The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-07-11
Liberal Viewpoint
by DIR. HARRY ELMER BARNES


THERE is much bellyaching at present among
i the die-hards as to the cost of the New
Deal Great apprehension is expressed about
such things as the $4,000 0O0O 900 budget the
increase in the national debt and the like.
This sort Of talk goes on in spite of the fact
that these New Deal expenditures are intended
to the country from collapse and its citizens
! from starvation and eXpoSure-indeed, they alb
solutely are indispensable if We are to succeed
in these desirable achievements
The recent discussion about war debts has
suggested to me an interesting comparison of
| the relative nonchalance with which we take
| the announcement that there is little prospect
Of our ever getting any more on account in con-
nection with war debts and the vast concern
which some of us show about the expenditure
of few billions to save America.
In the first place, we should be clear about
the abysmal difference between the benefits
| to be expected from our war loans and from the
expenditures in behalf of the New Deal.
At best the war loans never could have
brought any definite benefit to the United
States. They were designed to finance the war
activities OF the allies which aimed to secure
| Alsace-Lorraine for France, the straits and
adjacent territory for Russia and the German
colonies, mercantile marine and navy for Great
Britain.
We stood to gain little or nothing from these
war loans in the way of immediate benefit to the
United States. We would have been far better
of if we had kept out of the World war and
never allowed the American investment bankers
to pass the buck Of war credit to the back of
Of Uncle Sam.
WHEREFORE, any failure to receive COM
Il plete payment of principal and interest
from the debtor nations represents a stark loss
to the American government and public
On the other hand, expenditures on behalf
Of the New Deal constitute the best possible
tine xrrhjP ho do Nv
eminent if one wishes to save the capitalistic
system, representative government and democ-
racy.
The radical may think this all wasted money
but any one who believes in the profit system
and democratic government logically must look
upon the financing of the New Deal as the most
promising expenditure of money conceivable at
present. 1t is indispensable to the salvation of
of the American system. The depression is more
of menace than the kaiser and his shock
troops and submarines ever could have thought
of being
The losses from war debts have every pros
pect OF being greater in total in so far as the
latter can be foreseen and estimated at present
than the cost of the New Deal
The total of debts amounted to some
S1l,6OO,O 100000. By 1923 the accumulated inter-
est en- these loans came to approximately $4OO,-
100000, making total of about $4,000 900 OO0
The money to finance these vast foreign
loans was raised through the sale of federal
bonds. most of which are still outstanding
Whether the foreign governments pay or not
Uncle Sam must raise the money to retire these
bonds and pay off the Americans who have in
vested in them.
WHEN we estimate the interest payments
w involved, it probably will cost the United
states government around $25 900 0O0O 900 to pay
of these federal bonds. If the foreign govern
ments default, then that is the burden which
the American taxpayers will have to assume
There is every evidence that said taxpayer will
have to undertake this additional burden
More than half of these war debts indeed |
became total loss to the American government
In the debt settlements of 1923-1926, in the |
course of which 51.2 per cent of the original |
debt total was cancelled by the United States |
Inc present value of the funded debt is only
S5873,638,000 out of the original $4,000 900 900 |
total
1t now seems quite apparent that the debtor
nations have for the most part decided upon
paid default. They showed no enthusiasm even
Tor our recent proposal that they pay in kind |
Hence we may anticipate the loss of 100000 |
OOO,OOO on the war debt account.
Yet there seems no hySteria in the country |
IN the face of this prospect.
II we can lose $4,000 100000 quite cheerfullv
IN the effort to help ruin Europe, there is no |
very good reason why we can not face cheerfullv
tile prospect of spending $4,000 100000 in the |
effort to save America.