In the Commons on Tuesday there were several criticisms of
the Anglo-French Loan in the United States. It was objected that to offer a rate of interest which amounted to 7 per cent. (since the interest is free of Income Tax) was a reflection on British and French credit. To this and similar criticisms Mr. McKenna replied that it was a mistalie to suppose that the sending of the Commission was the first step taken by the Government. Inquiries had been
made in this country last June, and it had been found impos- sible to raise a loan from London. As for the rate of interest, capital normally earned more in America than in Britain. By means of the loan we were retaining in Britain £50,000,000 which was owed on the trade balance to the United States. Income Tax was being paid on this. We could not expect to get Income Tax twice over. The loan was not for buying munitions, but to correct the rate of exchange. It had been proposed originally to raise a loan of £200,000,000, but the amount bad continually to be reduced, and now that all the circumstances were known he considered that the Commission had done splendidly.
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