World War Debt Settlements

World War Debt Settlements

World War Debt Settlements

World War Debt Settlements

Excerpt

The world war left in its wake a volume of international indebtedness of unparalleled extent. Taking both inter-allied and reparation debts into account, there came into existence in the space of about five years a much larger total of international obligations that had been built up by ordinary processes in the course of the preceding century. These debts were, moreover, inter-governmental in character and resulted almost wholly from the destructive processes of war rather than from constructive commercial enterprise.

At the close of the war there was surprisingly little realization in the world at large of the economic difficulties that might be involved in the liquidation of this indebtedness. Since they were obligations between governments, it was popularly assumed that all these debts would be readily settled merely by the transfer of money between government treasuries. Only gradually has the world come to realize the all-pervasive and far-reaching political and economic implications of the war debts. The existence of these debts, indeed, has proved to be the greatest single obstacle to world reconstruction. Not only has it been productive of currency disorders and trade demoralization, but the whole reparation and . . .

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