Mr. Mellon chivalrously took upon himself the full responsibility of the note bearing his signature, and with his accustomed courtesy and candor made an effective offset to Mr. Churchill's testiness.

"The whole thing," he said frankly, "was most unfortunate, especially as there was no call for it at all. My reply to Mr. Peabody was not intended for publication, but even then I thought I was stating nothing but positive facts. However, it was most regrettable that it should have been published, and more regrettable still that it should have given rise to any controversy with Mr. Churchill.'

Being blessed with an exceptionally acute sense of humor, Mr. Mellon no doubt will derive much amusement from the information awaiting him that it was the Treasury, not Mr. Peabody, who in this instance ran true to thoroughbred form, that gushed into print with its reply before Mr. Peabody had even received it. The merits of the subsequent bickering of the two Treasury Departments hardly call for consideration, since analysis would resolve chiefly into a matching of erroneous and deceptive assertions.

In fairness, however, to our own Treasury, whose admirable functioning within its prescribed province has never been excelled, the fact should be noted that matters pertaining to foreign policy find their statutory lodgment in the State Department except in rare instances such as this, involving a personal attack upon the President, when direct and authoritative treatment by the Executive Secretary sometimes proves to be most salutary.

It was the tone rather than the substance of the Chancellor's quick response that puzzled Americans. His challenge of the accuracy of our Treasury's statements was natural enough and, even though ineffectually supported by equally erroneous assertions of his own accountants, was in some respects warranted; but when he solemnly declared that "no complaint has been made by Great Britain against the adverse discrimination to which she has been subjected," and added sarcastically that none would be raised but for "reasons assigned which clearly arise from a misconception of facts," the hostile note was unmistakable. There was, moreover, neither logic nor candor in the assertion itself for

the simple reason that “discrimination" was obviously impossible when the first settlement, that with England, was made.

Mr. Churchill, along with a large majority of the Cabinet, was strongly opposed at the time to acceptance of the terms negotiated by Mr. Baldwin, but he acquiesced nevertheless and, when he became Chancellor of the Exchequer two years ago, he clearly indicated full reconcilement in these words spoken in the House of Commons:

Opinions have differed about that settlement. It is a settlement which commanded the support of the leading financial authorities in the City of London. It is a settlement which was advocated by the experts at the Treasury. It is a settlement which has been ratified by Parliament and accepted by the country. There have been different views about it. I have been myself quoted as having expressed different views. My right hon. friend the Prime Minister is the last man in the world to resent a sincere divergence of opinion between persons perfectly free at the time upon a matter admittedly highly complicated and in regard to which there have been the broadest differences of opinion between experts of unquestionable and unimpeachable authority.

But, whatever views may have been taken about the settlement or expressed about it, there can be no dispute in regard to two facts. First of all, the settlement has been made; it is done and it must be made good. It forms the starting point for all future discussions in the field of inter-Allied debts. That is the first point.

The second point is this: It has placed us in an extraordinarily strong position. We take our seats at the council board of Allied and Associated Powers under financial obligations to no one. We have no need to seek indulgence in any quarter. (Cheers.) Having met all our liabilities as prescribed, having rigorously discharged every contract into which we have entered, we are entitled to rest ourselves with confidence upon a position of freedom and independence which we have regained. We have regained it, not without great sacrifice; but it is ours, and it is ours forever. (Cheers.) We can look every one in the face.

This debt settlement was unquestionably the indispensable forerunner of that consolidation and increasing establishment of our credit throughout the world, on which our world-wide trade depends, and it is an essential foundation in all that improvement in the exchange between this country and the United States and the maintenance of that exchange, which is a vital factor in the whole of our national and international finance.

To his credit be it said that this is not the first time Mr. Churchill has noted "misconceptions of facts" in connection with the Anglo-American debt settlement. When the illustrious Earl

Balfour had the effrontery to declare in his famous Note of August, 1922, that the United States would make no loans to the other Allies unless they were endorsed by Great Britain, the American Ambassador, feeling constrained to make flat denial of that misstatement, expressed the hope that the time would come when the British Government would publicly and officially disavow it.

At the expiration of two years this modest hope was realized and the man who made the correction unreservedly and most handsomely was no other than the Rt. Hon. Winston Leonard Spencer Churchill, Chancellor of the Exchequer.

His latest apparent faceabout is accounted for in various ways. Some think that he still considers it necessary to take a dig at Uncle Shylock once in a while in order to convince the provincials that his being half American by birth does not impair his onehundred-per-cent British spirit, but we frankly doubt that he now recognizes such manifestation as a political requirement. Nor do we believe for a moment that his inferential slap at Mr. Baldwin, to whom he owes his present high position, was designed to arouse resentment that would enable himself to force the retirement of his sponsor from the Prime Ministry in furtherance of his own ambition. It is far more likely that his purpose was merely to test the real feeling of the British public toward America and then perhaps to consider the advisability of shaping his course to accord with the popular inclination.

If so, the outcome is all that could reasonably be desired by the citizens of both countries who feel that the best interests of England and the United States, no less than of civilization itself, can be served most effectually through good feeling and mutual helpfulness. The only public journals that seized upon Mr. Churchill's characteristically impulsive outburst were those hitherto supposed to be directed by Viscount Rothermere, né Harmsworth.

These widely circulated sheets, it must be confessed, in the words of Artemus Ward spoken of Napoleon, “tried to do too much and did it" so thoroughly that, after perceiving the impossibility of capitalizing prejudice and passion, the noble Lord was compelled by his own subscribers, advertisers and shareholders to

make abject retraction and apology, while simultaneously assuring Americans that personally he did not share the views of his benighted editors. Freely admitting that he found the humiliating task "most distasteful," he recognized the absolute "necessity" of performing it and promised never, never, to do so again; consequently no good could come from recalling his tirades; rather, the very few Americans who ever heard of His Lordship may well hold him in grateful remembrance for endorsing, along with Mr. Peabody, the new and pleasing appellation of Uncle Shylock originally applied by the affectionate Press of Paris. Having thus exonerated, we trust to their entire satisfaction, all those who participated in the unfortunate episode, we find much gratification in bearing sincere testimony to the admirable treatment of the whole matter by the representative journals of both countries. After paying Mr. Mellon a handsome compliment, for example, The Manchester Guardian squarely concedes that "the logic of the American case for repayment is very hard to answer, and is very much that of the British public, whose agreement with America leaves little room for generosity to other countries;" and The London Times, with equal candor and breadth of view, says:

The British debt settlement with America, whatever its actuarial consequences may prove to be in the life of the two countries, was based on a sound instinct of an essential identity of fortune, character and endeavor in the new world as it is now shaping. It is of no slight significance that since its conclusion, and the practical removal by that means of an occasion for futile controversy on fundamentals, the United States and Great Britain have been closely associated as principals in a work of systematic reconstruction in Europefirst in Austria and later in Hungary and in Germany.

In this work they have altogether acquired a joint authority and inspired a growing confidence that neither could have acquired or inspired alone. The process of extending and developing coöperation has already yielded conspicuous results that can at once be determined by a hasty comparison with the world of 1922. That process dates from our debt settlement with America. It would be folly to jeopardize the achievement by any nervous and fretful impulse of recrimination over the act by which Great Britain made all this possible.

So much still remains to be done. A new dread of instability is passing over Europe. It is reflected in the present economic and financial condition of France, Belgium and Italy, and in some obscure premonitions of new develop

ments farther east. This is the very worst moment for the two nations which have vindicated their stability to undermine, by any petty quarrel or controversy, the basis of the practical agreement by which they mutually assure their prestige and marshal their joint resources for the benefit of a world in great distress.

Those are true and wise words and bear exceptional significance as coming from a great British journal owned by a broad-gauged man of American birth.

They are, moreover, well matched by those of The Minneapolis Journal, one of the most discerning of the newspapers of that great Middle West which, until recently, was not noted for proBritish proclivities; namely:

In America there are some who hate her, many who respect her, not a few who love her next to this, our own country. Americans have jested at her expense, have reproached her for her faults, have even at times reviled her for her failings. But deep down in the American heart there is recognition of her affinity to ourselves, and she is never seriously threatened without evoking something more than sympathy. Unconsciously or unadmittedly, Americans are proud of Great Britain, proud of her empire, proud of her record, her character, her ability to take care of herself, her invincibility.

We Americans conceived that we discharged a sentimental debt when we saved France from the Teuton. "Lafayette, we are here!" Pershing said at the tomb of the friend of Washington. Yet, not a sentimental, but a substantial debt we Americans owe to Britain, the debt of a descendant to an ancestor. The United States is the offspring of Great Britain. We owe to her our language, law, institutions, our spirit of freedom, our genius of self-government. And all the other stocks, their presence amongst us, all the hereditary hatreds, all the prejudice and contumely, cannot diminish the fact or traverse the truth. In 1917 we went to the rescue of Great Britain, primarily because our national self-interest could not afford the downfall of the British Empire. There were other motives, but that was a main one. Probably in this crisis Britain will extricate herself as usual. But the crisis reveals to us again as in a lightning flash our deep concern in British affairs, our stake in her welfare, how it behooves us to do what, if anything, will help her to regain her feet, to go on.

The simple truth, always to be borne in mind, is that the adjustment of the greatest debt the world has ever known was accomplished by a mingling of the spirits of both negotiators in honest endeavor to serve the highest interest of each country as much as that of the other. It was as fair a settlement as could be devised at that time. Relatively today, as France's inherent "capacity to pay" has increased in approximate proportion to