524 THE WORK OF THE STOCK EXCHANGE 
The Post-Armistice Adjustment—To win the war, 
American commerce, agriculture, industry, and finance had 
under necessity thrown sound economic principles to the winds. 
Prices and rates were everywhere artificially “regulated” and 
restrained. Inevitable as were these developments during the 
war, after it they became intolerable. As the “controls” were 
one by one relaxed during 1919-21, long pent-up economic 
forces vented themselves upon the markets with universal and 
unaccustomed violence. On the one hand, a hunger for goods 
long denied by war restrictions seized the world, and commod- 
ity prices, bank loans, stock prices, and interest rates every- 
where soared. An illusion of unlimited wealth possessed a 
world temporarily impoverished by the vast sacrifices of the 
war. In March, 1919, governmental support of the European 
exchange rates was withdrawn, and these currencies began a 
precipitous descent which in some cases ended in complete 
collapse and repudiation. In November, 1919, prices on the 
New York Stock Exchange began an ominous decline. The 
silk panic in Japan at the outset of 1920 was succeeded by a 
universal wave of commodity liquidation that in following 
months swept the world. To practical panic succeeded a 
period of stagnation and prostration, which in America reached 
its nadir in the summer of 1021. 
The Role of America.—The crisis of 1919-21 for many 
reasons proved less serious and lasting in the United States 
than in the other great belligerent nations. Unknown to our- 
selves, we had during the stress of war become the greatest 
creditor nation in the world. After a century during which 
we had always owed other nations, this country suddenly found 
that it had repurchased most of the American securities pre- 
viously held abroad, and that vast sums were now due our 
Treasury for sums which it had advanced to other govern- 
ments during the war. In addition, America had suddenly 
thrust upon her not only much of the world’s gold supply, but 
also the unfamiliar role of acting as the world’s banker and