File No. 841.51/63
The Ambassador in Great Britain ( Page ) to the Secretary of State
[Received 5.30 p.m.]
6645. Late yesterday I attended a financial conference, to which I was called, of the Prime Minister, the Chancellor of the Exchequer, the Foreign Secretary, the Governor of the Bank of England, and their advisers about the $400,000,000 overdraft which the British Government owes Morgan. They informed me that on April 6 Spring Rice telegraphed that he had received a definite promise that this sum would be paid the British Government to meet this overdraft and that it should be the first call on the Liberty Loan. They say also that on April 9 the Governor of the Bank of England received the same promise from Mr. McAdoo. On June 29 Mr. Balfour telegraphed Spring Rice reminding him that this overdraft was to be paid out of the Liberty Loan. The foregoing was made quite clear in their statement to me; then followed something less clear, namely, that they understood that since the Liberty Loan was received by our Treasury on July 1 this overdraft was to be paid July 2. I remarked that first call did not necessarily mean July 2, but it turned out that the British officials in the United States, for some reason not made very clear, expected to receive the $400,000,000 on July 2 and that Morgan then expected to receive that sum from British officials. Yesterday Morgan telegraphed his expectation and disappointment. The conference asked me to report the foregoing and to express the hope that this sum would be [Page 536] speedily paid. In the course of an extended conversation I reminded them of the disadvantage of failing to have all financial agreements reduced to writing and of the probable confusion caused by having so many persons taking up financial subjects with our Government. They then informed me that Northclifle was their authorized financial agent and that he had not lately been able to see McAdoo because of McAdoo’s absence. I promised to send you this telegram and I suggest that McAdoo’s understanding of the matter be telegraphed me with whatever assurance he may give of the payments of this overdraft and the date when its payment may be expected.