The diminution in the supply of the raw materials
of manufacture would be much greater and more immediate. Something like
half the manufacturers of Great Britain must close their works for want
of materials. But will the other half be able to carry on? Foreign
orders they cannot possibly execute, because there can be no certainty
of the delivery of the goods; and even if they could, the price at which
they could deliver them with a profit would be much higher than it is in
peace. For with a diminished supply the price of raw material must go
up, the cost of marine insurance must be added, together with the extra
wages necessary to enable the workmen to live with food at an enhanced
price.
Thus the effect of the greater difficulty of sea communication must be
to destroy the margin of profit which enables the British capitalist to
carry on his works, while the effect of all these causes taken together
on the credit system upon which our whole domestic economy reposes will
perhaps be understood by business men. Even if this state of things
should last only a few months, it certainly involves the transfer to
neutrals of all trade that is by possibility transferable. Foreign
countries will give their orders for cotton, woollen, and iron goods to
the United States, France, Switzerland, and Austro-Hungary, and at the
conclusion of peace the British firms that before supplied them, if they
have not in the meantime become bankrupt, will find that their customers
have formed new connections.
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