Aber they had to pay 400 million dollar back that they did not have. And that loan was to be paid back in dollar. If they were not able to (which they were not I trust the UK treasury more than I do some guy on the internet) they were broke.
Being broke means you cannot meet your obligations on time and that they could not.
Denying they were broke is just denying a fact.
Well ... something happening everyday esp. regarding debts. Usually endig with a bailiff standing at your door.
Something rather difficult to enact if your debtor is a nation or even a world spanning empire ...
I' quite confident that the treasury and Morgans would have found a way to clear this overdraft i.e. by Morgans accepting some 'special' treaury bills and/or elongating the timeframe for repaying and/or 'arranging' some buisness across the border in/with Canada and/or something else I can't think of (
not being a finance juggler at all).
However, Britains 'credit' would take a hefty hit almost down to nonexistance. Its ability to get 'fresh' money would be heavily curtailed if not backed by quite considerable shipping of gold. ... what the bank of England and the treasury were fighting to avoid as the devil avoids holy water.
Britains ability and willingness to support the other Entente members esp. the other two 'big ones' with abundend gold reserves - compared to Britain - but also all the smaller ones (Greece, Italy, serbian remnants, Belgium [remnants]).