It is true that the government had no responsibility for any of these transactions; but the honour of Britain was involved in seeing that the foreign merchants should not suffer ruin because they put their trust in British commercial integrity. For that reason the British government of the day shouldered the burden, took all the risk, and although it meant a liability of between four hundred and five hundred millions sterling, not a voice was raised in protest.
The action then taken, though quite unprecedented, was not only honourable; it was wise. It saved British pride from a reproach; it also saved British credit from a blow from which it would not have recovered for a generation. During that generation this lucrative business would have passed into other hands.
As soon as the war was over the people of Britain, with an instinctive impulse that required no persuasion to stimulate its activity, set about the task of restoring their war-battered credit. Government, bankers, merchants, brokers, manufacturers, and workers of all kinds were of one mind; borrowing must come to an end; Britain must pay her way—whatever the sacrifice. Expenditure was ruthlessly cut down. The army and navy were reduced below pre-war dimensions. Other services were curtailed. Heavy taxation was imposed—taxation such as no other country bears. The budget at home must balance. Debts to other countries must be paid off. Already large sums have been paid abroad. It required courage and constancy to pursue such a policy; but the endurance of the nation was beyond praise. It is now calmly facing the liquidation of this heavy debt to the United States of America; but no party has yet arisen, or is likely to arise, to demand that the hand of the negotiators should be arrested. Britain means to pay the last of her debts without a murmur.
We are already reaping some of the reward. The purchasing value of our currency has already risen under its burdens, and, as a consequence, the cost of living has fallen steadily, while other countries who have pursued a different policy find the cost of living for their people ascending month by month.
A short time ago we were taunted in the French Chamber of Deputies by the president of the council that our unsound financial policy had been responsible for our unemployment. It is true that if we had gone on borrowing instead of paying our way—if we had defied our foreign creditors instead of paying them—we also, like many other European countries, might have fostered an artificial prosperity by means of a discredited currency. But British credit would have rapidly disappeared beyond recovery and British trade would soon have followed. Meanwhile, the cost of living in Great Britain would have been double what it is to-day. We all therefore dismissed that policy from our minds without paying it the tribute of a discussion.
Trust is the only soil in which credit flourishes. Had that trust been forfeited British buyers and consequently British consumers would to-day have been paying more for their wheat, their meat, their cotton, and their wool. The burden of repayment to the United States will be infinitely less than that of the indirect burden involved in large purchases with a discredited currency.
The government are therefore right in arranging with the American treasury without loss of time for the liquidation of a debt incurred by this country. I am taking for granted that they have made every effort to see that the agreement shall form a part of an all-round settlement of inter-Allied debts. But as to our own debt the moral obligation must remain whatever our Allies do or fail to do. Why it was incurred, the circumstances in which it was entered into, the purposes for which the money was advanced, were open to the consideration of the American government in arranging terms. That, however, was their privilege; ours is to honour our signature.