I remember listening to the BBC years ago on the topic of debt owed to Britain by states that had defaulted on their loans during colonial times and the Civil War.
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I don’t recall any issues over loans from London to the American colonies. Prior to the Revolution, the British government treated the colonies as part of the British Empire; it would have been unusual for the British government to loan money to itself.
The two financial issues London had with America were the debts the British Empire incurred during the Seven Years War and the money owed to Loyalists after the Revolution.
Pretty sure if any of the US States owed Britain any money it would have been taken care of during WWI (Contracts to make the Pattern 1914 rifle) or WWII (Lend-Lease).
The Republic of Texas owed rent for their embassy in London. It was finally settled in 1986, 140 years late.
Don’t recall if it was the BBC program I heard, or read about it - it’s been a long time, and my google-fu is weak for some reason. But the story was Alabama or Georgia defaulted on some bond payments in the 19th century, and as the story goes are still prohibited from issuing bonds in the City of London or somesuch.
The history of debt (and debtors prison) is pretty interesting. One angle that I was unaware of, inheritance worked both ways - heirs were responsible for accumulated debts. It would tend to cast a pall over family relationships with regards to misuse of credit for example.
I remember reading, in one of those “fact of the day” type things years ago (though I’ve found no source to confirm it), that, “Every year, Britain sends a bill to America for the tea destroyed in the Boston Tea Party. Every year, America refuses to pay it.”
It would be a fun little ceremonial thing for the nations to do, but like I say, I haven’t found anything in the years since then to confirm.
I don’t think anyone’s getting too agitated about it at the moment. As far as we know, we’ve repaid everything we borrowed from the US for the two world wars - I seem to remember the last tranche was cleared sometime during the Blair government - so we can afford to be magnanimous: and tell you so.
The colonies were treated as part of the British Empire, but they still had a Royal Charter which incorporated them with legal personality. Thus the colonial governments had the legal capacity to borrow money on their own (as opposed to the British government’s) account, quite similar to how a present-day county or city in the United States can (and usually do) borrow money on its own account as opposed to the account of its state or the federal government.
This question was asked on the Board back in 2002, but it wasn’t resolved:
According to Wikipedia:
I haven’t found anything about Britain sending the US government a bill in my quick look around. It would seem to be an odd thing to do – there was no US government at the time which could have been held responsible.
I can’t speak to the specifics of this, but a standard part of peace negotiations is to handle these matters. If one country owes another country some money, and they have a war, the debt can be either affirmed as still standing, or folded into whatever reparations are agreed to at the end of the war. Remember that in old style wars it was very common for one side to agree to pay the other side as part of the peace treaty, money and territories were often exchanged, based on who did better during the war and who wanted the war to end more.
But as a money-raising part – Britain extracted money & assets from it’s colonies and brought it back to Britain. (That’s rather the point of having a colonial Empire.)
So any money owed would have been in the other direction – Britain would have owed for the assets it had extorted from the colonies.
There might have been other monies ‘owed’, but these were mostly fraudulent bills. Like the British demanded that the colonies buy all supplies from them, even if others, like Spanish or Dutch merchants offered them at lower prices. The colonies were supposed to pay the British a fee or tax for buying cheaper goods elsewhere. Just like in the colony of India, all residents were supposed to buy salt only from the British monopoly. And for any salt they produced themselves, like boiling seawater, they were supposed to still pay the British a tax on it. That was what Gandhi’s march to the sea was about.
Most such ‘debts’ to Britain were settled, on the battlefield when they defeated the British army, and formalized later in treaties.
You would think so, wouldn’t you? But historical evidence points in another direction. The point of having a colonial empire is to satisfy imperialistic attitudes which domestically influential interest groups may have. It’s rarely a money-making business, and in history has not infrequently been a lossmaker for the colonial power. In the run-up to the American Revolutionary War, there were often complaints raised by British politicians that the North American colonies should pay a larger share of the expenditures (mostly, but not exclusively, of a military nature) associated with them. Wikipedia states that the costs of running the colonies was four times higher than the revenue Britain collected from them.
What basis would there be for doing this? Why would the United States government bear any responsibility for private property that was destroyed by a group of private individuals? Keep in mind the United States didn’t even exist when the crime occurred. If any government would somehow be responsible it would be the British government, which ran Boston in 1773.
The WWI loans from the US, eh, aren’t discussed in polite company. They’re sort of in a state between being forgiven and not paid off.
From post 9 above:
In Lost States by Michael J. Trinklein, c. 2010, he lists the odd incident where Sen. Richard Russell Jr. (Georgia) suggested in 1947 that England, Scotland, Wales, and Ireland should apply for statehood. Needless to say, this did not happen, and the frosty reply from England (“think absolute zero”) is relevant here.
The Brits said that it couldn’t happen until Georgia repaid the money it borrowed during the Civil War (amount not stated). This is a problem, of course, since the agency that borrowed the money (the Confederate State of Georgia) doesn’t exist any more – and never did legitimately exist, according to Honest Abe and others.
I expect that the U.S. has no interest whatsoever in legitimizing the Confederacy at all (as by paying any such debt), and the modern state of Georgia would catch a LOT of political hell if it so much as whispered any consideration of doing such a thing itself – if it wanted to at all, which is extremely doubtful.
Anyhow, after a small diplomatic flap, the matter was forgotten.
Well, that’s really an accounting fiction. It’s fixing the books when you charge the colonists with the costs of the soldiers who are oppressing them.
It’s a common tactic to allow an oppressor to claim “we’re doing it for their own good – it actually costs us money to do this”. Britain claimed that ruling Ireland cost them money – because they charged the costs of the occupying soldiers to the Irish people. US Southern states claimed slavery was costing them money – they charged the costs of slave-catchers to the slaves. Nazi Germany fined the Jewish community 10 billion reichsmarks for the Kristallnacht anti-Jewish pograms that destroyed & confiscated Jewish property – for the costs of the government employees who planned & organized these attacks.
With creative accounting, you can change a profit to a loss for any activity.
The soldiers for whom the colonists were being charged were defending those same colonists from the Indians and the French (there was this thing called the “French and Indian War,” for example, as well as ongoing hostilities with some Indian tribes well after the French withdrew; before that, there had been King George’s War and Queen Anne’s War and King William’s War and associated other military adventures involving the Brits, the French, and the Indian allies of each).
I just happened to have read the other day that the last payment was made in 2006. Huh.
I wonder if other nations have paid the US back?
Section 4 of the 14th Amendment makes any such payment by either the US or a state unconstitutional, so it’s a moot issue.
As far as British American colonies, I do wonder if the British could have gotten away with taxing the colonies themselves, rather than imposing taxes on individuals (e.g. the Stamp Tax). That is, a law that says: Massachusetts, you owe X pounds/year, Rhode Island Y pounds/year, North Carolina Z pounds/year, etc. It’s up to you to impose the taxes to raise these amounts and we don’t care how you do it. Oh sure, there’d be complaints but would they rise to the point of armed insurrection?