War spending

“ Upon a nation so circumstanced, and with such habits, there has suddenly descended—for we did not anticipate it, nor prepared the way for it—the thundercloud of war—war which, as we now know well, if we add to our own direct expenditure the financing of other countries, will cost us in round figures about a thousand millions in the year. Now how are we, who normally have only three hundred or four hundred millions to spare in a year, to meet this huge and unexpected extraordinary draft upon our resources? ”

“ I shall not consider the costs of wars long since fought, a burden strapped for all time on the backs of the toilers of Europe. I shall not consider the cost of future wars, never to be fought, but provided for in the budget of every nation, again a burden unbearable on those whose chief relation to the life of nations is the burdens nations needlessly impose. I shall not depict the growing strength of the invisible empire of bondholders who are fast becoming the owners of the civilized world, and whose silent nod determines the issue of every great empire in war or peace. ”

“ Thus then you see the extent of that pecuniary succor, which has filled the minds of all with such teeming expectation, is narrowed down to one million of dollars. But by the best accounts and estimates I have been able to procure, this war has hitherto cost about twenty millions annually. I do indeed expect that the future expenditures will be greatly curtailed; but it must be remembered that the most rigid economy has its bounds, and that it cannot exist without the punctual performance of those engagements, on which the first steps towards it must depend. ”

“ The geographical situation of the United States, their history since the Revolution, and above all present events remove every apprehension of frequent wars. It may therefore be confidently expected that a revenue derived solely from duties on importations, though necessarily impaired by war, will always be amply sufficient during long intervals of peace not only to defray current expenses, but also to reimburse the debt contracted during the few periods of war. ”

“ In order to determine, therefore, a question of economy, between depending on foreign supplies and encouraging domestic substitutes, it is necessary to compare the probable periods of war with the probable periods of peace, and the cost of the domestic encouragement in time of peace with the cost added to foreign articles in time of war. ”

“ These figures represent only a small part of the real cost, because besides the recognized expenditure of the war budget of the various nations, we ought also to take into account the enormous loss to society involved in withdrawing from it such an immense number of its most vigorous men, who are taken from industrial pursuits and every kind of labor, as well as the enormous interest on the sums expended on military preparations without any return. The inevitable result of this expenditure on war and preparations for war is a continually growing national debt. ”

“ War costs money. So far, we have hardly even begun to pay for it. We have devoted only 15 percent of our national income to national defense. As will appear in my Budget Message tomorrow, our war program for the coming fiscal year will cost 56 billion dollars or, in other words, more than half of the estimated annual national income. ”

“ The expenses of our past wars, consisting chiefly and mainly of pensions, are just, and no one would cut them down, excepting as they will be curtailed by the hand of Time as he gathers into his fold our heroes of the past. We will therefore eliminate the past from the financial consideration of the question. During a single year of peace, Great Britain,252 Germany, France, and the United States spent nearly one billion of dollars in making preparation for war. All the money in the United States would only pay this enormous expense for a little more than two years. ”

“ The loss to people with fixed incomes, the disturbance of trade, the potential labor difficulties are stupendous. And as a result of purchasing war material at excessively high prices, the dead weight of debt incurred by all the countries at war is very much greater than it need have been had currencies been kept within reasonable bounds. ”

“ Although a century of British experience has proved to what a wonderful extent the funding on specific redeeming taxes enables a nation to anticipitate in war the resources of peace, and although the other nations of Europe have tried and trodden every path of force or folly in fruitless quest of the same object, yet we still expect to find, in juggling tricks and banking dreams, that money can be made out of nothing, and in sufficient quantity to meet the expenses of a heavy war by sea and land. It is said, indeed, that money cannot be borrowed from our merchants as from those of England. ”

“ The actual money costs or expenditures of government for war include not only the actual outlays for military and naval purposes, but also the whole range of expenditures incurred in industrial life to prepare the wherewithal for the Army and Navy; and they also comprise the sums devoted to the maintenance of the families of the soldiers. All these items are far greater in modern times than they used to be. ”

“ Whatever stimulates a more active development of our natural resources produces accordingly a proportionate amount of new wealth.
The people have been taught, until the belief is now well-nigh universal, that the cost of establishing, equipping, maintaining, and supporting a [224] standing army, the cost of building, manning, and supporting a large navy, and the expense of manufacturing and storing large supplies of ammunition and other war-materials, represent just so much dead loss to the taxpayers of the country. ”

“ None of the countries which have come out of the War on the Continent have a financial position which helps toward a solid situation. All the financial documents of the various countries, which I have collected and studied with great care, contain enormous masses of expenses which are the consequences of the War; those of the conquering countries also contain enormous aggregations of expenses which are or can become the cause of new wars.
The conquered countries have not actually any finance. Germany has an increase of expenses which the fall of the mark renders more serious. ”

“ Your usual partiality to me is evinced by the belief that our finances might have been better directed if I had remained in the Treasury. But I always thought that our war expenses were so great; perhaps necessarily so in proportion to the ordinary resources of the country; and the opposition of the moneyed men so inveterate, that it was impossible to avoid falling into a paper system if the war should be much longer protracted. I only regret that specie payments were not resumed on the return of peace. ”

“ The war experience taught European government officials that it was possible to make money and pay debts with the aid of printing presses. The rapid increase in prices, and the unwillingness of the owning classes to pay for the war by means of a capital levy, placed the governments in a position where the ordinary expenses, plus the costs of the war, the interest on the war bonds, the costs of reparations and other extraordinary expenses amounted to far more than the total government revenue. ”

“ I think I could make it apparent to gentlemen that in any war, of the duration of six years, the plan of funding all the expenses to be incurred in carrying it on, would leave at the end of it a greater burden permanently upon the nation than would be sustained, than they would have to incur for the six years only of its continuance, and one year beyond it, provided that they made the sacrifice of a tenth of their income. ”

“ Our government expends about the same amount of money as the other leading nations of the world in the preparation for war in the future, but for the expenses of wars that are past it expends more than all the other nations combined. ”

“ In order to make up the balance, we must either draw on our national savings or run into debt. If we draw on our savings, we shall have so much the less money left for the expenses of the war. If we run largely into debt, we shall find ourselves heavily burdened when the day of peace arrives. ”

“ I admire beyond expression the courage which has carried through the threefold operation of cutting down in earnest your war establishments, maintaining for the time your war taxes, and paying off in your first year of peace twenty-five millions sterling of your debt. There are nations that could lay an electric telegraph under the Atlantic and yet could not do this. ”

“ Nay, sir, it is better to expend the thirty millions of dollars (even if that sum was necessary) so repeatedly spoken of on the other side of the House as the cost of the war for two years, to accomplish our object, than to expend the same sum in five years, even if we could effect our object with equal certainty.
However commendable economy may be in every other situation in life, in war it is inadmissible; it loses its character; it becomes parsimony: you might as well attempt to unite profusion and avarice as war and economy. ”

“ Every dollar paid to them in wages, and every dollar expended in connection with their work, would prevent devastation or create values for the nation immensely larger than the total expenditure. The values created and benefits assured in time of peace would alone justify the expenditure. The value to the nation of such a great Reserve Force of trained and hardened men in time of war would again justify the expenditure. ”

“ If the United States shall be forced into a state of actual war, all the resources of the country must be called forth to make it efficient, and new loans will undoubtedly be wanted. But whilst peace is preserved the revenue will, at all events, be sufficient to pay the interest and to defray necessary expenses. I do not ask that in the present situation of our foreign relations the debt be reduced, but only that it shall not be increased so long as we are not at war. ”

“ But we can also afford to spend more on our defense. Our defense budget currently consumes less than 4 cents of every dollar that our booming economy generates - far less than we spent during the Cold War. ”

“ The war has cost the country five or six hundred millions of money. This has not been a nominal expence, a playing at ducks and drakes with the King's picture on the water, or a manufacturing of bank-notes, and then lighting our pipes with them, but a real bona fide waste of the means, wealth, labour, produce, or resources of the country, in the carrying on of the war. ”

“ No more talk of carrying on the war economically! The only economy is to make short and swift work of it, and the people are ready to bear the expense, if it were five hundred millions of dollars, to-day.
This was printed when the war was very young; when no man dreamed that it would cost the Federal government six times five hundred millions.
The Sun’s editorial articles were not without criticism of the conduct of the war. ”

“ On the other side of the balance-sheet, the only asset that has not yet been included in the calculation is the sum that we are going to receive from Germany, Some cheery optimists think that it is possible for us and for the Allies to make Germany pay the whole of our war cost. ”

“ Though our credit and resources should continue undiminished, yet the great addition which the present war will make to the public debt, is alone likely to sink their value, [197] because every increase of a saleable commodity has always a tendency to lower its price.—It follows from hence, that the purchasers of FOUR per cent. capitals have now a prospect of an advantage of 12 or 14 per cent. at redemption, which they could not have had before the last peace. ”

“ It is a commonplace that if it had not been for the great mass of foreign securities, which this country held at the beginning of the war, we could not nearly so easily have financed the enormous amount of food and munitions which we have had to provide for our population, for our armies, and for the population and armies of our Allies. ”

“ In other words, the pensions, before we are through with them, will have cost us at least as much as the whole war debt amounted to, and perhaps a good deal more, for the pension sharks are by no means through yet with their demands. We shall therefore have to consider not only how much a war may cost us, but that a heavier expense, although spread over a longer time, will begin when the war is over. ”

“ Four millions of men under arms and army budgets of five billions of francs a year! Is that not terrible?
“Truly, this increase of armies, of fleets, of budgets, of debts, seems to have been brought out of a Pandora’s box, the gift of a wicked fairy who desires the misfortune of Europe. War is sure to arise from this method of foresight, which is meant to safeguard peace. The increase of contingents and of expenses will be the real cause of war. ”

“ Financial Reconstruction.—The finances of the government, of corporations, and of business men have been greatly changed during the course of the war. There may never be a complete return to the old conditions. But it is certain that peace will create problems of finance almost as serious as those of war. ”

“ That the revenue of the United States will in subsequent years be considerably impaired by a war neither can nor ought to be concealed. It is, on the contrary, necessary, in order to be prepared for the crisis, to take an early view of the subject, and to examine the resources which should be selected for supplying the deficiency and defraying the extraordinary expenses.... ”

“ The world makes its peaceful expenditures and not only recompenses itself from production, but actually adds to capital. In war, of course, there is a lot of non-productive expenditure, but on the other hand there is some added stimulus of production and greater enforced economy in everything save in the actual expenditures for carrying on the war. ”