The twice-a-week Twin Falls times. (Twin Falls, Idaho) 1916-1918, 1917-05-31
HISTORY OF FORMER LOANS
Continued from page u

worth only about one seventh of its
face value. BY the end of 1875 more
than twenty millions had been issued.
In July 1875 the colonies attempted
! q five million dollar loan at per
cent. failed because capitalist could
] get 6 per cent from private borrow
ers? In 1777 a big lottery was at
tempted 100000 tickets being sold to
produce government revenue but this
did not succeed as well as was ex-
pected. During 1777 thirteen million
dollars more of paper money was
issued. The continental congress, des-
perate, asked the states to raise
money by taxation and lend it to the
government at per cent. The prop
erty of British loyalists in the colonies
was confiscated and used to carry
on the war Then when the colonies
were almost at the end of their fin
ancial string, came the French alli-
ance. and France bOlstered up Ameri-
can credit a little bit by guarantee
ing the interest on the debt. When
France joined America fifty million
dollars of paper money had been is
sued.
BY the end of 1878 the total issue of
paper money had reached $200000,00
and it had lost its purchasing power;
the money would not even be accepted
for furnishing supplies to Washing
toms army, so congress assessed a
certain amount of supplies against
each of the states, Virginia being as
sessed 10000 barrels of Indian?
1t was Robert Morris, a Philadelphia
banker, who finally devised the finan-
cial system which saw the colonies
through. He created the bank of
North America to redeem notes in spe-
Gle payments. He was materially aided
by reason of the better feeling which
prevailed over the chance of victory
and the consequently enhanced credit
of the colonies.
American credit was desperately low
during the war of 1872. The great fin
ancier Albert Gallatin was able to
sell only about one-half of the first
eleven million dollar loan at per
cent. The second loan of sixteen
million dollars only produced about
five million. Finally the government
offered a premium of 10 cents on the
dollar and David Parish, Stephen
Birard and John Jacob Astor took the
balance of the sixteen million dollar
loan.
During the remainder of the war the
securities of the government sold for
between IS and 95 cnts on the dol
lar.
The civil war, 1861 to 1865, required
financing on a greater scale than was
ever known to the western hemisphere
until now. Five years of warfare
cost the United States and the states
of the north over five billion dollars
or less than the first loan offered to
finance the war with Germany. At
one time during the war the United
States had 2,6SS,52S men under arms.
Government credit was again at a
low ebb during the civil war. Paper
money illegal tender notes. to the ex-
tent of SAB, 100000 was issued and it
deprecated tremendously and magni-
fled the cost of living. Bonds to the
extent of more than 81 900 100000 were
sold. One Of the spectacular money
raising campaigR in the history of
the United States occurred during the
civil war when Jay Cook was EN-
ployed on a commission basis to sell a
government loan of $300,000.00 He
succeeded remarkably.
At the end of the civil war the debt
of the United States was greater than
any time in all its history, reaching APP
proxiately $2,7OO,O00OOO. During the
SOS this debt was greatly reduced,
the government paying large prem
iums to retire outstanding indebted
ness.
The war against Spain in 1898 cost
more than one and one-half billion
dollars. A large part of it was raised
by taxation The first war loan
amounting to $200,O00,000 at per cent
was a spectacular success being over
subscribed more than seven times.
The history of war financing in the
United States attests the corr ectness
of the present government policy of
issuing bonds to meet war expenses
and levying taxation sufficient to meet
the newly created interest charges
and an additional sum for amortiza-
ton. The bonds acknowledge a gov
eminent obligation that will draw in
terest and will be repaid. The tax
program eliminates the tendency to-
ward harmful price initiation.
A vigorous tax policy should always
supplement borrowing for war pur-
poses. Taxes, except tariff taxes, are
levied against property and income.
The government which demands the
lives and services of its men at the
front surely has a better right to de-
mand those lesser hings,-property
and income. Paying all of a wars
expense by borrowing puts off the day
of reckoning until after the war is
over and compels the men who have
offered their lives and their labor to
pay off the debt after they go home.
The magnificent manner in which
the United States has reacted from
periods of financial depression, pro-
duced by war, constitutes powerful
proof of it's material resourcefulness
and it's constructive genius. From
every trial it has emerged stronger
than before. 1t has been tempered in
the furnace.
1t is the inevitable conclusion that
the crossing of swords with the giant
of Europe will furnish the inspiration
for the nation to rise proudly to its
new plane of world leadership
Floating q seven billion dollar indeb-
tedness within a few weeks sounds