The Myth of
“A Rich Man’s War”
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THE MYTH OF
“A RICH MAN’S WAR”
Since Pacifism and semi-seditious agitation have become both unpopular
and risky, the propagandists of disunion have been at pains in
endeavoring to insidiously affect public sentiment by spreading the
fiction that America’s entrance into the war was fomented by “big
business” from selfish reasons and for the purpose of gain. In the same
line of thought and purpose they proclaim that this is “a rich man’s war
and a poor man’s fight” and that wealth is being taxed here with undue
leniency as compared to the burden laid upon it in other countries.
These assertions are in flat contradiction to the facts:
Nothing is plainer than that business and business men had everything to
gain by preserving the conditions which existed during the two and a
half years prior to April, 1917, under which many of them made very
large profits by furnishing supplies, provisions and financial aid to
the Allied nations, taxes were light and this country was rapidly
becoming the great economic reservoir of the world.
Nothing is plainer than that any sane business man in this country must
have foreseen that if America entered the war these profits would be
immensely reduced, and some of them cut off entirely, because our
Government would step in and take charge; that it would cut prices right
and left, as in fact it has done; that enormous burdens of taxation
would have to be imposed, the bulk of which would naturally be borne by
the well-to-do; in short, that the unprecedented golden flow into the
coffers of business was bound to stop with our joining the war; or, at
any rate, to be much diminished.
The best indication of the state of feeling of the financial community
is usually the New York Stock Exchange. Well, every time a ship with
Americans on board was sunk by a German submarine in the period
preceding our entrance into the war, the stock market shivered and
prices declined.
When, a little over a year ago, Secretary Lansing declared that we were
“on the verge of war,” a tremendous smash in prices took place on the
Stock Exchange. That does not look, does it, as if rich men were
particularly eager to bring on war or cheered by the prospect of having
war?
But, it is said, the big financiers of New York were afraid that the
money loaned by them to the Allied nations might be lost if these
nations were defeated, and therefore they manoeuvred to get America into
the war in order to save their investments. A moment’s reflection will
show the utter absurdity of that charge.
American bankers have loaned to the Allied nations—almost entirely to
the two strongest and wealthiest among them, France and England—about
two billions of dollars since the war started in 1914.
These two billions of dollars of Allied bonds are not held, however, in
the coffers of Eastern bankers, but have been distributed throughout the
country and are being owned by thousands of banks and other corporations
and individuals.
Moreover, they form an insignificant portion of the total debts of the
Allied nations; they are offset a hundredfold by their total assets.
Even if those nations were to have lost the war it is utterly
inconceivable that they would ever have defaulted upon that particular
portion of their debt, because, being their _foreign_ debt, it has a
special standing and intrinsic security.
It is upon the punctual payment of its foreign obligations that a
nation’s credit in the markets of the world largely depends, and the
maintenance of their world credit was and is absolutely vital to England
and France. Furthermore, the greater portion of these obligations was
secured by the deposit of collateral in the shape of American railroad
and other bonds, etc., which were more than sufficient in value to cover
the debt.
But let us assume for argument’s sake that the Allies had been defeated
and had defaulted, for the time being, upon these foreign debts; let us
assume that the entire amount of Allied bonds placed in America had been
held by rich men in New York and the East instead of being distributed,
as it is, throughout the country. Why, is it not perfectly manifest that
a single year’s American war taxation and reduction of profits would
take out of the pockets of such assumed holders a vastly greater sum
than any possible loss they could have suffered by a default on their
Allied bonds, not to mention the heavy taxation which is bound to follow
the war for years to come and the shrinkage of fortunes through the
decline of all American securities in consequence of our entrance into
the war?
Is it not perfectly manifest to the meanest understanding that any
business man fomenting our entrance into the war for the purpose of gain
must have been entirely bereft of his senses and would have been a fit
subject for the appointment of a guardian to take care of himself and
his affairs?