The Washington herald., 1914-08-30

i
Though the raw materials of these pro-
ducts may have been produced on thu
farms. yet, the finer they are the more
the indoor Industries will usually have
contributed to their final preparation.
Consequently, the reduction in the demand
for these products Will depress indoor
more than outdoor industry.
Distributing Cost Higher.
| As to the distribution of agricultural
products, the cost is certain to be in
creased by war. and, consequently, a
larger proportion Of the total value will
be absorbed by various classes Of middle
men or distributors The rates of ma
rine insurance. TO take a single illustra-
ton, advance because of the uncertain
ties OF shipping. Spectators become in
creasingly active. and they will come in
for share Of the price OF the products
in which they deal This Is specifically
true II larger quantities are stored in
anticipation OF a rise, or in order to Gre
ate an artificial scarcity. Again, the
transportation agencies will be 50 occu-
pied with military affairs as to increase
the difficulty and delay. IL not the direct
cost Of transportation. The result OF
this increased cost OF distribution will be
TO nullify any advantage which farmers
might otherwise gain from the Increased
consumption during war times.
However. there are a number OF spe-
cial factors entering into the problem
at this time. The partial or temporary
closing Of certain European markets to
all American goods. in case Of a block
ade, the limita tons growing out OF the
laws relating to contrdband of war, in
crease the uncertainty and the hazard
Of prediction. II the combined English
and French fleets should bottle up the
German and Austrian fleets, the ports
Of Western Europe at least would re-
main open to neutral goods from the
United States.
Even though German markets should
be closed to American foodstuffs-our
trade with Austria is neglIgible-this will
be more than compensated by the par
tiaI or complete inability Of Russia, the
worlds greatest producer OF wheat. to
get IL to markets in Western Europe. As
to such concentrated food products as
hams, bacon. and lard, war creates an
abnormal demand for them.
Teutons Can Feed Themselves.
The combined empires of Germany
and Austria-Hungary can feed them
selves for an indefinite period; there
fore. We need not expect that they will
be on ale verge OF a famine when the
war Gloss.
Since 50 large a proportion OF the
American cotton crop goes to Europe,
a partial closing Of European markets
will tend TO depress the price OF that
staple. But We must not exaggerate this
tendency. English mills can run with
out much curtailment. IL any. so far as
the supply of hands is concerned. Many
OF the millhands are women, and. in
case of necessity. more women can work.
Besides, her total army is not much
greater than her army OF unemployed.
The only question is as TO her markets
for cotton goods. Germany and Austria
are the only markets likely 10 be closed.
The rest Of the world will remain open.
and her carrying trade IS not likely to
be so seriously impaired as to prevent
her from marketing these light freights,
After the war Is over. those countries
which have not been able to get cot
ton will be clamoring for II.
Germany has a PcactIcal monopoly
OF theAsupply OF potash During the war
we shalt probably get some for fertiliz-
ing purposes. s-
Since the three countries Germany,
Austria and Russia produce more than
two-thirds Of all the beet sugar, and
nearly one-third of all the sugar, both
cane and beet. in the world, we must
expect a scarcity of sugar until the
products OF those countries can again
find an oHtlet whenever there are neu-
trail ships to carry IT, Therefore, there
is not ukeiy to be a severe sugar famine.
The wholesale destruction Of life. es-
pecially OF young men. Al the
most productive period of their lives, win
reduce somewhat the supply OF labor
during, and for some time after, the war.
This would Of itself tend TO improve the
labor market, and make wages and gen.
eral social conditions somewhat better,
were IL. not for the fact that modern
warfare is even more destructive Of cap
ital than of labor. So much of the
capital Of the country has been invested
in the Implements of the destructive in
dustry, II war may be dignified by that
name, and then destroyed in the process
Of being used, as to deplete seriously the
supply of capital available for invest
mentl in productive industry.
VIII Counterfeit Reduction.
This will more than counterfeit, through
reduction In the demand for labor, the
reduction In the supply Of labor. How
ever, unless the war Is prolonged further
than any one now contemplates, a redue-
ton in the supply Of capital, that is of
tools and implements of production. can
easily and quickly be replaced. Germany,
who Is likely TO incur the greatest cost.
is rich and has been consuming lavishly
for years. 1t viii only be necessary for
her people to curtail consumption for a
time, to buy tools. implements, bricks
and mortar, fertilizer. etc, instead of
articles OF consumption. for a few years.
to replace all the capital that Is lost
By spe nding their money for tools In
stead OF consumers goods, they will d.
rect their labor force into the Industries
which make tools rather than into those
which make articles Of consumption. In
this way they will soon be as well sup
piled with tools as ever, and may then
begin to consume the products OF those
tools. .
Much, however, depends on the dura-
ton of the war, and the temper Of the
people OF the. various countries involved.
II the war should continue, as did the
Thirty Years war. until the whole coun-.
try is reduced to the verge of starva-
tion, then there Is no room for the cur
tailment Of consumption and no power Of
recuperation. Or, IL the people of any
country should lose their economic vir-
tues and refuse to spend their money
for the tools which are needed to rebuild
their industries, but insist on living from
hand TO mouth. that country will not re-
cuperate. s.
Whether America Is to become the ii:
nanciaI center Of the world viii depend
upon the power and the willingness OF
European populations to reeuperate, to
reduce consumption and replace .thier
depleted supply Of capital II they can
not. or, viii not, America viii become a
lender to them. instead Of being bor-
rover from them Ny guess 10 that they
win recuperste