Evening star., 1918-12-01
BY G.. GOULD LINCOLN
OF The Star star.

dOUIdIFUL Americans arc
asking themselves, today.
':How is the United States
going to pay its war debt?'
Il No one doubts the coun-
try's ability to pay in full.
But one Of the main problems Of
postwar reconstruction in this coun-
try is the method or system which
is to be adopted to obtain for
the government the needed money
to retire the obligations it has as
sumed to finance the war and to pay
the interest on those obligations.
When the country gets back to a
peace basis the government will still
be faced with the payment of the war
debts-the public debt. Either the
people of the United States must go
dewn in their jeans and pay these
debts. or the enemy countries must
be compelled to pay.
Predict Share in Indemnity
There has been a great deal of talk
about mo reparation" SO far as the
United States is concerned. But
there are statesmen here who believe
that the United States should and
will share with the allied nations in
whatever indemnity the Teutonic
powers are compelled to pay. 1t is
safe to say. however. that whatever
indemnity the United States obtains
from Germany and Austria will be
trifie in comparison to the sums
which it has put into the prosecu-
tiOn of this war
The people. therefore. must pay.
They must pay through the medium
OF taxes. Taxation will be large
issue, perhaps the large issue, in this
country and in politics for years to
come. Incidentally. the fact that tax
alton is to play such a prominent
part in this country's affairs is what
is causing many of the republicans
concern over the probable selection
of Senator Boise Penrose Of Pennsyl-
vania, as chairman of the finance
committee. Any tax bill that bears
his name. they are afraid. even
though it be the best that could be
produced under the circumstances.
will be anathema in the eyes of the
people.
Tax Burden to Continue.
The tax burden has been great dur
ing the war. 1t will continue great
after the war. IL the people of this
country intend paying off the public
government bond issues. and do not
leave it for the generations OF other
centuries to deal with. Take a look
at the obligations now v0outstanding
and probable obligations that will
be added in the near future.
The total liberty bonds in the four
loans. up to date, amount to $17.614,-
100000. War savings certificates have
been sold for $s5o.467.s93.5s, and it
is the plan of the Treasury Depart
ment to sell another billion or two
if 1t is possible. At least one more
liberty loan is to be made. probably
next spring, and it is reported that it
100000. When war broke out April
s. 1917, the total public debt. repre-
sented by outstanding securities of
the government, was $1.282, 2,044, ,346.2S.
Some Stirring Figures.
In round numbers, by May of next
year the liberty bonds outstanding
will be in the nehghborhood Of $21,-
600, 100000. bearing interest at from
s1k to ~ or AZ per cent, according
to the amount Of interest which will
be allowed on the fifth liberty. loan.
At present the interest runs from 31k
to Az per cent. The first liberty loan,
which amounted to only $4,000. .000. 900.
bears 31a per cent interest. Because
of the fact that these bonds are free
from taxation, a comparatively large
verted into bonds of later issues
all of the others, how
ever, may be said to bear the rate of
Az per cent. If the interest on the
fifth loan is increased, it may be fair
to figure that the government must
IND OF
per cent, or $S92,500,000.
Savings Certificates Interest.
The war savings certificates bear
pounded. The interest is not paid
until maturity of the certificates,
which is five years from date of issue.
If the government sells $4,000. 600 900,
face value. of these certificates, then
at the end Of FIVE Ave oa years dao it will have
them. or issue securities to take their
place.
still remains to be settled also,
amounting to s1,2s2. .0oo. 900. The
bonds covering it bear rate Of in
s25s, ,OOO, 900 of the old debt there is no
interest to be paid. part of it not
bearing interest and on part of it in
terest has ceased. If the interest. is
estimated at 3 per cent it would be
$50 100000 a year.
Half Century's Taxes.
It does not require any very great
financial ability to grasp the fact that
with such obligations outstanding the
government of the United States must
find a lot of money, and the people
of tha limited States must pay a lot of
taxes during the next fifty years.
Part of the money which the gov
ernment has raised has gone into
loans to foreign nations allied against
Austria and Germany, Up until to-
day the loans have amounted to
SS.1S4,576 This huge sum has
been credited to the foreign nations
and the United States has taken their
obligations for it. Secretary McAdoo
has arranged to obtain per cent in
terest on these loans. which have all
been made on demand. It is neces-
sary. therefore, to subtract something
over $4,000. 100000 from the amount
which this government will have to
q y,rnuided