March 20, 2024

At the beginning of the XX century, when railroads were being built at a rapid pace, steamships and telegraphs were running everywhere, and international trade was booming, no one believed that a major European war would break out. In 1909, there was even published a book called “Europe's Optical Illusion”, which said that trade and economic ties between European countries were so strong, international credit system was increasingly binding the countries together, and therefore there was no benefit from a war that would only bring economic ruin to both the defeated and victorious sides.

The likelihood of war was also questioned by British insurance companies. In February 1912, the British Imperial Defense Committee held a hearing concerning the continuation of trade in the event of war. At that hearing, the chairman of Lloyd's stated that a large part of the German merchant fleet was reinsured at Lloyd's of London. And should the British fleet sink German ships, Lloyd's would have to reimburse Germany for insured losses as required by the reinsurance contract.

Nevertheless, the European war began in Y1914 and in its first days France and Great Britain passed laws prohibiting any kind of trade with enemy states, including monetary transactions.