Germany at that time and the serious menace
of Spartacism rendered this step necessary in the interests of the
Allies themselves if they desired the continuance in Germany of a stable
Government to treat with. The question of how such provisions were to be
paid for presented, however, the gravest difficulties. A series of
Conferences was held at Treves, at Spa, at Brussels, and subsequently at
Chateau Villette and Versailles, between representatives of the Allies
and of Germany, with the object of finding some method of payment as
little injurious as possible to the future prospects of Reparation
payments. The German representatives maintained from the outset that the
financial exhaustion of their country was for the time being so complete
that a temporary loan from the Allies was the only possible expedient.
This the Allies could hardly admit at a time when they were preparing
demands for the immediate payment by Germany of immeasurably larger
sums. But, apart from this, the German claim could not be accepted as
strictly accurate so long as their gold was still untapped and their
remaining foreign securities unmarketed. In any case, it was out of the
question to suppose that in the spring of 1919 public opinion in the
Allied countries or in America would have allowed the grant of a
substantial loan to Germany. On the other hand, the Allies were
naturally reluctant to exhaust on the provisioning of Germany the gold
which seemed to afford one of the few obvious and certain sources for
Reparation. Much time was expended in the exploration of all possible
alternatives; but it was evident at last that, even if German exports
and saleable foreign securities had been available to a sufficient
value, they could not be liquidated in time, and that the financial
exhaustion of Germany was so complete that nothing whatever was
immediately available in substantial amounts except the gold in the
Reichsbank. Accordingly a sum exceeding $250,000,000 in all out of the
Reichsbank gold was transferred by Germany to the Allies (chiefly to the
United States, Great Britain, however, also receiving a substantial sum)
during the first six months of 1919 in payment for foodstuffs.

But this was not all. Although Germany agreed, under the first extension
of the Armistice, not to export gold without Allied permission, this
permission could not be always withheld. There were liabilities of the
Reichsbank accruing in the neighboring neutral countr