The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-08-09
Liberal Viewpoint
by DIR. HARRY ELMER BARNES

THERE is much whining at present among
l. the die-hards as to the cost of the New
Deal-especiaIy since the President has pro-
posed to pay for it in part through just sys-
| tenn of taxation. Great apprehension is eX-
pressed about such things as the big budget,
expanded public works expenditures, the in
crease 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 save the country from collapse and its citizens
from starvation and exposure-indeed they are
absolutely indispensable if we are to succeed in
these desirable achievements.
The anniversary of the outbreak Of the
World War has suggested to me the interest
| ing. comparison of the relative nonchalance
with which we spent money like drunken sail
or from 1917 to 1918 and the vast concern which
some of us now show about the expenditure of
! a few billions to save America.
In the first place, we should be clear about
the abySSmal difference between the benefits to
be expected from our war costs and war loans
and from the expenditures in behalf of the
New Deal
At best, the war expenditures could never
have brought any definite benefit to the United
! States. The war loans are designed to finance
the war activities of the Allies who aimed to
secure Alsace-Lorraine for France the Straits
and adjacent territory for Russia, and the Ger
man colonies, mercantile marine and navy for
| Great Britain.
/
WE stood to gain little or nothing from
w these war loans in the way of immediate
benefit to the United States. We would have
been far better off 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 uncle Sam.
Therefore, any failure to receive complete
payment of principal and interest from the debt
or nations represents stark loss to the Amer
| lean government and public.
| On the other hand, expenditures in behalf
| of the New Deal constitute the best possible
investment which could be made by our govern
ment if one wishes to save the capitalistic sys-
tenn, representative government and democracy
The radical may logically think this all
wasted money but any one who believes in the
profit system and democratic government must
! logically look upon the financing of the New
Deal as the most promising expenditures of
money conceivable at present 1t is indispen-
sable to the salvation of the American system
The depression is more of a menace than
the kaiser and his shock troops and submarines
ever could have been.
The losses from our war debts have every
prospect of being far greater in total than the
costs Of the New Deal, in so far as the latter
can be forseen and estimated at present
| The total Of our war loans amounted to some
s11 500 100000. BY 1923 the accumulated inter
est on these loans came to approximately $780,
100000, making a grand total of about s12 000,-
100000
THE money to finance these vast foreign
Il loans was raised through the sale of Fed
eral bonds, many of which are still outstanding
Whether the foreign governments pay us or not
Uncle Sam must raise money to retire these
bonds and pay off the Americans who have in
vested in them.
When we estimate the interest payments in
volved. it will probably cost the United States
government around SIS 600, 100000 to pay off
these Federal bonds. If the foreign governments
default, then that is the burden which the
American taxpayer 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 a total loss to the American government
in the debt settlement of 1e23-1926 in the course
of which some Sig per cent of the original debt
total was cancelled by the United States The
present value of the funded debt is only SIS 873,-
$4,000 out of the original s1200000O 900 total
1t now seems quite apparent that the debtor
nations have for the most part decided upon the
default. They showed no enthusiasm even for
our PROPOSAL that they pay in kind Hence. we
may anticipate the loss in excess CT $40 900 O00,
900 on the war debt account.
| Yet there seems no hysteria in the country
| in the face of this prospect
| Wilson wanted to save the world for