Los Banos Rotary Club History
Bank Official Makes Study of National Debt

Declaring that eventual amortization of our 262 billion dollar national debt is absolutely necessary to our permanent prosperity and national economy, Ben C. Corlett, vice president of the American Trust Co., Tuesday noon told members of the Los Banos Rotary Club that, even under most favorable conditions, it will require no less than 100 years to fully pay the indebtedness and accruing interest. It is a problem, he said, that every living American should seriously consider and study, and one that despite our utmost efforts, will linger to be passed on to our children and their children's children.
Comparing present day trends with the like period of following World War I, Corlett praised the job done by OPA in preventing inflationary prices, and said that despite its many mistakes, the overall job had been done well. Although inflationary tendencies are fairly well stopped today, Corlett believes continued controls are necessary until we know we are "out of the woods."

We had a national debt of 25 ½ billion at the end of the first World War, Corlett related. This was reduced to $16 billion by 1931. The depression and consequent relief programs had increased the debt to $48 billion in 1940, and the war cost us approximately $210 billion. As a result, today every man, woman and child in the United States owes $12,000 as his share of this debt, which is a real debt and must be so considered.

As to the ability of this country to pay this debt, Corlett analyzed a theoretical financial statement in which assets were listed at $400 billion, salvage of war merchandise at $50 billion, deposits and savings accounts at $225 billion, or total assets of $675 billion. On the debit side he listed the national debt, $260 billion; private debt, $75 billion; cities and states debt, $25 billion, or total obligation of $350 billion, leaving a working capital of $325 billion.

As to ability to pay, Corlett said that our national income has increased from $66 billion annually before the war to over $160 billion today. If we are to remain solvent, our income must be retained at a high level, and at the same time our cost of government must be reduced to less than one-half its present cost. We have, he concluded, the greatest capacity, the best engineering, the best skilled labor and the greatest management in the world, and if all are utilized to the fullest extent it will be possible to lift ourselves out of debt in about 100 years.
February 18, 1947

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