General SMUTS: I fear that we cannot agree to that, because we consider the Government notes indisputable. General HERTZOG: I do not think that Your Excellency represents the matter fairly when you say, for instance, that you do not wish to pay the accounts of both parties. There is one matter with reference to the Orange Free State which we must specially note. We have contracted no loans and we have issued no Government notes. The notes we used were South African Republic notes, of which some were sent to the Orange Free State also. Our (Orange Free State) law is based on the principle that in case of war, all cost could be met by commandeering notes. This was acted on in the Orange Free State, and receipts in the usual form or in the shape of requisition notes were given. If we take this into consideration, and at the same time also the fact that we have always acted, and still act, as a party which is a lawful belligerent party, then we come and only say: from our side we give all that we possess, and ask the other party to acknowledge only that which if we had concluded a loan would in any case, in the shape of a public loan, have fallen on the British Government, which takes over everything from us. Lord Milner will thus understand that from our point of view it is of as much importance for us to obtain payment of these receipts as it will be for the South African Republic to obtain the taking over by the British Government of the liability of a loan concluded before the war. But I can even go further and give Lord Milner the assurance that if we had also concluded a loan before the war, we could never have acted so economically as we have done by using receipts. That was also actually the reason why the Orange Free State never wished to conclude a loan beforehand, because now we have purchased only what was absolutely necessary for the day and for the circumstances. So that really Lord Milner will have to admit that we stand in the same position in respect to those who now hold receipts as we would have stood to any other creditor that we may have had before the war. I have already informally pointed this out to Lord Milner, and can now only express my agreement with what the Commandant General has said that this difficulty is almost insurmountable. Lord MILNER: We can refer this to our Government; but your proposal is entirely in conflict with the Middelburg proposals, because in them it was absolutely refused to take over all State debts. Lord KITCHENER: I wish that we could know the amount. General DE LA REY: I issued Government notes to the value of between L20,000 and L40,000; but to what amount receipts were issued I cannot say. Lord MILNER: There is really a compromise possible, namely, to allow these notes and receipts to be presented, and to introduce again the limit of L1,000,000. Lord KITCHENER: Would that meet your difficulty? General BOTHA: No.