Quotes about War Debts

Calvin Coolidge

Borrowed money, even when owing to a nation by another nation, should be repaid. They hired the money, didn't they? Let them pay it.

Debts accumulated by the allies in World War I was still outstanding a decade later. When it was proposed that the United States help reduce this debt, President Coolidge remarked:

Will Rogers

I have a scheme for stopping war. It's this -- no nation is allowed to enter a war till they have paid for the last one.

Fiorello H. La Guardia

I believe that a good portion will be in due time be returned, but I am certain that some of it will have to be placed on the profit and loss column of Uncle Sam's books. Let us understand that clearly now and not be deceived later. [He was right.]

President Wilson had proposed a $3 billion foreign loan bill to shore up the allies. The congressman supported it but warned his colleagues:

John Steele Gordon

Wars have been fought with borrowed money ever since Rome instituted the practice of forcing its richer citizens to loan the state money to help fund the conflict with Carthage in the third century BC.

James Jackson

Since this report has been read in the House, a spirit of havoc, speculation and ruin, has arisen by people who had access to the information… Three vessels Sir have sailed within a fortnight freighted for speculation; they are intended to purchase up the State and other securities in the hands of the uninformed but honest citizens of North Carolina, South Carolina, and Georgia. My soul rises indignant at the avaricious and immoral turpitude which so vile a conduct displays.

The States sold bonds to finance the Revolutionary War. Some states had better prospects for redeeming their bonds than others. Georgia, South Carolina and North Carolina in particular had poorer prospects than most and their bonds were selling at about 25 cents on the dollar. Alexander Hamilton, then the Secretary of the Treasury, wanted the new Federal government to assume the state’s war debt and pay off the bonds. He made his proposal for how he would accomplish this on January 14, 1790. He delivered his report and proposal to Congress “Report on the Public Credit”. As soon as Hamilton’s proposal was read in Congress, sophisticated speculators set off for the Southern States to buy up as many bonds as they could before the owners found out that a Federal bail-out was under serious consideration. They could easily double, triple or even quadruple their money. To Jackson this was gross immorality. Other representatives had a different point of view. See {619928} & {619939}.

Alexander Hamilton

A national debt is the price of liberty.

Elias Cornelius Boudinot

I should be sorry if on this occasion the House should decide that speculations in the funds are violations of either the moral or political law. A government hardly exists in which such speculation is disallowed.

The States sold bonds to finance the their efforts in the Revolutionary War. Some states had better prospects for redeeming their bonds than others. Georgia, South Carolina and North Carolina in particular had poorer prospects than most and their bonds were selling at about 25 cents on the dollar. Alexander Hamilton, then the Secretary of the Treasury, wanted the new Federal government to assume the state’s war debt and pay off the bonds. He made his proposal for how he would accomplish this on January 14, 1790. He delivered his report and proposal to Congress “Report on the Public Credit”. As soon as Hamilton’s proposal was read in Congress, sophisticated speculators set off for the Southern States to buy up as many bonds as they could before the owners found out that a Federal bail-out was under serious consideration. They could easily double, triple or even quadruple their money. Many congressmen wanted to outlaw the speculation. See {619929} & {619939}. The pro-speculation forces got their way. Some speculators made fortunes. Most bondholders lost money.

Calvin Coolidge

We desire to see France paid and Germany revived, and as the creditor of Europe we would not wish to assume the role of an oppressive creditor, but would maintain the principle that financial obligations between nations are likewise moral obligations, which international faith and honor require should be discharged.

France had lost almost all their wealth during WWI. Under the Peace Treaty of Versailles, Germany was supposed to pay France (and others) for the damage and destruction they had wrought. If Germany did not pay the reparations, France could not rebuild. And if Germany did pay the reparations, Germany could not rebuild. The United States at that time was not rich enough to help Europe rebuild.

Patrick Henry

If we are now to pay these debts to the English, for what were we fighting?

The treaty ending the Revolutionary war guaranteed that the English bankers and merchants who had debts going back to before the American Revo
lution would have “no impediment” in collecting their debts in America. However, Rhode Island and Virginia in particular placed many impediments and made it virtually impossible for debts to be collected in their states. The John Jay led Supreme Court, in particular, overturned state actions on the grounds that they had implemented Patrick Henry’s sentiment and hence violated the treaty.

Nancy Isenberg

The war years had taken their toll. A postwar depression created widespread suffering. States had acquired hefty debts, which caused legislatures to increase taxes to levels far higher, sometimes three to four times higher, than before the war. Most of these tax dollars ended up in the hands of speculators in state government securities that had been sold to cover war expenses. Many soldiers were forced to sell their scrip and land bounties to speculators at a fracture of the value. Wealth was being transferred upward, from the tattered pockets of poor farmers and soldiers to the bulging purses of a nouveau riche of wartime speculators and creditors—a new class of “moneyed men.”

Robert H. Jackson

Particularly when the war power is invoked to do things to the liberties of people, or to their property or economy that only indirectly affect conduct of the war and do not relate to the engagement of the war itself, the constitutional basis should be scrutinized with care. ... I would not be willing to hold that war powers may be indefinitely prolonged merely by keeping legally alive a state of war that had in fact ended. I cannot accept the argument that war powers last as long as the effects and consequences of war for if so they are permanent -- as permanent as the war debts.

Stephen King

What charitable 1 percenters can't do is assume responsibility - America's national responsibilities: the care of its sick and its poor, the education of its young, the repair of its failing infrastructure, the repayment of its staggering war debts.

Nicholas Roosevelt

Throughout 1922 the demand for further occupation of the Ruhr became stronger in France, the people being convinced that in no other way could the Germans be made to understand that the Allies were determined to collect reparations.

After WWI, the Germans were reluctant to make the reparation payments that they had agreed to in the WWI peace treaty. The French, to “motivate” the Germans, occupied the German Ruhr Valley—an area that contained very important German heavy industry and coal mines that could not function under the occupation. See {640090}.

J. William Fulbright

With respect to the creation of the program, I introduced the bill in September 1945, immediately after the end of the war with Japan, in August of that year. A number of considerations, of course, entered into my decision to introduce the bill, growing from my own experience as a Rhodes scholar and the experiences our government had had with the first Word War debts, [Herbert] Hoover's efforts in establishing the Belgian-American Education Foundation after World War I, [and] the Boxer Rebellion indemnity.

James Madison

The Federal Government’s assumption of the various State debts from the Revolutionary War has caused a buying frenzy and unscrupulous speculators are still exploring interior & distant parts of the Union in order to take advantage of the holders.

State Bond Holders prospects were not looking very good and some states would only discount their debts while others would not pay for the War Bonds at all. Most people had written off their State Bonds. The idea of the new National Government assuming this debt was profound for people who understood government, laws, and the like, but most patriotic farmers and frontiersmen sold their bonds to Speculators for a fraction of the value. Under the theory of bailing out the States, the rich Bankers, financiers and speculators of some states who had paid pennies on the dollar to buy the bonds would get the full face. would and make a huge windfall profit, The patriots who originally bought the bonds would have taken a big loss. The same argument with fairness and business support to be balanced has been ongoing in our democracy over and over whenever, the Federal Government has bailed out banks, countries, and corporations or guaranteed debts.

Thomas Jefferson

Immense sums were filched from the poor and ignorant.

Franklin D. Roosevelt

Don't forget what I discovered that over ninety percent of all national deficits from 1921 to 1939 were caused by payments for past, present, and future wars.

Thomas Jefferson

… the most bitter and angry contests ever known in Congress

Jefferson was then Secretary of State and Hamilton, Secretary of the Treasury. See {629699} for Hamilton’s view.

War Debts Quotes