means of going to work and producing. Which is the result of saying that they cannot be made worth anything unless she has assets to begin with to establish her own credit. And therefore the thing has two sides to it; not only the aspect of Germany and France and Italy -but the world aspect; working out a method by which this sum would be made not only definite but worth something, by having means for Germany to get to work. The President continued in the Council of Four his powerful and common-sense arguments for a fixed sum. Even if the device of payment by bonds were used-and the Americans believed it practical-the basis must be a known amount. President WILSON said that the only argument in favour of fixing a sum was to provide a basis for credit. Supposing, for example, the sum were fixed at twenty-five billion dollars, the financial world could then form a judgment. If it was thought that Germany could pay this sum, many would be willing to lend to her on the strength of the bonds to be issued under the reparation scheme in the Treaty. Otherwise, money would not be lent. To find some way of making the bond issue the basis for credit was the whole question.1 The Americans realized that their whole theory of the economic restoration of Europe, through private credits and without further governmental action or interference with the body of existing obligations, depended upon a sound reparation scheme. Germany required a certain and hopeful future, the Allies, fresh assets in the shape of reasonable expectations of payment, in order to release the life-giving streams of commercial credit from our side of the ocean, which would reinvigorate Europe to the point of all-round payment of debts. If there was any hope for the American scheme at all, it lay just in this feature-a reparation settlement sound enough to make the bonds acceptable securities. But could such a settlement be 'Secret Minutes, Council of Four, June 9. devised? It may be doubted if even the minimum American estimate of Germany's capacity to pay-twenty-five billion dollars-represented a sum which could actually be collected through the only possible procedure of placing the necessary quantity of German exports in foreign markets. Our own market would certainly not be thrown open willingly for its share. Consider the protective tariff barriers we are putting up! But there was no occasion to reason even thus far. Even by stretching their estimates of what could reasonably be asked and what the Germans might possibly accept in good faith, the Americans could not reach a sum which the allied statesmen would undertake to uphold before their peoples. The impasse was bluntly described on June 9. Mr. LLOYD GEORGE said that on the question of fixing the amount, he was not in agreement with the United States experts. He had turned the matter over in his mind again and again, in order to try and meet their views. The conclusion he had come to was that if figures were given now they would frighten rather than reassure the Germans. Any figure that would not frighten them would be below the figure with which he and M. Clemenceau could face their peoples in the present state of public opinion. . . . Mr. Bonar Law had been in Paris during the last day or two and was better in touch with British public opinion than he was himself. Mr. Bonar Law was also inclined to take the same view as the United States delegates, but the moment any possible figure was mentioned he began to shrink from it.1 What was to be done? Reconsideration of the subject had now been under way nearly a week. The experts of the Commission on Reparations had wrangled hotly and ended by presenting two conflicting reports. In their proposed reply to the Germans, the American delegation had again boosted this figure to a capital sum of thirty 'Secret Minutes, Council of Four, June 9. billion dollars, though with part payment in German currency, as in the earlier negotiations, but, as before, they could not offer the one condition that might possibly have persuaded the Allies to put such a proposition before their peoples-a reduction of their own burden of foreign debts. Tardieu relates that at this time the question of these debts was more or less frankly discussed and that the Americans held off because they could not undertake to put the matter before the country until the Treaty itself was out of the way. He surely exaggerates the meaning of the American replies. No one (unless it was Colonel House) could have held out any real hope on this score-knowing opinion in America. At any rate, the Americans could give no assurances in this respect sufficient to sweeten the reparation dose they offered; and the Allies refused to swallow it. So a reply to the Germans on reparations was patched up out of the American explanation of the Reparation Commission, a promise of consideration for Germany's needs so vague as to be meaningless, and the British scheme for definite proposals in three months—which came to nothing, as the Allies were not any more ready to face realities by that time. It was not thought necessary to say anything to the Germans about limits on the charges for the Army of Occupation, though a private agreement? was later reached on this. The President's strong feeling about the outcome was expressed ironically and truthfully when the Council shifted its attention to the Silesian problem. President WILSON pointed out that the reply to the Germans on reparation had been whittled down so that all sacrifice by the Allies 'Tardieu, "The Truth about the Treaty,” p. 344. 2See Chapter XXX, p. 117, of this book. had been abandoned. Now it was proposed to place the sacrifice on the Poles.1 Here in this brief remark the President strips bare, and reveals as in a flash of brilliant light, the entire secret of the failure of Paris. No willingness to sacrifice anything! Therefore no possibility of securing real or just settlements based upon coöperation. And this did not apply only to France and Great Britain, it applied also to America. 'Secret Minutes, Council of Four, June 11. CHAPTER XLIV PROBLEMS OF ECONOMIC DISARMAMENT AT PARIS- P RESIDENT WILSON had remarked, ironically, of the reply of the Four to the Germans regarding the Reparation settlement (June 11) that “it had been whittled down so that all sacrifice by the Allies had been abandoned." The President clearly perceived in connection with the economic as with the political issues at Paris that willingness to sacrifice was the cornerstone of any just settlement. There must be give as well as take. To get a league of nations, for example, there must be a willingness on all sides to accept certain new responsibilities if the future good of the world was to be served and the truest interests of all nations served. Article X was the "heart of the Covenant" because it represented the element of responsibility on the part of America-which America later rejected. Similarly in the matter of disarmament, there must be sacrifice all round: the great Powers could not ask the small powers to disarm unless they were willing to do so themselves. And finally exactly the same situation arose in connection with the proposals to meet the vast economic problems confronting the world. Could the great Powers ask economic disarmament of Germany, or economic |