The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-05-13
A Cheerful View OF the Chain OF
Debts, Bonds, Taxes and Interest.

To THE EDITOR OF THE suN-Sir: The
twenty-five billions of bonds OF the Uni
ted states represent our national debt
but this statement Is only half truth,
for these bonds are assets exactly to
the extent that they are debts II the
American Expeditionary Force had been
maintained by the sale in Europe Of
these United States bonds we should
have a true national debt in cor sequence.
But having subscribed ourselves for the
bonds and paid for them we as a peo-
pie are investors in our own paper. You
cannot really be in debt to yourself nor
can we be in debt to ourselves. Debt
in the ordinary acceptance OF tho word
implies the existence Of debtors and
creditors. the two being in opposite posi-
tons.
The distinction Ia a matter of the
greatest Importance In either case the
interest on the bonds and the money
for their redemption would have to be
provided By the taxation OF the Ameri-
can people, but II the bonds were held
abroad we should have TO become ex-
porters of gold or securities or merchsn-
disc TO any necessary extent, whereas
the situation which We face is an obli-
cation to tax ourselves in order TO pay
ourselves, the process involving no loss
TO the nation as whole however harm
full or beneficial TO individuals within
the nation.
The members OF family may borrow
from each other and the head OF the
family supervise the settlement. but the
family would not by such operations
either 20 into debt or get out OF debt.
The factories OF great corporation
borrow money or materials from each
other and 80 become indebted 10 each
other. but without putting the corpora
ton in debt.
Involved In this reasoning seems to
be the idea that We as a nation do not
pay for the war at all. All the money
that we pay in taxes or for bonds we
get right back, the Government never
keeping or destroying 1t. And in the
future too, all the money that we shall
pay in taxes for the redemption of bonds
will be paid back by the Government
TO those OF our children who may hap
pen to own the bonds.
The problem becomes less dificut,
though, IL we realize that the losses
by war are only those which are felt
at the time or can be seen to project
themselves into the future. Real losses
are the loss of life. the manning OF indi-
viduals the fastening OF disease upon
them: then comes the destruction oil
materials, buildings. other property: the
diversion OF thought and labor and the
DISCRIMINATION OF trade, industry, trans.
portation, communication, finance, with
the resulting high cost OF living Our
generation surely has paid its way as
well as fought the war. and all the
taxation and the bond issuing and the
bond redeeming are but methods for the
distribution OF costs among a multitude
OF people. The real cost and the reaI
loss end with the end OF war. and the
people may at once seek prosperity just
as II no bonds had been issued. taxpay-
srs and bondholders all belonging to our
own national corporation. Our children
will inherit a right TO receive as surely
az an obligation TO pay and the amount:
will correspond The twenty-five bill
ions might be called a credit debt 10 dis
tinguish II from a real debt. for it is
not a real debt as debts are generally
understood.
j. Howard CowPsRrHwAIr.
TEGIRwooD n / Nav IL