One of the dislocations of the war in the United States will be the cutting off of imports of a large part of our dutiable commodities, and therefore the loss of national revenue.  There is an urgent need to compensate for this loss by some other form of tax.

But it is well not to lose perspective, to remember that dislocations are not necessarily losses, that, however loudly they are proclaimed in news columns, they are small in extent, when considered in relation to our whole trade, that this country of ours is a vast one, and that the rank and file of Americans will be but slightly affected by the war—­especially by contrast with our friends, now fighting each other, across the sea.

We are too nearly self-supporting to be prostrated.  Our foreign trade is and always has been a trifling matter compared with our internal commerce.  The internal commerce paid for by money and checks annually in the United States amounts to nearly five hundred billions of dollars, which is more than a hundred times as much as our combined exports and imports.

Almost all of what has been said so far had grown out of the prospect that the prices of foods and other materials needed in Europe will be high, while the prices of securities which Europe does not need and cannot afford will be low.  Other prices will rise or fall according to special circumstances.  Like a bomb-shell, the effect of the war will be to disperse or scatter prices at all angles of rises and falls.  The prices of luxuries will be lowered.  The prices of chemicals will be raised.  The same article will fall in price in one country and rise in another if the transportation from the former to the latter is interfered with.  This is true today of cotton.

There has already been a speculative movement to anticipate these changes and arbitrarily to mark some prices up and some prices down.  But as this is guesswork, and will be subject to frequent revision, one of the striking phenomena will doubtless be an increase in the variability of prices.  The general level of prices will tend to rise.  The rise will probably be greatest in little countries like Belgium, which are in the war zone and largely dependent on foreign trade.  The rise will be less in England and in the United States than on the Continent.  In fact, it is conceivable that in England the hoarding of money and the shock to credit, which is as predominant there as it is here, may actually lower the general level of prices during the war, especially if we could include in the index number the prices of securities, luxuries, and articles of English internal trade.  If any nation tries the old experiment of paying its bills in irredeemable paper money, that desperate expedient will have the same result that it did with us during the civil war.  Inflation of the currency will expel gold from that country and raise its price level higher than elsewhere.