Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1926-02-18

It is apparent that the idea generally
prevails in Europe and possibly in other
parts of the world that the United
States prohted greatly by the war. The
high prices which foreign buyers paid
for American products, the extravagant
reports of profits made in certain lines
Of industry, the heavy movement Of
gold to this country, the large sums of
Indebtedness created here by foreign
governments and private borrowers, and
the change in this country's position
from that of borrowing country to
that of lender, afford evidence which
although superficial is sufficient to make
this the common belief. It is, in fact,
an illusion based largely upon price
imitation.
Inasmuch as prices have gone up all
over the world without creating a gen.
eraT state Of prosperity, that particular
count in the indictment is not well sup
ported The producers of the goods
which were sold at high prices paid
production costs on the same basis, and
whatever profits they realized were d.
luted in purchasing power at the same
rate. There is no instance in the world
history of any people getting rich by
mere depreciation of the money In which
values were measured.
There Is some force in the argument
that the burden of debts IS increased
by a fall of prices, but if the debts to
the United States government, as fixed
by the settlements effected, are calcu-
lated at their present worth to the credi-
tor, it will be apparent that the total
sum is not a very important Offset to
the cost of the war to the United States.
The Secretary of the Treasury in 1920
estimated the net cost Of the war to
the United States Government from
April s. 1917, to June 80. 1920, at
$33,455, 00o, 900, allowing for salvage
and sales of war material to the latter
date. These figures, however. included
the loans to other governments, stand
ing at that time at s., 49,, 006,855.18,
without interest.
The loans to Europe in the public
markets of the United States have been
for the most part contracted since the
fall of prices occurred The hotations
have aggregated about $2,533, 59o, $50 to
this time, and although most OF the
funds have been expended here the Dor
rowers have been at liberty to expend
them elsewhere or do with them as
they pleased. The people of this coun-
try do not accept responsibility for the
high level of world prices.
The goods and services which this
country has received from Europe in
partial payment for our exports have
been paid for, of course, at scale OF
prices corresponding to the general in
crease.
European holdings Of investments in
this country before the war were esti-
mated at about 5000, 600 900, and while
those held by countries involved in the
war have been largely reduced, Euro
pean investments in this country by no
means have been closed out. Probably
the excess. of investments returned to
this country over new ones made here
does not exceed $4,000, 0OO,0OO, II so
great.
The total stock of gold and silver
coin in the United States. as shown
by the census reports quoted below, in
creased from $2,617 100000 in 1917 to
SALTS, 100000 in 1922, or by 65.5 per
cent, which does not much more than
compensate for the loss in. purchasing
power chargeable to the war. In other
words our gold stock at the last named
date had not much greater value tor
buying and reserve purposes than Our
pre-war stock
Profits OF War Time Business
So much for the tangible evidence OF
gains at the expense of Europe result
ing from the war. The profits made
in business in this country during the
war period were not all made on ex-
port goods, and to the extent that they
were made on goods of home eonsump-.
ton they were made at the expense OF
OUR own people, and cannot be counted
as increasing the net wealth OF the
country at me expense of Europe.
Moreover, these profits to a great ex-
tent never existed except temporarily on
paper. While business was being done
on a rising market, book profits made
large showing, but when the slump
came, heavy losses were incurred, wp-
- Il "a