XX
WAR LOANS AND ECONOMY
During the last three years and a half the political economy of Germany and her allies has strongly resembled that in vogue among certain South Sea Islanders, who are supposed to make a living by taking in one another's washing. The same money has been making the rounds on one of the oddest economic whirligigs mankind has so far seen.
The war has been carried on by means of funds derived mostly from war loans. By means of them Germany has so far raised, roughly, $19,800,000,000, and Austria-Hungary $8,600,000,000, making a total of $28,400,000,000. In addition to that the two countries have spent on the war about $2,300,000,000 derived from other sources—taxation, indemnities levied in occupied territories, and property here and there confiscated.
Within my scope, however, lie only the war loans.
The interest on the German war loans so far made amounts to $762,000,000 per year. To the German public debts the loans have added $293 per capita, or $1,082 for each producer in a population which the war has reduced to about 67,500,000 fit individuals. Each wage-earner in Germany will in the future carry a tax burden which in addition to all other moneys needed by the government will be weighted every year by $43.28 interest on the present war loans.
Austria-Hungary's load of interest on war loans will amount to $344,000,000 annually. The burden is $204 per capita, or $816 for each wage-earner, out of a population which war losses have cut down to about 42,200,000. The annual interest each Austro-Hungarian breadwinner will have to pay on the war loans is $32.64, and in addition he must provide the revenues which his governments will need to operate.
This means, of course, that the cry for bread will be heard long after the guns thunder no more. It must be borne in mind that the average yearly income of the wage-earner was a scant $460 in Germany, and $390 in Austria-Hungary. The war loan interest so far in sight will constitute about 9.3 per cent. and 8.2 per cent. respectively—no small burden when it is considered that all other revenues needed by the government must be added to this.
But the bitter cup of economic losses due to the war is by no means full with these figures. The Germans have so far lost, killed in action and dead of wounds, fully 1,500,000 able-bodied producers, and have at this time to care for about 900,000 men, of whom one half is totally incapacitated and the other half partly so. The Austro-Hungarian figures are 650,000 men dead, and 380,000 totally or partly crippled. In other words, Germany has lost 2,300,000 able-bodied men, and Austria-Hungary 1,030,000. It may well be said that those dead can no longer figure in the economic scheme, because they consume no longer. On the other hand, each of these men had another twenty years of useful life before him. This long period of production has now been lost, and two decades must elapse before the Central states will again have as many producers as they had in 1914. Their propagation has also been lost, though, with the women as strong numerically as before, this loss will probably have been made good within ten years.
Before treating further of the effects of war loans and their influence upon the body politic, I will examine here how these loans were made, in what manner they were applied, and what the system of economy was to which the transaction gave birth.