You and I will say things about our cousins to our aunt.

Our aunt would not allow outsiders to say those things.

Is it this, the-members-of-the-family principle, which makes us less discreet than the French?
Is it this, too, which leads us by a seeming paradox to resent criticism more when it comes from England?
I know not how it may be with you; but with me, when I pick up the paper and read that the Germans are calling us pig-dogs again, I am merely amused.

When I read French or Italian abuse of us, I am sorry, to be sure; but when some English paper jumps on us, I hate it, even when I know that what it says isn't true.

So here, if I am right in my members-of-the-family hypothesis, you have the English and ourselves feeling free to be disagreeable to each other because we are relations, and yet feeling especially resentful because it's a relation who is being disagreeable.