I was listeding to a CSPAN call in program yesterday morning that was discussing the current banking liquidity scenario in the US, when a person called in and started exclaiming excitedly on the gazillions that are owed the US in uncollected war loans (I’m guessing WWII) if we only bothered to pursue collecting them with interest. He said that now would be great time from the European countries to pay us as the Euro is strong relative to the dollar.
After a minute of ranting he was cut off, but I do wonder whatever happpened with the war loans. Do other nations owe us zillions from war loans we’re not collecting, were they paid, forgiven or what?
Possibly the caller was referring to World War I debts. The United States loaned $10 billion to World War I allies, most of which was never repaid after the chaos of the Great Depression and World War II. This was a cause celebre among isolationist Americans in the 1930’s, so much so that my recently deceased father (born in 1921) used to talk about it until the end of his life.
As a reaction against the World War I defaults, Congress prohibited direct loans to the belligerents in World War II, and FDR had to create the Lend-Lease program to provide aid to Great Britain before Pearl Harbor. After American entry into the war, Lend-Lease was extended to many other nations. The terms were usually more flexible, however, and most (perhaps all?) nations repaid their obligations by hosting or supplying American troops. The UK, as noted, is paid up. I’m not aware of any big hangover of WWII debt from any other country.