pay the premium rather than send sufficient gold, because, for one
reason, shipping gold was costly and more than hazardous in war time,
and, for another, all the belligerents wanted to retain their gold as
long as they could afford to do so.

An adjustment of the exchange situation and a reestablishment of the
credit relations between the United States and the allied powers on a
more equitable footing was imperative. The British and French
Governments accordingly sent a commission to the United States,
composed of some of their most distinguished financiers--government
officials and bankers--to arrange a loan in the form of a credit with
American bankers to restore exchange values and to meet the cost of
war munitions and other supplies. After lengthy negotiations a loan of
$500,000,000 was agreed upon, at 5 per cent. interest, for a term of
five years, the bonds being purchasable at 98 in denominations as low
as $100. The principal and interest were payable in New York City--in
gold dollars. The proceeds of the loan were to be employed exclusively
in the United States to cover the Allies' trade obligations.

The loan was an attractive one to the American investor, yielding as
it did a fraction over 5-1/2 per cent. It was the only external loan
of Great Britain and France, for the repayment of which the two
countries pledged severally and together their credit, faith, and
resources. No such an investment had before been offered in the United
States.

Strong opposition to the loan came from German-American interests. Dr.
Charles Hexamer, president of the German-American Alliance, made a
country-wide appeal urging American citizens to "thwart the loan" by
protesting to the President and the Secretary of State. Threats were
likewise made by German depositors to withdraw their deposits from
banks which participated in the loan. The Government, after being
consulted, had given assurances that it would not oppose the
transaction as a possible violation of neutrality--if a straight
credit, not as actual loan, was negotiated. Conformity to this
condition made all opposition fruitless.

Toward the close of 1915 an ambitious peace crusade to Europe was
initiated by Henry Ford, the automobile manufacturer. Accompanied by
148 pacifists, he sailed on the Scandinavian-American liner, _Oscar
II_, early in December, 1915, with the avowed purpose of ending the
war before Christmas. The expedition was viewed dubiously by the
allie