The Press. Saturday, July. 10, 1920. The Spa Conference.

Press, Volume LVI, Issue 16883, 10 July 1920, Page 8

The Press. Saturday, July. 10, 1920. The Spa Conference.

Tho German Government's objection to the Allies''insistence upon the full terms of the Peace Treaty is not based upon any desire to maintain the means of aggression, because the means of aggression, to say nothing of the will, cannot exist in Germany until after, a. longer time than need concern anyone alive: to-day. Nor is it based upon any anxiety to possess the means ol resisting attack, truth of the matter is that the German Government wishes to maintain a force strong enough to guarantee internal stability, and is in any case hardly able to disarm everyone in tho country even ; if it wished to. Apparently some compromise settlement is in process of arrangement, but it is much to be hoped that disarmament -will be insisted upon. * ttpeaking to the Labour Party in "Wel-» ington yesterday, General Russell said, in reply to a question concerning the "para bellum" doctrine l that- "an un- " armed Germany would be a menace "to the peace of tho world, be- «' cause it would invito attack' from " hostile countries." But to advocate the disarming of Germany is by no jneans to wound the hopes of European peace. On the - contrary, it would expose to the full force of the world's armed-disapproval any State— Prance, for example—that cought to presume upon the defencelessness of Germany. An even more difficult problem than this one is the problem of indemnities, which must be settled at the present conference, or put on the way to settlement, or the patience of the Allied peoples will bo exhausted. The time has long gone by when thcro could bo any considerable body of support for a treatment of this" question m tho spirit that dominated Great Britain during tho last general election, when it was proclaimed from the Coalition platforms that tho German people would Jbe stripped bare of all their possessions. But the difficulties created by this spirit have not passed away. The people of Britain do not now expect Germany to help the Chancellor of the Exchequer, but tho people of the Allied countries, and especially the people of France, havo been led to expect that the financial troubles of their countries, will bo solved by the enormous payments to come from G-ermany. It is this that has caused the Supreme Council its greatest perplexity; for the representative of France shrinks from letting his constituents see tho real truth, which is that Germany cannot possibly pay as much as they have been led to expect. Many proposals have been made. One is that a fixed sum should bo named, and it is generally agreed that if Germany is allowed to drift on without knowing her liabilities, the results may be disastrous for Germany and for Europe as a whole, since a stats of uncertainty would discourage Germany and turn her present economic disorder into economic and social chaos. But the objection has been raised that the maximum amount that it would bo safe or expedient to lix niiyhfc really turn out to ho less than will give to France the amount she can rightly claim. An alternative suggestion is that an annual sum should be fixed, to be paid for a stated number •of years. There is infinite disagreement concerning the iimounfc which Germany ought to pay and the amount she is able to pay. Mr Keynes, in his analysis of the first question, comes to the conclusion that Germany's total liability for damage dona is about "2V2Q L millions sterling. This is much less than half the amount. 5360 millions sterling, declared by M. Klotz in Scb-

j ttmb T last to bo due to France alone. ; This discrepancy is surprising. but it | heeoni-es less so when it is stated that ! the area of substantial devastation v.-as 1.-! per Wnt. of the whole country, and I that the total value of the house propel .y. land, and farm capital of the j whole of France is less than M. Klotz's j claim. " ; "What Germany can really pay nobody j can confidently say. The Treaty prcvTilcs I ior the payment of 1000 millions ster- ; ling before May. 1921. and for the delivery of hearer bonds to a farther amount of 2000 millions, bearing interest at "21 p:>r rent, for four years, and 0 per cent, (.including 1 per cent, sinking fund) .-hereafter. As soon as the | Reparation Commission thinks she can do s<>, Germany must issue bonds for a further 2000 millions sterling, and any further instalments required. Bonds representing payments in excess of 'iCOO millions sterling are not to he i = Hied until the Commission is' satisfied that Germany can meet the mterost on | them. Hut from May next, interest on outstanding debt will be debited against Germany. These provisions will mean that if Germany pays, for examp!e ; 1-50 millions annually up to 19.";), her debt will have grown to 13,000 millions sterling. Tt is not surprising that on considering the whole question in the cooler atmosphere of today most people, including those who very properly insist that Germany must net be let off lightly, realise that the Treaty provisions must be modified Newspapers as sound as the "Sprcta"tor" have urged Mr Lloyd George to. remember the value of moderation, a virtue which marked the policy of Castlercagh and Wellington after "Water, 100, and which the "Spectator" holds was responsible for the generally good relations of France and Britain since that time. "It is conceivable," itadds, "that even Germany hereafter may "oome to be thankful to the Allies if "they treat her as Castlcreagh treated "France. "We have exorcised the "Kaiser as we exorcised Napoleon. " The French peoplo have long since "repudiated Napoleon's statecraft. "We " must now seek to wean the Gel-mans ' " from the Napoleonic ideas which have "brought them to disaster." But an indispensable condition is that Germany shall act with perfect frankness, and display not only a readiness to assist the Allies to ascertain the exact truth as to her economic condition, but a sincere anxiety to do her very best to meet her liabilities. For -while everyone realises the grave importance of assisting the economic recovery of Germany, nobody should forget for a moment that ' the penalty to be. paid must he made as severe as possible within the limits set by considerations of sound economic policy.