File No. 841.51/216

The Ambassador in Great Britain ( Page ) to the Secretary of State

[Telegram]

Mr. Balfour asked me to a conference at 7 o’clock with him, the Chancellor of the Exchequer and their financial advisers. It was disclosed that financial disaster to all the European Allies is imminent unless the United States Government advances to the British enough money to pay for British purchases in the United States as they fall due.

Bonar Law reports that only half enough has been advanced for June and that the British agents in the United States now have enough money to keep the exchange up for only one day more. If exchange with England fall, exchange with all European Allies also will immediately fall and there will be a general collapse. Balfour understood that in addition to our other loans and our loans to France and Italy, we would advance to England enough to pay for all purchases by the British Government made in the United States. He authorizes me to say that they are now on the brink of a precipice and unless immediate help be given financial collapse will follow. He is sending an explanatory telegram to Spring Rice.

[Page 533]

I am convinced that these men are not overstating their case. Unless we come to their rescue we are all in danger of disaster. Great Britain will have to abandon the gold standard.

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