HERBERT HOOVER
The
Waldorf Astoria Towers
New York, New York
June 1, 1957
The Honorable Leverett Saltonstall
Committee on Armed Services
United States Senate
Washington D.C.
My dear Senator,
I have read your bill and the able speech advocating
it. I don't think I could add anything constructive
to
that which you have already said.
Obviously it is not only a legal but a moral duty
of the Govenment to pay back the money it has borrowed
from its citizens. Moreover, it is an important defense
action, for should we be involved in another war, we would
need to borrow again, which would be more difficult with
the load we already have.
From observation of two world wars I believe there
are two conclusions:
1. The vanquished nations get rid of their national
debts by repudiation, revolution or inflation. They are
relieved of consequential military establishments.
The victor nations must aid the vanquished nations
to prevent starvation; they must struggle to pay interest
and principle on their national debts; they must support a
military establishment and they must carry increased expendi-
tures to meet the increasing needs of their peoples.
2. The peoples of victor nations cannot stand the
amount of taxation to do all these things. Thus they are
also forced into inflation.
In our own case, our inflation has decreased the puchas-
ing power of our money by fifty per cent and thus has reduced the
national debt by fifty per cent. And inflation is still going
on partially as the result of our national expenditures and
their accompanying taxes.
Incidentally, the innocent bystander by inflation has
lost fifty per cent (and continues to lose more) of the
purchasing value of his prior lien securities, his bank
deposits and his pensions.
It seems to me our first job is to stop the continued
inflation. There is some hope of this if there is a turn in
world affairs but, in any event, we could reduce expenditures
and taxation: (a) by reduction in demands on the Government
of minority groups; (b) by reduction of waste in the Government;
(c) by modernization of the Govenment's methods both in the
civil and military establishments. But that is another subject.
Yours faithfully,