276 
INTERNATIONAL TRADE 
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a 
results which would presumably come in the long run do come at 
once and without a hitch. The mechanism of outflow of money, fall- 
ing prices, increasing exports, declining imports — all this automatic 
readjustment — does not work out its results in one year, or two, 
or three. It has been abundantly set forth in the preceding pages 
how long a time must be allowed before the eventual consequences 
appear, before the final readjustment can be expected. It is not 
to be supposed that a sudden huge remittance can be really brought 
about in this way. If we picture to ourselves a situation such as 
Adam Smith tried to analyze — subsidies which exceeded in 
amount the whole circulating medium of the country — and imag- 
ine a sudden export of perhaps half of the specie, we must imagine 
further a collapse of prices, a complete disorganization of trade and 
industry, a chaos in which neither exports nor imports could move 
quickly or in large volume, from which recovery and readjustment 
would be long and disastrous. Clearly nothing of the kind hap- 
pened in 1756-63. Nor can this sort of explanation fit the con- 
ditions of the Napoleonic period. The Ricardians imagined that 
changes in prices would follow quickly and smoothly from the 
inflow and outflow of specie; goods would also move in and out of 
the country with ease and promptness. The whole machinery 
would work without giving any trouble, without disconcerting 
either the business world or the public Treasury or the observing 
economist. This intellectually courageous simplification of the 
problem is quite out of accord with the experiences of their own 
times or of any later time when there was the sudden impact of a 
huge remittance. 
What then has happened? What was the course of events in the 
Seven Years War? What in the Napoleonic period? What in 
the Great War of 1914-1918, when Great Britain advanced 
enormous sums to her allies ? 
I have no more than a provisional hypothesis to offer; no more 
than this, at all events, on the earlier cases. As will be seen when 
the extraordinary operations of the Great War come to be con- 
sidered, they are susceptible, as regards the mechanism of inter- 
national payments, of a comparatively simple explanation. The