United States will loan Great Britain $425,- The signing of an agreement, whereby the 000,000 at three per cent, marks but another step in the general programme of Washington in extending every possible aid to Britain The purpose of the loan is to enable payment to be made for purchases made in the United States prior to the passing of the Lend-Lease Bill. Early in the war British securities in the United States had been mobilized, and it was thought at one time that they might be sold for the purpose of financing purchases. There was some doubt as to the wisdom of such a step, but it seemed to be the only method possible in view of existing legislation in the United States. Forced sale of these securities might have had a disastrous effect not only on their own values but on the values of other securities on the New York market, and it was a wise decision to wait and see before taking any such step.
By this latest arrangement any danger of depressing the market by forced sale has been removed, while the terms of the loan indicate that within fifteen years, the period of the agreement, it should be possible to wipe off the whole loan, though provision is made for its renewal providing two-thirds of the capital have been paid off. The rate of interest is reasonably Low, indicating adoption by the United States of the policy which has already been accepted by Great Britain of avoiding as far as possible raising money at anything like the rates which prevailed during the last war. It is early at present to endeavour to estimate American reaction to this latest development, though first reports suggest that it is not expected to arouse anything but approval, chiefly because it is being more completely realized by the average American that, in the interests- of world economy in general and the United States in particular, it is essential that Britain should remain as a going concern and that unless she can earn money she cannot buy.
There was a strong section of public feeling before the passage of the Lend-Lease Bill that Britain should be given no assistance until she had liquidated all her investments in the western hemisphere. Fortunately it did not prevail in the discussions in Washington, for, if it had, an enormous amount of valuable securities' would have been thrown upon the market producing a bear effect which would have been damaging to American and well as British interests, Under the present agreement British securities and investments in the United States will continue to earn money out of which the loan will ultimately be liquidated, and at first blush it does not appear that this loan is likely to become a charge upon the British taxpayer, but rather that the earning power of the collateral will be sufficient fo pay the interest and the capital as well, within fifteen years, or failing that, within twenty. In the circumstances the arrangement is a wise one conferring benefits all round, which any other arrangement would have failed to do, But the loan has much more significance than the mere accommodation of Great Britain by the United States in the matter of finance. It is a further proof of the solidarity which prevails between the two countries, and the determination of both to do everything necessary to see that Naziism shall be brought down. Here is a demonstration of the pooling of common resources for the carrying out of that important task, another example of how the United States is responding to Mr. Churchill's invitation to give Britain the tools in order that she can finish off Hitler and all that he stands for. It is even more than that. It is a development which shows to the whole world how the two great democracies are mobilizing their great wealth in money and material—far more than Germany and Italy possess, even if Germany has overrun the greater part of Europe,—to defeat the menace to their security which the Nazis have created. From that point of view it is but another promise of victory at such a time as when Great Britain and the United States reach the peak of their strength which they are now rapidly approaching.
Text read from the printed page and cleaned; old type leaves the occasional error.