316 SPECIAL PROVIDENCElioninhard-earnedtaxpayermoney.!AsSen. HiramJohnsonwroteto
hissons,explaininghisoppositiontoHoover'sproposedmoratoriumon
war-debtrepaymentsduringthedepression,"Theordinaryman...like
myself...resentsinthistimeofstressbeingsaddledwithunusualand
harshtaxation,andpaying$250,000,000thisyear,whichshouldhave
beencollectedfromEurope."2RaisingthetaxesofAmericancitizensto
subsidizedebtreliefforforeigncountrieswasnomorepopularthen than
itwouldbenow.
Jeffersonianargumentsfocusedonthehypocrisyofthedebtornations
andnotedthattheyclaimedtobeunabletopaytheirdebtstotheUnited
States but found no difficulty in raising the money to oppress
theinhabitantsoftheirvastcolonialempires.FortheUnitedStatesto
forgive thewardebtswouldsimplyfeed militarismandimperialism
abroad."Everydollarwedeductfrom thislegitimateclaimwillfeed
themilitaristicmawofthatcountry[France},"SenatorBorahwrotein
192 3.^3
WilliamJenningsBryanproposedlinkingdebtforgivenessto"satis-
factory" disarmament agreements,4 bursuch potentiallyconstructive
approacheswereovershadowedbyfierceresistancetotheideaofexpen-
sive foreign giveaways. Rep. Louis McFadden ofPennsylvania saw
Britain'sinterestina moratoriumandforgivenessaspartofa widerBrit-
ishplotagainsttheUnitedStates."AssoonastheHooverMoratorium
wasannounced,"hethundered,"GreatBritainmovedtoconsolidateher
gains. After thetreacherous signingawayofAmericanrights at the
7-powerconferenceatLondoninJuly,1931,whichputtheFedunder
thecontroloftheBankofInternationalSettlements,GreatBritainbegan
totightenthehangman'snoosearoundtheneckoftheUnitedStates."5
Thisoppositionmaderealprogressonthedebtissueimpossible,and
theresultwasunsatisfactoryfromeverypointofview.Withgovernment
encouragementAmericanbankerslent Germanymoneyto repaythe
Allies.Ultimatelythefinancialinstabilityofthissystemhelpedprecipi-
tatetheGermanfinancialcollapseof1932,6deepeningthedepres,sionin
theUnitedStatesandassistingHitler'srisetopowerinGermany.The
UnitedStatesneverrecoveredthewardebts;ofthenearly$12 billion
owed,only$2.6billionwaseverrepaid.^7 (Finlandwastheonlycountry
topayitsdebttotheU.S.infull,itslastdebtinstallmentcominginthe
U.S. bicentennialyearof1976.8)TheAlliesgotpreciouslittleoutof
Germanyaswell,withonly2.5billiongoldmarkspaidourofthetotal
billof 132 billioninreparations.
AmericanfinancialpolicyinEuropecouldoperateonlywithinnar-