Evening star., 1927-11-20
duced in continental United States of
a total value of over $6S4, 100000.

total value of over S6S4,000,0O0.
Constructive Loans.
Other constructive purposes for
which the money has been found by
borrowing are S2,O00,000 for the pur-
chase in 1892 of stock in the first bank
Of the United States, and in 1917,
$7.000.000 for the purchase of stock in
the Second Bank Of the United States.
To aid in the construction of the first
railway to the Pacific. loans were
made of $4,000, 900 in 6 per cent
bonds-"Currency Skies" they used to
be called; while that great waterway
from the Atlantic to the Pacific, the
Panama Canal, which cost the Gov
ernment, including equipment and
fortifications. about $i0N. 900 900. was
financed out Of Treasury surpluses,
but wGS reimbursable in case of need
to the extent of S375,000,000 from
Panama Canal bond issues. Up to the
time of the war only S135 900 900 in
round figures. of such bonds had been
issued. The balance Of the authorized
issue was merged into the authoriza'
ton for the first Liberty loan.
The Pacific railroad companies. with
one small exception, long ago repaid
the loans made to them. The Panama
Canal has earned gross since it was
opened to traffic on August Is, 1914. to
June 80. 1927, from transit and busl-
ness revenues, 5000. 72S.000. AS the
operating expenses have totaled So
10000, the Treasury has enjoyed
net revenue from this investment Of
$50. .929 000. an average of S6.223 600 a
year. This is, however. a rising aver
age. the net income in the past five
fiscal years having eraged over
S15.000,000, amounting to S11.463.OOo
in the fiscal year ended on June 30
last.
But, after all, war and its after
math has been the chief cause of
the crea ton of public debt in our
country. as it has been in other lands.
AS we have seen, the Revolutionary
War was responsible for an initial
debt of some S77.0OO.000, the War of
1872 added $50, ,125 900 TO the debt, the
Mexican War and it's aftermath re-
suited in the creation of a debt OF
So. $4,000. The Civil War piled up a
debt of $2,694.000, 900 and the Great
War was responsible for a debt nearly
10 times greater-namely for $24 4,29o,-
100000 Traditionally, the American
people have believed in promptly pay
ing off debts and therefore have cheer
fully borne the burdens of taxation
which this involves.
Planned Early Payment.
Hamilton had no sooner succeeded
in funding the debt inherited from
the period prior to Washington's ad.
ministratio than he was found advo.
eating the creation Of a sinking fund
L.
the necessity of some new borrowing,
by the close of the Federalist period,
the old domestic debt had fallen ST.
7GS. 900 and the foreign debt s2.394 900.
But the nearer war with France. and
Treasury deficits involved in putting
the new Government on its feet, Gre
ating the new city of Washington
establishing lighthouses, putting down
the outbreak in southwestern PennSNl-
vania against the imposition of in
ternal revenue taxes. the creation OF
customs service and a postal serv-
ice, had involved new borrowing of
some 1o,737.0 900 so that when Jeffer-
son came into office he found a debt
of SS3.O3S,000. Notwithstanding the
increase made necessary by the pur-
chase of Louisiana the debt had fall
en- to S45.210.000 by the end of 1911.
L our Years idL6I TIE wal
had raised it to s127.335 900. From
then on until 1884 the debt steadily
decreased until at the close of 1884 it
was entirely liquidated. This result
was due to an important extent to
the large sales of public lands. Treas
ury deficits. the Mexican War and
the acquisition of Texas. the South.
west territory and California were
some of the causes which accounted
for the fact that just prior TO the
Civil War, we again had debt. ag-
gregating on June 80, 1860, $64, ,S44 900.
The Civil War raised the debt to
maximum of $2,S44 $40 900 on August
81, 1865. The amount of this debt
was so appalling that at the time
many thoughtful people felt that it
would he hopeless task TO liquidate
any important part of ii for years
to come and pamphlets and news
paper articles were written to show
that a national debt is national
blessing" One writer summed up
his conclusions in the following words:
Emerging victorious from the most
gigantic war the world has seen. with
the rescued Republic on our shoul.
ders, it was becoming that as we
marched home to peace and to labor,
some of us should exultantly propose
to pay off instantly the huge debt of
our great salvation. Twas war
song. 1t was pleasant to hear. But
the thing proposed cannot be done.
1t would be impossible to raise the
money to liquidate it, and he con-
cludes, Let us accept the public debt
as public wealth. as the bond of pOlit-
ical and national union, as the safe
M CT f1-y-
banking, as our orphans and widows
funds. The national debt rightly
managed will be a national blessing"
Outcome Was Happier.
However, notwithsta nding the view
taken by the writer just quoted and
by many others at the time, the sub
sequent developments made for a
happier outcome. The Nation took
different view of the proposition
and. as a matter of fact, the revenues
from taxation proved to be so great
that 1t was compare lively easy mat
ter to cut down the debt and frequent
ly the Secretary of the Treasury was
compelled to go out in the market
and buy bonds with the surplus rev.
enues at the lowest price for which
they could be obtained. 1t happened
t'fot tHC IIllefeSlS Oh ID6
country were very strongly opposed
to reducing the customs duties and
the people generally upheld this posi-
ton, re-electing to the seats of power
In Washington those who were in
faVor OF maintaining high customs
duties. The usage had grown up
curing the war period of maintaining
nigh internal revenue taxes as rough
way of harmonizing the interests Of
importers and manufacturers and so
IL happened that there was not only
opposition to reduction of customs
duties hut also opposition to a reduc.
tlon OF the internal revenue. This
state Of affairs made it necessary for
the Secretary of Treasury consta ntlv
10 he In the market for Government
hnhds and made it possible to renew
AT lower rates Of interest such nor.
tlons of the debt as he was not unite