re actually free of taxation, at the same
time that they placed themselves on a war basis for the supplying of
Europe's war demand. When the United States did enter the war, she came
with all of the economic advantages that had arisen from selling war
material to the belligerents during two and a half years. Throughout
those years, while the Allies were bleeding and borrowing and paying,
the American plutocracy was growing rich.

When the United States entered the war, she entered it as an ally of
powers that were economically winded. She herself was fresh. With the
greatest estimated wealth of any of the warring countries, she had a
public national debt of less than one half of one percent of her total
wealth. She had larger quantities of liquid capital and a vast economic
surplus. As a consequence, she held the purse strings and was able,
during the next two years, to lend to the Allied nations nearly ten
billion dollars without straining her resources to any appreciable
degree.

The nations of Europe had been so deeply engrossed in war-making that
they had been unable to provide themselves with the necessary food. All
of the warring countries, with the exception of Russia, were importers
of food in normal times. The disturbances incident to the war; the
insatiable army demands, and the loss of shipping all had their effect
in bringing the Allied countries to a point of critical food scarcity in
the Winter of 1916-1917.

The United States was able to meet this food shortage as easily as it
met the European credit shortage--and with no greater sacrifice on the
part of the American people. Then, too, with the exception of small
amounts of food donated through relief organizations, the food that
went to Europe was sold at fancy prices. The United States was therefore
in a position to lay down the basic law,--"Submit or starve."

With the purse strings and the larder under American control, the
temporary supremacy of the United States was assured. She was the one
important nation (beside Japan) that had lost little and gained much
during the war. She was the only great nation with a surplus of credit,
of raw materials and of food.

The prosperity incident to this period is reflected in the record of
American exports, which rose from an average of about two billions in
the years immediately preceding the war to more than six billions in
1917. In the same year the imports were just under three billions,
leaving a trad