File No. 841.51/69

The British Embassy to the Department of State 1

Since the commencement of the war, the British Government has furnished her Allies with all the funds they needed, nor has the magnitude of this assistance been in any degree diminished during the last four months. Italy and France, but especially the latter, are becoming more and more exhausted financially, so that although the United States Government have come to their help, nevertheless Great Britain has had to continue to make advances precisely on the same scale as before, providing France, for instance, with one million pounds per diem for the last three weeks, in order to enable her to maintain her rate of exchange and to meet her other immediate liabilities. At the same time, the British Government are meeting the liabilities incurred in the United States by Belgium and Russia.

His Majesty’s Government now possess no further means wherewith to pay for their purchases in the United States, and in consequence the whole financial system of the alliance will break down unless the United States Government is able to meet the payments due on this account.

Such an eventuality would be disastrous, and not improbably fatal, to the cause for which the Allies are fighting.

  1. Copy of the original which was communicated by the British Embassy to Mr. McAdoo.