accumulated capital, which is thereby destroyed. All the things and
services needed for war have to be produced as the war goes on. The
warring nations start with a stock of ships and guns and military and
naval stores, but the wastage of them can only be made good by the
production of new stuff and new clothes and food for the soldiers and
new services rendered as the war goes on. This new production may be
done either by the warring powers or by neutrals, and if it is done by
neutrals, the warring powers can pay for it out of capital by selling
their securities or by pledging their wealth. In so far as this is done
the warring powers impoverish themselves and the neutrals are enriched,
but the world's capital as a whole is not impaired. If we sell our
Pennsylvania Railroad bonds to Americans, and buy shells with the
proceeds, we are thereby poorer and Americans are richer, but the
earning power of the Pennsylvania Railroad is not altered. It may be, if
we conduct the war wastefully, and refuse to meet its cost by our own
self-denial--going without things ourselves so that we can save, money
to lend to the Government for the war--that we shall pledge our property
and sell what of it we can sell to neutrals, to such an extent that we
shall be seriously poorer at the end of it. At present[9] we are not
selling and pledging our capital wealth any faster than we are lending
to our Allies; and if we pull ourselves up short, and exercise the
necessary self-denial, seeing that we must pay for the war in the long
run out of our own pockets, and that far the cheapest and cleanest
policy is to do so now, and if the war does not last too long, there is
no reason why it should impoverish us to an extent that will cripple us
seriously.

It is true that we shall have lost an appalling number of the best of
our manhood, and this is a loss that is irreparable in many of its
aspects. But from the purely material point of view we may set against