IF AMERICA DECLARED WAR

Dominion, Volume 8, Issue 2515, 17 July 1915, Page 12

IF AMERICA DECLARED WAR

PROBABLE FINANCIAL' CONSEQUENCES. The American papers now arriving by mail are. full of all kinds of comments concerning the sinking of the Lusitania and the strained relations resulting therefrom between Washington and ;Berlin. . One responsible journal, tho '"New Yprk Evening Post," comments upon the possible financial and economic conditions wliich might result 'should there be an actual severance of .diplomatic relations between tho States ,and Germany. Although the comment comes entirely from the standpoint of the business man, the forecast is not without interest as suggesting that .some of the thoughts of the writer may 'also' have been in the mind, of Germany itself when it showed its preparedness to risk a rupture witli the greatest civilised Power Which at is .not engaged in the conflict. Tho City of tho "Post" says:— "If the worst were to come, in the negotiations on the Note to Germany, there would necessarily bo some recasting of opinion in regard to the country's outlook. That we should be drag'ged into tho economic maelstrom in .which financial Europe is sinking is in all respects improbablo. We are not in tho theatre of war; as matters stand, it is diffioult to see how a break botween tho United States and Germany could mean more to either Power, in a governmental way, than the recall of Ambassadors by each, and the relinquishment by our own representatives, at the capitals of the Allied Powers, of tlio German interests for wliich wo havo been caring. A large war loan and an increase in the excise and income taxes would necessarily ensue, and probably a certain degree of precautionary re- ■ strain in our export of foodstuffs and war munitions. "But with theso results the chapter of immediate financial consequences would apparently end. Our gram harvests would continue, as before," to act as a mainstay of profit and prosperity. Our export trado would be .cut off from iio foi-eign'country from which it is not cut off already. The requirements of our own people, resulting from tho country's prolonged retrenchment aiid accumulated wealth, would bo tho same as tlioy aro to-rday. London would scarcely find any larger motive for 'unloading' its American securities than it has had over sinco last summer. The flow of foreign capital to Now York, for safekeeping or otherwise, would havo as much reason to continue as before. Tho movement of gold to Now York from Europo has already rison to dimensions as largo as might'havo been desired if we had been making ready for war. The facilities of otu- new banking system aro as yet so completely unemployed that the twelvo Resorve banks have only 11,000,00(1 dollar notes outstanding, and hold as rediscounts only 35,000,000 dollar bills, as against cash resources of 278,000,000 dollars of which 2'l'ljooo,ooo dollars aro gold."