War causes an actual diminution of a country's wealth in two ways. First, it takes men out of pro ductive employments and puts them into battle; sec ond, thoseiinen while continuing to be great consumers of foodstuffs and clothing become also consumers of vast quantities of munitions, which have been pro duced at great cost by the men, women and children who stay at home. A war which calls to the front even no more than one-tenth of the men of fighting age and ability necessarily causes an economic or industrial upheaval. If a million men take up arms many mil lion others must change _their occupations, stop pro ducing the useful ob jects of commerce, and work in the manufacture of ammunition and war supplies. Thus a war not only brings about a physical destruc tion of vast amounts of wealth, such as bombs, air planes and battleships, but also causes a lessened pro duction of the articles ordinarily produced for the sat isfaction of human wants. If a crazy king had the confidence of his subjects and should order that one fourth of all the produce of their labor be taken to sea and sunk in the ocean in order that -the gods be pro pitiated, he would do his people less economic injury than would be wrought if he plunged them into war.
16. Economic effects of war real effects of war upon industry, upon consumption and upon the economic welfare of a people are veiled dur ing its progress. The government raises immense sums of money- by means of taxation and bond issues and enters into the various markets as a gigantic buyer of the products of labor. New factories are built and the demand for workers is insatiable, labor and capital being diverted from many industries. The prices of foodstuffs and of most of the necessaries and comforts of life also advance because of the war demand, because of the scarcity of productive labor and because of the great expansion of credit incident to the war loans. During the progress of a war busi ness changes its character, but is active; many indi viduals make fortunes ; and all classes of labor de mand higher wages. The country seems to be more prosperous than ever, and unthinking people do not see that it is actually growing poorer every day. If a million men of gigantic stature should capture the United States and compel its people to feed, clothe and house them comfortably, every one of us would realize the cost, yet the economic effect would be much like that of war.
Not until after a war is ended and 'all extraordi nary expenditures by the government have ceased, do the people of a country begin to pay its economic costs. Only a small part of this cost is represented by the interest which must be paid on the capital bor rowed and destroyed during the war. When people
return to the industries of peace it is soon discovered that the old markets have lost their buying power and that the amount of capital available for production is less than had been supposed. Then comes a period of depression which is like that of convalescence after a fever, the nation as a whole being industrially feeble and incapable of new enterprise. If a country can get thru such a period without a financial panic or a commercial crisis and without great distress among large numbers of unemployed, the people may con sider themselves fortunate and should be grateful rot only to God but also to their entrepreneurs, their cap tains of industry and finance, who during the period must have most wisely regulated their production if not their consumption of wealth.
17. The destructive power of nature.—From time to time a vast amount of wealth is destroyed by storm, fire and flood. A tornado on the Great Lakes and along the east coast of the Atlantic not long ago drove hundreds of vessels ashore, drowned many persons and destroyed valuable cargoes. In 1913, a storm on the Japanese coast, accompanied by a volcanic erup tion, killed thousands of people and destroyed the property of many more. The report of the engineer ing division of the War Department states that the annual loss from floods in the United States averages $50,000,000. In the Ohio flood in 1913, the loss to railroads, cities and private individuals amounted to hundreds of millions.
Losses by fire add to the appalling aggregate of wealth destruction. In recent years the fire losses in the United States are estimated at about $200,000,000 a year ; and despite the efforts of the insurance com panies and other agencies to limit the size and fre quency of fires, the absolute amotmt of waste has de clined but slightly. The newness of some parts of the country, the absence of regulations for building in many places and the failure to provide first-class pro tection against fires, give the United States a per capita fire loss which is from five to six times as large as that of any of the leading European countries.
18. Consumption and progress.—From a purely materialistic point of view a nation can be said to be making progress when the labor of its people produces greater wealth, whether because of new inventions and machinery, or because better conditions of living have improved their health and increased their energy, or because they have been better trained and organized. Progress of this sort would mean an increasing demand among all the people for the necessaries and comforts of life and doubtless an increase in the variety of goods which they consumed.