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CON SOLS IN A GREAT WAR 191
The event was not discounted beforehand. This dif-
ference, then, was from 73 to 66, or about 10 per cent.
In the case of Germany the fall in Government stocks
was even greater; but that is hardly a good precedent,
on account of the small amount of the stocks them-
selves, and the absence of a first-class market for
securities at that time in Germany. The faU in other
stocks at the same time, especially the fall in the
weaker foreign stocks, §uch as I talian, was much
greater than what has been stated, partly owing to
the suddenness of the panic which broke out on the
Paris Bourse and on the London Stock Exchange;
but in such emergencies, for obvious reasons, the
change in the value of Stock Exchange securities
may be greatest, not in the securities of the Govern-
ments themselves who are directly concerned, but in
those securities in which at the time there happens to
be most speculation arid which happen to be weakly
held. In the first-class securities of the Governments
themselves, the change is much less, and the case of
what happened in France when the war of 1870 broke
out is accordingly very much to the point. Similarly
at the time of the Penjdeh incident, when there was
great apprehension of an immediate war between this
country and Russia, the drop in Consols in one day
was about five points, or more than 5 per cent. At
the time of the recent Fashoda incident, threatening
as matters looked for a few days, the drop in Consols
was even less, and was very quickly recovered.
There is no reason in substance, if we think of the
matter, why the fall in such a case should be very
great, assuming all the present prices to be natural
prices. Apart from panic the appearance of great
States as borrowers for a few hundred millions is not
calculated really to disturb the markets very much, as
these issues to a large extent would do no more than
absorb new savings which now go into all sorts of
other .new issues. I should say, however, that in the
event of an actual outbreak of war between this country