§ The House will perhaps remember that, when I presented the Budget Statement a year ago, I pointed out that America had just entered the War, and that it would not be possible to make any adequate forecast as to what our advances to the Allies 692 would be. I said then that I was certain that the Government of the United States would assist the Allies financially to the full extent of their ability, and I am glad to say that that expectation has been realised to the full. In spite of the assistance of the United States, our advances to the Allies last year amounted to £505,000,000 sterling. That is taking the face value of the obligations, and not the cash advanced. In addition to this the United States have advanced to the Allies no less a sum during the year than £950,000,000 sterling. Of this amount approximately £500,000,000 were advanced to us, and £450,000,000 to the Allies. The House will see, therefore, that whereas this year we advanced to the Allies approximately the same as last year—£505,000,000, as against £540,000,000—the United States advanced, in addition, £450,000,000—that is to say, the total advances to the Allies by us and by the Government of the United States were £955,000,000, as against £540,000,000 advanced by us alone last year. This will show the Committee how enormously the financial needs of the Allies have increased, and how timely, and indeed necessary, was the financial assistance which has come from the United States. But the Committee will have noticed, on the figures I have given, that our advances to the Allies were in the year approximately of the same amount as the advances made to us by the Government of the United States. This is satisfactory. It means that it is only necessary for us to lean on the United States to the extent that the other Allies lean upon us. In other words, after nearly four years of the War, we are self-supporting. This is important from another point of view also, as showing that, in spite of these advances, the net amount of indebtedness outside these Islands has practically not increased.
§ But there is something anomalous in this arrangement. It is almost, in a sense, absurd that we should be borrowing with one hand, while we are lending with the other. The result of that is that our accounts are inflated apparently—that, in fact, to that extent our credit is weakened. I have, therefore, been in communication with Mr. McAdoo, the Financial Minister of the United States, on this subject, and Mr. Crosby, the head of the Financial Mission of the United States to Europe, is on the point of returning to Washington to consult his Government, 693 and I am making to him certain suggestions as regards advances to the Allies, which, if adopted, will have the effect of lessening to a certain extent our burdens, while in no way increasing the total obligations of the United States. From the way in which not only the United States Government, but Mr. McAdoo himself, has shown every desire to co-operate both with us and the other Allied Governments, I am sure that he will give these suggestions most sympathetic consideration.