s this
country or towards America, if their future development is stifled for
many years to come by the annual tribute which they must pay us. There
will be a great incentive to them to seek their friends in other
directions, and any future rupture of peaceable relations will always
carry with it the enormous advantage of escaping the payment of external
debts, if, on the other hand, these great debts are forgiven, a stimulus
will be given to the solidarity and true friendliness of the nations
lately associated.

The existence of the great war debts is a menace to financial stability
everywhere. There is no European country in which repudiation may not
soon become an important political issue. In the case of internal debt,
however, there are interested parties on both sides, and the question is
one of the internal distribution of wealth. With external debts this is
not so, and the creditor nations may soon find their interest
inconveniently bound up with the maintenance of a particular type of
government or economic organization in the debtor countries. Entangling
alliances or entangling leagues are nothing to the entanglements of cash
owing.

The final consideration influencing the reader's attitude to this
proposal must, however, depend on his view as to the future place in the
world's progress of the vast paper entanglements which are our legacy
from war finance both at home and abroad. The war has ended with every
one owing every one else immense sums of money. Germany owes a large sum
to the Allies, the Allies owe a large sum to Great Britain, and Great
Britain owes a large sum to the United States. The holders of war loan
in every country are owed a large sum by the State, and the State in its
turn is owed a large sum by these and other taxpayers. The whole
position is in the highest degree artificial, misleading, and vexatious.
We shall never be able to move again, unless we can free our limbs from
these paper shackles. A general bonfire is so great a necessity that
unless we can make of it an orderly and good-tempered affair in which no
serious injustice is done to any one, it will, when it comes at last,
grow into a conflagration that may destroy much else as well. As regards
internal debt, I am one of those who believe that a capital levy for the
extinction of debt is an absolute prerequisite of sound finance in
everyone of the European belligerent countries. But the continuance on a
huge scale of indebtedne