War Debts Research Articles

The British Program for the "Reconstruction in Europe" in 1922: Political and Diplomatic Aspects

The article examines the process of formation of the British program for the "reconstruction of Europe" and the diplomatic efforts of Prime Minister D. Lloyd George to promote it on the eve and during the Genoa Conference of 1922. The Conference was one of the key events of European diplomacy between the two world wars. In 1922, thirty four nations met to restore peace between victors and vanquished, reestablish ties between Soviet Russia and the West, and promote the economic reconstruction in Europe. The relevance of the problem under study is due to the controversial assessments of the Genoa Conference in modern foreign and domestic historiography. Considering the content of these discussions, the authors of the articles proceed from the fact that Lloyd George proposed to hold a major economic and political conference to re-energise the European economy and revive the flagging fortunes of his coalition government. He believed that if Russia was opened to world trade, this would enable Germany to prosper and pay reparations to Britain and France, who could then repay their American war debts. Germany's agreement with the new principles of relations with the winners would abate France’s security fears, thus contributing to the stabilization of the Versailles world order. However, the British program was not implemented, because Soviet Russia and Germany concluded the Treaty of Rapallo. Analyzing the reasons for the failure of D. Lloyd George, the authors come to the conclusion that they stem from the basic contradiction between the large-scale plan and the diplomatic miscalculations made by the British delegation on the eve and during the conference.

Impact of the French Revolution and the Napoleon Wars on Industry Mobility, The Military and The Economy in England Country

The subject matter occurred at the start of the French Revolution and Napoleonic Wars which caused various problems such as poverty caused by damage to the industry through various continental blockades which triggered an increase in prices resulting in an economic crisis and had an impact on increasing government spending on war costs. The purpose of this study is to find out how the impact of the French Revolution and Napoleonic wars on the industrial, military, and economic mobility of the British state which focuses on the struggle for power aimed at conquering it. Thus, researchers use quantitative methods that use literature studies by collecting various data and information which are then processed to produce precise and accurate conclusions according to the facts that have occurred or will occur. This war has a long-term impact that builds inhibits the development of the world economy. The results of the war research have destroyed economic resources, agriculture and factories were all abandoned due to the war which resulted in people not having enough money to buy basic necessities and having to defend themselves. The strategy of the UK was to continue to borrow heavily for its war expenditure at relatively low rates. However, Britain's tax rate did not change much as long as it earned a peacetime surplus that offset the wartime deficit and paid off the mounting war debt.

Debt Diplomacy in the 1920s: The Case of the French and Hellenic War Debts

Debt Diplomacy in the 1920s: The Case of the French and Hellenic War Debts

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Previous article FreeBack CoverPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreOn War Debts and Long-Term Interest RatesIn the year 490 BC, Athenians were about to confront King Xerxes’s army in the fields of Marathon. Just before marching out to the battlefield, the polemarch Callimachus made a vow to Artemis. “And while they had vowed to Artemis that for every man they might slay of the enemy they would sacrifice a goat to the goddess, they were unable to find goats enough; so they resolved to offer five hundred every year, and this sacrifice they are paying even to this day.” (Xenophon, Anabasis III, 2, 12) “In the battle of Marathon about six thousand and four hundred men of the foreigners were killed, and one hundred and ninety-two Athenians.” (Herodotus, The Histories VI, 117)The sacrifice was celebrated during the festival of Agrotera Thusia at least 500 years after Xenophon. This yields a yearly real interest rate paid to the gods of about 1/12, or 8.5%.[Xenophon, Anabasis (Cambridge, MA: Harvard University Press), Loeb Classical Library 90; Herodotus, The Histories (London: Penguin, 2003)](Suggested by Iñigo Iturbe-Ormaetxe) Previous article DetailsFiguresReferencesCited by Journal of Political Economy Volume 129, Number 4April 2021 Article DOIhttps://doi.org/10.1086/714588 Views: 415 © 2021 by The University of Chicago. All rights reserved.PDF download Crossref reports no articles citing this article.

Urban Neoliberal Debt Peonage: Prisoner Reentry, Work, and the New Jim Crow

In this study, I analyze the experiences of people leaving prison and jail, using the concept of urban neoliberal debt peonage. I define urban neoliberal debt peonage as the push of race-class subjugated (RCS) formerly incarcerated people into the low-wage labor market. I argue that urban neoliberal debt peonage is a social process of economic extraction from and racial control of RCS groups structured by state bureaucracies and corporate employers. I provide evidence for this argument using participant observation and interview methods in a large northeastern U.S. city at an employment-oriented prisoner reentry organization that I call “Afterward.” People came to Afterward seeking employment, but were forwarded to work that was often unstable and unable to support subsistence living. Unstable low-wage work did not alter people’s social and economic situations enough to preclude them from engaging in income-producing criminal activity that comes with the risk of reincarceration. Meanwhile, the criminal justice system extracted money from the formerly incarcerated via debt collection, and corporate employers benefited from neoliberal policies that give them tax breaks for hiring Afterward clients. While not identical, the social process of urban neoliberal debt peonage echoes that of post–Civil War debt peonage and convict leasing.

Hayek and Mises: Some Vignettes

My aim in this paper is to present a series of vignettes, snapshots if you will, that when I am finished will give us perhaps a little bit better idea of the Hayek-Mises relationship. Some of these stories are well known, others less so, and some that are well known might need to be modified. After I present these stories I am hopeful that those in the audience who may have others will be encouraged to share them, and when necessary to correct my own. I should add that some of these come from research that the Viennese historian of economic thought Hansjoerg Klausinger and I have done for a planned biography of Hayek. Beginning at the beginning, Hayek has told us in his reminiscences that though he had once tried going to one of Mises’ lectures at the University of Vienna when he was a student there from 1918 to 1921, he found him not to his taste (Hayek 1994, p. 68). After finishing his first degree he went in search of a job, and found himself standing in fall 1921 before Mises at the Abrechnungsamt (which I shall henceforth refer to, given my hatcheting of the German language, as the Office of Accounts), a temporary governmental office charged with clearing war debts.

The Kaiser and the ‘Political Dinosaur’: Greece, Germany and World War I Claims

In recent years, Greece's war claims against the Federal Republic of Germany, stemming mainly from World War II, have returned to the forefront, piquing Greek and international public opinion, while mass media worldwide strove to understand the nature of these demands. However, a fact that remains unknown, is that in 1974, the Federal Republic agreed to compensate Greek nationals for damages they suffered during Greece's neutrality before its official entry in World War I in 1917. The compensation was paid 56 years after the end of the Great War and was distributed almost 70 years after the damaging events, with a large part ending up in the hands of non-Greek recipients. This article will follow the origins of the claim, by analyzing its various aspects and the international framework governing World War I reparations. It will also document Greek and German policies in handling the claim, the claim’s connection to the Greek military dictatorship (1967–1974) and in part to the USA, while depicting the legal and political impact on the war debt assertions currently being raised by the Greek state.

Hamilton's Law and Finance - Borrowing from the Brits (And the Dutch)

We live in an era when Modern Monetary Theory has gained purchase. Deficits do not seem to matter to nations or their finance ministers. States believe the can print their way to utopia without a reckoning; this is a scheme freighted with disaster. This article centers on the achievements of America’s greatest finance minister whose grasp of political economy was without equal. Hamilton charted the course for American economic power. His work is timely and worthy of study. Late-18th century America sought commercial growth and new manufacturers yet feared monopolistic economic power. Hamilton’s economic program, centered on a national bank and program for manufacturing, provided the framework for the finance-led transformation of America. In a short time, Hamilton’s elegant solutions (based upon the English financial model) transformed America from a defaulting debtor to a magnet that attracted immense amounts of capital in the 19th century. The burden of the Revolutionary War debt needed to be resolved. Hamilton’s program: the assumption of the states and Confederation debt, its monetization, the establishment of the Bank of the United States, and Report on Manufactures laid the foundation for a vibrant economy. The article demonstrates how Hamilton’s prudent program strengthened the new federal government while providing the blueprint for the commercial society that emerged in the 19th century.

‘We can't pay’: how Italy dealt with war debts after World War I

The article deals with Italian inter-war debts against the background of the contentious international issue of war reparations that many Allied nations wanted to link to war debt repayments. Italy, having first achieved an extremely large haircut by restructuring US and UK debts in 1925-6, defaulted in 1934, after the Lausanne conference of 1932 failed to deliver war debt forgiveness. We construct a new series of Italian foreign debt from 1925 to 1934 that is consistent with the unfolding of relevant historical events. Starting in 1926, our values are much lower than the currently available foreign debt series. The reason is that the current series do not take into account the large haircut that Finance Minister Volpi extracted from the London debt accord of 1926. Then, beginning in 1932, the values of our series exceed the currently available series because we date the formal Italian exit of the US war debt to 1934, whereas the current series dates it to 1932, at Lausanne.

War, International Finance, and Fiscal Capacity in the Long Run

AbstractIn this article I revisit the relationship between war and state making in modern times by focusing on two prominent types of war finance: taxes and foreign loans. Financing war with tax money enhances the capacity to assess wealth and monitor compliance, namely fiscal capacity. Tax-financed war facilitates the adoption of power-sharing institutions, which transform taxation into a non-zero-sum game, carrying on the effect of war in the long run. Financing war with external capital does not contribute to long-term fiscal capacity if borrowers interrupt debt service and, as part of the default settlement, war debt is condoned or exchanged for nontax revenue. The empirical evidence draws from war around the world as early as 1816. Results suggest that globalization of capital markets in the nineteenth century undermined the association between war, state making, and political reform.

Liberation

Liberation Speer Morgan The founding concepts of the United States are based on Enlightenment ideals of equality and freedom. Throughout our history these broad ideals have struggled against anything that might impinge on them, such as government controls, regulations, and taxation. This opposition, along with other forces both internal and external, has resulted in our share of strife, as well as occasional threats of systemic failure. In our nearly 250 years as a nation, we have fought wars and serious conflicts at an average of about one per generation, more than any other major military power. We have repeatedly armed and disarmed. We have also conducted systemic campaigns against perceived enemies—including Native Americans, Irish and other immigrants, blacks, “Leftists,” organized labor movements, and various others— within our own borders based on race and political beliefs. There have been plenty of moments of crisis that, while little remembered now, were real and threatening at the time. Our first real estate, debt, and securities crash as a nation happened less than ten years after the end of the Revolution. Among the notable people who went broke in that crash was Robert Morris. Morris had been the superintendent of finance who’d come up with the money to keep General Washington’s army in the field from 1781 through 1784 to finally win the war. Along with Alexander Hamilton, Morris helped establish the American financial system. Unfortunately, he was also a principal buyer of millions of acres of western lands, as well as real estate in Washington, D.C., which was the immediate disaster that brought him down and got him thrown into jail. Two years after the 1792 crash, the Whiskey Rebellion forced [End Page 5] President Washington—desperate for money to pay off Revolutionary War debt—to send fourteen thousand troops to Western Pennsylvania to quash an uprising over taxes on distilled spirits. Looking at the course of American history, it could be argued that the threats to our nation were apparent from the start and in some ways even foreshadowed by the Constitution. It is fortunate that genuine leaders and larger democratic efforts have arisen and fought back—moral, competent people such as Abraham Lincoln, Elizabeth Cady Stanton, Franklin Roosevelt, and Martin Luther King—who have reminded us that we can continue to fight for a practical and resilient liberty. Liberation is a classic theme in literature. It comes in many forms, from bold statements of the free human imagination, such as Walt Whitman’s “Song of Myself,” to humble expressions of renewed vision, as in William Blake’s “The Tyger.” In tone, it may be celebratory, or it may be ominous or fatalistic, as in Melville’s Moby Dick, which dramatizes how moralistic quests for deliverance can in certain cases be nihilistic, worse than the evil the protagonist imagines fighting. It can also be angry and specific, as in Frederick Douglass’s 1845 narrative of his own life, in which he speaks of the diabolical hypocrisy of “the corrupt, slave-holding, women-whipping, cradle-plundering, partial and hypocritical Christianity of this land.” This issue’s stories include Thea Chacamaty’s “Earthquake Weather,” which portrays the dilemma of a pair of former West Coast rock musicians, Iris and her husband, George. Iris is pregnant with their first child, and they’ve settled in a house, bought with her sister’s money, which has just been leveled by an earthquake. Iris’s relationship with her sister, Patty, is tense, after Patty published a best-selling tell-all memoir about their dysfunctional family. With the house destroyed and no money to get through the short term, the couple has to rely again on Patty, but it doesn’t take long for her to discern things about her sister that paradoxically lead to a certain degree of unshackling from their family’s past. In his short story “Boulder,” Paul Smith’s unnamed narrator is a member of a construction crew laboring on a thirteen-mile addition to the interstate that two other companies are also working on. With sharp comic touches, the story reveals the internal politics and competition among contractors and subcontractors in an industry that doesn’t appear much...

Loans of the revolution: how Mexico borrowed as the state collapsed in 1912–13

AbstractThis article assesses why the French and US banks Paribas and Speyers underwrote a series of loans to revolutionary Mexico in 1912 and 1913, when the state was in the process of collapsing. This is a case of a war debt that failed to prevent the borrowing government from suspending payments and subsequently falling. Based on unpublished primary documents, the article shows that the 1913 loan involved a conflict of interest. The credit delayed a default and sustained the price of Mexican securities while Paribas, its main underwriter, was liquidating its Mexican portfolio. Evidence also suggests the existence of asymmetry of information. Paribas accessed pessimistic but accurate first‐hand information on Mexico, while the public read over‐optimistic press reports. Paribas forced the government to sell the bonds on the primary market at a price that was low, controlling for publicly available data. It subsequently sold the bonds at a margin on the secondary market. An additional reason for the lending is the Nacional railway, a state‐owned company that used a share of the funds to pay its debt. More exposed to Mexico than Paribas, the small and internationalized Speyers held the bad bonds it had underwritten.

Krigens finansieringssystemer - en formanalyse af krig og kredit i kølvandet på Clausewitz

Clausewitz analysed wars in their material, social and temporal interchanges (Wechselwirkung). During a war the form of the conflict is transformed from a controllable and planned activity into a form where its gravitation centre is displaced. Over the last 500 years, logistics and financial supplies have become the repeated focus for protracted wars. The forms of taxation, inflation, war debts and credits have been decisive. In fact war strategies can have the financial attrition of the enemy as its culmination point and its gravitation centre. A vast army stationed far away and for a long time imposes enormous financial and human costs. The US in particular has been affected by the protracted wars in Vietnam, Afghanistan and Iraq. The recent wars and a number of complex financial mechanisms accelerated the US fall from unipolarity. This shows that wars contain risks that cannot be controlled by a political system. After the initial decision to go to war, control is only reasserted when the political system accepts to stop the ever increasing supplies.

State-Building After War's End: A Government Financier Adjusts His Portfolio for Peace

The end of the War of 1812 transformed American political economy. Merchant-financier Jacob Barker participated enthusiastically in this transformation: divesting from war debt after 1814, Barker poured his capital and political experience into banking, insurance, lobbying, and lawmaking. This article makes the case that Barker himself was one of the period's more enduring institutions: though he spent many years in disrepute, his experience and financial logic structured the American state in ways that would endure long into the nineteenth century.

1865 Alabama: From Civil War to Uncivil Peace by Christopher Lyle McIlwain Sr.

Reviewed by: 1865 Alabama: From Civil War to Uncivil Peace by Christopher Lyle McIlwain Sr. Mike Bunn 1865 Alabama: From Civil War to Uncivil Peace. By Christopher Lyle McIlwain Sr. Tuscaloosa: University of Alabama Press, 2017. 364 pp. $49.95. ISBN 978-0-8173-1953-3. 1865 Alabama: From Civil War to Uncivil Peace explores in unprecedented depth the devastating final year of the war, as well as the tumultuous beginnings of the Reconstruction Era in the state. In the pages of the book, author Christopher Lyle McIlwain, Sr., argues for a reconsideration of our collective understanding of both, contending our hazy shared memories of the denouement to Alabama's wartime [End Page 267] trials and its postwar reality are heavily colored by a debilitating accretion of myth, legend, and partisan scholarship. McIlwain believes the year 1865 in Alabama history is rather simply defined by a cascading litany of bad decisions on the part of irrational leaders which manifested themselves in an unnecessarily prolonged and particularly devastating period of economic struggle, political turmoil, and isolation from the mainstream of American society that handicapped the state's progress for generations afterward. McIlwain opens his study by chronicling perhaps the paramount blunder among a series of poor choices by Alabama leaders, a decision which, in his opinion, flew in the face of common sense—the attempt to continue to wage a war he contends had long been lost by 1865. Continuing the theme from his recent book Civil War Alabama (Tuscaloosa, 2016), he portrays Confederate nationalism as something akin to either an elaborate hoax foisted on a gullible populace or a tragic disconnect with reality. The state's elite come in for the harshest of his criticisms, as he examines their self-serving efforts to prolong the war, offering either editorial or financial support—but rarely battlefield service—with a thinly veiled contempt. While he tracks in cursory fashion some of the major military campaigns which ravaged the state from the Tennessee Valley to Mobile Bay in the spring of 1865, this is no military history. McIlwain's focus is on the progressive disaffection with the Confederate military effort within Alabama and the wasted opportunities to end the struggle prior to the dismantling of its industrial complex, the complete destruction of its economy, and a wasteful loss of life. The conviction that the state's leaders should have been willing and able to move on and make the best deal they could with their conquerors in the wake of Appomattox undergirds McIlwain's assessment of events during the latter half of 1865. He notes that despite conventional wisdom, a good deal indeed could have been obtained when viewed from their perspective. President Abraham Lincoln, he argues, offered even more generous and lenient terms than commonly understood, pointing to evidence that indicates the president [End Page 268] did not intend to insist on full political rights for black citizens as a condition of the readmission process. Thus with Lincoln's assassination, Alabama's path towards rejoining the Union with any degree of its traditional political autonomy grew considerably more difficult. But the early days of President Andrew Johnson's administration offered opportunities for a relatively smooth readmission process, as well, asserts McIlwain. When Alabama's leadership stubbornly refused to comply, it not only marked the beginning of a hegemonic shift in the state's political power structure, but spelled doom for the state's prospects of economic recovery. It is actually in Alabama's marked recalcitrance during the first months of Johnson's tenure, McIlwain argues—not the later vindictive reprisals of radical Northern Republicans—that the state's postwar fate was sealed. Alabama leaders followed a course of arrogant retrenchment in the latter half of 1865, highlighted by the passage of an exceedingly conservative constitution which raised the eyebrows of observers in Washington. Overall, the first few months of Alabama's postwar era revealed state leaders to be committed to subverting efforts toward the full extension of civil rights to black citizens; the election of outspoken former rebels to the highest of offices; and even the entertaining of an outrageous attempt to repudiate the state's war debt. All this only encouraged...

Debt, Taxes, and Reform in Walter Scott’s Count Robert of Paris

Brian Goldberg, “Debt, Taxes, and Reform in Walter Scott’s Count Robert of Paris” (pp. 343–368) Walter Scott’s Count Robert of Paris (1831) treats “debt” in a way determined by the author’s response to the Reform Crisis of 1830–1832. Scott’s solution to the reformist impulse was the reintroduction of the income tax. He believed that an income tax would give the nation’s elites an opportunity to acknowledge their duties and contribute their fair share toward the payment of the national war debt, thus stabilizing the economy and eliminating a crucial motive for reform legislation. Count Robert of Paris reimagines this solution by translating the nation’s relationship to government debt into a system of personal indebtedness. While the novel’s main characters, the Anglo-Saxon mercenary Hereward and the Crusader Count Robert, assume their roles in a working hierarchy through the assumption and discharge of debt, these developments take place in a dystopian fictional world that reflects Scott’s apprehensions about reform. In Count Robert’s late-eleventh-century Constantinople, leaders evade responsibility, justice is inscrutable or impossible to achieve, and the city is populated by Crusaders and Byzantines who are unwilling or unable to recognize or pay what they owe.

Dissolution of an Empire: Insights from the İstanbul Bourse and the Ottoman War Bond

During the transformation period of the Ottoman Empire leading to the Republic of Turkey, many conflicts took place between 1918 and 1923. These conflicts interrupted the servicing of the Ottoman war bond. The reimbursement likelihood of this bond was related to the outcomes of First World War and the hostilities. This paper analyses the impacts of First World War and hostilities on the risk assessments regarding the Ottoman war debt, using manually collected data on the price of the Ottoman war bond traded at the İstanbul bourse between 1918 and 1925. The empirical results imply that the defeat of the Bulgarian army and the peace offer of Austria-Hungary were associated with the increasing premium demanded by investors of the bond. The victories of the Turkish National Movement and the peace offer of the Allies to end the hostilities by 1922 positively affected the likelihood of the servicing of the debt.

Fairness and efficiency in US Revolutionary War takings and post-war debt redemption

Many have noted the debate amongst Hamilton, Jefferson, and others on compensating original versus final US Revolutionary War debt holders upon federal assumption of state debts in 1790. However, to our knowledge the economics literature has not yet proposed a theoretical model of the argument. The purpose of this paper is to propose a simple household-level economic model to capture the most salient aspects of the debate, including the role of military impressment and the emergence of the Takings Clause of the US Constitution.

英米戦債協定の成立とイギリス外交、一九二〇―一九二三年

英米戦債協定の成立とイギリス外交、一九二〇―一九二三年

SOVEREIGN DEBT RELIEF AND ITS AFTERMATH

This paper studies sovereign debt relief in a long-term perspective. We quantify the relief achieved through default and restructuring in two distinct samples: 1920-1939, focusing on the defaults on official (government to government) debt in advanced economies after World War I; and 1978-2010, focusing on emerging market debt crises with private external creditors. Debt relief was substantial in both eras, averaging 21% of GDP in the 1930s and 16% of GDP in recent decades. We then analyze the aftermath of debt relief and conduct a difference-in-differences analysis around the synchronous war debt defaults of 1934 and the Baker and Brady initiatives of the 1980s/1990s. The economic landscape of debtor countries improves signicantly after debt relief operations, but only if these involve debt write-offs. Softer forms of debt relief, such as maturity extensions and interest rate reductions, are not generally followed by higher economic growth or improved credit ratings. (JEL: E6, F3, N0 and H6)