One of the most interesting developments arising out of the great war and one which appears to be no means unnatural, is the present unhappy condition of exchange between the various countries of the world and the results which it is having upon trade relations throughout the universe. It must be remembered that during the war the normal habits of trade were rudely disrupted not only for combat ants but for neutrals as well and before the war had lasted many months the inevitable results of that disruption were becoming apparent, though probably not the extent to which the trade of the world would be affected. To understand the position so far as anything but a technical paper can explain it, it must be appreciated that while the balance of trade of any one country had to be financed by the movement of bullion, that movement was kept at something in the nature of a minimum by natural factors which were operating in the ease of every nation in the world.
Tua Drain or Gown.
Specie shipments continued so long as the seas were safe or until certain countries found they could not afford to release gold. In Great Britain, for instance, when the danger of parting with gold holdings was in sight, other measures were taken, such as the depositing of foreign securities held by companies and private individuals with the Government as collateral security against borrowings in America. In the meantime, however, and for long afterwards, those combatants, who could, maintained the import of munitions of war in order to meet the imperative demands of a struggle which could not be sustained out of the resources of the Allies as they were in 1914 and as they were subsequently developed.
Had the export trade of the Allies remained exactly where it was in 1914 this state of affairs would have been economically bad enough, but when to this was added the facts that establishments manufacturing for exports had to direct their attention to filling the more pressing needs of the nation and that shipping, which could have carried some goods abroad somewhat to redress the ever increasing adverse trade balance, was diverted to the carriage of munitions, troops, foodstuffs and the necessity of maintaining large armies in the field, that the labour supply was restricted and that from the ordinary pursuit of business the civilian populations of the belligerents were turned to work involving—for the time at any rate—the rapid expenditure of what was after all capital rather than income—when all this is considered, it will be seen that not only had more money to be found to finance adverse trade balances, but that the prospect of wiping off the indebtedness created by this capital expenditure (for a mortgage on the resources of a nations can amount to nothing less) was being considerably reduced.
Text read from the printed page and cleaned; old type leaves the occasional error.