General Botha: It cannot be a particularly large amount; but we do not know how much it is.
Chief Commandant de Wet: You can well imagine that our expenditure was as a drop in a bucket compared with yours. And if I am not mistaken, the Orange Free State had three-quarters of a million pounds when we commenced the war; and the expenditure by means of receipts began after that amount was exhausted. Your Excellencies must therefore admit that these receipts impose upon us the same obligation towards creditors as any other debt would have done.
General Botha: You have already many of our notes in your possession. In one place, for instance, 50,000 were hidden and found by you.
General Smuts: I have already privately used the argument with Lord Milner that what we are now contending for has in principle already been conceded by Lord Kitchener. In the Middelburg proposals the payment of the Government notes was refused, but it was laid down that receipts to the value of £1,000,000 would be paid out, and if this should now be withdrawn it would certainly be a deviation from the Middelburg proposals. The payment of notes is something lawful, and stands on another footing; and I cannot understand how the payment thereof could have been refused in the Middelburg proposals, and therefore an agreement to pay them now is reasonable. But with reference to receipts, the payment of them was partially acceded to, and now it is withdrawn. I think that when we have arrived at such a stage in the negotiations as we have now, then a point such as this, which was as good as agreed upon, must no longer be a stumbling-block to a final agreement. I believe that this amount is small. I was with General de la Rey for one year in command of the half of the South African Republic. Accounts were kept of all receipts, and where the books are no longer in our possession they are in your possession. The issue of these receipts took place in proper order and under proper regulations, and books thereof were kept. As far as I have been able to go into the matter the amount of receipts is really small. And although Lord Milner recoils from the payment of an enormous amount which may be presented for payment if our proposal be accepted, yet I personally think that the fear is vain, and that the amount will prove to be much less than you probably think.
Lord Milner: I do not think it is so much a question of the amount. This payment of Government notes and requisition notes is, in my opinion, very reprehensible. I believe that in this respect I feel what the great majority of the British people feels, that it would rather expend a large sum after the war to improve the condition of the people that has fought against them, than pay a smaller amount towards the expenses incurred in fighting them. Whether this be right or wrong, it is a strong feeling with which you must reckon. We do not wish to pay the accounts of both parties, and the clause in the Middelburg proposals with reference thereto was, in my opinion, always one of the bad ones in that document. If something of this kind must be done, then I think that the payment of the Government notes is not so bad as the payment of the requisition notes. I put the point with reference to the payment of notes in this draft proposal, because I thought that if a choice had to be made between the payment of the one or the other, you would consider it better that the Government notes were paid. If it is considered better to go back to the Middelburg proposals on this point, then, however much I object to it, I would agree, if Lord Kitchener agrees.
General Smuts: I fear that we cannot agree to that, because we consider the Government notes indisputable.
General Hertzog: I do not think that Your Excellency represents the matter fairly when you say, for instance, that you do not wish to pay the accounts of both parties. There is one matter with reference to the Orange Free State which we must specially note. We have contracted no loans and we have issued no Government notes. The notes we used were South African Republic notes, of which some were sent to the Orange Free State also. Our (Orange Free State) law is based on the principle that in case of war, all cost could be met by commandeering notes. This was acted on in the Orange Free State, and receipts in the usual form or in the shape of requisition notes were given. If we take this into consideration, and at the same time also the fact that we have always acted, and still act, as a party which is a lawful belligerent party, then we come and only say: from our side we give all that we possess, and ask the other party to acknowledge only that which if we had concluded a loan would in any case, in the shape of a public loan, have fallen on the British Government, which takes over everything from us. Lord Milner will thus understand that from our point of view it is of as much importance for us to obtain payment of these receipts as it will be for the South African Republic to obtain the taking over by the British Government of the liability of a loan concluded before the war. But I can even go further and give Lord Milner the assurance that if we had also concluded a loan before the war, we could never have acted so economically as we have done by using receipts. That was also actually the reason why the Orange Free State never wished to conclude a loan beforehand, because now we have purchased only what was absolutely necessary for the day and for the circumstances. So that really Lord Milner will have to admit that we stand in the same position in respect to those who now hold receipts as we would have stood to any other creditor that we may have had before the war. I have already informally pointed this out to Lord Milner, and can now only express my agreement with what the Commandant General has said that this difficulty is almost insurmountable.
Lord Milner: We can refer this to our Government; but your proposal is entirely in conflict with the Middelburg proposals, because in them it was absolutely refused to take over all State debts.
Lord Kitchener: I wish that we could know the amount.
General de la Rey: I issued Government notes to the value of between £20,000 and £40,000; but to what amount receipts were issued I cannot say.