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Total debts of principal belligerents, 504.- Table showing debts before the war and at its close, 505. Expenditures, receipts from taxation, and borrowings of the United States, 507.—Great Britain, 508. -France, 510.—Italy, 514.- Russia, 516.-Germany, 519. — AustriaHungary, 526. — Turkey, 527. — Loans to Turkey from Germany and Austria-Hungary, 529.

THE nine belligerent countries specified in the table below have accumulated, after more than four years of war, debts aggregating 236 billion dollars as compared with a total of 26 billion dollars before the beginning of the conflict. To the grand total, the allied countries contributed 170 billion dollars and the Central Powers, 66 billion dollars. Russia leads all the belligerents in the amount of indebtedness, and its obligations continue to increase daily. Inflation prevails here to a degree that is as astounding as it is deplorable. While in other erstwhile warring countries the issuing of paper money is more or less at a standstill, in Russia the government presses are kept busy night and day printing fresh credit notes. Germany follows next in order of importance, with Great Britain and France closely behind, as seen from the summary on the following page.

It must be remembered, however, that there is considerable duplication in the figures given above, the elimination of which would reduce the aggregate materially. In the amount of the national debt of Great

1 Because of lack of information, Japan, Belgium and the Balkan belligerents are not discussed in this article.

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Britain there are included loans to Allies and Dominions amounting to £1,683.5 millions on November 12, 1918, or approximately 8,193 million dollars. France had outstanding on March 7, 1918, 3,225 million francs or 622 million dollars, loaned to allied nations. The obligations of the Allies to the United States totaled 7,975 million dollars on January 31, 1919. The extent of


1 Unless otherwise indicated, the sources of the data presented in this table are identical with those furnished in the text proper. The rates of conversion into dollars are as follows: 1 lira or franc = 19.3 cents; 1 mark 23.8 cents; 1 pound 1 ruble 51.5 cents; 1 Austrian crown = 20.3 cents; 1 Turkish pound * Financial Statement of the United States, March 31, 1917.

$4.8665; $4.40.

* Inclusive of 50 billion rubles, conservatively estimated as the amount of paper money put into circulation by the Bolsheviki. Cf. L'Economiste Européen, October 18, 1918, p. 251. A recent statement by the Omsk government placed the circulation at the present time at 70 billion rubles. Cf. New York Times, April 19, 1919.

• The credits opened by the United States to its allies (i.e., the amounts not actually expended but upon which the latter can draw) totaled $9,036,269,000 on March 27,

financial assistance rendered to Bulgaria by Germany and Austria-Hungary is not known, altho it may be safely said that the great bulk of the former's expenditures has been met by loans from the latter two countries. Turkey's indebtedness is largely included in the estimate of its two principal allies for the loans of Austria-Hungary and Germany totaled £r 207 millions by the end of 1917, or 909 million dollars. Consequently great caution must be exercised in the use of figures appertaining to the net debt of belligerent nations.

Another note of warning must be sounded. The total cost of the war to these countries is by no means accurately reflected in the data presented in this table, even after due allowance is made for duplication as specified above. Even were it possible to translate the loss of lives into dollars and to evaluate all the damages and injuries caused by the war, our estimate would fall short of the truth. Increased and new taxation, the burden of which neutrals as well as belligerents had to bear during the war and will be forced to carry for decades to come, is one factor that may be lost sight of upon a superficial study of this table. The inflation resulting from the huge credit operations on government account and the increase in fiduciary circulation, has contributed in no small degree to the war's toll, and to the misery and suffering of the forces behind the firing lines. Finally, one must reckon with the effects of the world war on the public indebtedness of neutral countries. The interruptions in the flow of commerce, seriously reducing the basis for taxation, increased expenditures accompanying mobilization, and observation

1 In a subsequent article, the writer intends to treat briefly of the fiduciary element in public finance during the war. Some information as to the banking situation at the end of 1917 may be gleaned from an article on which the writer was engaged, appearing in the Federal Reserve Bulletin, April, 1918, pp. 267 et seq.

and maintenance of neutrality guarantees, and the rising costs of conducting the affairs of state have all forced neutral countries to resort to borrowing on a scale that is not usually appreciated.1


The total disbursements from March 1, 1917, to January 31, 1919, were $26,620,334,804, of which $7,975,267,248 represented loans to foreign governments. During the same period, the receipts, exclusive of the public debt, totaled $6,117,762,295.2 To this total, receipts from customs duties contributed $357,574,899 and the internal revenue, $5,132,205,822. The ratio of revenue from taxation to total disbursements is therefore 23.0 for the entire period of the war to January 31, 1919, and the ratio of revenue from taxation to net disbursements, excluding loans to foreign governments, is 29.8.

The gross public debt had on January 31, 1919, reached a total of $23,267,039,032, distributed as follows: bonds, Liberty and others, $17,457,365,040; treasury certificates of indebtedness, $4,798,064,800; and war savings certificates, $1,011,609,242. The prewar debt had been reduced to $1,192,444,102 by December 31, 1918.3

The results of the four internal loans are indicative of the state of prosperity that existed in this country throughout the period of the war and point to the prodigious financial strength that had lain stored away, only to be mustered up as time and occasion demanded it. The first loan was for $1,989,447,389; the second

1 A study of the effect of the war on the indebtedness of neutral countries was made by the writer and published in the Federal Reserve Bulletin, May, 1918.

• Taken from a statement prepared by Secretary Glass for the House Ways and Means Committee. New York Times, February 12, 1919.

Financial Statement of U. S. Treasury, December 31, 1918.

for $3,807,864,349; the third for $3,793,780,647; and the fourth for $6,989,200,000. In every case the loans were



On August 1, 1914 the public debt stood at £710.5 millions; on February 8, 1919 it had reached £7491.4 millions, representing an increase of £6780.9 millions during the war. In this amount there is, however, included advances to Allies and Dominions which totaled £1683.5 millions on November 12, 1918. The net debt on February 8, 1919 was, therefore, £5807.9 millions. Details of the gross amount of debt are here given as follows:

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For the eight months ending March 31, 1915, the average daily expenditure was £2,050,864; in the fiscal year ending March 31, 1916, £4,271,666; in the fiscal

1 Financial Statement of U. S. Treasury, December 31, 1918.

2 London Economist, February 15, 1919, p. 206.

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