REPARATION BY GERMANY.
(To THE Emma or THE " Srecreroa."l
SIR,—Mr. Lloyd George has promised that Germany shall be made to pay according to her capacity. But when will it be explained to the public of the Allied countries that reparation will be made not so much in accordance with the capacity of Germany to pay as in accordance with the capacity of the Allies to receive! Knowledge of economies grows slowly, and the vast majority of people still imagine that wealth consists in a number of pounds, shillings, and pence or their equivalent in foreign currency. They argue that, as Germany has a large amount of valuable things, art treasures, jewellery, gold, and silver plate, &c., all that the German Government has to do is to conscript and sell these, together with bonds, stocks, and shares held by Germans, and to hand to each of the Allies a cheque for the proceeds. In addition, they point to the un- doubted fact that Germans could be, and should be, more heavily taxed, that the German Government should be com- pelled to show a large surplus on their budget, and that that surplus should also be paid over to the Allier by cheque.
Of course this is nonsense to any student of economics, but it is. Ian certain, what -the average person. thinks who knows nothing of the problem of exchange and does not understand that the wealth of a nation consists mainly in the amount of commodities or goods which it produces and in the number of services which it renders to the rest of the world. Germany's real wealth therefore consisting, except to a very small extent, entirely in the goods which she manufactures, she can pay only in kind, i.e., by exporting these goods to the Allied countries to be sold in their markets. The inevitable result of such pay- ment would be that the Allied countries would be flooded with German goods, there would be a corresponding decrease in the output of similar goods by factories in the Allied countries, and unemployment on a scale undreamt of would be bound to follow. In other words, the Allied countries are not in a position to receive payment of reparation on anything like the scale fondly imagined by many. The ideal reparation in Germany's case, apart from the renunciation of her colonies, would be something like this : (1) The handing over of the materials necessary for the repair of the devastated regions of France and Belgium, such as wood, stone, bricks, oement, &c. (2) The delivery of ships, locomotives, railway wagons, agricultural implements, And machines in return for those taken away or wantonly de- stroyed. (8) The return of farm stock and other goods seized, (4) The continued supply of coal to make up the loss sustained by France until the French mines are again in working order.
(5) The payment of the pensions due to the dependents of the men killed in the war and to the disabled of all the Allies.
(6) Possibly the renunciation of all property held by German nationals abroad, though the comparative insignificance of the sum involved and the questionable precedent created in seizing private property makes this of doubtful expediency, unless the German Government were compelled to compensate the owners. Possibly, too, there might be added a surtax on German exports on a sliding scale, as proposed at the recent Paris Conference, so that all the Allies would share in any increase of German trade prosperity. If to the fulfilment of these six or possibly seven conditions could have been joined the cancellation of Allied debts as between themselves, the outlook for the economic future of the world would have been brighter than it is to-day.
We are only beginning to realize that the comity of civilized nations in these days is such that (1) it does not pay the creditor nation to have largo debts owing by other nations. (2) Modern warfare on the grand scale tends to involve in financial and economic ruin both victors and vanquished. (8) The bank- ruptcy of any one nation, e.g., Russia, by depriving the other nations of the much-needed raw materials which the bankrupt would otherwise have for sale, and by closing its markets to the exports of those nations reacts disastrously on the economic prosperity of the world.—I am, Sir, &o., E. B. HEBERDEN. Broadstairs.
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