On the eve of the dissolution of Parliament, Lloyd George, speaking at Wolverhampton, November 24, 1918, did not even hint at the question of the reparations or indemnity.

Speaking the same evening at Bristol, he promised to uphold the principle of the indemnity, and asserted the absolute right to demand from Germany payment for the costs of the War.

Nothing pained me more than to hear the facility with which politicians of repute spoke of obtaining an indemnity of hundreds of milliards.

When Germany expressed her desire to pay an indemnity in one agreed lump sum (à forfait) of one hundred milliards of gold marks (an indemnity she could never pay, so enormous is it), I saw statesmen, whom I imagined not deprived of intelligence, smile at the paltriness of the offer.

An indemnity of fifty milliards of gold marks, such as that proposed by Keynes, appeared absurd in its smallness.

When the Peace Conference reassembled in Paris the situation concerning the indemnity was as follows.

The Entente had never during the War spoken of indemnity as a condition of peace.

Only the United States maintained that the indemnity should be limited to the reparation of the damages: a reparation which in later phases included not only reconstruction of destroyed territories and damage done to private property, but even pensions to the families of those dead in the War and the sums in grant paid during it.

When Prussia beat France in 1870 she asked for an indemnity of five milliards.

The Entente could have demanded from the vanquished an indemnity and then have reassumed relations with them provided it were an indemnity which they could pay in a brief period of time.

The French totals of the material damage claims in the invaded districts have been absolutely fantastic and more exaggerated than in the case of Belgium, whose indemnity claims would lead one to suppose the total destruction of at least the third part of her territory, almost as if she had undergone the submersion of, say, ten thousand square metres of her small territory.

The moment has come to make an objective examination of the indemnity question, and to discuss it without any hesitation.

We shall have to examine with all fair-mindedness if Germany is in a position to pay in whole or in part the indemnity established or rather resulting from the treaty.

At Spa, on April 27, 1921, the proportionate sums assessed for each of the conquering powers were established on a total indemnity notably reduced in comparison with the earlier absurd demands.

But leaving alone the idea of an indemnity of 250, 150, or even 100 milliards of gold marks, it will be well to see in a concrete form what Germany can be made to pay, and whether the useless and elaborate structure of the Reparations Commission which, with its powers of regulating the internal life of Germany for thirty years or more, ought not to be substituted by a simpler formula more in sympathy with civilized notions.

In these conditions she must not only nourish her vast population, not only produce sufficient to prevent her from falling into misery, but must also pay an indemnity which fertile fantasies have made a deceived Europe believe should amount even to 350 milliards of gold marks, and which even now is supposed by seemingly reasonable people to be able to surpass easily the sum of a hundred milliards.

Germany has not only to live and make reparation, but to maintain an inter-allied army of occupation and the heavy machinery of the Reparations Commission, and must prepare to pay an indemnity for thirty years.

Germany, without any of these things, is to find herself able to pay an indemnity which a brazen-faced and ignorant Press deceived the public into believing could amount to twenty or twenty-five milliards a year.

What goods can Germany give in payment of the indemnity?

What goods can Germany give in payment of the indemnity, and what goods can she offer without ruining the internal production of the Entente countries?

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.

We must also remember that Germany, in addition to the indemnity, must pay the cost of the Army of Occupation, which up to now has amounted to twenty-five milliards of paper marks a year, or more than 1,600 millions of francs at par.

Germany's monetary circulation system is falling to the stage of assignats, and the time is not distant when, if intelligent provision is not made, Germany will not be in a position to pay any indemnity.

Obliged to pay only one milliard of gold marks, Germany has not been able to find this modest sum (modest, that is, in comparison with all the dreams about the indemnity) without contracting new foreign debts and increasing her already enormous paper circulation.

All this is true and cannot be denied, but at the same time it must be recognized that in the first move for the indemnity there was a reasonable cause for anxiety on the part of the Allies.