The two blanket transactions with France—the bulk sale of buildings and supplies and the general settlement of claims—were of great value to the United States in relieving this nation of the responsibility of having to deal with individual French claimants. In taking over all the A. E. F. installations the French Government agreed to hold the United States harmless from all claims for property damage and restoration. In the general settlement the French Government assumed responsibility for all other claims of French nationals against the United States and agreed to settle with the claimants. If, however, the claims paid by France exceed 12,000,000 francs, America is bound to pay the excess up to 6,000,000 francs. Except for this arrangement, the American Government would have had to maintain in France for years an organization for dealing with French individuals’ claims.
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We are now in position to see in close approximation the financial result to the United States of the international war business. On the credit side we have the Cuthell settlements, amounting to $48,716,080.99 in all—this figure, however, not including the Cuthell Board’s settlement with the French, the debt of France on her American war contracts being carried over into the general settlement effected by the United States Liquidation Commission. We have, as a further credit, the 6,000,000 francs which were the American share of the French payment in the liquidation of the Anglo-American heavy tank project. Finally, the general settlement of the Liquidation Commission with the French Government brought to the Treasury the further sum of $28,000,000. To all these credits must be added the $800,000,000 received from the sale of the A. E. F. property. The sum of all the American credits (counting ten francs as a dollar) is approximately $877,000,000.
From this credit, however, we must subtract, first, £17,726,685 13s 13d as the American obligation embodied in the termination contracts made with the British Government by the Liquidation Commission, and £2,946,511 2s 8d as our debt to England under the Burr-Niemeyer Agreement. We must subtract also the $3,568,653.23 paid by the A. E. F. in cancellation charges to individual European contractors. A final subtraction is the 437,985,399.73 francs paid by the Liquidation Commission for port dues and for the transportation of the A. E. F. on French railroads. Translating pounds sterling and francs into dollars at average exchange rates, the total debit of the United States is found to have been about $120,000,000. The net balance, therefore, in favor of the United States as a result of the international war industrial transactions was the sum, approximately, of $757,000,000.
CHAPTER XIX
THE BALANCE SHEET
What did the war cost America? It may be that an accurate answer to that question will never be given. Certainly it cannot be given now, when the stocks of surplus materials are still being sold and the final settlements of the more difficult claims are still being made. Still, we can arrive at a fair approximation of what the war cost the War Department alone. In doing so we must deal with billions of dollars in our columns, and therefore errors and differences of a few millions, or even of a few hundred millions, have no important effect upon the totals. Even if all costs and credits could be figured out to the penny, the result would not be much unlike the estimates which follow.
As a starting point we can take the appropriations for the Army made by Congress, since all the war costs of the War Department must be included within those appropriations. And we find that for the Army Congress appropriated in all, for every war purpose, the sum of $24,373,274,223.67. But not all these appropriations were expended. Some were made late in the war, and none of the money authorized by these acts to be spent was even obligated before the armistice terminated all proposed new projects. Congress hastened to repeal the untouched appropriations, and the various repeal acts canceled authorizations to the amount of $7,703,448,569.36. Therefore, the net amount made available to the War Department by the war appropriations was $16,669,825,654.31.
This figure still does not represent the gross war cost of maintaining the War Department, but it is close to it. Since final expenditures and reimbursements have not yet been determined, but are still growing, as claims are paid and surplus property is sold, it is necessary that we accept a date somewhere and examine the ledger on that day, and from this examination we may be able to estimate closely the final figures. The date chosen here is April 17, 1920,—a day far enough this side of the armistice to bring the figures fairly close to their ultimate and conclusive form. By that day the Army was almost completely demobilized, the liquidation of the Army’s foreign affairs was virtually complete, the demobilization of the domestic war industry was approaching the end, and the greater part of the surplus war supplies had been sold.
On April 17, 1920, then, we find that the actual expenditures of the War Department had reached the total of $16,276,288,337.19. This was within $400,000,000 of the net war appropriations, the difference, of course, being in the Treasury as unexpended balances available to those paying the final war bills of the War Department. Yet this expenditure cannot be labeled the cash cost of the war to the Army. We must first make several large deductions for money derived from sales of materials and, especially, for the property on hand set aside for the permanent Army and for the military readiness of the United States.
The foreign liquidation, as we have seen, recovered into the Treasury approximately $757,000,000. On April 17, 1920, the sales of military property in the United States had brought in the sum of $641,261,000. Transfers of army property for use by other departments of the Government—a proper credit—involved materials valued at $42,096,000. On the date selected there still remained in the United States surplus, but unsold, army property valued at $600,000,000. The average recovery from the sale of surplus within the United States was about 75 per cent of the cost. Assuming that this ratio would hold throughout the entire liquidation, we can anticipate a cash recovery of $450,000,000 from the surplus still existing on April 17, 1920.[16]