The Washington herald., 1914-09-05
WHERE THE
SHOE PNCHES

4 ANOIy1fnts lslA, Dy Y. NJ heghs NcN AoAA-l
| In the early days of the European war
good many thoughtless people express
ed the opinion that the war would make
relatively little difference in this country
| and that possibly even from the very
start a great deal Of direct benefit might
. be derived by the people Of the United
| States from the misfortunees Of theil
] feIIow-men in Europe This rosy view OF
the situation unfortunately did not pre-
vail very long. and only a few Of the
most thoughtless now entertain It. Men
have come to realize that while a few
special industries may gain new foot
holds in South America, Australian OF
| African markets. as a result of the Grip
| pling Of European industries, this ad-
vantage Is likely to be more than count
! erbalanced even in the case Of these IN
dustries by loss Of other and more i'm
| portant markets, and that even this adj
vance. small as It may be, Is terribly
impeded by the breaking down Of meth
DDS OF exchange with these distant mar
kets.
Other results Of the war have come
much closer home. II Is well to glance
at a few them not with any idea Of
forecasting what the ultimate effects Of
the war will be-for that is far beyond
the intelligence of man at the present
but to give at least vague and indefi-
mite hint of some OF the results that will
make themselves felt in the immediate
future in this country and in other
countries.
Since South America is talked about
as being the principal market into which
our American exporters &c ship goods,
one may note the first immediate effect
OF the war in a great South American
country. Brazil, as everybody knows, was
badly overextended before the war be-
gan. In fact, negotiations were going on
for very large governmental loans to
Brazil, the money being about 10 be
provided by European capital That Of
course, collapsed Immediately. In lieu Of
II, the Brazilian government passed some
extraordinary measures providing for the
circulation Of paper money to the ex-
tent OF approximately Sl6O, 0oo, 0OO in order
to tide over an emergency Of unknown
duration. In other words, the first re-
suit Of the war in Brazil was practically
to put that nation on an emergency cur
rency basis and thereby to make trading
with that country on a large scale al
most impossible.
To come much nearer home, let US in
stance a few items of the news OF the
first two weeks In August A Ounty
in Florida, which was negotiating for a
million dollars for reclamation and i'm
atoms when IL became obvious that they
could not succeed. One OF the strongest
cities in New Jersey also was compelled
to abandon its negotiations for a rela-
lively small amount OF money for city
Improvement, because not a single BID
was received as a result Of the offering.
In fifty other different municipalities ia
the United States. which made offerings
OF bonds for the purpose of raising mon
ey for public parks OF various sorts dur
ing that period, no bids were received.
In the cases of actual record, something
over &,5OO0OO OF offerings Of this sort
failed to attract bidders.
II is. OF course, ridiculous to suppose
that the known cases of such curtail
ment are more than a fraction OF the
actual number Of cases. For every dol
lar Of work set back. delayed or aban-
doned by the cities and other municipal
tiles, there is probably at least another
81 Of work set back. delayed or aban-
doned by corporations. There has been
no important bond issue or stock issue
by any great American corporations
since the war broke out. II does not
appear likely at this writing that any
amount Of such financing
will be possible for some time to come.
The effect, of course, is problematical.
The loss to the laboring class and TO the
producers of raw material from the alb
solutely sudden tying up of all sources
OF capital for an indefinite length OF
time. cannot be mea sured in dollars ana
cents in advance. II will be offset to
some extent. of course, by the increase
Of wealth, as n result of higher prices
for cereals and for foodstuffs. What the
cotton planters Of the eSouth will lose
as a result OF the cutting of Of the,
rEaf for COffnn the
growers of wheat and corn and cattle in
the West may gain. These are pro-
ducts that enter into immediate consump-
ton.
Every one knows, however, that there
are thousands of Industries, great and
small in this country whose products
are not sold for daily consumption and
paid for out of the net earnings Of the
people day by day. but whose products
are used only as capital goes to work. |
II the war in Europe makes capital idle |
for any great length OF time. there is no |
doubt that the shoe will pinch pretty !
tight on the foot of labor.
1t Is well, Of course, to be as optimistic !
as logic and fact will permit, but It Is !
well also not to be blind or fatuOus when |
face to face with facts. One cannot dis |
guise the fact that the direct losses In |
many branches of American business will !
be great. as. for instance. in the import !
trade, particularly such branches of II |
rs draw their raw material from Central |
Europe, and in such business as have |
branches in Europe. 1t may also be |
aiken for granted that the curtailment |
If industry as a result of Gripping and /
Stagnation Of capital will, II the war
continues long. be enormous. 1t is well, |
therefore, not to be misled by super
icial arguments into feeling Of thought
ess security. There is nothing in sight
10 cause q logical man to lose faith in
standard American securities or TO at
empt to throw them overheard at any
price. There is, however, plenty OF fact
n sight to justify the most extreme
,aution and to lead to consistent care
md watchfulness not only in the matter
If investments, but in all business mat |;