Evening star., 1944-12-24
Wurs' Costs Already
A Problem for Future
Observer Believes President Will
Urge Loans Abroad

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Observer Believes President Will
Urge Loans Abroad
By Owen L. Scott.
The cost OF the present wars to the
United States can be estimated with .
fair degree of accuracy. That cost. IN
turn, then can be related to its long
run effect.
1t now seems probable that casualties,
which are a first cost Of war, will
reach between 100000 and 100000
before both wars are ended. That is
. casualty level about five times that
Of the last war and, while high, is not
so high as war planners had anticipated.
The policy Of lavish use of munitions
to save lives is paying of.
In dollar terms, war costs will range
between 5000, 600, 100000 and $35o.ooo,-
100000. Those costs already are ap-
preaching $3.50 ,0OO, 100000 This means
that 10 times as many dollars will be
spent on these wars than on World
War I.
Out Of the wars will come q debt
Of about $500, 900 900 900 and an annual
interest charge OF at least 5000, ,oo0, 900.
Such figures are difficult to compre-
hend but they have the greatest agnin-
canoe for the people who pay taxes.
These wars are to leave behind them
a problem Of veterans aid and veterans
care that will cost between $1,000 OO0.-
600 and 5000 100000 annually. They
are to leave the country with the need
for sustaining Navy, Army and air
forces Of size commensurate with the
Nations new responsibilities. That cost
will be a minimum of $1,000 900 900 q
year.
Altogether, to fulfill commitments
made in war and to grow from war.
the Federal Government after the war
will need to spend about $25, 5,000, 900 600
annually. That is three times the pre-
war level Of spending.
Wars, too, have had other costs. Mil
lions of lives are disrupted. Industry
is pushed all out of balance, leaving
behind problems Of adjustment that
are immense. Vast quantities Of the
Nations best oil resources, its best iron
ore resources, its best timber resources
are wasted.
AS result of these and other war
costs, certain things are becoming clear.
One thing that Is clear Is that the
United States probably cannot afford
another war or combination of wars
no 70 h1o IN yho
retain its system of private capitalism.
Wars tend to make government all
powerful and to result in widespread
socialization. This country now has
every reason to try to create and then
to support some sort of world ma
chinery that will permit disputes be-
tween nations to be settled on some
basis other than war
Another thing that is clear Is that
very high taxes are here to stay. Very
little reduction can be made in rates
OF taxation of individual incomes, if
there Is to be any prospect for q bal
anced budget in postwar
There is next to no chance that debt
/ reduction can be achieved after this war
as 1t was after the last war At the
same time, with a debt of $500 600, ,0oo,-
! 600 1t will not be simple to try to solve
the countrys problems through pump
priming and more debt creation. Debt
| management, at best, will be a difl-
! cult postwar problem without compile
eating 1t by more debt expansion.
A third thing that will become clear
q uror %ha >f
ent ones, leaves behind extremely seri-
GUS maladjustments. After the last war,
| which was minor in its effects COM
pared with this one, this country en-
Joyed record inflationary boom in
the 192os and then devastating COL
lapse In the early 1905 A base Is being
laid in this war for what can be an
there is great care
1t is becoming apparent now that
President Roosevelt's plan for dodgins
some of the consequences of war costs
is to call for very large loans abroad
With these loans, other nations vii
tap the American market for goods
and in that way will help to provide
jobs. The loans are to be long tern
loans and will appear on the books II
a way that will avoid the appearance
of an addition to the national debt
The annual cost to the borrowers abroad
will be limited to a low rate of interest
Repayment of the principal of the loan
will be delayed 20 to 80 years, 20 that
the question of whether the loans are
or are not sound will be delayed for Q
quarter Of a century.
A very large foreign trade probably
can be built on that basis and can
continue for number Of years. BY the
time the loans are maturing, the pres
ent Government will have been out for
Office for quite time. The idea Is that
loans abroad can be used to tide over
| the situation in the postwar period when
rehabilitation will create big problems
and that the question of repayment of
these loans can be forgotten for the
time being
| War costs, reflected in the Federal
Governments annual postwar budget
can be carried only If a way is found
to keep national income at high level
Yet, after war, when surpluses Of
labor and of materials tend to reappear
there are difficulties in maintaining q
sustained high level Of national income
without resorting to devices that In the
end aggravate the troubles they are
supposed to relieve. There Is no sign
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