A cold shiver ran down the back of England when it was announced officially that the British government had definitely agreed to pay over ￡30,000,000 a year for sixty years to the United States in respect of debts incurred by us on behalf of our Allies without seeking a contribution from our debtors to protect the taxpayers of this country. It is not that anyone dreamt the evil dream of repudiation. That was never woven into the texture even of the worst nightmare out of the many that have disturbed our repose since the greatest nightmare of all left the world a quivering nervous wreck.  
Nor did we expect remission of our debts. Whenever we were tempted to exaggerate the bounds of human charity paragraphs appeared that reminded us of the attitude of the "Middle West." America was discovered by Europe centuries ago, but the "Middle West," as a political entity, is to[Pg 253] untutored Europeans a discovery of the war. We were then told by returning explorers that it was the seat of the American conscience—inexorable, intractable, but irresistible when engaged in any enterprise. How potent this conscience was, as a world force, the war demonstrated. From the heights it hurled an avalanche of force against Germany that overwhelmed the last hope of resistance. Unfortunately for us when it came to debts we struck against the hard side of the Middle West conscience.
 
Our hope was therefore not in remission. There were, however, many other possibilities. We were not the only debtors of the American government. Other Allies had borrowed not merely indirectly through us, but directly from America. We had every confidence that the United States government would not mete out to Britain severer treatment than it was prepared to accord to our Allies. We had to contend, it is true, with legends of our inexhaustible wealth. Apart from our great coal deposits, and a climate which leaves those who endure it no alternative but activity, we have no treasure except the industry, the resources and the inherited skill of our people. We have nothing like the rich[Pg 254] plains and the fertilising and ripening sunshine of France, which maintain sixty per cent. of its population. Our sources of wealth—apart from coal—are precarious, for they depend more largely than any other country on conditions outside our own. We are international providers, merchants and carriers. A sixty-year contract to pay large sums across the seas is in many respects a more serious consideration for us than for countries whose riches are inherent in their soil and are, therefore, more self-contained. The demoralised condition of the world markets has left us with a larger proportion of our industrial population unemployed than any other European country. I hear tales of unemployment in the United States of America, but the reports that reach us here on American unemployment are so contradictory that I can build no argument upon them. But, as to the gigantic dimensions of our unemployed problem there can be no doubt. We have 1,400,000 workmen on the unemployed register drawing unemployment pay in one form or another. The annual cost to the nation of feeding its workless population runs to over ￡100,000,000—almost the figure of the annuity demanded from Germany as a war indemnity.
 
[Pg 255]
 
Although there are signs of improvement the omens point to a prolonged period of subnormal trade. Continuous depression for years will mean that Britain will suffer more from the devastation to her trade caused by the war than France from the devastation of her provinces. Our country, anxious about its means of livelihood, with a million and a half of its workmen walking the streets in a vain search for work, has to bear the heaviest burden of taxation in the world. Why? Because it has not only to pay interest on its own heavy war debts, but also on ￡3,000,000,000 which it either advanced to the Allies or incurred on their behalf. That is why we felt hopeful that the United States would not discriminate against a nation so situated.
 
When I talk of debts the Allies owe to us, I want to emphasise the fact that these debts are not paper myths nor tricks of accountancy. They are onerous facts representing a real burden borne at this hour by the bent and panting taxpayer of Britain. If these loans had never been made the weight on his shoulders to-day would have been lighter by over two shillings in the pound. He is every year paying to the actual lenders—some British, some American—that proportion of his income.[Pg 256] It is a weight he undertook to carry for his Allies during the war on the sacred pledge of those Allies that they would take it over after the war. The American government borrowed from their public to make advances to Great Britain, and have called upon the British taxpayer to redeem his pledge. We make no complaint, for the demand is a mitigation of the strict letter of the bond. But that amount is in substance part of the debt owing by the Allies to Britain. And the British taxpayer naturally feels it is hard on him to have to bear not only his own legitimate burdens but that he should in addition have to carry the debts of his less heavily taxed brethren in continental countries. He naturally inferred that if equal pressure had been administered on all debtors alike it would have forced an all-around consultation which would have terminated in an all-round settlement.
 
That was the real purport of the Balfour note. The true significance of that great document has been entirely misunderstood—sometimes carelessly, sometimes purposely, sometimes insolently. I guarantee that not one per cent. of its critics if confronted suddenly with an examination on its contents would secure one mark out of a hundred.[Pg 257] It has suffered the same fate as the treaty of Versailles. Opinion is sharply divided as to both between those who rend without reading and those who read without rending. Most men have received their impressions of the Balfour note from denunciatory phrases penned by writers who received their ideas about it from men who gave instructions to condemn it without ever reading it. The men who really understood both the Versailles treaty and the Balfour note have been too busy to find time to inform, to interpret, and to explain.
 
But the time has come when the public attention should be once more drawn to the remarkable and far-reaching proposals of the Balfour note. They constitute an offer on the part of Britain to measure the amount of her claims against her Allies by the extent of her obligations to the United States of America. The British government even offered to include the claim of their country against Germany in this generous concession. What does that mean in reference to present conditions? That if the Allies and Germany between them found the ￡30,000,000 a year which Britain has undertaken to pay America, she would forgo her claim to the ￡3,300,000,000 due to her under contract and treaty. It[Pg 258] was a great offer and if accepted would have produced results beneficent beyond computation. Britain, which would have been the heaviest direct loser, would have profited indirectly throu............