The Gathering Storm: The Second World War Read Online Free PDF Page B

stood as a Liberal, great numbers of Tories worked and voted for me. In charge of each of my thirty-four committee rooms was a Conservative M.P. defying his leader Mr. Baldwin and the party machine. This was unprecedented. I was defeated only by forty-three votes out of twenty thousand cast. At the general election I was returned for Epping by a ten thousand majority, but as a “Constitutionalist.” I would not at that time adopt the name “Conservative.” I had had some friendly contacts with Mr. Baldwin in the interval; but I did not think he would survive to be Prime Minister. Now on the morrow of his victory, I had no idea how he felt towards me. I was surprised, and the Conservative Party dumbfounded, when he invited me to become Chancellor of the Exchequer, the office which my father had once held. A year later, with the approval of my constituents, not having been pressed personally in any way, I formally rejoined the Conservative Party and the Carlton Club, which I had left twenty years before.
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    My first question at the Treasury of an international character was our American debt. At the end of the war, the European Allies owed the United States about ten thousand million dollars, of which four thousand million were owed by Britain. On the other hand, we were owed by the other Allies, principally by Russia, seven thousand million dollars. In 1920, Britain had proposed an all-round cancellation of war debts. This involved, on paper at least, a sacrifice by us of about seven hundred and fifty million pounds sterling. As the value of money has halved since then, the figures could in fact be doubled. No settlement was reached. On August 1, 1922, in Mr. Lloyd George’s day, the Balfour Note had declared that Great Britain would collect no more from her debtors, Ally or former enemy, than the United States collected from her. This was a worthy statement. In December of 1922, a British delegation, under Government, visited Washington; and as the result Britain agreed to pay the whole of her war debt to the United States at a rate of interest reduced from five to three and one-half per cent, irrespective of receipts from her debtors.

    This agreement caused deep concern in many instructed quarters, and to no one more than the Prime Minister himself. It imposed upon Great Britain, much impoverished by the war in which, as she was to do once again, she had fought from the first day to the last, the payment of thirty-five millions sterling a year for sixty-two years. The basis of this agreement was considered, not only in this island, but by many disinterested financial authorities in America, to be a severe and improvident condition for both borrower and lender. “They hired the money, didn’t they?” said President Coolidge. This laconic statement was true, but not exhaustive. Payments between countries which take the form of the transfer of goods and services, or still more of their fruitful exchange, are not only just but beneficial. Payments which are only the arbitrary, artificial transmission across the exchange of such very large sums as arise in war finance cannot fail to derange the whole process of world economy. This is equally true whether the payments are exacted from an ally who shared the victory and bore much of the brunt or from a defeated enemy nation. The enforcement of the Baldwin-Coolidge debt settlement is a recognisable factor in the economic collapse which was presently to overwhelm the world, to prevent its recovery and inflame its hatreds.
    The service of the American debt was particularly difficult to render to a country which had newly raised its tariffs to even higher limits, and had already buried in its vaults nearly all the gold yet dug up. Similar but lighter settlements were imposed upon the other European Allies. The first result was that everyone put the screw on Germany. I was in full accord with the policy of the Balfour Note of 1922, and had argued for it at the time; and