The sudden lightning bolt of war produced as one of its first economic effects a general dislocation of credit machinery in Europe and to some extent in this country. We heard at once that letters of credit of travelers in Europe were uncashable. Gold was hoarded everywhere. It is estimated that about $30,000,000 in gold was hoarded in New York in the first week in August. Runs on banks were frequent. Bank reserves were depleted. The moratorium was resorted to to avoid a general cataclysm of bankruptcies which might have occurred--not from actual insolvency but from mere insufficiency of cash. To me one of the most striking phenomena was the promptness and effectiveness of the co-operative actions by which, so far, any business cataclysm has been avoided. The closure of Stock Exchanges perhaps saved us from general financial panic. Most striking of all is the manner in which the Governments of the world have come to the rescue of business. Those of us who were brought up in the old laissez-faire school have to rub our eyes. Had the world been guided by laissez-faire ideas, in this emergency we should in all probability have witnessed by this time the greatest collapse of credit the world has ever seen. Almost all the large and effective measures to meet the many emergencies arising were taken by Governments. The moratorium must be counted among the Governmental acts which, so far at least, have saved the day for business credits. In England the Government permitted suspension of the Bank act, (not of the Bank, as many Americans seem to imagine.) Improvised Accounting Methods. The Bank of England has been enabled to rediscount a great mass of acceptances by the guarantee of the British Government against loss in so doing. These in the end will amount to several hundred millions of dollars. Emergency notes were issued by Governmental authority on both sides of the Atlantic, and in the arrangements made for special gold funds in Canada and in France the Governments of England and France played the important parts. Thus have been improvised methods of international accounting by which the transportation of gold balances may be deferred and largely dispensed with. Our own Government has co-operated in the currency exchange and credit situation in many ways. It made provision for sending gold to Europe for our stranded countrymen. It promptly revised the banking and shipping laws.