Moreover, the existence of this huge debt to us on the part of the countries of Europe will keep rates of exchange at low levels for many years, in spite of the best they can do to send goods to us, and will impair their ability to buy from us the surpluses of raw materials, especially wheat, cotton, copper, and petroleum, that we are bound to make and must sell if those industries are to be operated at anywhere near the capacity for which they are developed. This influence has not yet exhibited itself, except perhaps in speculative anticipation, for none of this debt, either principal or interest, has yet been remitted to us; but as soon as that begins this will inevitably be a potent factor.
Such considerations indicate some of the major reasons why it may be politic for us to cancel this debt, in whole or in part. Quite aside from considerations of policy, however, are those of equity, and by equity I do not mean legality, for there is no question about the debt being legally owed and fully recognized. It is simply the question whether the exaction of full payment is quite square.
The United States went into the war because it had to in order to protect its future welfare. Great Britain went into the war at the beginning for the same reason, but while the British quickly foresaw the meaning of German aggression, it took the United States more than 2½ years to do so. In the meanwhile the Allies were fighting our battle as well as their own, and we were profiting materially—to the extent of about five billion dollars—as I have estimated in a previous chapter. After we joined them in the war we gave them credits out of which they bought goods of us for the purpose of
