Note 9 — Chapter I · OUR DAILY BREAD

The question is dealt with more fully in the last chapter of the ‘Addendum’ to this book. The chapter of ‘The Great Illusion’ dealing with the indemnity says: ‘The difficulty in the case of a large indemnity is not so much the payment by the vanquished as the receiving by the victor.’ (p. 76, 1910 Edition.) Mr Lloyd George (Jan. 28th., 1921) says: ‘The real difficulty is in securing payment outside the limits of Germany.... The only way Germany can pay is by exports—the difference between German imports and exports.... If she exports too much for the Allies it means the ruin of their industry.’

Thus the main problem of an indemnity is to secure wealth in exportable form which will not disorganise the victor’s trade. Yet so obscured does the plainest fact become in the murky atmosphere of war time that in many of the elaborate studies emanating from Westminster and Paris, as to ‘What Germany can pay’ this phase of the problem is not even touched upon. We get calculations as to Germany’s total wealth in railroads, public buildings, houses, as though these things could be picked up and transported to France or Belgium. We are told that the Allies should collect the revenues of the railroads; the Daily Mail wants us to ‘take’ the income of Herr Stinnes, all without a word as to the form in which this wealth is to leave Germany. Are we prepared to take the things made in the factories of Herr Stinnes or other Germans? If not, what do we propose that Germany shall give? Paper marks increased in quantity until they reach just the value of the paper they are printed on? Even to secure coal, we must, as we have seen, give in return food.

If the crux of the situation were really understood by the memorialists who want Germany’s pockets searched, their studies would be devoted not to showing what Germany might produce under favourable circumstances, which her past has shown to be very great indeed, but what degree of competitive German production Allied industrialists will themselves be ready to face.

“Big business” in England is already strongly averse to the payment of an indemnity, as any conversation in the City or with industrialists readily reveals. Yet it was the suggestion of what has actually taken place which excited the derision of critics a few years ago. Obviously the feasibility of an indemnity is much more a matter of our will than of Germany’s, for it depends on what shall be the size of Germany’s foreign trade. Clearly we can expand that if we want to. We might give her a preference!