International Loans

Much has been made this past week about the news that Britain will soon be paying off the final two installments on loans made to help it through World War II. Some people have taken the opportunity to poke some fun at Britain and Europe in general.

To me the news was a reminder that early in our country's history we badly needed foreign investment and that when we hit a rough patch in the early 1840's some states just defaulted on their loans instead of honoring their obligations. Specifically American states like Pennsylvania, Maryland, Mississippi, Indiana, Arkansas and Michigan plus the Florida territory defaulted on their loan obligations to British banks. Most states later made good on their obligations but not Mississippi or Florida.

In a way - I'm thankful for that. Now this is just guessing on my part but I think this failure to honor debts like a "gentleman" on the behalf of Mississippi and Florida in the 1840's may have just been enough to keep the British from recognizing and helping the Confederate States in the Civil War. A distrust of the South was sure to be a lingering effect over the defaulted loans from the 1840's.