New-York tribune., 1918-04-29

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wealth through war In an ar
ticlc appearing in The Tribune of April
Is by Sir George Paish the following
sentence is found:
Nor can it be denied that if
the object in view had been the crea-
tion instead of the destruction Of
wealth the worlds wcllbeing could
have been enhanced in a most remark
able manner by such a vast creation
Of credit"
Mr.. Paish obviously means the de-
struction of wealth represented by
government expenditures for military
purposes and not the destruction Incl
dent to military operations, such as
destroying cities. railroads and other
fixed forms of wealth and capital It
might be worth while, notwithstanding
the view of Sir George Paish, TO in
quIre briefly into the subject. If money
raised by the government and expended
by it in military operations is actually
destroyed, the commercial and 1inan-
clal future Of the countries which have
been compelled to expcnd these unprc-
cedcntcd sums is certainly less rcas-
suring than if such expenditure do
not involve the approximate dcstruc-
tion of the wealth represented by
them. The latter view is held by the
writer. The subject must necessarily
be divided into:
First-Thc sources of governmental
moneys.
Sccond-Thcr destination and ap-
portionmcnt.
The income secured by the govern
mcnt through taxes represents, in cf-
feet. a cash withdrawal. How far such
withdrawals diminish the investment
or industrial stimulus is beyond the
limits of this article. That is matter
for legislative judgment.
BY far the larger part of the govern
ment's revenues arc derived from the
issuance of bonds. These bonds arc
taken by corporate and individual pur-
ch2sers through cash purchases and
Withdrawals, and also by credit com
mitments. Obviously, s1O,OoO,OOO, 900
to $4,000, 100000 of bonds could not
be purchased by cash Withdrawals
alone. Such loans can be noatcd only
by exchanging them Tor the wealth Of
country represented in securities,
real estate and other fixed forms of
wealth. Such bonds arc also financed
by the purchasers pledging or borrow
ing on these same fixed forms of
wealth A nero exchange involves a
sale. which in turn tends to produce
feclning market quotations. Credit,
however, if properly stimulated by
constructive governmental measures,
implies the stabization Of market
values.
Basis of War Loans
In the main, therefore, the basis for
the floating of huge war loans rests
on fixed forms of wealth. If it were
true that each loan and its expenditure
Tor military purposes decreased the
wealth of the country it would mean
that the purchasing power of the coun-
try Tor these war loans would become
smaller and smaller. The fact is. how
ever, that, even discounting govern
mental pressure and the incentive Of
PATRIOTISM, the country can and does
purchase larger and still larger
amounts of securities issued solely for
military purposes.
An analysis of the destination and
apportionment of governmental cx-
penditures might enable us to get
clearer point of view of what actual
destruction these enormous military
out,ays entail.
In our first year Of war we spent
50 2,o0o 100000. OF this $4,000 900 900 has
been loaned to the Allies. and the en-
tirc amount expended in this country.
The following appropriations amount
to considerable moro than the money
actually spent during our first year,
and include contemplated outlays:
=, VI elo HbUU ,UUUUUU
Naval appropriation ..... .3,0OO,OO 900
War Department ........ 100000, 900
Shipping Board appropria-
The war appropriation includes sal
aries of 100000 men, and also includes
their maintenance, with food and cloth
ing.
Taking this into consideration and
the increasing proportion that the ex-
penditure to labor bears to the final
cost OF all manufactured products, it