56 ESSAYS IN PERSUASION part

loans, and much of the money has been lost.Though wasted in part, they have helped Europe through the critical days of the post-Armisticeperiod. But a continuance of them cannot pro-vide a solution for the existing dis-equilibriumin the balance of indebtedness.

In part the adjustment may be effected bythe United States taking the place hitherto heldby England, France , and (on a small scale)Germany in providing capital for those newparts of the world less developed than herself—the British Dominions and South America .The Russian Empire, too, in Europe and Asia,is to be regarded as virgin soil, which may at alater date provide a suitable outlet for foreigncapital. The American investor will lend morewisely to these countries, on the lines on whichBritish and French investors used to lend tothem, than direct to the old countries of Europe .But it is not likely that the whole gap can bebridged thus. Ultimately, and probably soon,there must be a readjustment of the balance ofexports and imports. America must buy moreand sell less. This is the only alternative toher making to Europe an annual present.Either American prices must rise faster thanEuropean (which will be the case if the FederalReserve Board allows the gold influx to produceits natural consequences), or, failing this, thesame result must be brought about by a furtherdepreciation of the European exchanges, untilEurope , by inability to buy, has reduced herpurchases to articles of necessity. At first the