we
never included the recovery of separation allowances amongst our war
aims. I suggest, therefore, that we should by our acts prove ourselves
sincere and trustworthy, and that accordingly Great Britain should waive
altogether her claims for cash payment in favor of Belgium, Serbia, and
France. The whole of the payments made by Germany would then be subject
to the prior charge of repairing the material injury done to those
countries and provinces which suffered actual invasion by the enemy; and
I believe that the sum of $7,500,000,000 thus available would be
adequate to cover entirely the actual costs of restoration. Further, it
is only by a complete subordination of her own claims for cash
compensation that Great Britain can ask with clean hands for a revision
of the Treaty and clear her honor from the breach of faith for which she
bears the main responsibility, as a result of the policy to which the
General Election of 1918 pledged her representatives.

With the Reparation problem thus cleared up it would be possible to
bring forward with a better grace and more hope of success two other
financial proposals, each of which involves an appeal to the generosity
of the United States.

The first is for the entire cancellation of Inter-Ally indebtedness
(that is to say, indebtedness between the Governments of the Allied and
Associated countries) incurred for the purposes of the war. This
proposal, which has been put forward already in certain quarters, is one
which I believe to be absolutely essential to the future prosperity of
the world. It would be an act of far-seeing statesmanship for the United
Kingdom and the United States, the two Powers chiefly concerned, to
adopt it. The sums of money which are involved are shown approximately
in the following table:--[161]

-----------------+------------+------------+-----------+----------
Loans to | By United | By United | By France | Total
| States | Kingdom | |
-----------------+------------+------------+-----------+----------
| Million | Million | Million | Million
| Dollars | Dollars | Dollars | Dollars
| | | |
United Kingdom | 4,210 | 0 | 0 | 4,210
France | 2,750 | 2,540 | 0 | 5,200
Italy | 1,625 | 2,335 | 175 |