The Debts We Never Paid

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In March, 1930, Lord Redesdale, father of the Mitford girls, rose in the House of Lords to move that the repudiated American state debts, which he estimated to amount, with accrued interest, to seventy-eight million pounds, be applied against the British war debt, thus enabling the United States to rub out “a painful and shameful page” from their history and “raise them from the level of Russia.” (Russia, at the time, was the only sovereign nation to have repudiated its debts.) The Earl of Limerick supported Lord Redesdale and pointed out that the interest, if compounded, would bring the sum due to over one billion dollars. Lord Ponsonby, for the government, which was anxious not to disturb the London Naval Conference then in progress, held that the state debts were the result of private transactions and that for the British government to attempt to collect them would be impracticable; and Lord Redesdale grouchily subsided.

And there the matter rests. Still in their owners’ strongboxes and solicitors’ files they lie, the gaily engraved obligations of the deadbeat states. And there, while we go on lecturing defaulters and admonishing new states to meet their obligations, they will go on lying. The descendants of the widows and orphans of the 1840’s still subscribe to the annual bulletins of the Council of Foreign Bondholders, and yearly scan the melancholy news. There may be grounds for hope of some sort of accommodation with various Central American defaulters. But on the Planters’ Bank bonds of Mississippi, like the czarist Russian four per cents, the news is always bad.