan
honrdwl everywhere. Itjpis estimated
that about $30,000,000 i fej gold was
hoarded In New York Irij she first weelt
in August. Ttuns on rspliks were fre
quent. Bank reserves wife depleted.
The moratorium was'; ffsorted to to
avoid a general catac$em of bank
ruptcies which might HVe occurred
not from actual inso1viF-iy but from
mere insufficiency of cijjK'
To roe. one of the;!nt striking
phenomena was the pH'Vnptriess and
effectiveness of the cSjperallve ac
tions by which, so fat-i any business
cataclysm has been Iff voided. The
closure of stock excHjgws perhaps
saved us from general Hinanelal panic.
Most striking of all iajj jjh manner in
which the governmental at the world
have come to the resdjutg of business.
Those of us who wej; brought wi
in the old laissez-faire; school have to
rub our eyes. - Had Se world been
guided by lalasez-falrj sldeas, in this
emergency we should all probabil
ity have witnessed bihls "time the
greatest collapse of cry!t the world
has ever seen. AlmofC all the large
and effective measnrssg to meet the
many emergencies arllfyg Were taken
by . governments. TjliJi moratorium
must be counted am$ig the govern
mental acts which. !h5 Tar at least,
have saved the dayjj for business
credits. In -England, t9e government
permitted suspension the bank act
(not of the bank as jfnany Americans
seem to imagine).
4-
Improvised Accounting
Methods.
erain has to be stored In warehouses
at central cities, and carried by those
nomic effect of the war on the United engaged in the grain bustneas and by
States.
Foreign nations will get their much
needed loans on better terms, even If
less promptly, by the circuitous pro
cess mentioned than if they could bor
row directly in our markets; for their
own cltleens will pay higher prices
than we would, even if, to get the
money, they have to sell their, other
Investment securities to us at a con
siderable sacrifice. England has sold
treasury bills for $75,000,000 on as low
a "basis" as 3 per cent.
in this virtual trade of this year's
crops for titles to future years' crops,
we shall get a high price for the for
mer and pay ft low prise ln present
valuation) for the latter. Investment
securities are and will be a drug on
the market. In other words, the rate
of return to the investor will be Wfh,
the rate of interest on long time loans
will be high and stay high; that on
j - . , - - ' "
the banks.
This great warehousing of grain
acta as a balance wheel to keep the
machinery of supply and demand of
grain in equilibrium, as the balance
wheel in a great mill enables the milf
power to produce smooth action of the
machinery, or the ballast' in a boat
keeps the boat right side up.
We need these great reserves of
storage grain to be carried by men
in the grain trade as a protection to
the country for its grain supplies. A
great country must have great grain
storage reserves, the same as a great
bank must have great reserves in cash
resources.
We have harvested a wheat crop of
over 900.000.000 bushels, which Will
give us $00,000,000 for export, or 100,
000,000 more than our largest actual
exports in any previous year. In the
early part Of July we were Wondering
how We could get rid of it at any fair
price, but today we are wondering if
we can keep the price within reason
able bounds, as the pubile mind hat
become hysterically elted- To be
- sure, in 1868-7. just after the Civil
war, we sold wheat' at $3.30 per
bushel, and corn at $1.81. in paper
money, but we had no reserves in the
country to speak of.
The crop of corn gathered In 1913
was a small one, and hence now at the
end of the year we are seeing very
high prices for corn. ,
The present crop to be gathered this
fall, which begins to come on . the
market in December, is expected to
show at least 2,850,000,000 bushels, or
200,000,000 bushels more than last
year. While this is not a large crop,
the saving, which the farmer can
readily make through care in feed,
should make it equal, in results, a
crop fof 2,750,000.000. owing to the
high prices which it commands.
The waste going on upon farms in
our feed crops is every year enormous,
owing to the cattle and hogs being
carelessly fed, 'and immense quantities
of grain are trampled under their feet
and scattered carelessly over the
ground. The farmer this year will be
very careful to save every bushel of
grain possible, and in the aggregate
this saving will reach many millions of
bushels.
The' oat crop for this season will
amount to 1,160,000,000 bushels, and
Is what might be called a fair average
crop. It unquestionably will command
good prices, as the European countries
will want immense amounts for their
armies.
Potatoes are showing better results
. than last year, and the probabilities
are that their Keeping qualities will
be good. The general result of
tnlhor crops this year have been
fairly satisfactory.
There is no necessity for the Amer
ican people to become excited for their
food, supply; much of the sensational
talk is of a highly inflammatory and
deceptive nature. If the American
people can be brought to exercise care
In the nsa of their foot and to ceaie
the .immense wastage which is eon
stantly, going on year after year
through wasteful habits, at least 20
tiro change of our habits
The people seem, to be awake at the
present moment to tne situation, anu
they will probably meet it not only as
a necessity, but In a spirit of readiness
and adaptability.
We are creatures of habit, and If
we have acquired wasteful habits we
stick to these methods. Much is being
done by the government, as well aa
the railroads, In showing the farmer
how he may increase the production
of his crops by practical demonstra
tions along the lines of railroad in
many sections of the country. We
need to be shown in some- practical
way how we can serve to the best ad
vantage the food supplies which are
produced.
In Europe we are having the great
est lesson the world ever saw in tne
stoppage of free and quick means of
intercommunication between thickly
inhabited places In present day civili
sation, which will in one week pro
duce results in loss of supplies that
would seem incredible while the
means of ready transportation were
t hand. We ask where have the
supplies gone? They have simply beAg
stopped because we are denied the ma
terial means to move those supplies,
and have paralyzed the mind with fears
so that it will not act with the neces
sary confidence to meet the demands.
The American, people should take
this lesson to heart. If we have crip
pled the readiness and flexibility of
the will of our people to do things we
have dried up the sources which pro
duce the thousand and one means of
livelihood even if we say nothing
about Its crippling our food supply,
it seems cruel to prey upon the minds
of the people at such a time as this,
when we need the most calm and
sane presentation of facts, with the
stimulus of mere temporary excite
meat, which only exhaust our re
sources and our capacity to see with
out the glasses of distorted fears.
the fields of shipping and banking.
One consequence is that American
enterprise has now the golden oppor
tunity to capture a good share of
each. The outbreak of the war and
the simultaneous opening of the Pan
ama canal will tend to divert the
course of trade from Europe to South
America. Trobably our merchant ma
rine can be developed more success
fully for this ilouth American trade
than it could for the European trade.
New York can largely take the place
of London as the world's exchange
center for Pan-American trade. This
opportunity is increased by the possi
bilities in the new banking act for the
establishment of branch banks abroad.
. With these opportunities and the
rise of interest in Europe, the United "
States will change to a great degree
from a debtor to a creditor nation.
One of the dislocations of the war
In the United States will be the cut
ting off of imports of a large part
of our dutiable commodities, and there
' fore the loss of national revenue.
There is an urgent need to compensate
for this loss by some other form of
tax. .
But it is well not to lose perspective,
to remember that dislocations are not
necessarily losses, that, however, loud,
ly they are proclaimed in news col
umns, they are small in extent, when
considered In relation to our whole
trade, that this country of ours is a
vast one, and that the rank and file
of Americans will be but slightly af
fected by the war especially by con
trast with our friends, now fighting
each' other, acres the sea.
We are too nearly elf supporting to
be prostrated. Our foreign trade if
and always has been trifling matter
The Bank of EnglaniJ has been en
abled to rediscount M great mats of
acceptances by the guarantee of the'
British government alnst loss In to
doing. These "in the Jefiil will amount
to several hundred millions of dollars.
Emergency notes werissued by gov
ernmental authority f?u both sides of
the Atlantic, and in -e arrangements
made for special goldjgunds in Canada
and in France the ij governments of
England and Frances jplayed the im
portant parts. Thujiave been lm-:
pro vised mlthods of j International ac
counmig by which t) transportation, T
of gold balances maflbe deferred and
largely dispensed wltihv Our own gov
ernment has-oooperaed in the cur
rency exchange and j$dit situation Jn
many ways. It mi .provision for
sending gold i to jurope for out
stranded countrymen promptly, re
vised the banking anajshipplhg laws.
. Whether further latabillty will be
found to need such ljIsterlng we can
not be sure. ; The ptsent Outlook )s
that business! conditions sre fairly
sound and stable, r; which direction
across the Atlantic jghe title to gold
will tend to change annot as yet be.
foreseen. It will ftfpend largely on
bow much Europe went our products
and how large a sacrifice she is willing
to make in selling her securities.
It will also depend c possible issues
of paper money. Ftunately we are
the happy possessors of over $1,600,
000,000 in gold, arils! It is inconceiv
able that any large j$rt of this should
flow out unless whould be so In
sensate as to inflate -he currency.
If "we keep our heai we shall at the
end of the war be .4. the proud posi
tion of being the i&y great nation
whose economic retCiurces have not
even been strained.?,;
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