In 1864 the magnificently named Amos W. Stetson wrote Is our Prosperity a Delusion? Our National Debt and Currency (published by A. Williams & Co, Boston). He argued that the debt being accumulated by the Civil War (1861-1865) was unsustainable. For context, US national debt increased during the war from $64.8 million to $2.6 billion. In today’s money that is equivalent to roughly $45 billion, a fraction of the current US national debt (more than $18 trillion).
Our National Debt is an almost complete annihilation of capital; nearly its whole amount having been withdrawn from productive employment — it stands today a mortgage upon the property of the people, the interest upon which must be met by taxes paid by the people.
That we have abundant ability to sustain the burden of a large national debt, I have not the slightest doubt. That a debt, of reasonable proportions, distributed among the people, would have the tendency to unite us more compactly and steadfastly as an undivided nation, I believe susceptible of proof. And that Mr. Chase, the Hon. Secretary of the Treasury, has played his part with admirable shrewdness, tact, and skill, I fully believe.
“Mr Chase” is Salmon Portland Chase, who established a national banking system, and introduced the first American paper money.
Nevertheless, I am of the opinion that debt created by war, and consequent destruction of capital, cannot result in the material wealth and prosperity of the nation, whatever specious appearances it may possess. If, however, the hundreds of millions of capital destroyed, and debt created had been spent in improving rivers and harbors, the construction of railroads, the widening of canals, the advancement of learning, and the encouragement of science, all of which would have been a productive expenditure of capital, then indeed should we have been enabled to rejoice in our prosperity as a people, and in the brilliant position we should have attained among the nations of the earth.
It is often said, England is prosperous ; she sustains a large debt and so can we. This is all very true ; but we know not to what higher degree of prosperity she might have attained, had she not been burdened with debt ; for with all her prosperity, the masses of her people are impoverished.
” The poor of Great Britain,” says Joseph Kay — than whom no one is more competent to express an intelligent opinion — “are more depressed, more pauperized, more numerous in comparison to the other classes, more irreligious, and very much worse educated than the poor of any other European nation, solely excepting Russia, Turkey, South Italy, Portugal and Spain.”
Joseph Kay was a British economist, who had published two books on the poor of England and Europe, plus one concerning poor children in England and Germany.
We do not, therefore, want to imitate England, — far from it, there the rich grow richer, and the poor poorer, — but we desire to raise the masses of liberty-loving Americans to a higher level, and to a more prosperous condition, rather than oppress them with a burden of government taxation, which, in all nations, inevitably falls directly and indirectly upon the poor and producing classes.
Our national debt, although for a noble purpose, has been contracted through the deceptive character of a paper currency, without the reception of an adequate value. The increased prices of commodities produced by paper issues have very much enlarged it. The nation has been, in fact, an immense borrower of a depreciated currency, which it agrees to refund in specie. In other words, we are borrowing commodities at high paper values, which are fifty per cent, premium over their specie value, and agree to pay for them in specie. Our debt is therefore undergoing a rapid increase, because we thereby agree to pay $150 in gold for every $100 we receive.
The UK national debt at the time of publication of Stetson’s book was £790 million (somewhere in the region of £40 billion today). Today it stands in excess of £1.5 trillion.
“The more things change, the more they are the same.” (Jean-Baptiste Alphonse Karr)