Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-01-18
THE EFFECTS OF WAR
Not So Stimulating to Business as Is
Generally Supposed.
AN-EXPENSE THAT MUST BE MET,
And That, Too, Either by Taxation or the
Borrowing Of Money.
MATTHEW MARSHALL on THE SUBJECT
rsrEc1AI TELEGRAM TO THE DISPATCH,


''The Economic Effects of War;" Matthes
Marshall writes as follows for tomorrow
Sln:
4 new topic of consideration and discus
sion las been supplied to Wall street in tn
Chilean question. While politicians an,
plain citizens are busy only with askin;
themselves whether Congress ought or ough
not to declare war against the South Ameri
can Republic, and whether il will or will no
do it, financiers are more particularly con
cerned with forecastinz the possible effects
upon business of hostilities if they should
break out
Experience on this point is lacking to mos
of those who now have to deal with it. TIL,
survivors of the generation which witnessed
the Mexican War of 1916 are few in number
and they have nearly all retired from activ,
life, while our Civil War, which ended il
1866, furnishes no precedent by which t.
judge of one with a foreign power. Tha
war gave birth to new and wide-reachine
financial measures; it revolutionized many
great industries, and it stimulated inventive
ingen uity to an extraordinary degree. In
the field of railroad building and operating
alone 1t produced those enormous fortunes
which are the admiration and envy of the
beginners of this day in the task of accumu.
lating wealth, and, by abolishing negro
slavery, it brought upon the former slave
States 8 blessing instead of a curse. which
from the commencement of the Federal
Union they had dreaded and sought to
avert
Free Labsr Beats the Slaves.
So far from annihilating the cotton crop,
free labor has swelled it from 5000, 900 bales q
year TO nearly 9,c00, 600 bales, and in place OF
confirming the dependenceo of the South upon
the North for food supplies and for manu-
faetured goods, 1T has set the South to es-
II blishing mills and manufactures ofits own,
anG to increasing its home production of corn
and bacon.
None of these things can be expected from
war with Chile, and in estimating its prob
able effects they should be omitted. As a
rule, theoretical economists look upon wars
as agencies purely destructive of wealth like
fires, shiprecks, earthquakes ana pestilences,
and II we confine our attention rigidly to
their field of thought we must acknowledge
they are right. A war takes men from pro-
dUctive occupations and makes them-all the
while they are in service at least-idlers and
frequently destroyers of the products of
other mems labor The strength, skill and
ingenuity which in time of peace are devoted
% creating wealth are in time of war turned
III TIE opposite direction.
Political economy, being not politics in
the sense of statesmanship, as its name mis-
le3cingly suggests, is the science purely and
simply of getting rich. 1t has as little con-
nvction with patriotism, religion and moral
l-y as the differentinl calculus has, and
when experts in it declare that war is un-
favorable TO a nations welfare they refer
solely 60 its growth in riches and to nothing
else.
War Conflicts With Progress.
At the very outset war comes in conflict
with mere material prosperity. 1t disturbs
and upsets the routine of business, and sub
stitutes uncertainty and dread for certainty
and confidence. 1t acts upon the habitual
course of trade as misplaced switch or a
broken Iail does upon a train of cars. In
stead OF the smooth, even, and nicely-ad-
1usted track along which it had hitherto
oeen gliding, it is forced into a path for
which 1t is not lifted, and upon which it
comes 90 stop with q jar and a crash
W hen war breaks out every banker, mer-
Chant, manufacturer and head of an organ
lied industry has to stop and consider what
lie "ll! do next whereas, before, ne went on
from day to day in serene confidence that as
to-day Was like yesterday, tomorrow would
De Ike TO-DAY, and he need give himself no
c2ncern to provide for extraordinary con-
Hence it results that the declaration of war
or even confirmed conviction that it is 1ul- |
pending, produces rise in the rate of in
terest tor money, a fall in securities, and,
except in the case of commodities for which |
war creates special market, its materials |
Tor its production, fail in the prices OF
merchandise. Capitalists are unwilling to |
lend money cheaplv until they ara sure that |
they cannot by waiting, geta better rate for |
~ ana i2r the same reason they cease buy |
laE stocks and bonds, and are disposed |
lather t. sell them. Merchants limit their |
orders for goods until they can make up |
taelr minds what their customers are likely I
% want, and this in turn checks manufac- /
! snrsS and importations. Business is like |
bicycle: when it no longer moves forward it |
begins TO topple over.
Depressing Influence on the Mind.
Il Is curious feature. too. in human ma
ture that any sudden untoward event, even
though il has no direct relation to business,
has depressing influence upon the mind,
nd, for longer or a shorter period, indis-
i'Jses l. to enterprise. So unimport.nt a |
death as that of the Duke of Clarence mo-
.ientariE prOdIced a slight fall upon the
ioH1on ocG Exchange and well remem-
eer now the sinking of the steamer Arctic
involving, as IL did, the loss of a number of
New orAS most prominent citizens, cast
doom over Wall street which lasted for sew
arai DAYS.
\ war. therefore, being associated in our
#ou&hts with carnage and destruction, with
I" "oAauS and maitni~g, and with the multi |
5Acaton OF widows and orphans, to say |
iothing of an increase of national pecuniary
luiGens, Is Al disagreeable thing to all ex-
'ept NOSE WHO Immediately profit by it, and
a Is within the Category OF calalnitjes.
~ Hsst, therefore, if war should be de-
'lhlea DY this country against Chile it would
ave I'.N. q Dad effect upon business. know
iEtt many people entertain the conviction,
'a>r't upon their own memory of the re- |
Git> q cur Civil War, or upon informa ton |
4 hich they have received from the reco-
IN lA9 Va bLitSlss LllaV JnlS expected war |
YOU q give like impetus to trade and in |
llstr?, Dut l cannot agree with them. 1t
vas not until the Civil War had been in |
progress for year that it began to stimu-
ate enterprise, and then it was chiefly be- |
aEse OF the immense additions which the |
government maize to the national debt
ia the national currency, and to
ne ne +.a unnatural, feverish activity gen
ION OF war materials. During that first
ear, stocks and bonds were frightfully low |
2. price real estate became unstable, and
1efchandise or all kinds fell lower than had
'Seh Ahown Tor years.
How Trade Was Made Lively,
Finally. it is true, the depreciation of the
t'enback not only put prices up, but it set |
NeIybody to buying goods upon specula-
ION, as they bought gold for further rise,
nd thus it made trade lively. The rail
Gags, too, which transported troops and
munitions of war, charged high rates and
armed great profits; hundreds of manu-
~ ae'ul ers OF arms and ammunition spraug
-, imports increased to fill the vacuum
;'useu DE the diversion of home labor to
an riot.
How unhealthy was all this seeming pros
- - ~ ttie crash of 1873 and the stagnation
i N'Ie SIcceeulnE few years sufficiently
rove NO war with Chile can reasonably
e expected to Weld even a similar-.1
aIChtiH sooq result, and If il were to do it. |
MouIu M II ~ llle same manner at last leave |
: "Ot0S OH Ohan We were when we began
Equally fallacious it seems tn me is the
herehce Ihat because war; or the appre- |
ehslohs OF war, IN Europe creates demand J
T DI W ottL 600 products such as we now exper-
'hce Dy pau natvests there, SO a war be-
Neen US ana Chile Will likewise stimnlate
Deculat1on IN gram and pork A man cop-I
1mes no more food as a soldier or a sailor
nan ,a ne @ 9oes @ as simple citizen, and the