Walter Hines Page to Woodrow Wilson

29 June 1917LondonThe financial panic (it's hardly less) that this Gov't has raises the question, Why on earth do the British drift along until they reach a precipice? That's hard to answer. It's their way. They are too proud to acknowledge their predicament even to themselves till events force them to do so. — Mr. Balfour informs me that the agreement that he reached in general terms with Mr. McAdoo was this — that our Gov't wd thenceforth lend(1) to France and Italy (and Russia?) the sums they wd otherwise have to borrow from England (as they have all the while been borrowing) and in (2) addition lend to England whatever sums shd be required to pay for British Gov't purchases in the U.
S. — So much for that. I have no information whether that is Mr. McAdoo's understanding.
Now, Bonar Law assured me at the fearful financial Conference to wh. they invited me that the Treasury Dp't had given Lever, (the English financial agent) only half enough in June to meet the British Govt's bills in the U.
S. Since they had reckoned on meeting all such bills from advances made by us, they find themselves unable to go further without our help. They have used all the gold they have in Canada. — This, then, is the edge of the precipice. — It came out in addition that a few weeks ago, the French came over here and persuaded the British that in addition to the French loan from the U.
S. they were obliged to have the British loans to them continued — for how long, I do not know. Bonar Law said, “We simply had to do it.” The British, therefore, in spite of our help to France still have France on their back and continue to give them money. I know that for a long time the British have felt that the French were not making a sufficient financial effort for themselves. “A Frenchman will lightly give his life for any cause that touches his imagination, but he will die rather than give a franc for any cause.” There is a recurring fear here lest France in a moment of war-weariness may make a separate peace.
As things stand today there is a danger of the fall of exchange and (perhaps) the abandonment of specie payments. These British run right into such a crisis before they are willing to confess their plight even to themselves. They are not trying to lie down on us: they are too proud for that. Why they got into this predicament, I do not fully know. I know nothing of what arrangements were made with them except what Mr. Balfour tells me. It seems to me that some definite understanding ought to have been reduced to writing. But here they are in this predicament, wh I duly reported by telegram________It is unlucky that “crises” come in groups — two or three at once. But the submarine situation is as serious as the financial. I have a better knowledge of that than I have of the financial situation. But in one respect they are alike — the British drive ahead, concealing their losses, their misfortunes and their mistakes till they are on the very brink of disaster: that is their temperament. — Into this submarine peril (the Germans are fast winning in this crucial activity–there's no doubt about that) I have gone pretty thoroughly with their naval men and their shipping authorities. Admiral Sims has reachd the same conclusions that I have reached — independently, from his point of view. The immediate grave danger for the present lies here. If the present rate of destruction of shipping goes on, the war will end before a victory is won. And time is of the essence of the problem; and the place where it will be won is in the waters of the approach to this Kingdom — not anywhere else. The full available destroyer power that can by any method be made available must be concentrated in this area within weeks (not months). There are not in the two navies half destroyers enough: improvised destroyers must be got. There must be enough to provide convoys for every ship that is worth saving. Merely arming them affords the minimum of protection. Armed merchantmen are destroyed every day. Convoyed ships escape — almost all. That is the convincing actual experience.________If we had not come into the war when we did & if we had not begun action and given help with almost miraculous speed, I do not say that the British wd have been actually beaten (tho' this may have followd), but I do say that they wd have quickly been on a paper money basis, thereby bringing down the financial situation of all the European Allies; and the submarine success of the Germans wd overnight have caused a premature peace. They were in worse straits than they ever confessed to themselves. And now we are all in bad straits because of this submarine destruction of shipping. And time is of the essence of the matter. One sea-going tug now may be worth more than a dozen ships next year.ToThe President/