The Blackfoot optimist. [volume] (Blackfoot, Idaho) 1907-1918, 1915-05-27
Relation Of Foreign Trade
To Domestic Prosperity

Europe and considerable quantities were
shipped from the United States to
Canada and placed on deposit there with
the agents of European and particularly
London banks. The exports of gold
in the months succeeding the war and
until reverse movement began totalled
$14,941274.
In the few days succeeding the de-
claration of war there was practical
cessation of American imports and ex
ports and it was not until the control
of the sea was settled that shipments
began to be made with regularity and
even then many classes of commodities
were excluded from trade either be-
cause their shipment at the high rates
prevailing proved to be uneconomical
or because their shipment to certain of
the belligerent countries became i'm
practicable. 1t was NOT until many
weeks after the outbreak Of the war
that it became possible to ship cotton
in the quantities that are normally
ShAPPSu az UHdU SCdSOH VI VIC year. 1uV
consequence was that cotton which was
selling at 1875 cents a pound on July
30 sold at rs cents upon the reopening
of the cotton exchange about November
I20th.
The strain on the currency system of
the country was evidenced by the resort
to the issuance of emergency currency
The banks began to take out emergency
!currency soon after the outbreak of the
trouble in August of last year. They
|could only get the additional notes Sc
cured by commercial paper, etc, though
the medium of the national currency
associations provided for in the Aid
richVreeland Act of 1908. Through
hese associations emergency currency
was issued to the extent of $3S4,4S2,-
,025.
Twelve clearing houses made use of
oan certificates. The aggregate
amo-nt issued was $211,77S,OOO The
otal amount of emergency currency is
ued, therefore, during the 1914 crisis
was 1896, 2sO,o25,
1t may be interesting to note in this
connection, and as rough index of the
gravity of the situation, that the
issued during the crisis of 1907 amount
ed to 1886, $4,000, and that the clear
ing house certificates issued during the
crisis of 1898 amounted to 500, Ill 900
The gravity of the situation and also
/, the recovery which was rapidly made
by means Of our improved currency
measures, as indicated by the large
amount of emergency currency which
was outstanding on the first of No
vember and by the fact that it was
rapidly called in during the early weeks
of 1915, and that at present there is
outstanding only $5,016.130.
With the first definite intimation
that war had broken out in France
the bourses and stock exchanges of
the principal countries of the world
had closed. This occurred on July 81
The stock exchanges were closed in
order to prevent a wholesale dumping
of securities which would have brought
, about tremendous reductions in mark ct
values. The conditions at the outbreak
OF any war approximate panic condi-
tons and the people in general are
anxious to convert their securities into
ready cash. 1t is during such panic
period that large amounts of hard mon
ey are put away in stockings and safe
ty Vaults. The stock exchange, however
is only a convenient market where Sc
curities may be bought and sold. With
the stock exchange closed it becomes
difficult for private individuals to find
a market for their securities and thev
; are practically forced to hold them.
This result was obtained by closing the
New York stock exchange
The declarations of moratoria in the
principal countries of the world were
also emergency measures taken to pre-
vent panic conditions. Payments be-
as result of the declarations of war
in Europe. 1t become practically and
physically impossible for debtors in one
country to pay creditors residing in
another country. 1t also enabled those
who had contracted considerable debts
to bridge over the panic period
The outbreak of the war completely
shattered the well established lines Of
communication. 1t effectively cut off
two European countries from communi-
cations with large part of the rest
of the world and it made travelling by
sea dangerous. Over and above this
it was computed that Germany and
Austria Hungary owed London, when
the war broke out, about 10000, 900
pounds sterling which London had no
means of collecting. Therefore, the
bill acceptors of London found their