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ESSAYS IN PERSUASION

PART

with the result that we had to lend our Allies after America came into the war an amountalmost equal to what we ourselves borrowed.More precisely, we borrowed from theUnited States , after she came into the war,£850,000,000, and lent to our Allies duringthe same period £750,000,000; so that ineffect it was true—what the Americans havealways been concerned to deny—that theloans she made to us were for the purpose offinancing our Allies rather than for ourselves.

The result was that by the end ofthe war we were owed by our Allies about£1,600,000,000, whilst we, in our turn, owedto the United States £850,000,000.

Since the war, the question has been con-stantly debated whether these sums ought tobe treated as investments, just like any otherbusiness transaction, or whether regard shouldbe paid to their origin and to the circumstancesin which they were made. It has been theBritish view that they were not made as businesstransactions and should not be treated as such.It has been the American view, on the otherhand, that they should be taken at their facevalue, that is to say, as bonds due and payable,tempered only by considerations as to thecapacity of the debtor to pay, and, in practice,by a willingness on the part of the UnitedStates to accept a low rate of interest.

During the Peace Conference the BritishGovernment urged that the Allied War Debtsshould be entirely cancelled. Mr. Lloyd