General SMUTS: I have already privately used the argument with Lord Milner that what we are now contending for has in principle already been conceded by Lord Kitchener. In the Middelburg proposals the payment of the Government notes was refused, but it was laid down that receipts to the value of L1,000,000 would be paid out, and if this should now be withdrawn it would certainly be a deviation from the Middelburg proposals. The payment of notes is something lawful, and stands on another footing; and I cannot understand how the payment thereof could have been refused in the Middelburg proposals, and therefore an agreement to pay them now is reasonable. But with reference to receipts, the payment of them was partially acceded to, and now it is withdrawn. I think that when we have arrived at such a stage in the negotiations as we have now, then a point such as this, which was as good as agreed upon, must no longer be a stumbling-block to a final agreement. I believe that this amount is small. I was with General de la Rey for one year in command of the half of the South African Republic. Accounts were kept of all receipts, and where the books are no longer in our possession they are in your possession. The issue of these receipts took place in proper order and under proper regulations, and books thereof were kept. As far as I have been able to go into the matter the amount of receipts is really small. And although Lord Milner recoils from the payment of an enormous amount which may be presented for payment if our proposal be accepted, yet I personally think that the fear is vain, and that the amount will prove to be much less than you probably think. Lord MILNER: I do not think it is so much a question of the amount. This payment of Government notes and requisition notes is, in my opinion, very reprehensible. I believe that in this respect I feel what the great majority of the British people feels, that it would rather expend a large sum after the war to improve the condition of the people that has fought against them, than pay a smaller amount towards the expenses incurred in fighting them. Whether this be right or wrong, it is a strong feeling with which you must reckon. We do not wish to pay the accounts of both parties, and the clause in the Middelburg proposals with reference thereto was, in my opinion, always one of the bad ones in that document. If something of this kind must be done, then I think that the payment of the Government notes is not so bad as the payment of the requisition notes. I put the point with reference to the payment of notes in this draft proposal, because I thought that if a choice had to be made between the payment of the one or the other, you would consider it better that the Government notes were paid. If it is considered better to go back to the Middelburg proposals on this point, then, however much I object to it, I would agree, if Lord Kitchener agrees.