Spanish-American War: Death, Debt & Dents (in the U.S. Constitution)
Our debt is important insofar as it affects the value or faith in the U.S. dollar. While we were on a gold standard, citizens could vote daily on their faith in the U.S. dollar. If for any reason they feared their government's paper dollars, all they had to do was to march down to the local bank and exchange them for gold coins. Sadly, this is no longer the case, however, we can still exchange dollars for gold; just not at the local bank. It is important to study history to understand how we arrived at our present condition.
Many wars were fought by the U.S. in the twentieth century at a great cost in lives and treasure. They include the Spanish-American War (the Philippine Insurrection stretched into the twentieth century), World War I, World War II, the Korean Conflict, the Cold War, the Vietnam War, Gulf War I, Somalia, the action in the Balkans, Afghanistan, Gulf War II and many others. They all provided opportunities to open the spending taps and build up mountains of debt. They all also resulted in a steady ratcheting up of Federal Government size, power and loss of personal liberty. In addition to shooting wars, there was Franklin D. Roosevelt's (FDR) War on the Depression (he called it the moral equivalent of war whenever he was spending money), L.B. Johnson's War on Poverty (a line stolen from FDR) and now Ashcroft's War Against Terrorism (ironically referred to as the Patriot Act; patriots everywhere are spinning in their graves).
While these last examples are not actually conventional wars, the word "war" is used to justify the extreme government spending and suspension of liberties associated with them. At the end of every major war, the net result was a larger total debt and a larger more intrusive federal government.
Our national debt was almost under control just before the start of the twentieth century. Mr. Lincoln's experiment with fiat money, in the form of greenbacks to finance the War of Northern Aggression was over, and the million dollars of greenbacks he issued had all been redeemed a couple of decades after that war. All of Europe and the U.S. were on a common gold standard. European Kings normally only collected in the range of five percent total taxes, and so standing armies and wars were much smaller. (Napoleon's citizen army was an exception from the above statement.) Our own U.S. Federal Government was supported solely on tariffs and land sales.
Our story today starts off just before the dawn of the twentieth century with the Spanish-American War. This was "the splendid little war" that started the U.S. down the road to empire building beyond our shores. At the conclusion of the war, we ended up with all the Spanish Territories in the Pacific (for coaling stations to provide access to the vast Chinese market) and the Spanish Territories in the Gulf of Mexico (excluding Cuba which we liberated and then intervened in on a regular basis afterwards).
Even though it was a short war (not counting the guerrilla war that followed in the Philippines), it was much costlier than most people realize. After the Maine exploded in Cuba, President McKinley asked for 25,000 volunteers and 1,000,000 men volunteered. The resulting veterans benefits paid to all the volunteers amounted to quite a bit of the overall cost of this war.
At the time, the U.S. Army was mainly a defensive force. There was mass confusion when trying to gather the army in Florida and transport it to Cuba. The U.S. Navy did not even have a way to unload the troops when they arrived in Cuba. Most units forced their horses over the side and had them swim to shore, while they rowed ashore in boats and then rounded them up on the beach. Mercifully, there was little resistance on the beach by the Cubans. The docks were soon taken and the ships were then tied up and the rest of the army disembarked dockside. This perhaps explains how utterly unprepared the U.S. Army was to invade a foreign country. Of course, this only made sense because there was no need to do so.
Most of the country followed George Washington's advice, in his farewell address not to entangle themselves in Europe's endless wars. Before the call up of volunteers, the U.S. had only a very small standing Federal Army.
President Washington, as well as many after him, felt that standing armies were not only expensive to maintain, but a terrible temptation to use. The Spanish surrendered after their navy was crushed in both Cuba and the Philippines. General Pershing, Teddy Roosevelt, and General Joe Wheeler were among those who fought in Cuba. General Wheeler, an ex-confederate general, forgot himself during the heat of battle and yelled to his men to press forward, "We got them damn Yankees on the run". In the Philippines, Admiral Dewey commanded the Pacific fleet. He is remembered for his radio message to the commander of the Olympia, "You may fire when ready, Gridley."
The Spanish surrendered quickly in both Cuba and the Philippines, however, the Philippine Insurrection was quite another matter. Major Arthur McArthur (General Douglas McArthur's father) along with the U.S. forces fought the Philippine rebels in what can only kindly be described as the only way to successfully fight a guerilla war and win.
The total death count to American soldiers was 7,100 dead. Cuban and Philippine deaths were over 200,000 (mostly in the Philippines). The total treasure spent in U.S. dollars amounted to $1 million dollars.
The next war was more horrible than the previous one mentioned. It dwarfed it in size, scope and magnitude. But in order to do this, something happened first that set the stage for unprecedented spending that allowed war on a scale never before seen. In February of 1913, the 16th Amendment was passed (questionably) and a tax on income was levied. In December of that same year, the Federal Reserve Bank was authorized. President Wilson's imperial ambitions, coupled with a large tax base and "overdraft protection" by the Federal Reserve, allowed huge spending on the war and a resulting carnage, as never before witnessed in history.
Overall in the twentieth century, our national debt has gone from near zero to over $6 trillion dollars. If you count the unfunded liabilities from Social Security, Medicare and the like, then the number is over $40 trillion. At the conclusion of each one of our wars, we notice that the debt, as well as the size of the U.S. Federal Government, has grown significantly. In the twentieth century, the dollar lost over ninety percent of its purchasing power.
The twenty-first century seems to be heading in the same direction. Protect your family, yourself and your dollars from further devaluation. Get out of dollars and invest a portion of your assets in precious metals.
Larry LaBorde, Silver Trading Company
