New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-04-16
Old Glory Loan

world. The latest war loan Aoated m Eng
land was 8 billions, of which one-qdarter
or more was for the purpose Of rctundlnG
that is 80 say. for paying of a floating
debt Represented by the British Treasury S
temporary l 0 Us in the hands Of the
people.
There is no such thing as Z billion dol
lars Of American money, if you are think
ing Of gold. silver or paper currency. You
have to think of it not as money but as
,-od;t q statistical measure You can
hardly think Of it at all. -Four years ago
- Government could not have imagined
narrowing 7 billion dollars from its peo-
ple. The sum is equal to one-third Of the
countrv's total investment in railroads. 1t
* 70 increase the national debt twotold'
bv a rollcaH in Congress. Yet it Is only
about one-scycuth Of what is called our
national income" which only shows how
rich the 1OO,OOO.OOO richest people IN the
world really are.
or this gigantic loan:
Five billions viii he IN the form Of long
term United States government bonds
bearing 31s per cent interest, principal to
be repaid by posterty.
Two billions will be in the form Of tenn
porary certificates Of indebtedness-the
governments o U-bearing 9i2 per cent
interest until paid out Of the proceeds Of
war taxes to be levied later.
Az once 8 billion dollars will be loaned
TO the Allies, at 3i2 per cent, or without
nroft. and the Allies will pledge bonds OF
,bo;r own as security for future payment
The remaining billions will be used TO
0efrav the cost Of raising and sustaining
an American army and for other war pur-
moses. 70 he specified later, as Congress
from time to time appropriates the money
or. that is to say, authorizes the Treasury
10 spend what has been borrowed from
the people.
As to the billion dollars to be loaned
n the Allies. it is said that we thereby
"replenish their treasures That IS not
what we do. and the phrase is employed
only by those who find it difficult to ad-
dress the popular understanding in eco
nomic phrases or who themselves are con
fused by inexact terms.
You do not put cargoes of grain and
copper and high explosives into anybody's
treasury. and such are the things the Al
lies REQUIRE Of US. We do not send them
money. We supply them with war mer-
chandse, on credit. If we sent them 3
billion dollars in money-provided there
was so much to be found in existence for
that purpose-they would Immediately
send it back again to pay for commodi-
ties. Specifically, in this case, the United
States government, having entered the
war. undertakes to forward 3 billion dol
lars worth of merchandise to the Allies,
taking in payment their bonds, which shall
be paid off years hence. This is easy to
see. because the exchange is international.
or as between individuals.
II is not so easy 10 because Of the
minute complexities and endless ramifca-
tions Of the domestic activities of 100000
600 people-that what the United States
government borrows is not money either
but goods on credit. Besides the merchan-
disc il will forward TO the Allies, il will
REQUIRE for its own purposes enormous
quantities of food, ammunition, manufact-
ured goods, horses. mules, aeropanes,
transportation and other war merchandise,
supplied by the people. 1t sells bonds and
buys from the people for money, but the
same money is used over and over and all
that really fundamentally happens is that
the United States government exchanges
It's bonds for goods. Therefore, il is
question not of how many good bonds the
American people will or can afford TO
buy, but one, in fact, Of how rapidly they
can produce war merchandise and food in
surplus quantities. The government might
sell 50 billion dollars worth of bonds, and
If the people could produce a surplus Of
only 5 billion dollars worth Of merchan-
disc that is all the government could act
ually buy. II il tried 70 buy more it would
succeed merely in raising prices. 1t might
oonceivably spend 80 billion dollars for
bilion dollars worth OF goods. but in that
sc it would have inflated prices tenfold
ia degree, that is actually what has been
ln<ing place all over the world. The gov