derstands. If it be not averted before its manifestations become
apparent, it will then be too late to save the day.

The pressure of this approaching crisis, I am certain, has gone
beyond the ability of the Morgan financial agency for the British
and French governments. The financial necessities of the Allies are
too great and urgent for any private agency to handle, for every
such agency has to encounter business rivalries and sectional
antagonisms.

It is not improbable that the only way of maintaining our present
preeminent trade position and averting a panic is by declaring war
on Germany. The submarine has added the last item to the danger of
a financial world crash. There is now an uncertainty about our
being drawn into the war; no more considerable credits can be
privately placed in the United States. In the meantime a collapse
may come.

PAGE.

Urgent as this message was, it really understated the desperate
condition of British and Allied finances. That the warring powers were
extremely pressed for money has long been known; but Page's papers
reveal for the first time the fact that they were facing the prospect of
bankruptcy itself. "The whole Allied combination on this side the ocean
are very much nearer the end of their financial resources," he wrote in
July, "than anybody has guessed or imagined. We only can save them....
The submarines are steadily winning the war. Pershing and his army have
bucked up the French for the moment. But for his coming there was more
or less danger of a revolution in Paris and of serious defection in the
army. Everybody here fears that the French will fail before another
winter of the trenches. Yet--the Germans must be still worse off."

The matter that was chiefly pressing at the time of the Balfour visit
was the fact that the British balances in the New York banks were in a
serious condition. It should always be remembered, however, that Great
Britain was financing not only herself, but her Allies, and that the
difficult condition in which she now found herself was caused by the not
too considerate demands of the nations with which she was allied in the
war. Thus by April 6, 1917, Great Britain had overdrawn her account with
J.P. Morgan to the extent of $400,000,000 and had no cash available with
which to meet this overdraft. This obligation had been incurred in the
purchase of supplies, both for Gr