e prices
of bonds, will be an increased difficulty of financing our own
enterprises. Only the most promising enterprises will be able to sell
their securities. This means that we shall be neglecting, to some
extent, our own enterprises, to finance the European war instead.

This general depreciation of investment securities will doubtless lead
to many bankruptcies, if not to a genuine crisis. It will also give
tempting opportunities to investors. The likelihood of a genuine panic
is lessened by the fact that every one recognizes the real cause of the
disturbance and that insolvency is not suspected. According to the best
commercial observers, the previous liquidation had been fairly well
completed. Unless they are mistaken, disaster will not be likely to
follow.

We repeat that since the necessities of Europe have forced her to buy
our food in return for her investments, it is evident that during the
war food prices will be high and security prices, especially bonds, will
be low. These are the two facts of greatest economic significance to us.
To the country as a whole they defer some of our pleasures till after
the war. Uncle Sam will cut down for the present on his eating and
drinking, his clothes, shelter, and amusements in order to share his
rations with Europe. Instead of the pleasures foregone he will
invest--not in new enterprises at home, but in old ones--American and
possibly European also--purchased of Europe. We can never have our cake
and eat it too. In this case we shall let Europe eat some of it on
condition that she in turn shares hers with us after the war. Moreover,
we shall trade off a relatively small piece of our present cake for a
relatively large piece of Europe's future cake. In other words, Europe
will fill up the great breach in her income now impending by inducing us
to make a small breach in ours. The result will be that the course of
our real income, that is, economic satisfaction or enjoyable
consumption, will imitate in some degree that of Europe. This is,
reduced to its lowest terms, the chief economic result of the war.

But to many the question is, do we gain or lose, as compared with what
might have been the case if there had been no war? I do not think any
one can answer that question with certainty. Europe is willing to
mortgage its future to us on terms very advantageous to us; but when the
future comes, the purchasing power of money will probably be so much
lessened as to have ab