The vital interdependence here indicated, cutting athwart frontiers, is largely the work of the last forty years; and it has, during that time, so developed as to have set up a financial interdependence of the capitals of the world, so complex that disturbance in New York involves financial and commercial disturbance in London, and, if sufficiently grave, compels financiers of London to cooperate with those of New York to put an end to the crisis, not as a matter of altruism, but as a matter of commercial self-protection. The complexity of modern finance makes New York dependent on London, London upon Paris, Paris upon Berlin, to a greater degree than has ever yet been the case in history. This interdependence is the result of the daily use of those contrivances of civilization which date from yesterday—the rapid post, the instantaneous dissemination of financial and commercial information by means of telegraphy, and generally the incredible increase in the rapidity of communication which has put the half-dozen chief capitals of Christendom in closer contact financially, and has rendered them more dependent the one upon the other than were the chief cities of Great Britain less than a hundred years ago.
A well-known French authority, writing recently in a financial publication, makes this reflection:
The very rapid development of industry has given rise to the active intervention therein of finance, which has become its nervus rerum, and has come to play a dominating role. Under the influence of finance, industry is beginning to lose its exclusively national character to take on a character more and more international. The animosity of rival nationalities seems to be in process of attenuation as the result of this increasing international solidarity. This solidarity was manifested in a striking fashion in the last industrial and monetary crisis. This crisis, which appeared in its most serious form in the United States and Germany, far from being any profit to rival nations, has been injurious to them. The nations competing with America and Germany, such as England and France, have suffered only less than the countries directly affected. It must not be forgotten that, quite apart from the financial interests involved, directly or indirectly, in the industry of other countries, every producing country is at one and the same time, as well as being a competitor and a rival, a client and a market. Financial and commercial solidarity is increasing every day at the expense of commercial and industrial competition. This was certainly one of the principal causes which a year or two ago prevented the outbreak of war between Germany and France apropos of Morocco, and which led to the understanding of Algeciras. There can be no doubt, for those who have studied the question, that the influence of this international economic solidarity is increasing despite ourselves. It has not resulted from conscious action on the part of any of us, and it certainly cannot be arrested by any conscious action on our part.11
A fiery patriot sent to a London paper the following letter:
When the German army is looting the cellars of the Bank of England, and carrying off the foundations of our whole national fortune, perhaps the twaddlers who are now screaming about the wastefulness of building four more Dreadnoughts will understand why sane men are regarding this opposition as treasonable nonsense.
What would be the result of such an action on the part of a German army in London? The first effect, of course, would be that, as the Bank of England is the banker of all other banks, there would be a run on every bank in England, and all would suspend payment. But London being the clearing-house of the world, bills drawn thereon but held by foreigners would not be met; they would be valueless; the loanable value of money in other centres would be enormously raised, and instruments of credit enormously depreciated; prices of all kinds of stocks would fall, and holders would be threatened by ruin and insolvency. German finance would represent a condition as chaotic as that of England. Whatever advantage German credit might gain by holding England’s gold it would certainly be more than offset by the fact that it was the ruthless action of the German Government that had produced the general catastrophe. A country that could sack bank reserves would be a good one for foreign investors to avoid: the essential of credit is confidence, and those who repudiate it pay dearly for their action. The German Generalissimo in London might be no more civilized than Attila himself, but he would soon find the difference between himself and Attila. Attila, luckily for him, did not have to worry about a bank rate and suchlike complications; but the German General, while trying to sack the Bank of England, would find that his own balance in the Bank of Germany would have vanished into thin air, and the value of even the best of his investments dwindled as though by a miracle; and that for the sake of loot, amounting to a few sovereigns apiece among his soldiery, he would have sacrificed the greater part of his own personal fortune. It
