The Washington herald., 1915-05-17
A Pessimist's View of the War.

OF the and after its termination, we notice
letter written by Mr. Victor Morawetz to the
New York Times in which Mr.. Morawctz places
himself in opposition although not in very em-
phatic way to the opinion that the is of any
decided benefit to the United States. Mr.. Mora
wetz is an economist of rank, but he is commonly
esteemed a good deal OF theorist. He usually
writes nformingly upon any subject that he dis
cusses; but in the present instance either do
not understand exactly Mr. Morawetz's views or
must express ourselves in disagreement with
them. at least in great measure.
To begin with we must take issue with Mr..
Morawetz's fundamental statement that thus far
the war in Europe has not increased material pros
pcrty in the United States at all and this is shown
by the widespread unemployment OF labor. by the
large falling off in the production OF basic ma
teria in the industrial world such as iron and steel,
and by the prevailing general depression OF bust
ness. In this at least Mr.. Morawetz is plainly in
error. Business greatly depressed in this
country up to few months ago. But lattcrly
business, any rate in basic lines, has decidedly
improved. The production OF iron, OF which MIR.
Morawctz specifically speaks, is signal case IN
point. The average daily output OF the country
iron furnaces compiled by the Iron Age rose
from 66 500 in March to 20. 500 tons in April,
which was the highest average since April 1914.
On the first of the present month the daily output
was ~ 500 tons showing that there has been
progressive increase in the production OF the
staple The monthly output has increased nearly
AZ per cent since December Prices OF pig iron
and Of many iron and steel products are higher.
All the data obtainabe is TO the effect that while
there is large number OF people the country
unemployed, the number is much less than it was
in the closing months OF last year. Railroad earn
-.l, nd nnSt
significant OF ALL bank cearinss the country over,
even in cities out sidc OF New York where the num-
Der OF checks passing through the banks has prob
ably been enlarged to a certain extent by the &C
tivity the stock exchange, arc much larger than
thcy were. Indeed it is hardly point worth con-
trovcrting that general business in the country is
not better than it Therefore regards MIR.
Morawctz's primary statement we have no hcsi-
fancy in saying that he is mistaken.
Mr.. Morawetz is undoubtedly right in affirming,
as he does, that the large foreign trade balance
that has been created for the II ted States since
the war broke will not OF itself bring us pros
perty But it is also unquestionably true, as 1t
seems to us, that a large foreign trade balance,
however created, and whether not it may be
due to exceptional causes will bring us increased
prosperity so far as it goes We feel that it is
worth while to devote some attention TO Mr.. Nora
wetz's letter because the views expressed by
him are entertained by large number OF people
Who as we believe, unduly pcssimistic at the
present time. 1t certainly is OF advantage to us
10 have large foreign demand for our products
of whatever description and he able to sell these
abroad AT higher prices than we ordinarily do. No
amount of any economists theorizing or mental
turning and twisting make anything else out
OF the matter. or course country must receive
he oil AT iCh
prices in some form that will prove ultimately re-
munerativc to us. We must be paid either in cash
or in the equivalent OF cash, and ii OF these
equivalents is the taking back of securities
at low prices our country is enriched thereby.
OF course the ideal condition is for a country'S
trade with other nations sell its goods in such
4 way that these imports of her merchandise by
foreign nations will contribute the wealth OF
these nations ard be the subjects OF industrial
development that will benefit the world. But the
TACT that the merchandise sent to Europe IS to
grclt extent Immediately destroyed surely docs
not make the trade unfavorablc from the point OF
view OF the United States even though it is not
favorable as it might have been from the point OF
view OF an dcalistS political economy. No one
DISPUTES that the total Of tho worlds wealth is les
scncd hv the European struggle but it is equally
indis putab1c that the share OF the United States in
the wealth that remains j. relatively increased.
For he il remembered, the goods that the United
States is exporting to Europe under these con-
ditions do not represent any diminution OF the
actual wealth OF or country. For the most part
it is only that portion OF the wealth OF the United
States which is yearly taken from the ground in
tho shape OF crops minerals In this respect
our wealth must be considered practically in
{ xhaustiblc and the that sell OF it,
especially at prices greatly above the average the
better off
1t is true that after the war orders for ammu-
milton and the simila. products will be less than
they are now and that producer of these articles
" no has been so foolish to go to great expense
in crlarCine his plant will lose money there
BY that is 10 say if his enlargement OF plant has
been OF an extremely costly OF ovcrextend-
ed character In other words If he has been so
foolish as to make great conversion OF capital
to any fixed form in order to meet demand which
is in its nature exceptional he will find when
normal demand takes the place of the exceptional
demand that he has made mistake. But so far
as W, can find the conversion of capital Of this
kind that has taken place in country has not
been dangerously large. We hear in certain in
stances OF mills ordinarily devoted to a specific