STOCK EXCHANGE AN INTERNATIONAL MARKET 519 
now been largely repaired, the debts proceeding from it may 
not be liquidated for many years. While our capitalistic 
scheme of things has triumphantly survived this severest test 
ever made of its ability to endure, nevertheless profound 
economic changes have been produced by it practically every- 
where. In few countries have these changes been more arrest- 
ing than in the United States, and in few branches of American 
business more completely so than in American finance. Itis today 
a futile dream to expect any return of pre-war conditions— 
for better or for worse the world in which we live has been 
permanently transformed by the war. If we are to understand 
our modern society, and particularly its capital markets, we 
cannot remain satisfied with descriptions, explanations or eco- 
nomic theories which originated before Sarajevo. 
The Stock Exchange at the Outbreak of War.——When 
out of a clear sky the Great War burst upon Europe, America 
was still heavily a debtor nation. For over a century our 
surplus visible exports had balanced surplus invisible imports 
of foreign capital which had been used to build up this country. 
Europe, and particularly England, had accumulated billions of 
dollars’ worth of our choicest securities, many of which were 
listed on the New York Stock Exchange. When the war 
came, the Berliner Borse practically suspended, and on July 
31 the Stock Exchange of London, the Paris Bourse and other 
leading European stock exchanges suddenly closed. This 
fateful closing of the European capital markets was reported 
over the cables to New York. On the momentous morning of 
July 31, therefore, the New York Stock Exchange was the 
only great securities market in the world still open, and owing 
to the universal panic abroad it was threatened with an ava- 
lanche of selling orders from Europe, representing a frantic 
attempt to liquidate here and at once vast amounts of these 
foreign-owned American stocks and bonds. The untoward 
event was wisely prevented by the Governing Committee, 
which a few minutes before 10 A.M. announced the official