The Lynden tribune. [volume] (Lynden, Wash.) 1908-current, 1914-09-03
Dean Johnson Estimates Profits
and Loss of War to u. S.

Joseph French Johnson, editor of
the Spokane-Spokesman when that
newspaper was started and now
dean of the New York University
School of Commerce, one OF the
most distinguished economists Of
the country, and an acknowledged
authority recently published an arti-
Gle on "War and American bust
ness" based on a thorough investi-
cation conducted by the research
department of the institute.
Dean johnson is optimistic as to
the effect of the war on American
agriculture and the industries which
cater largely to agricultural inter-
asts. He is of the opinion, how
aver, that many industries will suf-
fer severely. An interesting feature
of his article is the summarized
statement of the chief items of
profit and loss to the American peo-
pie, which follows
LOSS.
/. Tendency to drain gold from
this country, which must be offset
by accommodating reserves, restrict
ing credits and avoiding initiation
of currency.
2. Closure of European market
20 American securities and sale at
low prices in this country, resulting
in checking all permanent financing
md stopping new projects and con-
struction that has not been financ-
I'd; probable permanent diversion
from the United States and Canada
Of large amounts of European capt.
tal which would otherwise come to
IS.
3. Cutting off certain raw materi-
ais (chiefly chemicals), which are
essential in some lines of manufac-
ure; great reduction in European
lemand for raw materials, partly
manufactures and manufactured
goods, resulting in partial readjust-
ments. and in losses.
4. Increase in the cost of living.
PROFIT.
1. Opportunity to increase the
prestige and banking connections of
America in international financing.
2. Opportunity to enter South
American and Oriental markets and
obtain a larger share of this trade.
3. Sale of foodstuffs and military
supplies at high prices in European
markets, resulting in prosperity for
producers of these goods and for
industries which cater to these pro-
ulcers.
Dean Johnson evidently believes
that Germany has long been antici-
pating and preparing for the war.
He calls attention especially to the
nf Gold hnldinuC nf
The Imperial Bank of Germany
ming of 1913 to $336,O00,O0O on
July II. 1914.
"FollOwing the lead of Germany
the banks of France and Russia al
so piled up vast stocks of gold"
he says. This extraordinary pres
sure for gold on the part of the
great governmental banks of Eu-
rope, beginning early in 1913, is re-
garded as highly significant by
| those who believe that one of the
world powers deliberately planned
TO promote this war"
Dean Johnson sees opportunities
for the United States, both in OK
tending our financial influence and
in building our export trade. So far
us exports are concerned, however,
he emphasizes the difficulties of
breaking into new markets, even if
they may be temporarily left open.
AS to the opportunities of American
financiers he says:
New York is today the financial
capital of the world. Up to. the
outbreak of the war the current of
International trade flowed through
London, and the London bill of ex-
change was the accepted standard
of payment the world over. But
the terrible finger of war has been
laid upon the imposing financial
structures of Europe and they have
shriveled under its touch.
ut is likely that the bankers of
South America and the Orient will
increase their deposits in New York
the only safe haven for the mo-
ment-and the New York bill of
exchange will temporarily take the
place of the London bill.
New York bankers have no de-
sire to take advantage of the diff
culties of their English brethen, and
in the long run it is to be hoped
that London will regain her finan-
cial strength and prestige. Yet
there is likely to be residue of
permanent gain for American bank
ers and exporters. Enduring finan-
cial and trade relations with many
countries now almost closed to A
merican products will be establish
ed
For the present, however, we
are confronted by closed market
for securities, with no definite. pros
pect of its being reopened. Broadly
speaking, only hand to mouth fl
nancing is possible.
New projects, therefore, or any
other large capital expenditures are
out of the question. Construction
that has already been financed may
be carried on and there may be
isolated cases of new financing, but
they will be exceptional"
American and Canadian banking
conditions, in Dean Johnson's opin-