Wichita daily eagle. [volume] (Wichita, Kan.) 1884-1886, 1885-05-01
WHAT OF A EUROPEAN WAR.

What will be the influence OF a for
eiga war upon the affairs of this ceun-
try. is question often asked. We
take the following contribution TO that
line of thought from the financial cir
cular of Henry Ciews 4 TO-. da:ed
April 25:
The effect Of war upon the financial
markets would depend largely upon
other than commercial considerations
First-clsss American investments
would naturally command certain
degree Of preference in Europe on DC
cunt Of the extreme improbabiIity of
our becoming in any political conpli-
cations that might arise out Of The
struggle. A corf lict involving so di-
rectiy as this would the possible miiI-
mate imDlication of other important
nations. or even a general Eur, pean
war, would naturally produce sen
sitiveness towards the obligations uf
the European nation. at large; aud it
seems inevitable that this possibility
would cause many foreign investors TO
prefer United States bonds, or the is
sues of cur most trusted corporations.
This inference is not only reasonable
in itself, bu- il 10 warranted by our
experience indcr former like circun-
stances; an, j, is further strengthened
by the fact hs, the present exception
ally low pr 'ef of our securities afford
unusual in luceinents 10 foreign in
vestors. ut. while our securities
would chi ' these advantages, tie
event alone can be trusted to sho .
" hat Nigh, be the actual effect upon
prices. Whilst our investments would
suffer less Than European, We, That
possibly not mean that they would ar
tually advance in price, but merely
that they would not fall 10 The
same extent a. the others. Or,lins-
rily. the first effect of a declaration
of war between two great nation i, 10
cause collapse OF credit in the bel
ligerent countries and consequent
withdrawal of gold froin debtor
countries. such result, in rhis case,
probably would not prove very Sc
rious matter for Us, Tor we could easily
part with a te. millions of specie
without any resulting pressure on the
money market After that. ,hcr-
would probably srise a foreign dc
rnand for our securities; which. how
ever, might have to contend a2ain-t
the borrowing necessities of the hr.-
liyerent governments. In considcrin.
any aspect OF this question. however,
IL is necessary 10 keer in mind that n
CREST war means destruction OF
property and great interruption Of
production. which in turn means
scarcity and high prices of the moro
necessary commodities which usually
carries along with it speculation and ).
corresponding rise in the price OF st
curities. For this reason. we might
reasonably look for a speculative rise
on the stock exchange - .omc stages
in the anticipated war between Eng
land and Russia.
Should war be Fortunately avertcd.
a set Of future conditions entirely diff
fercnt from those above considered
would be prcsented First of all. we
should experience a reaction from
certain measure of speculative adj
vance in few commodities, which
has been caused BY anticipaiions If
"
affected would be wheat, and, in re
spect 10 that il ia quite possible that
the gloomy prospect for that crop
might quickly cause an upward turn
in price The dispersion OF the war
cloud would produce q renewal of
confidence in the foreign markets
which would benefit our commercial
and financial markets in many WAYS
independently of war con.iGern-
,ions the position OF affairs in this
country is steadily improving. ANY
sudden recovery from the late state
of depression is not TO be expected,
but there is no reason for apprchen-
sion that the Improvement which has
distinctly set in NAV not be steadily
maintained. There exists no such
prostration of credit as followed for
mer panics. Lenders are still cautious,
but not 10 An excess that prevents the
procurement Of credit by sound Dor
rowers aud for merritorious en-
terpriscs. The banks are 40
plethoric in resources and the rate of
interest is 50 low that there il the
strongest pc sable inducement To lend
where reaso iable security is present
ed; and any increase of speculation in
securities would with the present very
low prices Cf stocks. be sure of all
needtul ass lance from lenders In
deed, the impression is gaining ground
that the condition of the loan market
will of itself force All earlN revival of
SPECULATIVE activity.