years after that date. It ranks first amongst the
foreign war obligations of these countries.

This was the first big credit arranged by England or France in the
United States and the proceeds were used, in the manner that I have
already described, for the purchase of American goods and to stabilize
the foreign exchange. These bonds which have had a very wide sale in
America were brought out at 98 and interest and at the time of issue
represented an investment that paid nearly 51/2 per cent.

These bonds, I might add, are convertible at the option of the holder on
any date not later than April 15, 1920, or provided that notice is given
not later than this date, par for par, into 15-25 Year Joint and Several
41/2 per cent bonds of the Governments of the United Kingdom of Great
Britain and Ireland and the French Republic. Such 41/2 per cent bonds,
payable, principal and interest, in United States gold coin, in New York
City, and free from deduction for any present or future British or
French taxes, will mature October 15, 1940, but will be redeemable, at
par and accrued interest, in whole or in part, on any interest date not
earlier than October 15, 1930, upon three months' notice.

The equity behind these bonds is the good name, wealth and taxing power
of the issuing countries. The interest on this loan equals only
one-fifth of one per cent of the total estimated income of the British
people in 1914. It is slightly more than one-third of one per cent of
the French Republic in 1914.

Between this loan and the next large borrowing by England or France in
the United States occurred an event of significance to the American
investor interested in the securities of foreign nations. The
Anglo-French loan, as you know, was simply the promise to pay of two
great countries whose Government Bonds at home represented the last word
in unshakable security.

But when England and France stepped up to our money counters again,
Uncle Sam put sentiment aside and became a pawn broker. "I think you are
all right," he said, "but you are in a war that may last a very long
time and I must have collateral."

To English pride this was a terrific jolt. I happened to be in England
at the time and I recall the astonishment of no less a distinguished
individual than the Chancellor of the British Exchequer. It was
unbelievable that any nation could demand greater security than the
good name of the Empire. "If the elder J. P. Morgan were alive t