Year: 1866

To THE EDITOR OF THE CHICAGO TIMEs.


The financial effect Of the European war


does not seem to be fully understood. The
popular idea is that it will have the effect


to increase the demand for, and conseguent-
" the value of American securities. et us


see how this belief accorzls with the probable


state Of the case.


During our war the demand for foreign


securities amounted to exactly nothing. For


eign investments may have presented them


selves as safer; but who for the sake of a


speculation, however sure, bnt which would


only yield, say per cent, would overlook


one little less secure, but which promised


four or five times larger returns?


1t is not true as general thing that wars
drive capital from country. On the con
trary, with war come opportunities forrigky


but profitable speculations and it is into
these that money always finds its way. The
Austrian Government must have horses.
There will be vast contracts for the delivery
Of horses; and the profits will be such that n
few, If any, can resist the risk in view of the
probable returns. The same Is true of oats.
of army cloth, Of supplies of coffee and food
of every description. Contracts for all these
articles will be eagerly sought for; and there
will be a demand for money to carry them
out and the demand will be supplied. What
is true Of Austria is likewise true of Prussia.
Bavaria, Hanover, Saxony, Italy, and, in
fine, Of all the countries which are involved
or win be in the present war.


1t is quite true that among few of the
more timid there may arise a demand for
American or some foreign securities. But
the number of these is snaiI. There are
now indications that there is much dissatis-
faction with the war, Jut all this will dissp-
pear as soon as the first blow is struck and
national pride becomes interested in the
result.


If we are benefited to any extent by this
European war, it will be by a demand for
our breadstufis. Even this is improbable,
in view of the fact that it is not long since
France found it profitable to ship flour TO
New York. Nor is it likely that there will
be great demand for our manufactures.
In everything, almost, British manufactures
can undersell US in our own market; and
hence, it is not probable that we could COM
pete with them 50 near their own workshop.
Even if there were no Britain, there is
France whose manufacturing ability is
scarcely inferior to that of its English rival.
Prussia to-day, in the markets Of Europe, is
a successful competitor Of the English man
ufacturer.


1t seems much more probable that there
will be a lessened in place of an increased
demand for American securities in the Ger
man market The demand for money for
speculative purposes will be so great that
people holding our securities will be anxious
to realize upon them with view of securing
the higher returns offered by home invest
ments. In view of this fact, it is by no
means improbable that the tide Of American
will set from the east to the west,
in place Of from the west to the east
It will be much better and safer for Ame-
rican capitalists to proceed cautiously in this
matter. The individual who bases his Ope-
rations upon an increased demand for our
securities abroad, is running the risk of
making a serious mistake.