The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-12-13
1889 AND 1882

In the midst of the present war debt contro-
versy it will prove interesting to turn to history and
find out how the United States met the debt situa-
ton when she owed large sums of money contracted
as loans during the Revolutionary war.
Between 1777 and 1888, we borrowed from France
some $6,352,5OO. When Washington and Hamilton
faced the problems of the new national government
in April, 1889, they had to consider ways and
for bankrupt nation to establish its credit and
meet it obligations.
Let us compare the situation and it's solution
with the conditions prevailing in the present i'm
passe, when France is the debtor and the United
States the creditor.
The financial situation IN the United States when
Washington and Hamilton took over the country in
1889 was almost incredibly bad. We mad large debts
and were in arrears in both interest and principal
The individual citizens we're SO deeply in debt as to
provoke armed resistance 10 creditors in instances
such as Shays rebellion.
The government under the Articles of Confed-
Grafton, had been unable to raise any considerable
sums by taxation. It had power to collect taxes
and many states ignored or defled the levies Gov
eminent credit dropped such point that the best
claims against it were worth less than Is cents on
dollar. France made no move to cancel any part of
debt to her.
To face this situation, We we're then a small and
chiefly agricultural population of 100000 scattered
along the Atlantic coast. One-Sixth were slaves
Yet Hamilton never for moment considered shirk-
ing payment or begging off.
He wrote: "It is agreed on all hands that that
part of the debt which has been contracted abroad
and is denominated the foreign debt ought to be pro-
vded for according to the precise terms of the con-
tracts relating to it."
In short, we would pay up 100 cents on the dollar
and that was that. We executed the payment
promptly
In 1882 France is an immensely rich and stable
nation. She has the most gold and the greatest
empire in proportion to population of any state in
the world Her empire is second only to Great Brit
ain, and her financial strength is surpassed by that
of the United States only.
France is the most prosperous and solvent major
nation in the eastern hemisphere
Even so, are not asking her 10 pay her full
debt. We have scaled it to a present value of
1881 100000 representing a cancellation of 6os
per cent of the original principal Yet there is no
talk in France of paying her debt to us according
to the precise terms of the contracts relating to it
With greater per capita resources than the
United States, she contends that she can not paw
OAS-tAl1u O1 NIldI SuS borrowed from even
though the payments are being strung along for
two-thirds of a century.
Some may object to this historical analogy on
the ground that the American debt of 600 was
an Insignificant sum. In the light Of our resources
at that time, it as great burden as the French
debt OF today. Indeed it was large enough to jar
the finances of France as a result of having made
the loan, though France then was much the richest
country in the world.
1t is well-established fact that the loan to the
revolving colonies was important contributing
cause OF the French revolution. Taking relative
resources into consideration, the French debt pay
ment OF sl926l00O due on Dec. Is is mere epn
money" compared to the American debt to France
in 1889.
One reason why the United states could under
take to meet its obligations to foreign creditors in
1882 IN spite of the desperate plight of the country
was that it did not permit itself the luxury of
vast and expensive standing army.
When washington took over the government the
American army amounted to 672 officers and men.
and we had no navy at all. This in spite of threats
from Indians at home and from Britain and other
enemies overseas.
France, one Of the protesting debtors today, sup
ports vast army of more than half million men.
In addition to these men thus withdrawn from
productive life, the cost of her ornaments REQUIRES
the equivalent OF the total annual earnings Of
100000 Of her laborers.