LETTERS TO THE EDITOR
THE NATURE OF THE BRITISH DEBT TO AMERICA [To the Editor of the SPECTATOR.] Sin,—On September 19th last you were good enough to publish a letter I wrote trying to refute the oft-repeated statement that Great Britain borrowed from America to lend to her Allies, and that Great Britain guaranteed France's debt to America. The following week a correspondent (Mr. D. M. Gimson) in a letter in your issue of September 26th, said : " Surely this matter should be cleared up once and for all by a question in Parliament, as the constant suggestion that we guaranteed the. French and Italian loans from U.S.A., unless it can be proved to be true, will bring us into contempt amongst right-thinking people in America and elsewhere."
On tuesday, in Parliament, Mr. James Hudson asked the Chancellor of the Exchequer whether the loan which is now heing repaid to America was contracted for the use of the British Government exclusively or in part ; and .whether it was lent directly to the Continental Allies by America with the guarantee of the British Government, or whether it was borrowed by Great Britain from America and then lent to the other Allies.
Mr. Churchill replied : " The hon. member's description of these transactions is not correct. Our debt to the United States is formally independent of the debts of the Allies to us. It is nevertheless true, as I stated in this House on November 10th, 1924, that If we had not lent to the Allies £2,000,000,000, we should not have had to borrow from America.' " The above statement of the Chancellor should be given publicity, as it settles once and for all the controversy as to whether Great Britain guaranteed the Allies' loans from America ; and whether Great Britain borrowed to reloan to the Allies, or for her own use.—I am, Sir, &c.,
85 Marine. Parade, Brighton. H. J. BAKER REESE.
[The interesting question remains why we borrowed from America in order to lend to our Allies. The suggestion that America refused to lend to them unless we backed the bill has been denied in Washington as well as, here. It looks as though we took an unnecessary burden on ourselves. Was it that Mr. Lloyd George unnecessarily played the part of " Paymaster of Europe," acting in an exalted mood and a frenzy of generosity, without troubling. to ask dull, business questions ?—En. Spectator.]
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