he Allied
Powers which is adopted above, would assuredly be found to exceed
$8,000,000,000 and to fall short of $15,000,000,000.

This is the amount of the claim which we were entitled to present to the
enemy. For reasons which will appear more fully later on, I believe that
it would have been a wise and just act to have asked the German
Government at the Peace Negotiations to agree to a sum of
$10,000,000,000 in final settlement, without further examination of
particulars. This would have provided an immediate and certain solution,
and would have required from Germany a sum which, if she were granted
certain indulgences, it might not have proved entirely impossible for
her to pay. This sum should have been divided up amongst the Allies
themselves on a basis of need and general equity.

But the question was not settled on its merits.

II. _The Conference and the Terms of the Treaty_

I do not believe that, at the date of the Armistice, responsible
authorities in the Allied countries expected any indemnity from Germany
beyond the cost of reparation for the direct material damage which had
resulted from the invasion of Allied territory and from the submarine
campaign. At that time there were serious doubts as to whether Germany
intended to accept our terms, which in other respects were inevitably
very severe, and it would have been thought an unstatesmanlike act to
risk a continuance of the war by demanding a money payment which Allied
opinion was not then anticipating and which probably could not be
secured in any case. The French, I think, never quite accepted this
point of view; but it was certainly the British attitude; and in this
atmosphere the pre-Armistice conditions were framed.

A month later the atmosphere had changed completely. We had discovered
how hopeless the German position really was, a discovery which some,
though not all, had anticipated, but which no one had dared reckon on as
a certainty. It was evident that we could have secured unconditional
surrender if we had determined to get it.

But there was another new factor in the situation which was of greater
local importance. The British Prime Minister had perceived that the
conclusion of hostilities might soon bring with it the break-up of the
political _bloc_ upon which he was depending for his personal
ascendency, and that the domestic difficulties which would be attendant
on demobilization, the turn-over of industry from war to peace
condit