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> Every major economic change produced by war, even the creation of new industries, is a dislocation which upsets the world for a long time afterward. Every neutral which had a war boom in 1914-18 had a post-War depression when its wartime markets were lost. In the case of the last war, after the first depression of 1921, the neutrals settled down to a decade of struggle with the recovering belligerents for the markets of the world.
Cuba's sugar millionaires in 1919 became sugar paupers by 1921 and Cuba suffered severe depression. Chile's Wartime profits in nitrates and copper were followed by post-War losses that wrecked her economy. U. S. farmers, who during the War period had sold all the grain that they could raise, found themselves in the post-War depression with crops they could not sell and progressively went bankrupt all through the twenties. The depression of 1929 was the culmination of this struggle for markets.
> The money profits of neutrals rose with war-induced inflation but the profits were for the most part taken from them by the high cost of living. Everywhere war produces a shortage of the goods that make for real prosperity in peace. For war is the opposite of free trade. A world war shuts off trade, like shutting the gate of a dam, at one clap, and it may take years for a mutually profitable exchange of goods and services to reestablish itself.
> The labor and capital which war induces neutrals to pour into industrial plants is not wasted—World War I made the U. S. the world's greatest industrial nation. When war ends the markets for war-built industries collapse and those who have built them may lose their investment. But the plants so built are not lost. New markets are eventually found for basic industrial products and the greater part of such industries remain as assets to society, producing real wealth.
Not so are the goods—whether food or cannon—which are exported to belligerents. Experience of the last great war shows that they might as well be burned or dumped at sea, for little if any real wealth is ever received in payment for them. They are paid for only with promises to pay or with gold, which is virtually as useless, so that war-born prosperity remains an illusion. Even after the war, if debtors try to pay by shipping goods, creditors commonly lock them out by tariffs.
War gives neutrals a choice between stimulation and stagnation. They can sit at home and count their losses while trade stagnates and costs of living mount. Or they can ride the crest of an economic wave, feeding and arming belligerents—making a gift offering of their wealth as a subsidy to war. They also suffer who do not fight.
* Eight Latin American countries declared war in 1917 and 1918: Brazil, Costa Rica, Cuba, Guatemala, Haiti, Honduras, Nicaragua, Panama. But practically speaking none of them took part except economically.