h low prices as to
compensate for the difference, or the exports must be reduced.

In the first case (which is not likely, since Germany succeeds only
with difficulty, owing to her exchange, in obtaining raw materials,
and must encounter worse difficulties in this respect than other
countries), Germany would be preparing the ruin of the other countries
in organizing forms of production which are superior to those of
all her rivals. Germany would therefore damage all her creditors,
especially in the foreign markets.

In the second case--the reduction of exports, one would have
the exactly opposite effect to that imagined in the programme
proposed--that is, the indemnities would become unpayable.

In terms of francs or lire at par with the dollar, Germany's
exportations in 1920 have amounted to 7,250 millions. In 1921 an
increase may be foreseen.

If Germany has to pay in cash and kind 2,500 millions of marks at
par, plus 26 per cent. of the total of her exports, then supposing an
export trade of eight milliards, she will have to give 1,840 millions,
or in all 4,540 millions of marks. Thus we arrive by stages at less
hyperbolical figures, coming down from the twenty-five milliards
a year to something less than a fifth. But to come to grips with
reality, Germany in all ways, it must be admitted, cannot give more
than two milliards a year, if, indeed, it is desired that an indemnity
be paid.

Notwithstanding her great resources, France would not be in a
condition to pay abroad two milliards a year without ruining her
exchange, which would drop at once to the level of Germany's. Italy
with difficulty could pay one milliard.

France and Italy are honest countries, yet they cannot pay their war
creditors, and have not been able, and are not able, to pay any share
of their debt either to the United States of America or to Great
Britain. As a matter of fact, up till now they have paid nothing, and
the interest continues to accumulate with the capital.

Why have neither France nor Italy yet started to pay some of their
debt? Having won the War, France has had all she could have--fertile
territories, new colonies, an abundance of raw material, and above all
iron and potash. The simple explanation is that which I have given
above.

Can, then, Germany, who is in a terrible condition, whose circulation
promises ruin, who has no longer credits nor organization abroad, who
has a great shortage in raw materials; can Germany p