20 THE ECONOMIC CONSEQUENCES OF THE PEACE ch.

port, and at the same time enabled the Old Worldto stake out a claim in the natural wealth and virginpotentialities of the New. This last factor came tobe of the vastest importance. The Old World em-ployed with an immense prudence the annual tributeit was thus entitled to draw. The benefit of cheapand abundant supplies, resulting from the newdevelopments which its surplus capital had madepossible, was, it is true, enjoyed and not postponed.But the greater part of the money interest accruingon these foreign investments was reinvested andallowed to accumulate, as a reserve (it was thenhoped) against the less happy day when the indus-trial labour of Europe could no longer purchase onsuch easy terms the produce of other continents, andwhen the due balance would be threatened betweenits historical civilisations and the multiplying racesof other climates and environments. Thus the wholeof the European races tended to benefit alike fromthe development of new resources whether they pur-sued their culture at home or adventured it abroad.

Even before the war, however, the equilibriumthus established between old civilisations and newresources was being threatened. The prosperity ofEurope was based on the facts that, owing to thelarge exportable surplus of foodstuffs in America,she was able to purchase food at a cheap rate measuredin terms of the labour required to produce her ownexports, and that, as a result of her previous invest-