Earthquakes and Finances

The Japanese earthquake proved a gloomy influence in financial London, owing to the extensive British investments and interests throughout the Orient. In New York during the past week, its influence was practically negligible except as a subject of debate.

Some American business leaders look upon it as a boon to our industries, because of the extensive purchasing of our products which it should occasion. Others consider it the forerunner of financial depression here, pointing out the effect of the Chicago fire in 1871 upon the panic of 1873, and the San Francisco earthquake of 1906 on the panic of 1907. Both views are extreme, and the truth lies somewhere between them. Prosperity is not created by wrecking cities, or the recent War would have created unparalleled prosperity for many years, instead of the irregular and frequently oppressive results now seen throughout Europe. On the other hand, few losses by American insurance companies are looked for, and in consequence little financial liquidation here. The principal loser will be Japan herself. More issues of Japanese securities in the near future are not unlikely. Meanwhile, a genuine curtailment in the Japanese naval and military program will be inevitable, if Japan's economic recovery is to be swift.