CHAPTER 25 
Tae Uxtrep States, III. ArreEr 1914 
Fan 
ulier 
THE present chapter deals with the international trade of the 
United States during the years of the Great War and of the period 
immediately after it. In carrying the narrative and analysis into 
this extraordinary and abnormal period, I depart from the plan 
of the previous chapters, which made no attempt to consider the 
war and post-war phenomena of European countries. The grounds 
for including the American experiences of this date are two. In 
the first place, the United States remained on a gold basis, and 
might be expected to illustrate the mechanism of international 
trade under specie conditions. Second, the events of the time led 
to unusual and striking operations bearing on our general problems. 
On the outbreak of the war, in July, 1914, the immediate effects 
were almost as disastrous in the United States as in the warring 
countries. A severe financial crisis was precipitated, so severe 
that the New York Stock Exchange, for the first time since 1873, 
was closed, and remained closed for a longer period than ever 
before in its history. There was a heavy drain of gold out of the 
country; gold payments were virtually suspended; foreign ex- 
change soared ; extraordinary measures were taken by the banks to 
meet extraordinary emergencies! But this stage of semi-collapse 
proved brief — so brief that it has almost faded out of memory. 
By the end of the year calm had been restored, and the export of 
gold ceased. The Stock Exchange opened in the early days of 
1915. There was a slow revival of industry and trade during the 
first half of that year, a more rapid revival in the second half. 
By 1916 the war boom set in. It lasted thru 1917 and well into 
1918. While a boom thruout, its economic characteristics were 
! For an excellent account of this first stage see an article by Professor O. M. W. 
Sprague in the American Economic Review, Sept. 1915. 
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