Chapter V: Reparation (4)

[133] It cannot be overlooked, in passing, that in its results on a country's surplus productivity a lowering of the standard of life acts both ways. Moreover, we are without experience of the psychology of a white race under conditions little short of servitude. It is, however, generally supposed that if the whole of a man's surplus production is taken from him, his efficiency and his industry are diminished, The entrepreneur and the inventor will not contrive, the trader and the shopkeeper will not save, the laborer will not toil, if the fruits of their industry are set aside, not for the benefit of their children, their old age, their pride, or their position, but for the enjoyment of a foreign conqueror.

[134] In the course of the compromises and delays of the Conference, there were many questions on which, in order to reach any conclusion at all, it was necessary to leave a margin of vagueness and uncertainty. The whole method of the Conference tended towards this,--the Council of Four wanted, not so much a settlement, as a treaty. On political and territorial questions the tendency was to leave the final arbitrament to the League of Nations. But on financial and economic questions, the final decision has generally be a left with the Reparation Commission,--in spite of its being an executive body composed of interested parties.

[135] The sum to be paid by Austria for Reparation is left to the absolute discretion of the Reparation Commission, no determinate figure of any kind being mentioned in the text of the Treaty Austrian questions are to be handled by a special section of the Reparation Commission, but the section will have no powers except such as the main Commission may delegate.

[136] Bulgaria is to pay an indemnity of $450,000,000 by half-yearly instalments, beginning July 1, 1920. These sums will be collected, on behalf of the Reparation Commission, by an Inter-Ally Commission of Control, with its seat at Sofia. In some respects the Bulgarian Inter-Ally Commission appears to have powers and authority independent of the Reparation Commission, but it is to act, nevertheless, as the agent of the latter, and is authorized to tender advice to the Reparation Commission as to, for example, the reduction of the half-yearly instalments.

[137] Under the Treaty this is the function of any body appointed for the purpose by the principal Allied and Associated Governments, and not necessarily of the Reparation Commission. But it may be presumed that no second body will be established for this special purpose.

[138] At the date of writing no treaties with these countries have been drafted. It is possible that Turkey might be dealt with by a separate Commission.

[139] This appears to me to be in effect the position (if this paragraph means anything at all), in spite of the following disclaimer of such intentions in the Allies' reply:--"Nor does Paragraph 12(b) of Annex II. give the Commission powers to prescribe or enforce taxes or to dictate the character of the German budget."

[140] Whatever that may mean.

[141] Assuming that the capital sum is discharged evenly over a period as short as thirty-three years, this has the effect of _halving_ the burden as compared with the payments required on the basis of 5 per cent interest on the outstanding capital.

[142] I forbear to outline the further details of the German offer as the above are the essential points.

[143] For this reason it is not strictly comparable with my estimate of Germany's capacity in an earlier section of this chapter, which estimate is on the basis of Germany's condition as it will be when the rest of the Treaty has come into effect.

[144] Owing to delays on the part of the Allies in ratifying the Treaty, the Reparation Commission had not yet been formally constituted by the end of October, 1919. So far as I am aware, therefore, nothing has been done to make the above offer effective. But, perhaps in view of the circumstances, there has been an extension of the date.