The Prime Minister on Monday received the French Premier, the
Italian Foreign Minister, the Belgian Premier and the Japanese Ambassador at Downing Street to consider once again the interminable question of German reparations. According to the official report M. Poincart began by complaining afresh that hence had spent £1,-600,000,000 in repairing the damage done, and that the interest on this vast sum, which should have been paid by Germany, had upset French finances. France could not reduce her armaments because, lacking the guarantees that had been given and then withdrawn, she felt insecure. She could not raise more money by taxation, because she had not many very rich citizens and her indirect taxes were heavy. M. Poincare declared that if Germany was financially distressed it was her own fault, as she had indulged in reckless capital expenditure and had persistently inflated her currency. There- fore France could not agree to a suspension of reparation pay- ments for two years, as Germany desired, unless the Allies received " productive guarantees."
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