Nelson's history of the war. Vol. XI., The struggle for the Dvina, and the great invasion of Serbia

THE POLITICAL SITUATION. me

production, and, therefore, our exports, but war conditions forbade this. Another was to reduce our imports of all non-essential commodities, and the thrift campaign in Britain and the import duties of the September Budget were steps to this end. A third was to export capital—gold and foreign securities. A fourth was to induce foreign exporting countries to make us a loan and grant us commercial credits.

Both the third and fourth plans were adopted. Some gold was exported, how much it was not known ; but there were obvious limits to this method. The Government took steps to prepare a register of American securities in British hands, an easy task so far as the chief holders—the banks and insurance companies—were concerned. The amount so held was believed to be between £500,000,000 and [700,000,000. It was proposed that they should be sold to the Government, who would pay for them with War Loan stock and use them to pay our debts in the United States. Meantime early in September an Anglo-French Commission arrived in New York to attempt to arrange an American loan. In spite of the furious opposition of the German sympathisers in America, a 5 per cent. loan for [100,000,000 Was arranged, a large figure when we remember the aversion of American investors to foreign securities, and the huge rate of interest to which they had been accustomed. There seems little doubt that the loan was floated by pro-Ally sentiment rather than by purely business considerations. The proceeds were to be employed exclusively in America for the purpose of steadying the exchange. At the same time,