The effect of this reversal of Anglo-American trade balance was a decline in the exchange value of the pound sterling, which was normally worth $4.86-1/2 in American money, to the unprecedented level of $4.50. This decline in sterling was reflected in different degrees in the other European money markets, and the American press was jubilant over the power of the dollar to buy more foreign money than ever before. Because Europe bought much more merchandise than she sold the demand in London for dollar credit at New York was far greater than the demand in New York for pound credit at London. Hence the premium on dollars and the discount on pounds. It was not a premium upon American gold over European gold, but a premium on the means of settling debts in dollars without the use of gold. Europe preferred to pay the premium rather than send sufficient gold, because, for one reason, shipping gold was costly and more than hazardous in war time, and, for another, all the belligerents wanted to retain their gold as long as they could afford to do so. An adjustment of the exchange situation and a reestablishment of the credit relations between the United States and the allied powers on a more equitable footing was imperative. The British and French Governments accordingly sent a commission to the United States, composed of some of their most distinguished financiers--government officials and bankers--to arrange a loan in the form of a credit with American bankers to restore exchange values and to meet the cost of war munitions and other supplies. After lengthy negotiations a loan of $500,000,000 was agreed upon, at 5 per cent. interest, for a term of five years, the bonds being purchasable at 98 in denominations as low as $100. The principal and interest were payable in New York City--in gold dollars. The proceeds of the loan were to be employed exclusively in the United States to cover the Allies' trade obligations. The loan was an attractive one to the American investor, yielding as it did a fraction over 5-1/2 per cent. It was the only external loan of Great Britain and France, for the repayment of which the two countries pledged severally and together their credit, faith, and resources. No such an investment had before been offered in the United States. Strong opposition to the loan came from German-American interests. Dr. Charles Hexamer, president of the German-American Alliance, made a country-wide appeal urging American citizens to "thwart the loan" by protesting to the President and the Secretary of State. Threats were likewise made by German depositors to withdraw their deposits from banks which participated in the loan. The Government, after being consulted, had given assurances that it would not oppose the transaction as a possible violation of neutrality--if a straight credit, not as actual loan, was negotiated. Conformity to this condition made all opposition fruitless.