One of the most popular of the arguments which have been used to justify extensive borrowing to finance a war is that future generations are recipients of the benefits, and hence should share the burdens. It is believed they share the burden by paying off the bonds which are issued during the progress of the war. There is no question but that war entails a burden upon the future - the sinking of battleships and merchant marine, the destruction of factories, cities, mines, railroads, and agricultural lands, which otherwise would have been handed down to posterity, is conclusive evidence that war places a burden upon the future. The contention, however, that the burden may be shifted has, in reality, no foundation. In only one way can this be possible. If the nation which borrows secures its loans from a foreign country, and in turn purchases abroad the products with which to prosecute the war, it may continue to live as usual and the burden will fall when the bonds are payable.

Burden Felt During War. - The usual situation is for loans to be made at home, and the revenue thus secured to be spent within the country. In this case the burden, as far as the national aspects are concerned, cannot be shifted. A war is waged by using up large numbers of men and vast quantities of goods; consequently men who will reach maturity, and goods which will be produced twenty or thirty years hence, cannot be used to fight present battles. An individual who has one thousand dollars has a command over commodities, but just as soon as he turns this over to the government in exchange for a bond he gives up this command. It is impossible to eat one's cake and have it too - one cannot spend his money for goods and at the same time turn it over to the government to purchase war materials.

Borrowing, then, does not lessen present material sacrifices, for just as much private consumption must be forgone, just as many commodities are destroyed, as if the war were financed by gifts or taxes. The difference to future generations is that, in the case of borrowing, bonds are handed down to them which they must be taxed to pay, while if no bonds had been issued they would be saved the expense of going through the process of taxing themselves to pay for their bonds.

The above reasoning applies where the same class which purchases the bonds is to be taxed to redeem them. Take a simple illustration. If there were no discounting of the future, in what light would an individual consider the purchase of a ten-year 5 per cent bond if the interest and principal were to be met by the bondholder? He is simply compelled to save enough each year to pay the interest to himself, and at the end of the ten years must have saved enough to pay him his principal. If the conditions of this assumption were true, and realized, very little popularity would be attached to the purchase of bonds.

Shifting Burden of Payment. - The future is discounted to such an extent that the sale of bonds might still be popular even if it were realized that there could be no shifting of the burden of payment. There exists, however, the possibility of shifting the burden of payment to different individuals or to a different class of society from the purchaser of the bonds. As already indicated, bonds must eventually be paid from some form of taxes. If, in the coming generation, the plumber class can be taxed to pay the interest and principal of the bonds which the carpenter class owns, then there is a shifting of the burden from one class of society to another. The plumbers are made to recoup the carpenters for the burden they have shouldered. The bond which the carpenter's son inherited from his father represents that much claim upon the productivity of the sons of plumbers.

Shifting of this nature represents a situation, moreover, which is very likely to occur. When the war is on and the feeling of patriotism is high, a call for loans meets with a generous response from the wealthy class. This is as it should be, because of the evident ability to carry burdens. When taxes are levied to pay the interest and principal, however, they are not likely to fall upon the wealthy class in nearly the same proportion that it has subscribed to loans. Customs duties and excise taxes have been extensively used, and because of the influence of the wealthier classes in legislative bodies, the fiscal system may be so framed that an undue part of the taxes will fall upon the poorer classes. To the extent that this is true, borrowing causes the burden of war to be regressive.