Page:Walter Renton Ingalls - Wealth and Income of the American People (1924).pdf/149

Rh shipyards, with 215 ways, and at the end of 1918 we had 203 with 1,020 ways. A large amount of capital was put also into plant for the manufacture of ammunition and military equipment. On the other hand some industries shrunk, the most noteworthy example of this being carriage and wagon building, for which there was only about one-half the number of establishments in 1919 as there was in 1914. This is not surprising. As automobile making waxed, carriage making waned.

I have previously pointed out that the large profits that we acquired in the early years of the war were derived from the sale of our agricultural products and metals. I have used the term “profits” although in fact what were viewed as such were to a large extent not really profits at all, as I shall explain. In part these profits came from the sale of stocks of goods at rising prices. These were true profits, but they were bound to be offset by losses from the subsequent sale of stocks on a falling market. This happened in fact in 1920-1921.

In part, however, the apparent profits of the early years of the war were the price that Europe was paying us for the provision of new plant that was destined to be thrown away. In other words Europe was transferring some of its capital for us to waste here, instead of wasting it at home, and we were not becoming any richer thereby, although we thought we were.

I may illustrate this from the zinc industry, with which I an especially familiar. The utter absence of adequate smelting capacity in the allied countries led them to bid us such prices for the metal as to induce us to provide new plant for making it. In two years we doubled our smelting capacity, adding