CLOSING THE STOCK MARKETS
We have so far dealt with only a few of the results of the war. There were various others of great moment, to some of which a passing allusion has been made.
On July 30th, for the first time in history, the stock markets of the world were all closed at the same time. Heretofore when the European markets have been closed those on this side of the ocean remained open. The New York Exchange was the last big stock market to announce temporary suspension of business. The New York Cotton Exchange closed, following the announcement of the failure of several brokerage firms. Stock Exchanges throughout the United States followed the example set by New York. The Stock Exchanges in London and the big provincial cities, as well as those on the Continent, ceased business, owing to the breakdown of the credit system, which was made complete by the postponement of the Paris settlement.
Depositors stormed every bank in London for gold, and the runs continued for a couple of days. In order to protect its dwindling gold supply the Bank of England raised its discount rate to 8 per cent. Leading bankers of London requested Premier Asquith to suspend the bank act, and he promised to lay the matter before the Chancellor of the Exchequer. In all the capitals of Europe financial transactions virtually came to a standstill. The slump in the market value of securities within the first week of the war flurry was estimated at $2,000,000,000, and radical measures were necessary to prevent hasty action while the condition of panic prevailed.
This sudden stoppage of ordinary financial operations was accompanied by a similar cessation of the industries of peace over a wide range of territory. The artisan was forced to let fall the tools of his trade and take up those of war. The railroads were similarly denuded of their employees except in so far as they were needed to convey soldiers and military supplies. The customary uses of the railroad were largely suspended and travel went on under great difficulties. In a measure it had returned to the conditions existing before the invention of the locomotive. Even horse traffic was limited by the demands of the army for these animals, and foot travel regained some of its old ascendency.
War makes business active in one direction and in one only, that of army and navy supply, of the manufacture of the implements of destruction, of vast quantities of explosives, of multitudes of death-dealing weapons. Food supplies need to be diverted in the same direction, the demands of the soldier being considered first, those of the home people last, the latter being often supplied at starvation prices. There is plenty of work to do—of its kind. But it is of a kind that injures instead of aiding the people of the nations.