Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1916-01-21
DIR. VAN HISE TALKS
OF BURDENS OF WAR
Excessive Taxation and Repudia-
ton Only Solution Of Great
Financial Problem.
RICH, RICHER AND POOR, POORER

CHICAGO. Jan. 2O.-European
war debts call for three alternatives
excessive taxation, reputation or
a combination of those two-accord-
ing to Charles r. Van Hise, presi-
dent of the University of Wisconsin,
who discussed THE National Debts
of the United Kingdom, Germany
and France and Their Economic
Significance" before the National
Association of Credit Men here to-
day.
Il am not asserting which of these
three things will happen" he added. II
am only pointing out the alternatives
wh.1h are before the nations which have
assumed these gigantic burdens.
Vast industrial changes have occurred
during the war under which the govern
ments have assumed far-reaching func-
tions, which in advance of the war would
have been called highly socialistic. Reg
ulation in Germany exists not only to the
control of prices for almost every essen
tial article but in regard to the distribu-
ton of food. To less extent the same
belligerent nations.
May become Permanent.
ITO these radical measures the people
will have become in a certain measure
accustomed, by the end of the war. and
some of them may become permanent.
On the other hand, IL these measures are
opposed to the best development of the
human race. it may be that the CALLING
bonds to which the people assented dur
ing the war will be resented after its
close.
"One cannot be sure in which direction
the pendulum will move, but we may be
sure that the social transformation fol-
lowing the war, in consequence OF the
war itself and the unexampled burden of
debt upon the people will be at a speed
never before approached"
Debts Now Ten Billion.
President Van Hise began by present.
ing estimates of the national debts of
Great Britain, France and Germany be-
fore the war and at the end of 1915,
giving the latter total as So 41s. 100000 for
the United Kingdom. y,25,OOO,OOO for
Germany and $10,514.OOO.O00 for France.
lie pointed out that these figures did not
include the local debts of these nations.
which at the beginning of the war were
about $3.2S5,000OO0 for Great Britain,
SS,SbbOOO,OOO for Germany and Lib 900 600
for France. He also pointed out that
additional loans are in prospect, He
added, in part:
The magnitude OF these debts will be
appreciated when it is recalled that the
maximum debt of the United States at
the end OF the civil war. at that time the
most colossal debt to which any nation
had ever been subject, was $2,75S, 10000.
or about one-fourth the existing debts
OF the United Kingdom or France.
interest Charges Enormous.
The new loans are being negotiated
on basis of per cent or more, and the
old loans are being rapidly converted to
higher rates OF interest. Therefore It is
safe to say that the interest charge upon
the debts OF the three nations is approx.
imately per cent Consequently the
national debts involve annual interest
charges for the United Kingdom of s52l.-
100000. for Germany 100000 and for
France s52eOoo.OOo
In the United States there has been a
great cutlery in regard to high taxes
and especially In regard to income tax.
suppose It were necessary to take 10 Der
cent Of the income derived from YOUR in
vested capital simply to pay the interest
on the national debt without taking into
account the interest on municipal and
other local debts and for sinking funds
Tor national and local debts; and then
you were obliged to pay In addition taxes
Tor running expenses of the government
national. state and local. you would thcn
be In the situation in which are the peo
pie or tho United Kingdom, Germany and
France. even IL the war were now TO end:
ana II 1t continues another year. or wear
and half. as it may possibly do. the
above figures will be proportionatelv in
creased-certainly by half, and possibly
more than half.
beneftcinries Are Minority.
The equity in the wealth of a nation
due to its debt might not be regarded bv
those who believe in socialism as a seri-
Gus matter IL the certificates were equally
distributed, but while the governments
nave a mortgage upon more than 10 Der
cent or the wealth OF the nations. the
oeneficiaries are the favored minority
who are fortunate enough TO possess the
bonds OF the country.
The result il that. relatively, at the
END OF the war the rich will be richer and
] N''N feot booiNIs ana the absolute nlVsi-
cal wealth will be decreased because
money spent for munitions, which are
wholly destroyed for guns, which rapidly
oeteriorate; for fighting ships, which are
OF no economic value, is money wasted.
Not only have the war materials been
destroyed but in their consumption other
property has been destroyed upon a CO.
lossal scale.
probably. however, a much larger loss
OF European wealth has been due TO the
sale OF American securities which have
been absorbed by this country. and their
replacement by certificates OF the war
debt Their total is unknown; but their
magnitude is TO be measured in thousands
OF millions OF dollars
For Russia. Austria Hungary, Turkey
and Bulgaria, the situation is very sim
liar to that for the United Kingdom, Ger
many and France; and for some of the
smaller countries. such as Belgium.
Serbia and Poland, the situation is inn
measurably worse. They are as near ruin
as was ever modern nation"