As I roll homeward along the coast of Spain a wireless message announces that the British government have accepted the American debt terms.  
The details which I have received are not sufficient to enable me to form an opinion regarding the character of those terms, or their bearing on Allied indebtedness to Britain as to the terms of payment. I know nothing of the steps taken by Mr. Baldwin and the government of which he is a member to make this the first step in an all-round settlement of inter-Allied debts. That is a matter of infinite moment to us, and I assume that this is somewhere—and effectively—in the arrangement.
 
As to the payment of our own debt, the government represent the real sentiment of the nation as a whole. The British taxpayer is no doubt fully alive to the fact that this heavy debt was incurred by him during the war in the main in order to finance American supplies to our Allies. We could[Pg 245] have paid for all the supplies we required for our own use without resort to any loan from the American government. Nevertheless, the money was advanced by the lender on our credit and our signature.
 
Our credit as a nation, therefore, demands that we should pay. Whether we can collect enough money from our own debtors to meet this charge becomes increasingly doubtful, as it is becoming increasingly needful.
 
Britain is alone in thinking she is under any moral obligation to pay the external liabilities incurred for the effective prosecution of the war. The attitude of the late and of the present government is identical in this respect.
 
Why have the British public taken a different view of their national obligations towards external war debts from that adopted by other Allies? In giving the answer I do not wish to dwell on obvious ethical considerations which must weigh whenever you consider whether you will carry out an engagement which you have entered into with another who has already performed his part of the engagement on the strength of your promise.
 
These ought to be conclusive; but to urge them[Pg 246] might be deemed to be an unworthy reflection on the honour of those who take a different view of their national duty.
 
I have no desire to offer censure or criticism upon their decision. They, no doubt, have their reasons for the course they are adopting. We have certainly overwhelming reasons for showing an honest readiness to pay our debts.
 
The settling up of accounts is always an unpleasant business, especially amongst friends. Strangers expect it and prepare for it—and there is no resentment when the bill arrives. But a man hates reminding his friend at the end of a business in which both have been engaged in warm amity that there is "a little balance" to be paid up. He has been expecting the friend to mention the matter to him. So he puts off introducing the unpleasant topic from year to year. But the friend disappoints his expectations. Not a hint comes from that quarter of any realisation that there is anything due. It soon looks as if it had been forgotten altogether.
 
The friend is most insistent on collecting the business accounts due to himself. He is angry at all[Pg 247] delays in payment of his own bills. But his conscience is blind on the side of the debts he himself owes. It is not an uncommon experience, and we are suffering from it to-day. The war left us a creditor nation to the extent of over 2,000 million pounds, and a debtor nation to the extent of about half that amount. We readily accepted an invitation from our creditor to discuss the repayment of the debt we owe. Our debtors have displayed an invincible reluctance to enter into a similar discussion with us.
 
That ought not to influence our final decision. Britain is the greatest of all international traders, and her credit rests on the reputation she has well earned—that her bond is a sacred trust which her people always honour and redeem without counting the cost in toil and treasure. I remember when war broke out the panic which seized bankers and brokers as they contemplated the obligations incurred by British firms with their support to finance world trade. These liabilities ran into hundreds of millions sterling, and the only security for repayment was represented by a bundle of flimsy paper, criss-crossed with the signatures of men most of[Pg 248] whom no British banker............