(c.) The blockade would be continued until we obtained reparation for the acts already committed, and guarantees for the future.
A copy of the telegram actually sent is printed in Appendix II.
Copies of the instructions to the British Minister in Athens to be sent simultaneously to Paris, Rome, and Petrograd.
The British Minister at Athens should be instructed that he should make a communication to the Greek Government as soon as his colleagues received their instructions.
(2.) The Admiralty to send instructions to the Vice-Admiral Commanding, Eastern Mediterranean, not to take any action, such as the destruction of bridges or railways, or otherwise to commit any act of war apart from the blockade, until he receives further instructions.
(3.) The Chief of the Imperial General Staff to send a corresponding communication to the General Officer Commanding the British Expeditionary Force in the Balkans.
Propaganda. 4. Sir Edward Carson read a letter from Rome, which had been communicated to him, regarding the harm done by the anti-Venezelist propaganda in Italy.
The War Cabinet decided that the whole question of British propaganda was one which would require consideration at an early date.
The American Exchanges. Attended for the Question:-
The Lord Cunliffe, Governor of the Bank of England.
Sir Robert Chalmers, K.C.B.
Sir John Bradbury, K.C.B.
5. Sir Robert Chalmers explained to the War Cabinet the present position as regards the American Exchanges. He said that, in September 1916, the Treasury had appointed a Committee, under Lord Reading
, to confer with French delegates on this subject, and the British representatives had first investigated our own position. They had found that we were spending 60 million dollars a week in the United States of America. This included an estimate of 12 million dollars utilised for the purpose of maintaining the Exchange. The maintenance of the Exchange was an essential pivot of the finances of the Entente
Powers. The remaining 48 millions, which estimate has been confirmed by the experience of October and November was utilised as payment for the purchase of different commodities required by the Admiralty, the War Office, the Ministry of Munitions, or the Allies, and including sugar, &c. It had been found that loans to the extent of 1,500 million dollars would be required before the end of March next. Messrs. Morgan, Grenfell, and Co.
, who acted as our agents in New York, had been somewhat staggered by the amount, but had said that we must strain every nerve to obtain the money, and had advised a second loan in November on the basis of collateral security, as we had in the summer got beyond the point where British credit could carry a loan without collateral. This second loan had been negotiated on this basis. It had then been hoped to obtain a straight loan in the United States in January, when money gets easier. We had raised 300 million dollars on our November collateral loan, but we had spent this, and now had a debt of 175 million dollars outstanding on short money in the United States of America. When we obtained our last collateral loan we were looking forward to a straight loan of 500 millions in January, when suddenly the whole situation was changed by the issue of the Federal Reserve Board's announcement to banks. The representative of Messrs. Morgan, Grenfell, and Co. in New York then advised us that we had, as it were, to begin