The Washington herald., 1918-07-26
WAR DEBT CAN
NOT HURT U. S.
Holland Shows the Drain Is
Slight Against Our
Resources.

In the darkest days for the North
OF the civil war there were appre-
tensions that because OF the defeat
IN Virginia Of the Union armies. the
Secretary OF the Treasury, Salmon
p. Chase, would find II difficult to
borrow any more money In the
United States or to negotiate any
loans In Holland or in England.
Then OF a sudden there appeared
q pamphlet, prepared by David A.
Wells. which has become historic.
In that pamphlet Mr.. Wells showed
that Notwithstanding the fact that
the expenditures OF the govern
ment each day in maintaining the
army reached a very large sum. new
ertheless the amount was trifiing IN
comparison with the resources Of the
North. The authoritative and detailed
figures OF which Mr.. Wells made use
to prove his statement produced an
immediate favorable effect in Holland
and Great Britain and a little later
throughout the North. 1t was possible
to negotiate loans abroad because Of
the belief that the North had abun-
dant resources whereby payment Of
principal and interest upon these loans
could be fully met
Appealed to the People.
In addition to this Secretary Chase
undertook something which was with=
out precedent and which was un-
doubtedly in lie mind Of Secretary
/ McAdoo when he undertook to float
s the Liberty Loans. For Secretary
Chase decided to make an appeal dt-
rectly to the American people. Pre-
81 aA ~
ly through the ban.Ss and the de-
nomination Of the bonds was large.
The services of Jay Cooke were Sc
cured and at once a campaign Of edu-
cation was begun involving the use Of
a great deal OF advertising and the
creating OF an efficient body OF sales
men. so to call them, whereby appeal
was made to the American people to
subscribe literally to the bonds.
This method was successful and
thereafter hundreds of millions OF
bonds were sold directly to the people,
though, of course, the banks were large
purchasers. especially after the ma
tional banking law was enacted
As 1t Is Today.
Today the apprehension Is slight
that the United States will incur so
heavy burdens upon the people. This
Is due to the common understanding
that the American. resources are so
great in comparison with the war
debt already created or that may be
CIe0ted that they will be sufficient not
only TO care for the obligations the
government may make but also for
the well-being Of the American peo-
pie after the war is ended.
This freedom from apprehension Is
well substantiated by a recent state
ment made by John G. Eonsdale,
who is president Of one of the largest
Of the st. Louis banks. Mr.. Ions
dale calls attention to the fact that
Notwithstanding the magnitude OF our
Indebtedness, much of it created in a
year and a half, the ratio of it to our
national wealth il very small. This
is exactly what Mr.. Wells set forth
in the pamphlet prepared by him in
the mid year OF the civil war. Mr..
Lonsdale in fact believes that the
ratio Of our war Indebtedness to our
national wealth will probably never
reach the ratio developed by the civil
war expenditures to the nations
wealth as it was in the early sixties.
What Our Wealth Is.
The best authorities are in sub
stantial agreement that the wealth
of the United States today is con-
siderably in excess OF 5000. 900. .OOO.-
900. Some who have made a study
Of the subject put the figure at
$3.50. 900. 900, 900. The national in
come Is estimated by some at $780,
900. 100000 a year and by others at
not less than $4,000. .OOO, 900.
As soon as our industries are per-
feCtIy established upon a war basis
presumably our war expenditures
600. 100000 a year. Mr.. Lonsdale has
called attention to what seems to
have been an oversight, made by
those who have estimated our ma
tionaI wealth and income as these
are today, for he says that II war
prices are taken into consideration
our yearly income at this time and
probably during the war will be
$50. .OOO. 900, 900.
At Washington the estimate was
made last year that income and ex-
cess profit taxes would yield to the
government $2,50O, 900, 900. That was
an underestimate. apparently, for
these taxes would probably yield
not less than $4,000. .000, 900. Mr..
Lonsdale calls attention to the fact
that these figures prove the truth
of a statement that was made by
some high'authorities before we be-
gan to incur a great war debt, for Il
was asserted by these authorities
that 1t would be perfectly easy for
orrr patfonaI dahf rybIch h1Saz. a. :.