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ANNEX 1834..
Proposals from the German Government

regarding Germany's reparation obligations.



ANNEX 1834 a 1.

Paris, May 2nd 1923.

K. No. 2586.

To the Reparation Commission, Paris.

I am directed by my Government to forward to the Reparation Commission a copy of
the Note which the German Government has to-day addressed to the Governments of the
United States of America, Belgium, France, Great Britain, Italy and Japan.
Signed :


ANNEX 1834 a 2.
( Translation transmitted by the Kriegslastenkommission).

It has always been the point of view of the German Government, which they are induced
to re-state in the present international discussion, that questions, upon, the settlement of
which depend the reconstruction of the devastated areas, equally desired by Germany, and

beyond that, the economic restoration and peace of Europe, can find their solution only
through mutual agreement.
The occupation of the Ruhr-district, carried out in contradiction to the above principle ,
was met by the passive resistance of the population. The German Government share the
wish of all reasonable people , that the tension which is daily growing more accentuated,

should be relieved and that a stop should be put to the useless destruction of economic

They have therefore decided to make a further attempt in this direction, without however
abandoning the principles underlying their juridical point of view , or renouncing passive
resistance, which will be continued till those territories occupied beyond the Treaty of
Versailles have been evacuated and conditions in conformity with the Treaty have been
restored in Rhineland.
Notwithstanding the events of the last months, Germany has decided to maintain her
readiness to fulfill all she possibly can for purposes of reparations, particularly for the
reconstruction of the devastated areas. Every endeavour to put this intention into the form
of practical proposals, is made difficult, because, on account of the state of the German
financial and economic conditions, it is impossible to estimate the capacity of Germany
expressed in definitely laid down figures. Therefore every solution must include an elastic
factor, which takes into account the present impossibility to put forward an infallible


_ 4 __

prepared to provide special guarantees for the proposed
d all sources of revenue of the German Reich and States

ty of Versailles.

How this pledge can be rendered effec-

nd what individual guarantees should be provided, can
otiations with the international loan syndicate and the
ordance with agreements to be arrived at, the German
ared to devise suitable measures including legislation in

al resources should participate in guaranteeing the service
are to be guaranteed by. private , long-term agreements

s assumed by Germany depends on, stabilisation on the

tabiliied systematically -and. permanently in connection
ons problem, the complaints of other industrial countries
on will simultaneously diSappear. After Stabilisation it
nise the German budget as required by Germany and her

me it is necessary, equally in the interest of bondholders,
s and sanctions should cease in future, and that Germany
urden of unproductive expenditure and from its political
lies that the administrative unity throughout Germany
e; that no further use should be made of the stipulations
economic equality to Germany, and that after stabilising
goods should no longer
subjected to restrictions occacurrency.
of Europe in economic cooperation, and to restore the
etween production and consumption, it is intended to
hange of essential goods between the countries interested
ld especially include private long-term contracts for the

l cooperation between Germany and France, the German
ir suggestion to conclude a Rhine-pact, are prepared to
e peace, based on reciprocity.





-4The German Government are prepared to provide special guarantees for the proposed
payment. The entire property and all sources of revenue of the German Reich and States
are already pledged under the Treaty of Versailles. How this pledge can be rendered effec-

tive for the purpose of the loan and what individual guarantees should be provided, can
only be ascertained through negotiations with the international loan syndicate and the
Reparation Commission. In accordance with agreements to be arrived at, the German
Government are furthermore prepared to devise suitable measures including legislation , in
order that the whole German national resources should participate in guaranteeing the service
of the loan. Deliveries in kind are to be guaranteed by. private , long-term agreements
providing for penalties in case of default.

The carrying out of obligations assumed by Germany depends on, stabilisation on the
German currency.
If the German currency can be stabiliied systematically and permanently in connection
with the settlement of the reparations problem, the complaints of other industrial countries
against unhealty German competition will simultaneously disappear. After stabilisation it
will further be possible to reorganise the German budget,. as required by Germany and her
For a realisation of this programme it is necessary, equally in the interest of bondholders,
that highhanded seizure; of pledges and sanctions should cease in future, and that Germany
should be freed from its present burden of unproductive expenditure and from its political

and economical fetters. This implies that the administrative unity throughout Germany
should be restored at an early date; that no further use should be made of the stipulations
of the Treaty of Versailles refusing economic equality to Germany, and that after stabilising
the Mark, the imports of German goods should no longer be subjected to restrictions occasioned by depreciation of German currency.

In order to promote the peace of Europe in economic cooperation, and to restore the
nature economic inter-relatiOns between production and cOnsiimption, it is intended to
provide the secure basis for an exchange of essential goods between the countries interested
private contracts. These should especially include private long-term contracts fore the
delivery of coal and coke.
In the same interest of peadeful cooperation between Germany and France, the German
Government, as manifested in their suggestion to conclude a Rhine-pact, are prepared to
conclude any agreement to ensure peace, based on reciprocity. In particular, they are
prepared to come to an agreement obliging Germany and France to treat all contentious
'questions arising between them and not amenable to diplomatic settlement in a peaceable
international procedure, viz. all legal questions before an arbitral tribunal, other,differences
according to a system of arbitrations on the lines of the Bryan treaties.
The German Government suggest entering into negotiations on a basis of the ideas set
forth above. The first essential leading up to such negotiations Must be , that the statu
quo ante must be restored within the shortest space of time. That is to say, . that those
territories which have been occupied over and above the stipulations of the Versailles Treaty
must be evacuated, conditions according to Treaty terms must be reestablished in Rhineland,

those Germans, who have been imprisoned must be set free and those who have been
expelled must be allowed to return to their homes and customary work.
The German Government are handing an identical Note to the Government of the United
States of America, the Belgian Government, Italian Goveratient, the French Government
and the Japanese Government.





ANNEXE N° 1834b,c,d,e.
Propositions du Gouvernement allemand

relatives aux obligations de reparation de r Allemagne.
b. 14onses des Gouvernements franfais et beige.
c. Reponse du Gouvernement britannique.

ANNEX No 1834 b, c, d, e.
Proposals for the German Government
regarding Germany's reparation obligations.
b. Reply from the French and Belgian Governments.
British Government.




ANNEXE 183i b.
F: F. F.

[Nom : Une leltre concue darts des termes identiques a etc adressee de Bruxelles a la meme date'
par M. Jaspar a M. thediger, Charge d'ajaires d'Allemagne a Bruxelles.]

Paris, le 6 Mai 1923.
M. von HOESCH , Charge d'Affaires d'Allemagne, a Paris.

'ai l'honneur de vousacculer reception de votre iettre en date du 2 Mai courant et d'y
faire, au nom du Gouvernement francais, la reponse suivante

Les Gouvernements beige et francais ne peuvent laisser passer, sans les relever et les
contredire, un grand nombre des observations presentees par le Gouvernement allemand.
D'uue part, it n'est pas exact qu'une mesure quelconqueait etc prise par la. France et par la
Belgiqu3 en mecrnnaissance du Traite de Versailles ; d'autre part, les propositions formulees
aujourd'hui par TAllemagne sont, en plusieurs points essentiels, en opposition avec ce
Le Traite de Versailles a determine les conditions dans lesquelles serait d'abord fixee et'
ensuite payee la dette de l'Allemagne. La fixation a eu lieu a la lin d'Avril 1921 ; les modalites de payement ont (fte arretees le 5 Mai 1921 ; l'Allemagne a formellement accepuS, a
cette date, la fixation et les modalites. Depuis lore , elk n'a pas term les engagements qu'elle
avait pris. Un moratorium partiel Jul a etc accorde. Elle ne s'est meme pas acquittee de ses
obligations reduites. La Commission des Reparations a constate les i ranquements successifs
que l'Allemag,ne avait commis. C'est a la suite de cette constatation et.en execution du Traite
que In Belgique et Ia France ont pris des gages.
Contrairement a l'allegation du Gouvernement allemand, cette prise de gages s'est effectuee sans la. moindre violence de la part de la BelgiquI e et 'de la 'France., ''et s'il n'avait dependu que de ces deux Puissances une collaboration se serail immediatement etablie, dar0.
la Rhurf entre les industriels, ingenieurs et ouvriers allemands et les industriels, ingenieurS
et ouvriers allies. Cc sont les ordres venus de Berlin qui ont, seuls, empeche cette coo,
Le Gouvernement allemand aflirme que la population a repondu par une resistance pas-

sive it I'occupatiou de Ia Rhur. Rien n'est moins exact. Ce n'est pas la population, c'est le
Gouvernement allemand qui a voulu et organise la resistance. Le Gouverriement allemand le
,reconnait, du reste, lui-meme implicitement, puisqu'il declare aujourd'hui que cette resistance ne cessera qu'apres un accord sur les propositions actuelles. Si Ole etait spontanee,
comment le Gouvernement allemand seraitil maitre tie l'abreger ou de Ia prolonget ?
Cette resistance, d'ailleurs, n'est pas seulement passive, mais active, alors que le 'Crake
de Versailles stipule formellement que
n'a pas le droit de considerer comme tin


acte d'hostilite une sanction, quelle qu'elle soit, prise apres constatation de manquement par
la Commission des Reparations.
Le Gouvernement allemand a provoque, non settlement des greves de fonctionnaires,
mais un conflit general et systematique, des agressions, des sabotages, des &tits de droit

commun. Les Gouvernements beige et franbais ne pourront prendre en consideration
aucune proposition allemande tant que se prolongera cette resistance. Es n'entendent pas
que la vie de leurs ofliciers, de leurs soldats, de leurs ingenieues, de leurs douaniers, de
leurs employes de chemins de fer, soit exposee a des attentats, pendant que seront exanin 'es

les questions a regler. Ils n'entendent pas davantage que le fonctionnement normal des
Commissions militaires de contrale reste entrave et que le desarmement de l'Allemagne soit
com2romis, par le seul fait que la France et la Belgique impayees ont pris des gages auxqueis
des avaient droit.
Les Gouvernemenis franbais et beige doivent ajouter que les propositions actuelles de
l'Allemagne sont, a plusieurs points de vue, tout a fait inacceptables.

En premier lieu, les chiffres oflerts ne representent meme pas, au total, le quart de la
somme fix& par la Commission des Reparations et reconnue par l'Allemagne comme montant de sa dette enviers les Allies. La France et la Belgique ont declare a plusieurs reprises,
et elks soot amenees a repeter ici qu'elles ne peuvent accepter la reduction de leurs propres
creances et pie, si cites soot prates a en compenser une partie avec les dettes interalliees,
elks sont dans !'obligation mate: ielle de toucher le restant pour se relever des epouvantables
Ilesastres que leur a infliges rinVasion allemande. La France a, a rheum presente, avance
cent milliards de francs pour le compte de rAllernagne; la Belgique a avance quinze milliards
de francs beiges et it leur reste h chacune, en dehors de leurs charges de pensions, plus de
In moitie de leurs domrnages a reparer. L'interat economique de la France et de la Belgique,

rinterat economique du monde entier, la justice elle-maine, commandent que les pays
ravages ne soient pas plus Iongtemps eondamnes h se ruiner pour favoriser remit hissernent-

de leur debiteur. Pas plus qu'a la France, [a somme oflerte ne permettrait a la Belgique,
victime de la plus cynique violation des Traites, de restaurer aujourd'hui ses regions
xlevastees. Ainsi 'done, tandis que les contrees envahies pendant quatre ans par les arniees
allemandes seraient exposees h rester indefiniment dans la desolation, I'Allemagne conti_nuerait a construire librement, dans is Ruhr et ailleurs, de nouvelles usines, des hauls
fourneaux, des corons, des routes, des chemins de fer, La Belgique et la France sont resolues
a ne pas souflrir cette iniquite.
L'offre de 3o milliards par le Gouvernement allemand contient, d'ailleurs, suivant

!'expression dont vous vous servez vous7tname dans votre Wire, une part d'elasticite
dont il est a peine besoin de signaler rarbitraire et le danger. Le chiffre que vous indiquez
serait, d'apres le Couvernement allemand, un maximum et it serait facile a rAllemagne de le
remettre en discussion avant qu'il filt devenu une realite.

Sans doute, le Gouvernement allemand pretend gull West possible d'estirner des main tenant en chiffres fermes et definitifs la capacite de payement de I'Allemagne. Mais precisement, lorsqu'ils out etabli le plan de payement de Londres, les Gouvernements allies
avaient tenu compte de ce qu'il peut y avoir de juste dans cette observation et its avaient
reporte le payement de pres des deux tiers de la dette allemande a une époque indeterminee
que devait seul fixer retat de prosperite de l'Allemagne. Or, le Gouvernement allemand n'a
pas cesse, depuis fors, de protester contre cette indetermination d'une partie de is dette. ll
n'en connaisa dit et repete que ce qui rempechait de tenir ses engagements, c'est
sait pas le chiffre definitif. Aujourd'hui, ii reduit de plus des trois cinquiemes la partie lixe

de sa
conserve dette, it reduit de plus des sept huitiemes la partie indeterrainee, mais
Federal Reserve Bank of St. Louis
itioaFt rsnme


nnnv. 1R'th L






A. A. A.

ANNEX 1834 c.
A. A. A.


13 Mai 1923.


A Son Excellence Herr Stahmer.

May 13th, 1923.



His Excellency, Herr STIL1MER ,


Le Gouvernement de Sa Majeste a prete
la plus grande attention au memorandum
que votre Excellence m'a communique le 2
de ce mois et dans lequel le Gouvernement
allemand presente ses propsitions pour le
r;,glement de la question des reparations.
11 est bien evident que cette demarche
est la consequence d'une su3gestion que j'ai

his Majesty's Government have given
their careful attention to the memorandum
which Your Excellency communicated to

faite au cours d'un debat au Paalement

gestion which I made in a debate in the

britannique, le 20 Avril, et c'est pourquoi

British Parliament on April loth ; and His

le Gouvernement de Sa Majeste est particulierement interesse par la reponse qui a ete

Majesty's Government therefore have a special interest in the response which has been
returned to that appeal.

taite a cet appel. Je ne puis cacher a votre
Excellence que les propositions de votre
Gouvernement ont cause un grand &sappointement et que l'impression defavorable
qu'elles ont faite sur le Gouvernement de
Sa Majeste ainsi que sur les Allies, est de
celles que dans mon opinion le Gouvernement allemand aurait pu et du prevoir, et
par consequent eviter.

Les propositions sont loin de correspondre, soit dans la forme, soit en substance, a celles que le Gouvernement de

me on the 2nd instant, and in which the
German Government put forward their proposals for a settlement of the question of
Reparations. This ac lion on their part is
well known to have been the sequel of a sug-

I cannot conceal from Your Excellency
that the proposals of your Government have

come as a great disappointment, and that
the unfavourable impression which they have-

made upon His Majesty's Government as
well as on their allies, is one which, in my
opinion , the German Government might and

tought to have foreseen and therefore guarded against. The proposals are far trom
corresponding either in form or in substance

to what His Majesty's Government might

Majeste aurait pu
attendre en reponse a l'avertissement qu'il
avail, en plus d'une occasion, cru devoir

wer to the advice which 1 have on more

donner au Gouvernement allemand, par

the German Government through Your

i'entremise de votre Excellence, et a l'invitation plus directe
lui a adressee dans

Excellency, and to the more direct invitation


reasonably have expected to be made in ans-

than one occasion ventured to con-Vwey to

cxtented to them in the speech referred to.




une solution effective et rapide d'un pro-

manner which the Allies could regard as
both equitable and sincere. If Germany
did intend to open the way to an effectual
and speedy solution of a problem, the

ideme qui, faute d'etre resolu, trouble gravement les conditions politiques et &ono-

failure to settle which is gravely disturbing
the political and economic condition of

miques de l'Europe et meme du monde

Europe, and indeed of the whole woild ,
then it seems unfortunate that she should
not have shown a keener appreciation of
the lines on which alone can any such

que les Al liees.pourraient consklerer comme
la lois equitable et sincere. Si l'Allemagne

avait vraiment !Intention d'ouvrir la vole

entier, it semble regrettable qu'elle n'ait pas
montre une appreciation plus juste destlignes
generales suivant lesquelles seules une pa.teille solution peut etre cherchee.
be Gouvernement de Sa Majeste.est per-

suade, pour sa part, que dans son propre
interet l'Allemagne reconnaitra l'avantage
qu'elle a a se montrer plus disposee a saisir
les rialites de 3a question et, ecartant tout
fauxfuyant et toute controverse, s'attachera

considerer de nouveau et a etendre ses
propositions, de maniere a en faire une base
possible pour une discussion ulterieure. Le

Gouvernement de Sa Majeste sera prat
prendre part, aux cotes de ses Allies, au
moment convenable, a cette discussion; it
prend comme eux a cette question, un
interet reel gull n'a pas !'intention d'abandonner, et partage leur desit de mettre fin
a une situation de peril international. Mais
it ne peut cacher au Gouvernement allemend que le premier pas vers la realisation
d'un tel espoir doit etre que l'Allemagne
reconnaisse les necessites de fournir une
contribution Imaucoup plus serieuse et beau-

coup plus precise qu'aucune de celles qui
ont 4te proposees jusqu'a prese nt.

l'honneur, etc.

settlement be sought.
His Majesty's Government foir their part

are persuaded that in her -Winterest Germany will see the advantage of displaying
a greater readiness to grapple with the

realities of the case and, discarding


irrelevant or controversial issues, will proceed

to reconsider and to expand their

proposals in such a way as to convert them
into a feasible ba;is of further'discussion.
In such discussion His Majesty's Goverment
will at the suitable moment he ready to take
part by the side of fhe Allies, with whom
they share a Practical interest in this question, which they have no intention to
abandon, as well as the desire to terminate
a situation of international peril.

they cannot conceal from the German
Government that the first step towards the

realisation of any such hope must be the
recognition by Gerniany that a contribution much` more serious and much more
precise is reqUired than any which has yet
been forthcoming.
I have the honour to be, with the highest
.consideration , Youir Excellency's most obedient Servant ,



ANNEXE 1834 d:

ANNESSO 18341.




I2 Mai 1923.



L'examen attentif du Memorandum du
2 Mai courant qui contient les propositions
du Gouvernernent allemand pour un regletneilt de la question des reparations m'a
con vaincu qu'elles ne soot pas de nature a
pouvoir servir de base aux Gouvernements
allies pOur tine discussion definitive.
instances repetees destinees a amener
le Gouvernernent allemand a presenter des
propositions raisonnables 'et pratiques pour
sortir de la situation dangereuse creee dans

l'Europe centrale me donnaient quelques
motifs d'esperer que' Is deme'rche du Gou,.
vernement allemand aurt marque un pro ,

gres en vue dune solution pacifigne de la
question; mass je (lois constater quit mon
'attente a Re decue. On. sait quel est le

point -de vue du Gouvernement italien en
la matiere.

resulte des projets qui ont ete
presentes par elle dans les deux dernieres
Conferences:de Londres et de Paris, 'Italie,
err raison de sa situation economique et


L'esamo attento del memorandum dd
2 Maggio corrente die contiene le proposte
del Govern() germanico per un regalement°
della questione delle riparazioni , mi ha dovuto convinvere che esse non sono di tale

nature da poter senire di base al Governi
Alleati per une discussione risolutivd.
Le mie ripetute insistenze, diretteAndurre
it Governo germanico ad avanzare proposte
ragionevoli e pratiche per uscire della pericolosa situazione creatasi nelf Europa Centrale,
mi davano qualche motivo disperare che it
passo del Governo tedesco avrebbe segnato
un progresso in vista una soluzione pacifica
della questione; ma debbo constatare che la
mia aspettati% a a stata dehisa.
E' noto quale sla it punto di vista da Governo italiano, in materia.

Come risulta Jai progatti,da essa presentati nelle ultime due COnierenze.di Londra

e di Parigi, Mafia, per le sue


economichefinanziarie, 6 costretta a considerare come sempre piu intimamente confinanciere, est obligee de considerer comme
nessi ii
toujours 'plus intimement lies
le problemeproblenia clelle riparazioni e quello
dei debiti di gue;ra interalleati e non puo'
des reparations et celui des dettes de guerre
fare a memo di insistere perehe tali partite
interalliees et idle ne peut se dispenser
vengano al pia presto regolate tenendo conto
d'insister pour qu ifs soient resolus le plus
anche delle spese di ricostruzione delle sue
tot possible en tenant compte des depenses
provincie invase. Questa necessity spiegano
de reconstructions de ses provinces envahies.
Cette necessite explique claireinent son
chiaramente it suo atteggiamento sia nei
rigtiardi dei deliberati della Com- naissione
altitude, soit en ce qui concerne les deli
delle Riparazioni, sia in ttitti gli avveni
berations- de la Commission des Reparanaenti 'die* hanno avuto luogo in seguito
tions, soit dans tous les evenetnents qui ont

- 10 eu lieu a la suite de la derriere Conference
de Paris, etant hien enten:l.0 que ses interets
-et ses exigences clans la solution d'une question aussi grave ne sont pas inferieurs h ceux
d'un quelconque des autres Etats allie,.

Comore it en existe la preuve dans pinsieurs manifestations officielles et actes expres.

xlu Gouvernement royal, litalie est disposes
it supporter sa quote-part des sacrifices pour
arriver a un reglement general economique,
mais elk ne pent consentir h ce qu'il lui en
soit impose an dela de ce que lui permettent
raisonnablement ses propres forces.
IL ne faut pas outlier que la position relative faite a l'Italie dans le pourcentage des
reparations allemandes se base aussi sur Ia
consideration de la part plus Grande qui lui
fut reservee dans les reparations dues par les
obei: petits Etats, a regard d 'squels

sant h un mouvement de generosin# et de
moderation et tenant compte de leur situa
a consenti des concessions
considerables sans invoquer ou reclamer en
droit jusqu'ici de la relponsab:lite solidaire
de l'Allemagne sanctionnee par les Traites,

alrultima Conferenza diParigi, considerat'
e dato per fermo che it suo interesse e le sue
csigenze nella soluzione di tali gravissima
questions non sono inferiori a quelledi alcuno
degli Stati Alleati.

Come 6 dovimentato da molte manifestazioni ufficiali e atti specifi del Regio Governo , l'Italia a disposta a sopportare la sua
quota parte di sacrifici per giungere ad una
gene rale sistemazione economica; ma non
puo' consentire che gliene siano imposti al
di la di quanto ragionevolmente le permetttono le sue forze. Ne devesi diinenticare che
la posizione relativa ad essa fatta nella per-

centuale delle riparazioni tedesche, si basa
anche sulla considerazione della maggior
assegnazione che le fu riservata nelle riparazioni degli Stati minori nei riguardi dei
quail, obbedendo ad impulsi di generosity

e di moderazione e tenendo conk) delle
loro strcmate concrzioni Mafia ha accordato
concessioni notavoli senza fin qui richiamare
o ricorrere al diritto della corresponsabilith
tedesca sancito dui trattati.
E' del resto not() al Governo tedesco che

le Gouvernement allemand salt, du reste,
que le Gouvernement italien s'est trouve
contraint, a son vif regret, de ne pas accepter le projet de reglement de reparations
presents par le Gouvernement anglais y la
Conference de Paris parce que, bien (pie

suo vivo rammarico, a non 'accedere al progetto di sistemazione delle riparazioni presentato dal Governo inglese alla Conferenza
di Parigi perche pur essendo ispirato ad 'alte

visant un but eleve', le memorandum Bo :Jar

non tenere in sofficiente conto le impres-

Law ne paraissait pas tenir suffisamment

cindibili esigenze dell':Italia.

it Governo italian' si trovo' costretto, can

finality, it memorandum Bonard Law nareva

compte des exigences irreductibles de l'Ital:e.

Etant donne ce precedent immediat, c'est
avec un sentiment de idgitime etonnement

Dato questo immediato precedente, i
con senso di legittimo stupore che it

que le Gouvernement italien dolt relever
que le Memorandum alkinand.du 3 Mai est

Governo Italiano deva rilevare come it memorandum tedesco,del 2 Maggio rimanga

franchement inferieur aux propositions con-

rement le payement de cette somme est

di gran lunga inferiore alle proposte contenute net progetto del Governo britannico.
A parte it fatto che Ia somma fissata
per le riparazioni a palesemente motto al
di sotto di qualsiasi cifra, anche minima,
che potesse ragionevolmente attendersi, if
prestito internazionale con cui si vor rebbe
interamente eflettuare it pagamento di tale
somma, y soltanto indicato come mezzo,

seulement indique .comme un moyen, sans

senza le necessarie precisazioni e senza che

tenues dans le projet du Gouvernement
britannique, A part ce fait que la somme
fixee pour les reparations est manifestement

de beaucoup inferieure a un chiffre quel-.
soit, qu'on
conque, quelque minime
pouvait yaisot nablement attendre r emprunt

international par level s'effectuerait entie



- 12 ANNEXE 1834 e.
F. F. F

15 Mai t923.


Le Gouvernement japonais a examine avec la plus grande attention les nouvelles proposi-

tions faites par le Gouvernement allemand, dans son memorandum du 2 Mai 1923 ,
adresse, au Japon, aux Etats-Unis, a la Grande-Bretagne, a la France, a l'Italie et a la Belgique, concernant tout le probleme du payement des reparations.
Le Gouvernement japonais, tant en raison du chiffre total des reparations que des modalites de payement prevues et des garanties a fournir, est dans l'impossibilite de donner son
adhesion au projet du payement des reparations, qui constitue la partie essentielle de ces

Etant donne que le Japon n'a pas actuellement dans cette question, un interet aussi
grand et aussi vital que les autres Puissances alliees auxquelles le Gouvernement allemand
s'est adresse, le Gouvernement japonais s'abstiendra d'exprimer son opinion sur les details
de la nouvelle proposition allemande. II tient cependant a exprimer son ferme desir que le
Gouvernement allemand fasse le necessaire en vue de faciliter un reglement rapide et amiable
de fensemble du probleme des reparations sur une base equitable.






:ay G. Lief

The fcflowine is the text of the ?Tench reply handed to Herr

on tioseh, tle

German `Merge d'affairee, this evening:-

I here the honour to ecknolledee the receipt of your letter
dated AT e and in the name of the French Government to make the
followire epply:-

Th4 eagian snd French Goveruments cannot allow to pass without
raisinenat contradicting a great number of oopervetions made by the
On the one hand it is not a fact that any measure
German oeernment.
whetsoeor has been taken by France and Belgium in disregard of the
Virsailes Treety, and, on the other hand, the proposals formulated toMy byrernany aro in several essential points in opposition to that
Teaty, The Treaty of Versailles has determined the conditions in
vich ermany's debts should first be fixed and then paid. The debts
',ere axed et the end of epril, 1921. The methods of payment eore laid
Germany formally accepted on that date the emounts
own )n May 5, 1921.
'ince then she heu not Kept the enixedand the methods of payment.
:ageents she entered into. A partial moratorium was accorded to her.
the heearetion
he he not even acquitted those redueed obligations.
10mmesion has declared the successive defaults which Germany has oomIt is as a result of those deelaretione and in execution of
the2reaty that aelgium and France have taken pledges.
Contrary to the allegation of the German Government, this taxing of
pleeee was effected without the smallest violence on the part of 3e1gin and Prance, and if it had depended only upon these two Powers, a
co:aboretion would have been immediately estaolished in the Ruhr betervn the German industrialists, engineers and workers and the Allied
inlistrialists, engineers and workers. It was the orders which mime
froi 3erlin which alone prevented that cooperation.
The German Government affirms that the population responded to the
occipation of the Ruhr with passive resistance. nothing could be less
It was not the population, it was the German lovernment which
The Lerman Government recognised
willed and organised the resistance.
thi; fact implicitly since it declares today that the resistance will
not cease until after an agreement has been reached on the present
If it had been spontaneous, how would the German Government
be Able to shorten or to prolong it?
This resistance, moreover, is not only passive but ective, although
the Versailles Treaty formally stipulates that Germany has not the right
to consider as an act of hostility any sanction whatever which may be
taken under a declaration of default by the Reparation Commission. The
German Government has provoked, not only strikes of officials, bat a
general and systematic conflict, acts of agereseion, sabotage, and offences against common law,
The Belgian and lorench Government cannot take into consideration
any German proposal while this resistance continues. They do noL mean
to allow the lives of their officers, their soldiers, their engineers,
their Cuetols officials, their railway employees, to be exposed to attacks while the questions which must be settled are being examined. Dor
will they permit that the normal working of the military commiseions of
control shall be hindered, and that the disarmament of Germany shall be
compromised by the single fact that France and Belgium, who have not
been paid, have taken the pledees to which they have the right.
The ?rench and 3elgien Governments must add that the present proposals of Germany are from several points of view altogether unacceptable.
In the first place, the fieures submitted do not even represent in the
aggregate a quarter of the sum fixed by the Ikeparation Commission and
recognised by Germany as the amount of her debt to the allies.
France and 'Belgium have declared on several occasions, and are
forced to repeat here, that they cannot accept the reduction of their
own credits and that if they are ready to set a part of these credits
against the Inter-ellied debts they are under the material obligation
to obtain the balance in order to recover from the frightful disaster
Digitizedinflicted upon them by the German invasion.


?ranee has at the present moment advanced one hund'red milliard
3elgiura has advanced fifteen milliard
francs on Germany's account.
3eleian francs, and there remains to each, in addition to their charges
for pensions, more than half of their dare to repair. The economic
interest of ?ranee and 3elgium, the economic interest of the world,
and justice itself de wind that the revneed countries shall no longer be
condemned to ruin themselves for the enrichment of their debtor.
more than to 2ranoe will the sum offered permit 3olgium, victim of the
most cynical violation of treaties, to restore today her dovaatnted
regions. Therefore, while the countries occupied for four years by
the German armies would be exposed to the risk of remaining indefinitely in a state of desolation, Germany would continue to construct freely
in the Ruhr and elsewhere new factories, blest furnaces, workmen's
quarters, roads, and railways.
3olgium and :`ranee ere resolved not to
permit such an iniquity.
?he offer o.'7 t' Arty millierds -rode by the German Government conteins
moreover, according to the expression you eMploy yourself ih your letter,
a certain elneticity of which it in Eirdly neueeeary to point out the
arbitrariness and the dancer.
The figure that you indicete would be,
according to the German Government, the maximum, and it would be easy
for Germany to bring it into discussion before it had become a reality.
Doubtless the German Government pretends that it is not possible to estimete at present in firm and definitive figures the capacity of Germany to pay.
7?,ut when they established the London schedule of Payments
the Allied Governments took heed of all that there tight be of justice
in thtt observetion, end they carried the payments of nearly two-thirds
of the German debt to an ineelterminate epoch which would be fixed only
in accordance with the state of prosperity of Germany.
The German Government has not ceased since then to protest against
leaving in abeyance a part of the debt.
It has acid and repeated that
what prevented it from keeping its engagements was that it did not know
the definite amount to be paid.
eodey it reduces
fifths the fixed part of this debt; it reduces by more than seveneighths the indeterminate part, but it keeps it floating. Can the
Allies be at all sure that the eerman Governmene will not soon come
back again to its original argument, and will not declere that the fixed
parts alone can be paid on the pretext that the German overnment does
not know the total amount of its obligations?
In point of fact, in the German proposals only a nominal nun of
thirty milliard Bold merks 41,500,000,000) is mentioned. The effective
payment only starts from July 1, 1927, and that is a sum of only twenty
milliards 41,000,000,000) of marks.
It is therefore a complete moratorium of fear and a half years that Germany asks for, starting from
January 1, 1923, the date at welch the London ehedule of Payments was
put into operation by the Reearation Commission. The sum of twenty
milliards, moreover, is itself considerably reduced since up to July
1, 1927, interest must be subtracted from the yield of the loan.
Taking the discount ad 6 par cent., the actual figure of twenty milliards
falls to fifteen milliards and 820 millions.
Those vague proposals are accompanied by reservations which would
leave it possible to bring everything again into dispute in a few
The German Government does not even guarantee that the twenty
milliards (or the leaser sum that it contemplates) will be effectively
paid on the date mentioned.
It anticipates, on the contrary, that if
this sum is not covered by means of a loan the part left unpaid will
bear the ridiculous interest of 5 per cent, and will form a redeemable
Tt efeere etill lee? eeeren1ee !c the t'e- tupplementer7 portions
of five milliards which should, in principle, bo paid on July 1, 1929,
and July 1, 19el.
An international Commission will decide, states the
German Government, whether these two portions should or should not be
issued, and similarly whether the interest from July 1, 1923 should or

fittoul6 not be paid. fuck contingent &mations nuke impossible
estimato of the eatual vniuo of the o fferi,
-oreever tn> ..reneh matt 13eigina Joverrrents at the Cent
of Porte
ei:n)ed to :eject tre idea of setting aside the -41,erntion
*4 so.
placing it by international acruniesio Sly interrati.xiel aaralittrom of baitaase
went Sr erbitral tribunals. In th, 'reair of lore: 11 ices ermaky sole n*/ pnew
aimed to froc:),nise tho :ettr,411...nt corrAseioS se judge in the patter of pinta
filletoonit of debts aid eljournments o f papents, and it was oloarlr deolaired

emit no pooloonannat void bo i;rcuitod oy.00pt by a unanimous vote of the` eveditor
Pamrs. fresco end 3eletiim oaunot consent to aban,ion the geloraskaas when
they held under the Treaty.

do Genius Oovernment aeolares Its rosns:me to furnieh securities for the

deliveries in midi aid in itta Ivilab it ray.7 ,,ffeirtio ant. Which a imply eanatitivbas
an 3 nOrM0118 d foliation g its previa."' pro)dsose Jut in rottArd to thew securities it confines itself to the regent ant obecumet
ant, althouuh the
;evarstion ConaissiOlt has alma, Demisted at length rdth th, Allied Glesiala
ail tee me esaree 7/it1sh wad kelp ammo. to otabille its currency. mostor
its flamer, and mine exterior loamy filthy," the Allied ilovernmenke have

new time tried to inJuee Germ.' to inns aria ewer attempla to aohisVO tine°

results, the `.ormein ,:ovorhront even to-day dome not Indies' oltier in what mg,
It will so,:iic to stabilize i to Ourinsegt or 'inlet lonleletive nevem it will
tare, or taunt rosouroes it proposes to allocate for SID georeatee of time diffemut portions of the loam.
Jimillarly vague sad illusory are them Indications given by tae 0010t°

:.:overnnOS on the qu'otion of the seourity that it sera it is pawed to

offer to Yraxce. it saga nothing of holmiumr mad that forgotfulnefie famende
at leant sin:lilar t ,firen one roT:e rho= the matter in "'trial Coralrfq, as filisrastar
iu li114 of :.3olgian noutralitv, then headiateet bareolf teesii(lo the nation *ea
ladayeateamo sin had pity/lined to diet St. The :=Jelisisit ofd iireneh Cieveramente hide
Alms been favourablo .'to -seam fic international proelenelkos mid to sin "entente
of -unrealities for :(1t.ioo ,dillah rusts on reeiprocit7" Slit the Mot" of
rantee for pees* will oh rests on zoolgosoltga kid
lite of
oc 111119 is ail :j
ye t the !o wan -overnmont rfrk.iee to-d ay little o f the prim
olalliell Ohiob,
it contains, in tale orIor of Weal* WI in those of Wparati)hoo MOW and
:*14urn are unable to co rt ant tr.cqfaelvea with tee new Osman declarati emu

recodne sevtairtty
pinroeals in ,art uneoacptable and in part inatieqtyte, tho
In ormamego
:amen Government puts forwarti i'retensiame that ''tho etnrting point of ruvfotiationa
Va least possible
ought to be gist the statue quo ante be me-ostabliohod
delay," end by tie application of that ano ral own' ti ia it to de, no tebly,
teat the regiohe r.lo ky oaclu! ed In c wrists Oaaf01111114 Stint iti

',lost/ of

Vnallase shoul l. be evacuated, that the sallosures taken in the law Imo b the
Iistor-AlUed Hiz 1 kkwainieslon to assure the exeouti n cif the Trost/ 'bead be
withdrawn Skit the (Israelis arrested or expelled for intimation of ciders
regularly teemed snuuld be liberated or reinstated in Moir kerne an tic it
fano %lona,

Sim* dor 11,:; four ant a half yeah teat is to saye tie very eriod

FM" art Solgien Governor:Juts iffire tie greateet need of r000ivint;
re liar -A leas in dal ai pormatte in moray to provide for the restoration of
thedeveststed regions. thy mat both -omit patio*. without pledgee or ;luareateoll
in which

until it plosion the *nu Government to tale isesureo whioh will be oonseatilat
Infinitosismil; arti. they foal
for it in order to of
a eon inlotornd.nate
oven to withdreir fens the :Air, wises they have gone in arbor to of we under
their hands the guarantof's ant the pled,me to ...7.a1ois grey ere

whiohlOW nifteed lo thin,
tau Seem& doleyameet nave decided that Vast
Me Mean Oeurameat
will war fps:rusts tie newly oacrepled territories aeofirding to the !manures
and in presort ion to t.te pernette offooted.
' s/ UAW nstking to eater in this meolution, :bey cannot in aid it ion
avoid remailming that the Woman :Iota, *ors ono ell. to tell) other, is (Ely t=i)
espies* inn* mearamly veiled, of a gleVNiatAtia revolt a.ainat the ?runty of
Verse Lilo°.

If it could be taken We cans 'aeration, it Ilaulti and imwitably

in the total ani devinitive destruction of tint ?runty* in tat rncessity of

rutiating another, and in I:erTosinyes revel/7e* moral, eemawnie9 vA)1Itical,
and zailitarys. On Ws morrow of tee der on villa the deaferenee of ,.abeam


unenispousty dsslared, once again* tint Gomm, had not ilalfilled her ail ations in asses to clisarmumsnto trance and BOW= al% asked to relizriuish
nas cortkelled them to trice; rem should
tin pease's]. steps vilioh
be relieved of the exionstio b r vhich stie is, sin sap, ovorwrnelwed. awl
which silo describes as talk) roaue tive -- sli Oh cppers to eA;.,;est West in has
is Mad the armlets of ocoutatt)n, ani tint WO 'Vistas to del rive BOOING MIA

Ficalee of one of tta e,10 guarantees which assure their seeurity and moral,
,tit the Truaty; the Inter-Allied FM41 <XMAS a i enould be di savored sod
sippressed. or reduoecl to inti.toVracog :lento*. shoubl. bs fused fru west sly

the political azt conomic fetters of tee

the Allies WNW* eeeead to
v Wed lately tilt) bon ,3rit of t ID 17118 t-focured-ration ammo whim woulel
omen* It r to profit by tiu ruins which silo sooutuulnted in ieligiew s A liscosee

Wel le vapidly to obtain Ia.: 1.6 trl.oi eeterkirity over tie
Idtiot IOW
has devastated. .7no question of ropsrati,me eixraLi be no more inalitted, as
the treaty p roviilos, to a %)onsr3iscstin wheat) clecision ca Gamily has utalertaaan
le Observe* but to intornational esuntissionsi lelfdum sal elan° s'aould
shamdea tivir .oledises; tiny (mould sin oxpoeekt to tin al Wiese of th9

scents of the :amnia Ci.orernasati sell, in return for all thee, sacrifices, tEey'
should nice five once more a few words on paier.

itian Goverment* if it will again roflects sill Wit be satlo.ishea,

that OVIUSe aid Belgium refuse such a havealn.

leesive, ;onalour le Onargo d Stains* Lib assurance of my /Itch

considersti _.a.



IMAMS MU it bit AL AK,

ism, Id *gi, My.
£ Oka imagematties of the aressaullan tt sky a, 133.
IMO eentalae Ile yeeyesals of the demo Osummeel for settlement
et the mpestelea esestioa, has eludneed me tbet tier are at if a

eaters eambla to seevo as a basis to the 411,1111 Oevernmets tee a dee-

into dlemetellik

Ng sweated ettoele, Nedisei to Was the messiest demeenuat
to proemial reseesable Mi iontedieside lea to ems100 gym Vie tebeell6
ess situation enatet Is elmteal Stelsok Om ass Sem WA* sat helo the*

the step at the team Goverenent old Woe as iff*Ipt10 s&M a WAN
at a peasetel seleilan of the smeotias. Out I nom Mate eat fey master
Sloe roe Mat 1* vats Me via of the Italie. awereseeas ea this seklese
is well *.a.
As melts gram the prejeete memembed W /WY is tits Ws,
rmie, Italy b reams of its esememie eel
timasial siematim de ehtlipt to essettee as *IMP, weireleeele emmesetei
the prolate fie mOOMOleme sat that of latemallist war tate. see lb eammet


lutes sat



avoid Imeistias eat

shall be resolve*

as 0006

as peesiblo, la


tato &woes* Mks wee of remsetr,otion et its Umbel storimee.

lots asuestey sephilas aleaserltalre *Mita% WO ha 1/
itilbeeationo se *0 iltpuselos deendseles sal is all the trassiam
wash hseo takes plass tells** the 1614
s Contagenth it WAS 101.semi that its intarsote and its rogelsoesnes Is the selatioa of a geseelas
gnrd to

se sumps me ame isferlor to those et met Wimp of the Allied states.

As Moot hoe been demsatrated is several ofiloial mesitestatioss
sma sots of the Mai 00,0mmest, Italy is Home* to bear its plapertium
of easpItlem to samba mural soono-to settlemont, Vitt it anise asst
tbs. eseritiem shall to imposed ipso it beyond those reasonably pormittell

WIMP elm reisomeeet.

relative putties

It aeltt am he tampsftes that the
doom to
Italy is the pones patege of eases mammies. is miss toss! ea the eseelders-

to is sosiosigaso *Ns w the anal otooso.
bobs its a
se* al

slas at too larger )part reessoed

Imo New to dikok elsws
soduatime east lobs seemed if thels eittlautt sheaf ea, Ms Unseated to
onsaleemble seaseuleas without thwarts/ ark
to this dye, by
omenrl as

01104, tie joist sempiesibility of

Mee *het



toms Ossormeat

to Its asset

senese. at


Mega that the



ie She Treaties.


teaks do pelmet Ass hem

the prejeee of ripmeelea settlement

to the mists Sessersmes, imams the

SoupLetomss, the laredtesiblehigh ideals, did not mem is tate sat1 seseuat
Tlerpirements of
Prostibeil elf bIts


Pieeleated *pea this, it is with a gentiles, of
that the Italie. OresemmeN4 must palm%
that the IletWilsolttlekdes at the dad of
is mesa, prior to the 1109Pesals 401014401 to the




project of the British tovormesm6 OW' foam tits fast test the sum


tor separations is gaaltestly greaUg laterior to a teemme holever AMU
it nig be, that :al ti reasonably be swots% the iatesestlomal Ism etwoegli
*deb unit be streets& entirahr the yams% of this acct is duly ladleated as
a meams, vitboat the nasHIMUN Maas sad without stating adeoate ilspesi

tisaas telieh ern be takes for Its flannel set its souse,


ate 91. 2

IA, 1211

All OOMOnlie imeloaticns for the c_arantoes and the :leo .rity.
and any assurance whish they might ffectivel! famish, are likewise lacking.
The Gammen proposal thus does not repre:ent a methodic and comr
plate plan, as would have been lit*
sable to warrant its being dickssed
in principle.' It is reduced to a eneeession of vague and imprecise
which have as much leas lame as the puniness to which they refer
rith a view
of a gmmeral settlement are sore ivortemt.
Such an insuffiolency is a emus. of regret rev the Boat Government, bemuse it delays, to the detriment Of all, any lmogIMMISSOn towards a eollties of the problem and that it ,riai reinter,* an opinion WWII pine rtain
an04011801 gmemaY, that Gummy ander the inflsince of determined domestic poltoles, is trying to evade the falfillment of its obligations.
In these oircumstanoes the Italian Govern,ient, noting that the
German proposals have not caused any substantial modification of the situation
and have curly dissipated its hopes, suwests afresh that, as such in the

terest of Gamey as in the *:Merest of general European pease and eeemem,
new and early desist= of the Germain Government briik' forth proposals vihloh,
by their teams and their precision, apesr of a nature to be gamiasd mostully
by the Maya Government in sword with its Allies.






: or the pa3sengor rates oespikrissa is even for strikils
ta ailoont in t',-

irk.; taiblAt

PasiketAer Rate durisr, 1922.

Period of

oromt' loos Illstailles rALarlff

in force o.nd Wear

retriary to 4optember
Osi Wier



Dews liar


Jae isoas th t fiat Mammary to 45ptember


1:Then the

airk fell Eras 50 to 50 paper larks to alw: sold mark ) to rate
the pre.
Jrszsair.:- fixed withoat o..-101, in paper wri4s et 17
' member, far inetk,.rxce, the reseen
war rates. rar the vaotith
rates represent wily ene it:-71rtteth to wh...t it. ehtrad be far t he
Ofarialind, of the pre-war
Ahis shows cl ny 1.;;3e *normals loss in re Ce ipta 1*5
'maim traps not sdapting tbe rei1r r,!et,.13 V.) the demeelittisiS

øt the nark.
As regards the *ma tuition -i-.?,;v1lises it is well kW=

thlt undoubtedly for ?times. of im-ernal politics tikes have beet
tioie by the P.e ids boring all
inflated also the ream:A on of*
maoonetble limits. Joe indication a ,.on.;:fit :/t9g otivrs 11; the

ix;;;:::nte emplayelt

present cravat of 50,000 kilometres, which eisolop.

ed a50,000 ?eor,le bf..:..4re the war divided. t ',tea icht dif ferent
syS tea If central teed MAW
:!-Fit, oil.
OraP107111 t4s

1'17 Crle million agent,. relreienting
of more tInn 50 (Yor tic!Fr of ezerste pre-r.


As an exarx.:110 it shottld be r.rmr.7..bered th-t the felz1sil
g'Fievernatent, wh la ales o ezlotta V-!(:' LOU leis r*i1we, employed in

19145 73,400 agents ocad in 1923., i3:3,Z)00, en ie of 13% ear ilk

;turiber of ants.

On :

-It an
ttlo exraoltation expenses ri,r;ht ly7:1 educed i
in line wit the normal e/y7rtlasea of -1 it or._:




Aolttical p
enterprise and mrnged wLtn.out
Burdened with an enormous loss of r,oeip

lously insufficient rates and no leas considurable
ex)onses, the result of' h study of the exploitation
railways can therefor() zive no idea of their value
It is better to r-ei,:r to the r os ulte of t

th war, a nor:al prrl.od durine which oach eo


state ex'loited its re::;oective system.

From the inforrarkt3_on furnished by tile Lie

at %-irussels t reo 1920 ) the cyst-rs of tA.) German
inittely 55,000 kilometres) closed the it

Pransis. and Hesse




462 m





609 millions of
It must be noted thrit because of t.. rritorial costa
riroaty the total length of those 8...istems b.f?.s been s
Irani 55,000 to 50,000 kilomctre, or &out 10
imately r. t'
system and
value of
certain that
alue has been notably increased since 1V1

r7,7- king



w ;lett have been made


operat Ione.

a first mtimate

t the 10% re.

of the system 'rising out of territorial

Vie increased w.lue due t-)
it exists to
Gorman railway system


is Brice, -tibia of providing a revue* stuns, to that
more tea

Mot:tug/A in

ly14300 sillicSS

Marks at t Mg t tit*.
Ta c inz a cc Gard, o t
a° tua 1 (loyal sat La 0ln 6old t eter

age 1922: 1.49 )
is suns th t on this bass a total annual fro! it
or a2:irozi :fttoly o.- billies gold narks so.i. 41
e.v.).,ctsd frau a
normal exploitation -JA
man railway crates.

re awl ad: its, thoreforet that the conversations, to
wb.ich saw aim* allusion a'...4rve, reflected et worthy este of valtattlai
seriously foanded
t.: t t re should izot be arty r R,I diffloalt7
for the ap;r02. Ginverfaient to lease the ex,loit,.tion of its railxay
an annual r;Intal of one bLllios sold mrks.

OINININ.... ---

CHAPS' 1.1

ING jr.


G 3'1414 Cow., IDER T I Aft

It has _.:mkt times been cienamastratool that Vie romentse from

dacitiedly interior to wh t it
might be and to what it is, all thin- c being inmate in otbrr
texas on soneusytion in



do not :;:uodo e here to re trams the denims trat I on of

this feet eti 20e tally s Uwe it mast bs apparent from the following
onsidor t ions 1),7,84:1-(1 on l ioares

is known tr,:c (x-.trereely magi. return, 1"ras German in

direct taxation arises 'vino Imlly from the ocntinued depreciation
-nos at' laws whoa* tenets apply, not to
of t,e mnrks, with tr.()
the vale of the :prouact, bat to the cla...ntity; laws of this nature
inv.riable,no ia s.ter wh t
fixed in t.=1-rag of mt-N1,
!.on. so= cease
tr.,o of :vices reatAltin6 from svrk dept. c
value to
to ro;iresent novo than an infinitesimal piroc,ntage o.
which they apply. Of such oases vs

f w examples:

in ev.ry, syst,era of indir ct taxntion it lc laapertnt, above
everything if it is Clegiar. to arrive t solid oonoluSions, to 7rott!ot amoselt ae?..inst the variation o. the value of to mark. hether the pro6.1ot a( the tax on oonswiptton iu obtained b
a specific tax or an ad v'./or-cis tax, the gold bees is the only One
et Install. 5Isat is why we will !ideav
to expro:41 in terns of cold all tfte fectcell of the problem and we w
on ti-.e difftr Tit taxes errvisaged will 1) ool
Suppose that
looted on tho trisis
y this is meant th t the ooneicapti
for difi ,:,T';?nt taxes Dust represent
in paper mrks to be

which rermitb of rf, s OTV b le

imrriable sold imam no mattor wh t the depreelation of the mark.
!Ihia can b.: easily ertolgh an conpl,:'tf)ly enough :txt. Into pr c ice I
applying to ute tax itself an "Aufceld" properly fixed, a system
which is analogous to t,v't eotually in use in 07rmany for '"tu:tace
duties, but a mart) exact one.


esea thou) t3 o

ttelltioe xi

-:t.k,nt es sot to lotd to tIle catxote L'xt of alt

yr,1,43':r"L1e lose of them.

Atod la 44, rz moray


lf.-, of wore*


thRt at 4pr11 Solliti.V. Ls tity &veer
Vt.* r latively /poet Use 4fith sitiob Clog. creatils-}tleas
33 La Ilve

in ttve toile:sine tnarb,4 ore we pl-eo oaroolve, Airely
the 17 tat
viraw of tits eriatioa of ealtis nortapoaa fa, ouch of two
7resi4teis 444134tet, to sose,Aption team* 'Pe will enosairo..r t find the
watts ow:: be stied for r,,acet of tire. teethe ourtv-liK:a ett a
rola. enetwaption tax eollootital tithich tpe wtll cope°, to be co,

awed ea a 6.1 4 basis.
This rxtrrial addat bee.I.L ea be flood en the beets ot

wales. of tosia-es dons by the aokopele ,r on tle .ceis of trait,
roallieeda. a' set stivly tto " f fated anna.tty.
le, tie *Ogre of oar preeeewati
cfl inohtelme the
extracts., to be fo.lad foe annual nerviee of ziven 04,1..a.1 ) it is
preferable to owirider t AVON& b tba oosoecsl, =airs of the Eton*
11=4 rental hion win be mid
.4.1.1y to the tierieratt
of to zi,rrentes fartiv or tt vinetasi lean.
' e Iona td-itt tir fors th.:t owe th!it "webs/eft prima for

art, na ti 6-3Iva

RDA the re,

,:itcses rld araititZA t On o04/t$ St

profit, or tte, letter have beet ea

tehlik.bed, toe ZitLa uoi1Ln wise ettos.kid a inozint.oed by to.,S
equivaltint to the eawsaptice tea 'blob i-f. Carr
r !Al Gm*
',tort taqs it: t et-lotant.o to tray td be ticva into* .wilto
ttr. Lk; ortas whietoiati corstituta the arsailal
4tz1 at the sow.
cessi Jnesirt or the tienappla 41.,!--.4 it Le Vv.t rtlto lt we propose to Liz

tar ri etch of toe wisteria/a ontissiged.




he v...,"te. 3.1. re, of tee tobxecto OCkM3 epd La Oor-Artv
t.* f tArtS Or crud* t3'oecee
tabu; brat ) *tab L tn

as lopert

raetaom1 in th,:. country tt. r. Li Vr; icils of ahitn tobacco, or
C Ut toiecO, or set cleprit anc elsrArettell.
kilos. and crows a her
Gorses; aetAally imports 76
&bait 5 million
arm 8011 10 minion kilos. Exnortation rc

; ilosi 80 that the annual Gowan:Alm

Cit)rny is a little raOrt 0

f.n 100 nilliaa dies.


The eonsimaption tax in calculated

chin 11.-11 produced 144 minim sold Mr 1211

end 160 millian

ur1r, g the exercise


The consumption tax is calculated on the retail
It produced 144 million csold marks during
selling price.
the exercise 1920-1921 and 160 million gold marks during the
This yield has now dropped owin,.=: to the
following exercise.
depreciation of the mark to 74 million ;:old marks.
his represents, therefore, at the present time
This yield, which is a
a tax of .74 gold marks per kilo.
result of the insufficient taxation rate as well as of the
in Prance, the profdepreciation of the mark, is laughable;
it realized by the tobacco monopoly represents, for a consumption one half less than that in Germany, a levy varying beiurther, here it
tween 5.1 and 7.3 gold marks per kilo.
must be realized that it is a ruestion of a statecontrolled
monopoly and that it is permissible to expect from a monopoly exploited commercially a greater yield.
It would be, therefore, moderate to fix a taxation rate in Germany in order to obtain a yield equivalent
On this basis the rental which
to 4-1- gold marks per kilo.
could be expected from a tobacco monopoly is shbwn to be
450 millions of gold marks.



Before the war beer was the object of a very
complicated taxation, and furthermore the taxation was speThe yield in
cial for each of the confederate states.
1913 was 130,000,000 ;,old marks.
The law of July 23, 1918, provided an average
tax of 10 to 1* marks a hectar litre, besides being suswhich represents
ceptible of reductions or increases,
at the exchange rates of that period an average tax of 9
gold marks a hectar litre.
In April 1922 (fiscal compromise) the average
taxation rate went from 40 to 60 paper marks per hectar
litre, or, at the exchange rate of this period, approximately .65gold marks per hectar litre, being 1/20 of the
tax in force in 1918.
since that date this tax has remained unchanged,
with the result that in April 1923, for example, (5061 paper
marks to one gold mark) it represents about 1/100 gold marks
per hectar litre, or 1/65 of the tax of the fiscal compromise,
and less than 1/1000 of the tax of 1918.

This ridiculously low tax is to be compared with
that in force in Lngland, for example, which is 12. 10. 0,
or 46.5 sold marks per hectar litre.
One can conclude that a tax the eeuivalent of
6 gold marks per hectar litre would be moderate not only with
reference to the law in force in other countries (46.5 gold
marks in :.;nzland), but even in regard to the German taxation



of 1913 (9 oi


Otta litre).

L6nrriL1 beer oonataaption in 'A orateany vary1118

rid 40 mil on
the trum of ;:.00 mir: Lou ,,o1 6.
1.) @toen 30

otar litre.ti, it ie 'Jertain tht
on titutes minimum es-

tiertte of the :field of thie tax.

it ie., there tore, this

sure "i4A.A-1 eG.T. bo onvist..god az$ the minimum annual rental to

be sicked for the beer monopoly.

,ho tax on nOn-sparklirz wires was reutored in
the law of July 46, 1918, }.ie; fixed thic ta
at Lt71 per oont of the selling rrioc.


The fiscal compromise m-intainfld this tt,..-x as

ts and it ie etill in force unchanged.

Its yie1, lob reached 46.3 mii'llons gold
marks in 1920.191.1, has fc...11en now to 11.4 millions gold
maZ$ due to the de.preoiL,tion of Vt...e
oonnumption of winos in
.any surp4saes
00,000 heotar litres or 1y; the value of this oont:tiOn
V. billion la-per rare in 1919 ana 3 billion p&per
ratIrks in 194,0, or approxim.telj 30 millions -if sold maks
a year. ?In oevaloruri tax of -CI or Gent. roprceented,
antazal yield of 64 million
therefore, on t} le bole


witlAn t limits of a very ...rioderote
ev;lluation, we will :30.clit that a, monoi.,oly of non-sparkling
Wince could furnich -,thout difficulty a rental of 0 1311!ar, e judgias froze the yield of tho to during

19..0 end 19L1.


Taxation of sparklin wines, in 4oriatfl7 gOee
baok to the law of i.4ay 9, 190k.:
noc?ified by that
remained in force until Jnly ;6, 1918.
of July 16,
Under tht,t r ive the tt7.x. o
r1In g wines

Produced 10 millions of narks in lAZ.
';:be law o -pril
190, modifyiLg the rateb

tax of 3 !larks per bottle
of thz:t of July 26, 1918, neat
for fruit wines e7:.corptine raisin winea, -nd t 1.., mz..rke per
it tax rreefmt5ottle for al other sparklin.0 Inc.
ed 5.i-proirrAo1y one 'o1 rthr .c-r oottio.
7.he fleoul cor,,i.romiso of .pril 19. replaced
this provision by an a.lvaloram tax of 30 per collie on the
selling ;rioe. The yield of this tc,x is so far only about
one million ?,old mark° ler your, von thou* the azulual oonetn:tian ounto to 15 million bottles in 1919 and 10 million

bottles in 19::.0.

tax eorL.bliebed on tho basio of of e, gold mark


give an annual Acid of b million tole.
Lie figure whioh
narka (talf thin prewar yield), tnu it 3
T:or bottle elloul

oen be asoignod tie the rental for a eparx11:-.6 wine monopoly.
figure 14-, still inferior to the ;yield of the
operklie3 Vibe. of roent years (exeroiso 19e1.19LL 9.5 million° 47old marks).



1918, iv the origin of the

The law ef

At was modified by
tt:ezation of mineral waters in eermany.
the law of April 8, 194:L, whidh provided the tax of 6 m:Irks
and 10 marts per hcotar litre for.mieerel watersand eoft
Asa remit of the depreoletion of
dri r_ce respeotively.
the stark the yield of this tax le aotually oeliy 1/4 mill on
zold marks a year efter h ving been 3 rillion ;old marks
((morels. 191;001921).

1,t the

veraee rut L for the fir%;t

enarter of 1922 (54 paper eirke 2 1 -old oe.rki the baaio
for the mte actually in foto*, the tax reerceentod 1/10
eOld mart and 410 ()11 mark mar he
litre for mineral
enters or
soft dri. ka rospeotivel;;.

law ouloeleted on tLis beets woie


eeplied to the annual convuostion of 60047,0 heotex lltre
of mineral outer') and of 2,000000 beater litres of soft
dri to, a yield whioh eoeld not reach 1/L million gold
.1oeniderine on the one bane the nature of
the commodity, which
permite of the rate of tL:xe.
tion bang inoreased w1thoet runnin:. the rink of nl-epre.ct,bly reetraining ooneemptiono and On tLo other h'ild the
rel%itivelv neac;ro yield vhloh o:in be eieeected, it Dooms
least In thn
that there is no need to elvisaGe hero,

first oetimate, the eettirT, up of a monolely fOr the sale
of mineral watore and soft drinks.



There existo
tho ,4ecent Line in 4ermam
monceeolj, in existence
a state monopoly for eloohol.
since the month of Ootob r 1910 and reorganised on Ootober
eraft leer 1:repented -o the eeiohs1, 194L, originetes ie
tag on Arra 17, 1918.
14 tele draft the taxes fetich were at that
from 84 to 1:::3 m,arke yell* beotar litre) were to have

been altc,red in order to useure to the vioh
-.4eld of
800 m3rke per heater litre, loioh oorreepoede to 4e/roadmately 450 gold marts per heotar litre,


of T,he depreoiat ion of the mark,
onollmition of
the present tzix4;.tion (a;plid to
L million heotLx litres) rol.;resents only boat 130 cold
Grit 4cei(lcs it f.1.1e;s _nl, to
mt:.rke per heotr litre;
of thc conelirctione 'ho other h. if

":"Lis rate of t:,:Aation of 1:::0 ,old marks per

beater litre it noreover
lov: in oemy,cion with the
rates ,,plied in othcr countri,:a.
lleso IzAtor
t 143. 16. 0.


400 -.runes
rka por heater litres. 000


- ranee

1 -itrn



?Imu it is seen that It %

2; -.oder ,te to
it this tax for Ger
pier hoot,..r lltro, especially ainoe tht

t.:.(; draft law of 1918 anountod to 650

over, while rer itting neoessary reda
of the consun:tion, tlioh is consider
ponable to oonfice these roduotious

"detaxation" will Lot exoec., an ,:vera

faerorore, half of the
1,00cOtA, hcotar litrco, sh(r1< ..!

be ta

ner hcotar litre, the other half

Le rate o

1L5 6;o14 per heota

:lider these conch` ion

a :)10 baes should hnve
million ,9o1(74. r=ake


the rent to 'Jo expalotee, from a commer


tit subst:.Loo


:here le raroady a ;%ono
to ,.hich te 1 ve Lut

at any rate is v
does Lot mem intorosting to study the o
meroial monopoly for this aubstnoc,


G A 2

The oonaumption tax for su
fOrn the wur (14 marks yer hundrod kilo
26 per Gent. of the eellimi :TiO0 of tY
GO marks
hundred kilos).
It yield
174 nillion mark* ;our1;7.


7,:nder the-preeent/rejno augur jielda bOrarko
per hundred kilos, which, at the averd4e rtAo for Lurch
(6061 raper narks II one 6o1d mark), for ex4.uple, rerreeente
jl ea rate
1/100 .o1? mark, or 1/1400 of the ; rbtes
rerTneents at the Selling .trio' Of 12.34000 paper el,rks per
hundred kilos, in foroo in 1:,aroh 19LZ a tax of .04 per mit.
of the oelling 1,rloo.
The ridloulouely 1. w yield of this

tax will, theroorn, be considerably further diminished because or the delay- o' the la:ment over the six menthe vut
Into force -:,r11 1, li)1
In -ranee t.nd in -aglund respeotive4 oudar is
the objnot of a tax of gw franoo, or 16 gold marks, and
o'er hundred kilos, represent per °e at. and
per cent. of thc solivrioe (400 frunoe 01:44 hundred kilAi in xrance and

1* pounc1e, or LZ




6. 5. 0. in Great Britain).
:o fix t n trLx on sugar in :.ermany -t 10 old
marke per hunt rnd kilos is, therefore, moderttto .rid will
!Galin: price superior to 60 -,old ,rke icr
not lead to
hundred kilos, ti:o
Alit: the o,.1
are reepeotivelY in

alaMM mod S Sbasoo et SU rti 140 gad mil pa Ufa illisa
Its Maur ltes U. Om ea a. $a assmap onisti Otoo moot =WO

ooatitheao rdU lm% Air WO &J eititimmr of low Si ow, omli is Seesset.,
at als imag, Ms la tbo don .drill *sr
a revesso oplirelemS to la a&
b ties) as Os boo Mr t as ool Woes 110 be assaeodl Ow etxtgoi. r aegis.
arab loo tarts /styli >s poolossi to We somog000llag to at promatIP

Is Sr vs


Ito 1121 ilsom OM as S114 at 1$ maw pot SO Miltevat boa rte
boo Aso% im Was it Who aspratestisaa lir the ma% ASA to to oi* 1
AO& poor *oft toe

sobs Os meow webs it ills swab ON itotho 1
Ins tog volooli


Mama it Ito I

solgtea Was* ins Ism

tax 101.1111114 slab* um 0 oLliSams it old mites IA 2211$

olanams rt all oults.
Oossideriakt the sactra of poodosts libroo dill be no it
mum te oimitimt to St U. paws: tads in obi Gods per 100 kitostessi as a
efoli brio.
swirl ossaAptio tst Orsor" Wog 4110.41 IWO*" to Wo
t,ao, too moms tom tide onatlas would is ooktosaaot
tIat ottald be oscatat as Ihrom i
saga, at Ms Is the estais
lesa Bros most to U. aplivals* of



sat i.1114111/11Z3

Oar ow bsleo of little logoarlemso
libe oome.e.002 at eau anseass
U. latter. wrest is
eampess* to Owl it wool satsbea. vs 1111 seilaUsip

mio a Maya et iR
MS at U. sato of 0.01 to 040 met pa lam, t
of sold1 aula.
lb sate it tesetstai at )01SMOS Its tem So 0,01 to WS make mew
I at tab. the avesspi gam W U. mask Is
tom ass. 011 0 to oeit areetoo tar 1 oat orilki Ike bat at sateen :Ais a tea
ter assople WW1 mow
v$miak oSsoolo why 1/1000tb it Ws paageorr


tooriodoino Iwo as te. peomost tikas Is MAIM Os ovalsalael
et 160 NFU esses.
It $t two swam oareassbio 110 mar to tbio soodemb a tot sopos.


U. abeam Pinsomm

U. Eton.!


ma VA tom

Is Somor 114111$ IMO


01a *Mar soprseetts a votes esparlor to U. agobalame Of to ealliess Of oli
amobst Ito so weamoortiag Its alnakome Mass to be ogoolloll Ins

le stobss.

t o t olas aloes liobtess (balitato) the octiveleat el 1 4014 as*
stook, skessysta tot susgerse 'Nita that tapesst to miser so steles tiolaimo
aillisas rat 1034 MAW mill
$ saws per Glow ball a ssipplassallaw sas
oupeolor to 4 Anions it otos
bs elsoakeol for se morma oeaelialette *lob




emils. Iwo tip isatattbsp itsz minim end deur 11~4 ea
easlip tirtlak a Winn aiond Maim Ai AU ago

ilea $$ quastita et korpotatowlb

Oa 11101.1s0. Orailtalle

Mir ma Illatils elseillo vapor tee. Oa*

to t

lots lariats airtioloo is saromati a los per pkia, asourible

WAIN nag lip go pew t arty $1, MOO gleaUble 11/ tit oat 41141 1.


Wan the latrosisa lia lariat littillotest tpp lots baler INN

this goo isstassse (MOD

4111Usis fit gal man ps. yaw.

So ins aka Waft Ina


fottaisall asoolap rap pailualika

is esessuplisse fn la aserossble W 01111116 dria a awe* or tiro ado et tam
aottoloa, *nada Ur Ilona of the tams aso loposoll ma s atlik lasts, so aim*
MI= eat avalea .11111kat at maidiatikaa

1:1Kina giatkar

asomor sessosse asoaally taw to ties talliess 'sae et patwisi
Imp putt Maas its sot tasieltes7«

es IS at piesse Illapassit Ohs sew mall retain, sot Ms

Wadi rues age isiipsew Its Its of tretaleisnt SW111101.110 to 411017 tat ootiola.

liatemit WI a aleapallp

Mr mem H Oho seer

y/ oar Moos oalogotasta net taoss la 1181211.

__ tba post alionsi most won to to aroma 4* eat ailinia eft polA

Mae per years

Mar as 11* puma taw Wilittswas$1. Om Ibis eigatioallial,

Ialleve Slat Mc amok lisiSsigtaSis N amp tar
1.141 ea= loportoola Mrs Mad, ilaw Us vetoes thilek

ho dwr Mt

111111411 pate


IN, Sitar
Me pas at tres% sae spealid to Gomm &saw she my ti else kw
of Amu so 1111. mite Olitftidiaimi AM M
tea at atrn as kw H
Oda 41. 19/11, llamas& Skis to 4114. A ass ism sated Nash

AI Na.


sat shags essostially tit. 'sate, 40010 !PIM is the Inaba*, git Baas

Us poor to astomo of to der it *UM sartsda liens sat miss .rebel
Federal Reserve Bank of St. Louis


Mew the teesse et the Sate% at thsee 3w/s the Mar ail the

ens et aki has tore taw lie tleval per lin" us aim*r or ass morp,
sail See the tallestua Oast pee all adilliese of 031 earn. Mr Ow parwit tiosal isawe Ow tibia the sate gat ban imminei Os 4113 Ow Moms
14131 ma supeemat awe Osoi weer' MS eilliale et 014 assles
Se ilimprombi 411Wialdas 013 Ille SIM 110110011 alms

the earl *as

M fista is ao amplesestan et Ole cask 050 tat NOW ariarieselg at the

temble 054 taillh,
the wise el seal la seworar Iwo vatiot la atimet la lisoam
*Wag Ow weee isas, issi ma ism oli wows' w sae agleam heals

Wow nee efts





sever orb lbws

slog pudel, at s
sopilliasekta et s
gm teelolliegeGas liellter s


at Ow
tea bielalell



IND .... ........ .4


pp". I -taw ake asea .....



Sasvompe nal








11. 1, MID -low 31 1/11. .
My 111 Memo MIL *ioefoolows

MO. I -Rte. She 1141 ....


Dn. 1. 111111 ... Sou ill, UM a

... ..1114.--s_

so, an 4,

Who 1


. 1 - ill 211111/

asps XI es tilimo I I II .....

ildro Ms ..... ....... .
sag., US .


*Oh.. 1

o, pm











3, ...s
























Undue Um time pan la Ismestii,n the swesise Agee et wane
lei imese se solo.
a apolleil MO 01101 strams per tat, taw U

the wile et tanattal et the 3400
Me sato et teeottee aid p stk. $4 giiiiip
fturg. sorois it OWN* Sow the asisosi issaessMpliter SI
34 heel* them Ali
ash Ss woo IVA oink* iiN019 a Mims at 00 iitarall eft sal





4011 0141 awes per tea Wad es








Oda Paw **an le bovemill eiraglatiebk it aw ~me or

Se ca Gal sal lbs embleas it a aup.

Os Wiwi WS IMP ildokainow it v

*111191k ow Ow obbilloir diawssell

WA on ma me Wad Is trarar

twowposb U alow


Nebo Os lawn it SW Owes NO isole 4111100W
desillee Pit
Is 00 Oallaw *Mal Sew it smatte eiw OM Ow 1w0 boa it on wadi%
00 alswoldaw dondornois 1,41111 a was it afoot

Ow wows* sowal 41011iim be Os boob ~ON norwaap
101, Igo of saw* NO MUM" con
Omm Iwo sow*
lINO 10 auswow
solo per ima, Ow swaweil uSgs
4411 alas p r tea.

V ailatat tas

It It a*



sq.'s% we ow* IMMO ~In 'bow

it sUlitemswie.
Is Oke taws Ow Ost sesOag a Owe,


wepsestias. ea sawIL


it weal would

air orgamirls

lawas mai ONO* Ow Own

2.11811 a Ow lame awilist





getw Oleo* wk. Owl Oro dithrornos as rowsompeam

Me amen adagio INS Ow Immo balgoll


lb Ns woe eamillowbs buis 00 IMMO or saw disibloess Is Ma

Os$ Owe. as woos. gar

s0.. Is

thia NO Is I

dknowash formsiselles& mom%
asolOoMiON Is nu it *Ink

WeSitiIS Os mowdOr Is is 011010114


1* Awn am Se the yeassOwg

so es Iamb* t

Obilo SIOINI emu =et

lapoliwwles of 11b)

.11100101 Oft 1001111111,016101ftwrawaisrusammarommwrrulpere.amowa0.1100

holl vs IS


ter 0//) lima*

await imam




as as INS mac Oat molowlibri

amwal, wl
LAM ellijkaps ar 6, 111,



area maw of




Amex It of the Noujtas Pao** et NI 1.0111 2NI6


Su skuu taloa so Osult oft silk Um latter
lus ameur or the *Mks aseattsibeiteir the tosit,
as ems &if tho telloolthe










imitre the INA tom poems

ameste et roplital





MO ISA assemil weal otthint* £







met Ohs or tatearttas
oiatraerie St
as to the math to.tie it Or Obarals Meg We is Os _ i
to awe that ler OmUt siSIMPIO swam 01 11* twit& 01 OM 40.1111,11,, Ars orripill

bee 807 mtlitemile et gall solo lis MS. to 111.3 tottlimille et yam. soft Os

ir imeme-voim -Now

es Or Os* - ears 01 OW

tthe Is me& NINON& hoe sow
Mr the lthimfaithae et ON

ths 34410.) SS Is air OW

t /oUlteste et' popeaP math

ir et the teessalthoth et OOP,

W. IN UN treduell lea lotto

at the sokersetees Its NNW

soigne of IN



oottlei that at__ hoe

illsordik torwamisalts. was stranii


laraoatilos la


So Ibtaimat as Ile gab* of So

ono mokaugoo M 1111*

ea of 111141,stillases at sae

OC OM, for Sr total it tie

to aro Nos two aollattoss age tam* ealbaly as stalk go-

amiala at xisa semetemedi IA** aceil bg esellassittas at toe Wes aralbess

iellosalo sem vita - I fanilesei at gat mew the OW load
yet goolattes at 11111 llegoaosa is vales at Ora dam tom' Wet

Ow a t atUlloollo at add amita.

WO at law too ortlasiso fampla 1e aaMssaiA


it Is to to oupp000l ark MIt molt Wag slibilissil ma OP
emissi wends itoetlaa stSsibialossi Moe goolatiano
palm at ail esker it
vast* omelmo to v1 me meld area to slatilloo
at $ martsila len&

tbo Moo W. it loan is too artimiatio M to aides

tam lariats rail aomo to seeseepale to 'swam wises.

Ilio OA vale, at Ile total **tag at ea stela Saar wan
at Oa eliti M a loyal
s tobioi.
tatoottor to OM Itillhollo at silt rata, WU
tee the 1913 160** xt is
emN toureseaesble to ampaso Oat
be about new bum ewe
No flame ma it soda to boot Mat *as the flamolal ottiottaa at lanolow
taw At op I* Wog aptsaltaboik, attar alralL
aselldalr der is $ atutages at Oil Mae

yoga is stolillioall is ouseot vale, at tho obtuse at is atollt aolasoiaa
soda waposoant a total await aroma id

at eon ur,

11, oh 15 isSi Mg. tie Profile flatoilistal kg lasso asolattoo

anopoltil, lb to lads* lea boa MO to Arlo Ow irptirmmal San
to SW it is *adult ooplIal, awt asireeSsil
s to o-vigi at its atilt or
Mom eattel vabilk
It is afar Waal aormitholoao to ~so Mai Ism titer eroloisa
attiatios will Woo
Ws asser solloast Ulu ot tdo Moo
MME in a maw assompoil to as alirdral itrhS ot
Olallav to
Os prewar roam*
air Maser olaromotaaosal s Moan at i atallame aK auks soli

omit is soallimi fro.

amodillsetisa at Ift Auks, thssatees, maid be

Sae ate* oalatoriall oleo, Mai Mt Malan st mai maw

aothoolo Is elm eels es eh eurvie end is saliserly Iwo*
tb41144 eemissekg lbe ompooteinay so to is tome *:act OIS at SIMEMIN

It las as lie sole wen, to Sa Met
alp* at date polISII
Praise at tao alike la too prints at au= Indastr, le listesestive, aid SO
a pia to is ommeasoot
Wake tar moo to °over the somulittes at Ms


ANNEX iii


24, 19=,

..----:here has eeme up for eceelderstion, La resent studies, the questino
of securities to be arrested UAW, financing of reparative*.
:'heat' securities were as follower


the yield of the remain of r:11, oys,
- deliveries of 000.19 Mt OVOnSt1111,7 et other products,

partioisetieu in the profits of Germs enterprises,
4* - deetons duties,
6 - yield of sandlot NeeepOly,
6" - yield of beer siesepelip
7* - yield at tebeeesiesospe70.

5" - yield of mar


ith respest to the last six of these oseurittes, it is advisable
to maim an observation yhleh 10 not witiloot *penance,
:0 safest se securities for reparations the yield of tho Customs
t pert in te indssIrisi and oessorcial prefits, sad the yield on alcohol,
beer, tobesee sod sugar monopolies, evidently mane the 41041486 to the
in feats
German budget at the oorrespendlog reeeiptes

The Custom* yield excess to be at tne disposal of the Nolo,
Vith rchlzed to the participation it ;.b, in the pretits of SW,
terprions, it seems ditfieult to NOR it es -exist Witt the eau senesced
by the :cash en these Moo profits the eelleotion of this tax should
therefore be obsodesed,

yield expeetou fries sempellee

as alcohol, beer,
the eelleetien by the ,rich
tobssoo and sop.r, newt inseseisleet with
present levied On these supplies.
of the consumption duties
;finally, the

it nicht therefore be aehedwhether the dowsed* in the reosipte
malting free the auridamovnt of these Wove and duties wade set be of
sash beyertenco as to prevent the equiliblibus of the Gene* West.
This is whet we 1,ropose to inlesticute,

It should first be noted that there would be little signifisome is refrlog to Budgets which have seeceeded each other sines the
Arnistlessaud whisk sego based on an unstable eurrency and presented

inerseeleg deflate,
ne must try to uaderstand what duties and Wee represent
Olor onneidered in a balaused budget which is bawl as a stable or stopbilized ocrreec.

In Gerawhve4detory history of these last years, only one
lulled permits it in investigation of this charaeter. It is that 'which
during whisk the value
includes the months of pzril, Soy, and June Lt.-:
of the mark did not very to a greet extent (I)

(I) Average



misit s April 192:













error; thib quarter the total receipts of the Allah have hem
of 61 billion paper maeke,

Ala oxpenditures have teems

. :toainistrt hart


30,4 milliard paper marks




jtats monopolies


milliard paper marks


or o total of



It stet therefore be seam that for this quarter the deavy&I
kdministratiem Budget of the Aeloh, exoluding Stets .411101)1,11 am& P0600
Treaty es sraditurea, hem preeentea am snout of t.9 milliard roper marks.


It sett therefore be sell that it the mark hedmaintainva
value durieg the reminder of the nasal year, the eusees of the Gemara'
tAmlnistratiea beiget at the ead of seek timeel year *geld have boom of
*bout 1011 milliard paper marks, NB teneeponding to lob milliard gold

Lf you include eipeedltufee sm aseseed of State iampolles,
the ex00418 could sweat to 43 milliard pager manna ter the quarter,
or tk milliard pager marks or t,3 milliard geld marks for the whale
tisoal year,
April. made* 10ah tits
that have been during this Qua
~pipits subject to duties apci tease 1141011 it is maw vrepseed to
decoy to the Budget of the .ioteht Theme reoeipts appear salaileitiy

is the stessunts published Osstki, by the Gems &a ikamicistrittiom,

*mop% thee* sabjeot to the tea ea profits of eaterprieee, raids
are ineluded in the yield of the Isom* tes, lir...opting these latter,
the reselpts umdsr conaideratiom for the quarter April.mlume 110i.t, are
es tall/met

Customs %Also

4441 million

of the total receipts
of the quarter.

,, or

lam ea the otos-

eveptlea of &UMW Lubti

or 1,8ia of the total receipts the total rec
or 0931. of

of the quarter.
bps ott the eseemeption

of leer



of the quarter.


or 4066 se Ihe total rec
of the quarter.

tax on the souseep-

tiqn of Obese*



or 0,z, of tbo total rece
of the quarter.

dart es the ssessep.
ties of sugar
fetal of the b categories
total re
6.71a millise :4." or 11,7 of
et rooelpts
of the qtexter,


r; ith

rt,Kt.rd enterprises,eubjeet to not appear in the erase mss of tLe Isiah,
to rovoiwts these to the tax on profile of
Then oedemata ooly give the total amount of oh
stated above.

inter tax returns,

deesoer, it is nut impossible to try end got an idea
in fact to know
the Importunes of reeeipte of this eategery.
the net profits of sleek sompecies has bees in 19:.. of 1Z mil
it yen
stook earpsales repemesat ems We of the total profits of Dor
traao used industry, rouoill obtain A figure of V.4 milliard pa
maresfor the sear 198,4. Tbo lit Us mbleate at that time, was
as these profits, will therefore amount to 3,510stillion paper
for thereat, or a tartans overtire of 9 10 'Anion paper =irk

esseliker as a first appretiostios that the -fro

'.this flame, me nor WM. 44 4 first wroaimatiON a

viola of the tax em preitte during the quarter s. ril-Jure 1944
of the total receipts of this quarter.

As %table, the seven esbleoriee of twtoe under cons
have therefore reprematoo, during the quarter tpril-June 1,2'4
of 714 ntilicrd paper works, or 130/4, of the total pield'of t

It can therefore be seen that if there he been deni
renyipts correspondiag to the seven neSegeries tinier co
there would have bees left fit his disposal turiag this quarter
42,4 milliard paper marks {Instead of Off milliard. paper marks

The *mess of the General Administration budget wou
mimed for this quarter from 27 milliards paper narks to 19,4
payer arks.

Per the nbele yowl. the *mess of thu kineral Ldelni
Budget, thronek the ea:elusion of the saws eatagorlos of twevu
cored, would therefore have boas brought true 105 to 1",41 mil
marks, that is to mg, free lob to about 1 Millard gold narks


It would have bees brought dorm to 66x0 million
if there had beep takes off the b40 rdllioa goldnefts ::hint
indioateu as representing the voice of moil whisk the 4ormar
mast pay to its industrials for reps sties deltreries,

esperbase Saes

It oar therefore be seen that the
when the mark yea relatively stable deneeetratee that SW is s
the subtraetiob of reseipts corresponding to Ca georeatsee en

&oration, the GOMM Midget of amoral Administration Olonn


Eansat 1 milliard gold marks.

It seems therefore b veld doubt that !Ii a normal fi
Nark otubilixed sr.d budget Ualueeed) the 7 sategeries of rece
teben off the Gadget without grave inoorven
lensing of the latter,








First of all I wish to express my thanks for
the courtesy and promptness with which the
Commission have granted my request for a
hearing. The generous attitude, the humanity

dustrial production of the country had suffered severely from the effects of a long and losing war; social unrest prevailed on all sides.
A revolution had scarcely time to live and die
and moderation shown to Austria have convin- before it was succeeded by Bolshevism - an
ced everyone that the Reparation Commission experience in horror and crime which other
have been guided only by the principles laid European countries were mercifully spared.
down in the Treaty of Saint-Germain i. e. jus- Then for six months what was left of Hungary
tice, equity and good faith.
was occupied by foreign troops.These had baI am not here to ask for the same measure rely returned to their own country before Hun-

of generosity which has been extended to

Austria, but in support of an application
which, as the Commission have doubtless seen

gary was subjected to an economic and commu-

nications blockade by International Labour. It.
was not until 1920, nearly two years after the
from the Note of the Hungarian Minister at end of the war, that the economic life of min
Paris, is practically limited to the temporary iature Hungary had opportunity to begin its
suspension of the Treaty charge upon such struggle for existence. Meantime, the country
revenues and assets of Hungary which are in- had lost her richest agricultural and timber redispensable to secure a loan. The necessity for gions, the greater part' of the territory which
obtaining even a small immediate advance h supplied her with salt, iron, coal, metals, and
so pressing and the consequences of failing to other raw materials for industry, as well as
obtain it are so grave that my colleagues in the some of her largest textile factories and all her
Hungarian Government thought it imperative plant for paper manufacturing, besides suffethat the Finance Minister and I should ask you ring almost every conceivable visitation calcufor the opportunity to put the facts before you lated to accentuate the normal dislocation of
in person.
economic reduction and dismemberment.
Before dealing with the necessity for the
I have ventured to recall the conditions under
loans I should like to be permitted to outline which present Hungary began her economic
very briefly the events which have led up to life, not wibh any desire to air grievances or
the present financial and economic position of bewail calamities, but in the hope of visualiHungary.
sing fundamental economic difficulties with
Until the Armistice, Hungary was an organic which we have had to contend during the last
unit from the economic point of view, with an two or three years, and with which, to a conarea greater than either Italy, Norway, or Great siderable degree, we still have to contend. If
Britain and Ireland. By the Peace Treaty, Hun- you will be good enough to bear them in mind
gary was reduced to the size of Portugal, there- when you look at the present financial posiby losing 72 per cent in area and 04 per cent in tion of Hungary, which has been submitted to
you with the Note already presented. I trust
The reduction of an economic unit with a you will agree that considering circumstances
population of 21 million to a unit of 7 or 8 mil- we did good enough work in our uphill struglion, even if carried out under the most fa- gle. When the first opportunity arrived for
vourable circumstances and with the utmost Hungarians to reorganise themselves economigoodwill amongst all those affected by the cally, that is in 1920, the Korona had already
splitting-up process, must naturally involve fallen to 2 1/4 Swiss centimes as compared
great economic dislocation which can only be with a pre-war value of 105 Swiss centimes.
rectified by the progress of time. The reduction Since then the Korona has occasionally, in seof Hungary took place under most unfavou- veral months of 1920 and in the month of May
rable circumstances. The agricultural and in- 1921, been higher than the 1920 quotation, but



in the epidemic of depreciation in surrounding
currencies it has been imposible to prevent the

Korona falling In the Note which has been

presented, the Hungarian Government have

me coned their efforts to avert a collapse in
the Korona. I should like to emphasise that
point. Everything has been sacrificed to main-

excess of exports. Our balance of trade for
1922 shows, as against 1921, an improvement
or 92 million crowns. Vigorous steps have
been taken, as is shown by the progressive reduction of the deficit, to remedy the position.

importation of articles not fundamen-

tally necessary has been prohibited or restrictaining the purchasing power of our money. ted, and foreign currency for payment of all
No one dare say or even suggest that we have imports or for any purpose can only be legally
endeavoured to dodge the penalties inflicted obtained through the Devizen Zentrale, which
upon us by permitting our exchange to depre- is under Government control. The re-creation
ciate. Possibly we have gone too far in the of home manufactures for textiles and textile
other direction.
fabrics, leather goods and other necessities Pre-war Hungary being an agrarian country formerly available within Hungary but now
was in need of foreign capital. In order to se- compelled to be imported - has been encou7
cure the amounts needed for the service of her raged and assisted. However, results cannot be
foreign debt she had to utilize the balance of expected quickly, as industrial production
her export trade and the financial balance of within the present area of Hungary has been
her migratory movement. By the loss of our estimated in 1921 at 53 per cent less than for
Uplands, however, in 1922 the balance of the the same area in pre-war time. The producremittance from Hungarian emigrants in Ame- tion in present Hungary of our four most imrica dropped to 24 million gold crowns, making portant cereals is also 35 per cent less than
less than one-sixth of what pre-war Hungary the pre-war figures for the same area. Neither
received under this head. Our adverse trade- industry nor agriculture have yet had time to
balance of 1922 represents, with an amount of recover from the war and from the shock of
214 million gold crowns, more than 4/5 of our the events which accompanied and followed
balance of payments. An improvement of our the economic reduction of the country. The
trade-balance can only be expected with the decreased agricultural output is to some extent
increase of our home production. 'Production due to lack of capital for the purchase of maand first of all agricultural production is the chinery and artificial fertilizers, and to the
only means by which suitable commodities can lack of natural fertilizers. I perhaps ought to
be procured to be given in return for those explain that the present export of cattle from
indispensable necessities which we must im- Hungary is due not so much to any large export. It is true that as an agrarian country we portable surplus as to the serious shortage of
can maintain ourselves with our own products, fodder which makes it impossible to feed the
but besides provisions we also need other com- cattle. The dearth of foreign currency within
modities, and a great many of these - provided the country also now compels the Government
formerly by home-production - must now be to encourage the export of anything that can
imported, while with respect to certain other possibly be spared in order to bring in the
goods our dependence upon foreign markets precious « sound money ». There has been,
has greatly increased since the war. These ne- however, no tendency to neglect the stimulacessaries of life, e. g. wood, coal, iron, salt, pa- tion of production wherever this was possible.
per, textiles we cannot dispense with except at This is shown by the fact that Huhgary's
the risk of exposing our production and the sugar crop is now sufficient to meet her remaintenance of our population to serious dan- duced consumption and in addition to provide
ger, in the same way as an industrial country - a surplus for export, whereas in 1921 Hungary
would be unable to renounce the import of had to import 2,854 tons of sugar. In coal, also,
provisions. During the war the reduction of Hungary's production increased from 5.5 milthe world's industrial production was cons lion tons in 1921 to 6.4 million tons in 1922. The
tantly increasing prices and people were Hungarian people are not merely sitting down
postponing particularly the purchase of wea- and wringing idle hands over misfortunes.
ring-apparel. At present it is no longer pos- I can assure you that the deficit of 214 million
sible for our population to postpone the pur- Gold Korona in our Trade Balance for 1922 is
chase of wearing-apparel, lest our labourers caused neither by lack of energy nor by exmight, for lack of clothing, be unable to go to travagance in home consumption. I should
work in winter time. One third of our imports particulary like to draw the attention of the Comin value are textiles while the greater part of mi.-sion to the fact that Hungary's present exthe rest are either indispensable necessaries ports of produce are partly due to the daily sa of life and goods absolutely neccessary for the crifice made by her people, our internal wheatkeeping up of our production, or such commo- consumption per head having fallen to 173 kg
dities the renouncing of which would be equi- as against 188 kg in pre-war time. But despite
valent to the destruction of our civilisation. A these sacrifices and these efforts there will be
further decrease of our imports can, therefore, another « passif » balanee in the Trade figures
hardly be expected. In our balance of trade for at the end of this year. And unless the finan1921 imports were 306 million crowns in cial situation is alleviated, I fear that the

Trade Balance for
Federal Reserve Bank of St. Louis

1923 will be even more


rate of exchange of the korona at 0.11 Swiss

-4paid, would leave Hungary in the same desperate economic and financial condition. Incidentally, I might mention that the cost of our deliveries in kind to the Reparation Commission
are estimated in the current Budget at 10.3 and
the expenses of Allied Missions at 1.9 manor.

comes the opportunity to prey upon the country
by declaiming specious remedies for the misery
of chaos.

I hope that what I have said, taken in con-

is hope - hope of an existence worthy of a civilised nation; hope that misery will not be the

Gold Korona.

junction with the Note we have presented, may
have been of some assistance in explaining our
present dilemma. If we remove our restrictions

on exchange and other transactions, the Korona will undoubtedly collapse and the financial position of the Government will become
hopeless; if we retain our restrictions, the economic life Hungary will be slowly, but surely
strangled. We have decided that the only way
out of this dilemma is to endeavour to obtain

external financial assistance. Therefore we have

come to yon to ask for the permission necessary to get it.

The Hungarian Government is ready to meet,
and capable of carrying out, any engagements
it undertakes in the national interest. A State
which only recently suffered Bolshevism i3
safeguarded against a recurrence of the danger

by the undimmed memory of its bitterness.
The struggle to create economic life, despite all
obstacles, which has been in progress since
Bolshevism was wiped out, proves the resolute
will of the Hungarian people to live.
Nevertheless the burden that can by imposed
even upon a virile population has its limits.
The capacity for self-sacrifice and self-help

of any nation largely depends upon the nation's belief in its own future. I believe that
the Hungarian people will make any sacrifice
in the interest of their future, provided I can
give them hope. I believe that they can make
themselves a self-supporting economic unit
among the nations. But if I can only tell them
that the speed of the Note Press is to be increased to the speed with which the Korona

That is a black picture, but I do not think
is exaggerated. 1 earnestly trust that the
Commission will enable me to return to the
Hungarian people and to tell them that there

sole reward of sacrifice and effort. Hungary
is rapidly sliding down the slope on which

Austria fell. There is a fighting chance - a
good fighting chance, I believe, - to arrest that
fall, provided Hungary is able in the immediate

future to obtain the external financial assis-

tance which is needed to give effect to her own
self-help. Surely the self-interest of the creditor
States and, above all, the economic and political
well-being of the whole of Europe justify giving Hungary the opportunity to obtain the aic!
she needs.

Therefore in the name of my Government

and in the name of the Hungarian people, I beg
that the Reparation Commission will grant the
suspensions requested in our Note and permit

us to utilize our resources. The proposal re-

garding the immediate advances involves very
little, if any dispensation, while the Long Term
Loan merely requires an approval in principle

which is not binding until the Commission

have approved in detail the proposals which the
Hungarian Government must submit at a later

If the Commission so desire, the Hungarian
Government will be glad to avail themselves of
the advice and assistance of the Finance Com-

mittee of the League of Nations in respect of
the financial proposals for reconstruction and
in regard to the negotiations for a long-term

I apologise for having taken up so much of

the Commission's time. My excuse is the grav-

have. And I am afraid they would be justified.
The natural end of recourse to the Note Press
is inability to obtain the funds for continued

ity and the urgency of the financial and economic crisis in Hungary and also my conviction, based upon what has been done in the
case of Austria, that the Commission desire to

reached, the road is clear for the suspension of
law and order. Then to any charlatan there

whose destinies they control to such important

falls, they will lose even the hope that they

administration. When 'that point is

hear fully and to treat fairly those nations







Mitquess Oarsea to Os** do shat-Aulttlro


eoroipt ()Mu, Jun. 13, 1923.

omr .neollessy.
et ham mesa thilr carefal attoatiou to tee so quo

y sale to no verially oa the lith inotain *a the
for a settlement of time tzuestioa of serarstioa put


:tell loner IxforTed us, tin initial Govonamost weld
Allies only after MOM passive nototooso is tam

Oho fulfills* of lad* It is nosontingly enulostod

*sold Jet* their Allies is dossulleg room the Oman
y vas geed *am* to mos to we at the sum tine a
s ou t.rhicit rrse
acuerment denim* tier
so a dismission of the aims* proposals. /bey ere

aving onamoile the ocou9stIon of the Ithe would

LWOW, dittoroat ooreationo. and with the
o part of her stare at the w and i bonds, but

sp a portion of C Bowls. videlt Walt be employed

he tato:ailed debts.
recof7r co that lemony molls a sorteta time for
; bat, havise lost no part of her daces, (meal*
over to the Allies a eiortala part of such of

1 be tomotiatiag voollatod,

the left bat or t bo ttiao r vhleh twat be
songsa to which drama, *slam% -,r.ot
the thlooloull Trapp hold mores.

l is the -14-)ro p,J1e01.? ;detail by the .aroma

a omeTeer.

: ?tar lattior similar ologlitlt,us

o to be *peel fled.
values sett pima at the disposal of the Allies.

troatoos dullest weigh alskt se ow* be lowlod

',portion at the foreign onobsogo oosaltIng

certain Imports* exports. *dal mould, is

the pilsolpies aoloptai by Gomm herself, bo
4a. 11 as. 11:34 ),I Of the 115 per swot. Wag

pos necasente reculinolorallo

terlos it would be for

Ire alum minwelims

eral isms raised it your Ascool loam's ounisororrooll usterotoalling of the peels. luport sf
s. i an asoordingir ~Pa ip elf tioessmoont
ed with fuller portionless on the telieetng pointer

nt flni thonsolvoo ansfroatell with a mambo, of

hat is the watt rased *Stashed by the Desalt eitisimat to the tamesit

Carr tan oesaanon at passive resletaweit

Is it demist for %ha withers/Pal
et all easetwats or esters elsootly se

WI* their people are eadelael I.

selherities et to *betel* tam nesiorl

Seem* sbelaietratiam, emit as Ds rum

that the ialeash Covelimmat
as latividaal lahabillaate, or wisps a

resenny oenplet amine larks* to v

or easitost ditaappavai W the wspat
twenty lb Vim& authorities to oevs

4. isms the statement ilea roar
sew as it the enstittloa at passive sm
Seveseseat as egsivailaat
&Wive e
Witeler sessistml. Moessive or ethe
Wm or orals* This wall be us wese

it it one aosesami oat /mai asMon
eater the Treaty at Versailles.
5. If, ea SO ether hest. the *m
toe r.voeatie* by the wawa aevemm
passive resistanse, is it to be usionte

I As& by the setae of the *noted mat i

the restoration at twit properties?
6. Ills atjtetes Movenatest farther note tat .:filet eery an awed to
won lamm to walettaise that passill resists*. whatever intoriereuatica b
Ives * that teas *an sat% IMItkire is win all to the istimestests to be
her to yield is tee paint. 41puestly all eta is to aspect as th
mail o
pies £11 bar selmissies Is that tbe weepation will enthuse, her ona people
a/Wrath* tor Sas pwriesse. 4Lti iznag has is the neacpation to ocalivast
Me is Vat twee Is it to reisais a palely atIll tory eseetpatioar gar will I
, air 11at**9 8115. Pea aureate! of polies proteetiesi or. again, I
territory to awtcal expleitatioa ty or ea behalf of
it propose& to sabsit
holglaa. OP male eves I. to levity(' tri tb simpatiou that it wil
be tat the .flies theaselves to oolleet the ammo* to be sate over to toe=
0111 the aactut,s4: writ torten's?

7. 11 tease are palate 4A uitieit 1ls :..9)31r4 Getement tad a to
be perfeetly slew beton ensiderlag *stasis Ow ea* sestaseplale the pawlbill* of apreasitina too :Iertas Iceevessent is sew law ae the ankle.% if
passive rests twee. Sat eleersess as ibis point is sat meek Ike ...mash
Seveivisset toorwilves hoe roi,eatedly trolarat trot Ste weepaticn of the
Matt latish it Is am soutyht to otabilise by ellaiastliss tieWirre passive
reatstenee. is Way a awls to as sot. 'ae ola is Gtaa pirates' or rspaustioneo
It the poaltioa be viewed is taia &Leah a distisitp piss lbw settlise the *to
',paten** (panties is a imateer that eat ease aerepled as riaatisal aid equitab
by ail paroles Lapeer* Itsolt as a first sseessity es sopa as the stage of th
eossatien of all weeletx.)zr: to too imetaPatIoAlk hers boa somillide It wall
eirelowly be of taw ercawei avacituce that the plaa should be racy. the
itheoleSse :Ott it is Wails:bit! odalot *Mr the etteesest latummat to I*


Gomm tcsiiissment to asset vassivo rosietttovits

11,kl431 AU. lie 11/111 itia 'assent of Self:tan Jabinet aria to
ate handed le Lard °Men as aitXf 6, 1923)

Tie Sirsooli 4offorsa

has 01110211Na w tth nook/ iiitervot the letter so k'.

ctrsssM as Awe 13 bef the roreign aeoretary to iho aseaeltador of the riersibllo
in Lesley Moo dollemimont to extrema, masible et the friendly wirit which
sorbs 14,01 Onrseee ossemaloat Jena sal Is itself animated with the desire to
por.-oe iD teal *Iona**. with the "wit iaa tieveransat the oonvertstieas which
hare been Mom. mothin; mut d be tiortroareeoble ti the ash --overawe thee
to are the two Allied asantriee ear at last to a omplete underetaalalle ae

CA* ;rare libation of reparations which is for rrusser toe of vital interest..

.zofore replyiss.:°. so sr to it ie able to relay at present to thi, vArioue
thr wreath Licemrement considers it
esoosser7 in Dolor to weld all poecibility of elgeoticw,:;et bn to mite its p0 sti
.13,:at Ione put bj the Britlah Uoe4rom.44

dean* Oolorpioe the
t!r SOMellet34 alealb tialaration dellsiselea:tub,aafter (*.aerations ofrotes. Art
di4eriegte map kir the
by isniority of throt


ie. thersterea cenriaaimi that in Steve *inmate:wee she st
the rig)* centers** ;pen bar by the treat;' of Versailles,

3is 442.4.1411 uoveriamst itsolf woe :..evelated. on other.*

mkt& um of


jiete of trniter1111 eeeVistier. us for instance igen Aummilderf ant *free*
1.-es the threat -'se addressed to wermany by all
were emapiesia
other to
the ahr hes
the allioe of eseepyine the :iinisr it self. :ha &et that this
tesseemeptee by Belgium Lad :OLMS0 Opus dees *4 in the view of the irench
cieverlimat 4311.4To the eharseter of the maser* witch IA b. On totem is dzeolp
ties of paregreorbe 17 13 of ...moos 11.


The it000llai iievertmiont ;Wes not a* the .zej.ish .;euervsent to all in with

its cm opinions it mane, however. that natter last Ammeter ear last desr

slam, did the ug., -lish oppose my oba* ion on the ground of legality ant it
ashen the teestion dose not need to be II Iseueeed is
;madders tint at
that aapeet The Astir ii easepini. ) fle ins ;,-;,nd .4tatee here pnbliely dealered that they wtLl evacuate the territory only In ; al,ortian t the pa:Mesta
wade by ,Atrasi. it woad seen that Stars is IQ ltaa bra ther. fors, axe reed
to samaine questions et cant i'4.5 hertz. _ions. "."ha versus Government replied

to the irameeselgien eaosatien by order bor ash argaisia a assistance of
sal of the great eoployors of the
its or totals. o f its agents on tho r
13" tr. fa h ant Sekitelt Governmato aro ressind net to swim sew *man

proposal before the oeseation f the reels time). 'rimy axe. 1301101r*r. is
position to ottniel the eeesattou by the sanetlens tillith they hate zlrea6y
tad these wit ds they here tad nadir consideration ter the l'uture ?hey are

tem laced tint if the eritish Jovernsont joined then in eeethes en telesettes
ter i a rugent to this natters the resinteme weld disappear ernek Imre

Julorcly, b. szai r el this Wagtela the Uereast 4110111011111egli Willi It eau reW as the

eentteatlet ion of attitude witch mists hstvets the Allele

ainsir 0110

zszt the :`rush uotarnmat nye no doh% rest the temilt *NM the "ramp.
rielgien efforts mid preinne over if Orr continued to he isaletell efforts,
and oeureleautly if the %Vona Coversatest has .stored into asevereations with
the eriti eh ,cove ratan OW hiring receitted the sea woman papilla, it is not

at all because it le afraid of sot b issx- able to NW the manes inweistrate
seam, but bee tose it &mires alesy3 to remain 1* OM Met with trod end be.ism at all times it acrid be he7qt to mite amen replies to itersoov.
is zaverastlees with the ihrilleit von,
tat just as it is atereeesi to to
orierent on the swot of reparations, ao it desires that the onebanose of vim
IOW csise on between the allies should tut U farther outlier remain Genii anttiel
and should not be tsar as to Gamow. The 3 al not ho which has ode the notreh
OeverinwInt in allote to bee;h11 thee* otrber::ationa at preset* is the fear that
they .4ky not result irttediatPly be a *terse: nt4r/P111110 :tad that a publie dirtatleaseat Warm the .111es Ltay be a fresh eneestugemest for the women Joe
terainut ion to rest at

2be Prozo,b uevern,t,t-it Is, therefor,:

reaey to ocatineie the c cevereat Ions

tar ugh diplomatic oluene ls. ahila ssidsg an appeal to the discretion of the
Fitts/A ireirmanat and prods ht-r diseretion on its own twbklft a nth it nen d4Orn
brinalse together a coneernnos of the
that there emelt net be rap ,:uestion
:gssetive s bofCre the day an Allah the 7rainii beta tiae7iy prentre4
across:eat world smear net en, probable LAtt aorta ie. Li the 11 hi of these
/mph ..avernstut hare pleasure
for prollELleary obserratioav
bola geed oranz,-h t o put
IS review the various heatless contra 14,rd -arson nee

elf haelt of the l'tritisit

ibea the itieeelt deserves* den lesed that the sestet.unoe or,-a-

ised by the Relish met emus hear. It beim the onsainetion st the Women 1,
panels, it aid sat %Wet makkag the hernia welassessat ireepeedble fer individual met 3 or oven sollsetive mots width bad bees elrunitted without itn come
out. but /nun the wrest lemmas* gives orders to its cf7:ioials to morose
to seen the Allier evehorities, than it torsos orders for the pertihnent of
officials min ideobey, of imiustrialists who to* llamas, aid Mem tubs p*
the icoleleastsfissie elm it forbids its railway off she to fulfill theist duty
whoa it A/Orates, sensidereble itues of coney to the warbles to paired than

tree wriedAve atm Qinassellor 01010 encoure.-es sabotage by sentiolf to the it all,'
of a rata 001246111011 is airsten leremothe tan mimeo aeldelseterieds to .we* of apinply the direst ren-ene
probation of coat4lolty. these are positive riots
OeVerilowat, And which tho tieiesturent bee set only the
sib13 1tw of the Gowan
power but the eleneatary Otto' to c11 eentirac ..rhose not.", *Loh we oite, are
way ea.siples, it wadi be eavy to menials turtber examples end to Owe what
are thk: act c of voluntary end p.,tarditated resist*** to Aida Omer. 0100
to pat an end. 4c, repeat, besides, eutt we arto (testate to arrive replay at an
arrstspenont, tho population of the ocswied territories hantsr7 thareeltres eawerul tines de exiled of erlin withdrawal of the orders "bleb vitally affect

ial de have not *44 that the eleination of the roil/mum livlies
ettereles, which the t'arensis autheriti eat find it woes cry to take or to order.
the east ive o eoperat ion of the Germs populat ion it z.0 ewe ea Qt 04. carotin, or


oensider that eoeveratipit le an eel to be att-iniki but It wee without
seitec that it nest be ellitelashOd in oraitable collitions flab will permit

the realisation of the pledges W thou onttobae; irritation emi without violence.
(3) `2130 cessation of the err= rosist,roo .Aonil

kirewal of aerials neriber of 14}8 MI/24 e

"atm the vith..

it Lie inveloadt. 0.4 notably the iv.°

tarn of u groat pert of the sv.illawornAtiail oo4 eqaopeots who hfos bean expel-

lode Alt that tither: ma will in no soy be the ,11:inot of suketintitme with aer
AV.121. tad t ben ea* be no 7 treat ion of on azaesig iior Ulnae Guilty of osakt!sisos

do n on1 sabotage, or of roz;tagrine to their
:orovoited revoIt4 or at Altos.



officials who hew

aoweriessat appears to believe, tr. ior 1,o ta of lord
IJoisoolo letter, gait Aram* smite her to !Attire-ate at Berlin is order that the
&saw 6111 matt to repot th t that to not the oases It etsal
reJetew to be Able to br in sword with k..-Itinti on the met ton of resew° re..
aidttatare, which wa otraider as a pretted.vary, but wc, ehould find it very part lots that -ria.eol ampeosed at herlia either us moiliator o r as a tri MAW ear,
;sorter at the ro,;oeot of trws. kierAktty %ool iimidiateli *male& OOP that
that alas bad had the last rd in the =fir operettas. s eenolosion sibtok is Ilion
ter taly frame alai ire weld tate adventure of it to increase her thwawahis
te bolievo it to be us:leas nd wen flax emus to p *tote b "ladioevents-

to brio.; Jorastp to Ave wv LS sla 4-ivon way to thew eseditiOne la 1041 1!.."10
t u ioa over &gilt in all renthe es wer:thio7 eentineally has boi to be tn,to
ever saga lairia
it is way the strireettion of an
that ohs sake aereawy t,..tee w y if tact viii i 4 the 7111 of all washeitatilc will
nary will Tito eel at onus. It it Is only the will of ear or tie t the
tdarisaay viii give vay all the, *OW bet she will Rive we' less ettottlye tat avy

Osseo ties she tam .weary/ the r lotions hetes** trate* sad wormer see be in
the :4shr shot try Ion oa the loft bark o f the Shine uld (loai:e neatly the nil..
/tory character of the elenpatlea
"boacrte lees sad less ae4estuated and the
randier of troupe will be fro4felpitoely re mood to rise manias= soossoari tor the



(to) it is perteetly true t hat the ooetipatIon or the taw to only
method of arriving, at the roma of reparations. The -4k;1iab ,overafteat de
qzares ost this subjest that the plan presented in Joinery lust by the :retch
4ovessesant ic1 not won to offer :maw of slrttle art whit* iser set lots $17

prseti mile and had asked or aryl ecotatary topl.nationr of the 4141fereat re sow
ass IA& the Jrreneh ehlivelloset Lad onomoroted under a paroly indicatory head..

ire in Its preview essousteatiela

bstare glebe to thee, various i'ieints sera detailed informal** the Osiers.
neat t the 3esteh1 ia vriAtm is It -nits clear that it )112e no pew, obit.
ever tree the Aromas aesetitnelenal psis* at vie* to modify in aset ley the
ryes!, of versatile*. 'Itat
has doteraired the sosatter things% the (Arson
debt ought to be valued. 7111s debt has been valued at 132 milliards ,>t geld
I by she ieparatlen Lo is Alen, ad the Cesselsatos attar.
war-415 mat nee or =ore tm:4otly. oonfirned the 'oboist* of eapsente of Vat Se 1A
Looarding to the '_rooty the debt thus fixtd era mar be its teeed iltb the snani
ewe **met of the ,,-11/es.


o corel4erationo rrslativo to the osiposity to --Ay mai thoseibra invel se a
resnotialt* 1401 acat e0 ham as a swot -arise an jadjourtmad of psymente
the a- pose ity of eststearty ism inproirod In those coiatitions 'Oran* whe boila

last to the ':rostg as otsply wits for its ap lication has strictly spoavting m

Isolloso as data to
pno;Asel to ra.lte It is for thaw at hot. Mies
De nocoosary to than cle-erly %tat to ltdiente a ties moo time haw tr=ey
e to : n,:iio thou lith the v Ace et tom! 1-atlisraala *Itch
ointalidar it vo sa
appeared tho ` 2%,,aty, of VcIrsailles and autho riced tho heads of t'itotes to rmerti7 it.
4* the r000rYatiOas ocntikimul In those eisorvations. vr rapist that thc,re
is :cote seasson wt. the total of the iierridi debt old the ement VP Mob she

d. The first is
Lesion cottertling
s of her rrvaA.nt
wnt milk. it 0,7 0 SO

certain the iitiv0o
the anion* 'vet

al1s lervier.4e setsni the As_te aciews.
Late of all others
oot disc roe -Ith no





:Zile-12 'Mat




13, 1923.

The ielgleit Geverlrut t: las co nizreaes of the totter au :reseed On June 13

last to :pie Free& A..asaseader

the 301,:les Aliverareant re :4 i es as tali est-

41h the rAoints ?awl in it

Lair can se aera ids red as ceasof.icit...a, ins lam. in, the .0.ed 'hen the 4er3ast :over/mut arti all sLi
est..olish the status % sad, :Mind on
eruconts of the jenalli .hater inyolvet.,
:La.. ita4, that is 40 ogy, eats tint y , ith'oath Waft of the ahine bofore
draw all oruinanoos, mac roes emd instructions :ontr.11:-/ to the status quo.
Th 30L71a12 soaves* at foul& not refuse to oiscsuas the '..reiJ ets Of .eparations
1. AmosiVe resists:we

even if soma of the inhaiitente or via Joy of inha LLsulis of tae -A-tfahr an other oo (holed terra toriti is coLtinned to 'ortie0 to -to ork tor the Oeaum. t ion .i.uthogt e.
to ten in
Cr (.4r..tlatted t0 idlost oisa)p -oval Of the or,:!udi.t.lor. alai the ae:44urea direct or
realgt of
that this reci4-4,-ase
'OnewIttalls of it, PrOvIded

indirect Order' frOle the Merlin .;overn :tent

V.* cern esti On of tlaasiv a rani v t ,,o4; "Ant nOt toe oesisidared

as the @Italy .lent of olive sea.-.,eration ay the ;eras ,4auciation in the steseetree
of the oactuyind, author1tt es. a..1. that ;.s c.letaci is that the A) InititiOli should

not infringe the sail -manures.
3. The irjal .lavern lent thing& that as the maul- of the eeeetion of resistance t r, aiak, sty eon *. De :rat.ted to 0, certain maser of persona
1 loll sand Or eatvlied, out eve7 44;.ao 41*.; it.1 Oa the suaJeOt Of Int.ivildlasil
oho T'here ()Quill so no question 9 f an ex, sty in the o. as o f r n =at o
viOier4e or satot-ge treated effikinat the ottauivin,,t. autboritios.

4. he provost to ins Of °salvation is the moat o f the 2.:_rusIlovern -ant tO Qontthus
al of the aothoriti., at fit 1%16, aid *dent:: of the ,.'$e
population -It :oh
to ,zarry out their 0w.1;:ationse roll Of the' attitudc of the th rola*, e arct 1 cited toy the ",:sio




hoellverio 7011Li in the 'WOO of the oessaticet of resist ,'oo be rvOi7 o 0..anino

in u,reeriont

ith the Imola .levettile!:. he odifications nseeesery to /AI,: to

to tit) «
their oe:uAtion I. less atlitary chu,aCt r n1 t;rtiOaaily to to the lermn ..i-osehre nt on J:In.
trAtictaa in the notification









mop% the advioe with regard to otmotion from passive reei
ease Moine t's question,. Should the geom. Quverumeut
it is proposed to tender to them, of the future pettiest i
Majesty's (lowermost believe that the FrosItimod Belgian O
the first tows that the eberester of the osowpatims mish
cometsmoes maw a mitt set material ohmage; that the mem
tary torsos stationed in the ambr eat at other Amos momp

last alsald be reamed as rapidly as possible, umll %hut ess
sad esupiete eweseetlea wits the geareetees have bees pmt l
rettas iriehlt het be atoms] 44 rbeeltemeseeiv. the maser

Met promulgated is Siemer of the atheism& Cesidesims fo
mulatto' and Impetteg the free movement of peewee sea s

be ellibereemeIled or raw Masson as flowerets an emeesty as p

assorted* emu Na mourn of the expelled population mod fmn
facilitated leder suitable guaranleas,

ft has not boom thought either heeessa
heeled* is the draft repU to the Serail asheareee$ the he
vilettafe esetainet he this itispatehr Atte01014, as *kw
two& to the um tateasmae at Allied maltr. modiso"Imed tha
will an early solution of the problem be Ponds His .ajvitt
in teems whisk th
drum tip the draft reply he a spirit
eseeptable to their Allies.

They will, of uouree, be glad to ocaeid
OP emmedutioss "kink say of the latter soy thamk fit to pro
tautly with the maim lines of valley %Alibi it his been the
aufa to defend,


;:hould the sets meet with gestercl Stivo

appear to be manifest advantages la its *art; diapatoh, and
ehrnost hope %hot there r be no deIuy in
nes% oxprosA
OR the subject.

ommumloation, addressed to
bees midst he seder to acquaint thou is greater detail th
gaistSelo tevesseeet hope to be permitted to pursue is eatj

Adak erg be Um



Germs Goiwnment to undertake to abondas the
passive reinstitutes,

steps to be Wawa epee the eesuatise at postage(' re
for the reeemption or Na civil adedidabratice of

sat to provide fo Na peregressiveummeetioa of %L

A bele at legartisl *marts Os be set ego sherapidist of sAyeinieg the Anted Gevesuatate wed the 'No

Commiselea omopootiveip as to Wress" sepaeity t

nod as to the hods of pipeent to be prescribed,
ratios of On emerisma export to be sought, eat ar
to be hate for GO MM Mapert4 to be soasalfleiset

the some heft, or ai* similarly oonstitvaed, to


watt* they balloter* modes to rotor to an ingertiel interni.tioual tribunal
Punish sash a aotheds ofall posoliblo latavatia mat sootaimas
Vith pignent, undertook to
the question Up* sir the sisal end the he
the investigates, sad preedWeei to seespt the dealsisa at Wish
furthi-r, the liermen Oriorionot propane oarlislo guarantees or su
regalar povient of the liabilities thus fined, involving, howeve
of a moratorium of four ;ears from the present date.

Finally, the Germs Uovernaceat sugmated a s
whioh Gisr:;any aigtt be assisted by oral diseueelou In arriving a

L11 these questlon.

the term mote did not, on this (*melon, os
refemnes to the sebiost of paoato resist-tame, mote it is proaa
failure to appresiate its peculiar importzmoo, but hegahhe thut
been mestisneit In all of the Replies of the Allied Governments t
note was Intendel. as an answer,

Allied Government:Is anxious to turainte
squally of putor coLtrovorey nd of international oengliestion, t
their vises igen each of these matters.

AR the treaty of Versailles it It&y recegnisc
teseelated Seweraments that, while aft/rain the fa]. rooPolo
DerMiir ter all, the less and damage whit& they het suffered at b
VAgy souldooto in visa of her 41alatolled moommos, e
reparetioe for all sash less ant
assommiltp mos admitted, even at that into, of oktoottoir the liab
eephollW to POW.



traskor aublipeo


to _cwo 194, the amount of

roprntiao ova M
No poor
tempt with th

Digerati= c, (minimalist at
of gad soolco.
the treaty to easeel wry part of that obligation,

enthori4 of the several Uoverements represented an the oommdsai
fere, the sestsellee Is now put forward that. ming to the ahem
of to. day, the figure of 194 is too MA aid sells for redsetio
be by action eithhe the framework of the treaty that sash radian
Gad it is qtly from this point of vier that the Allied
oenolder the first request of the Gerr:an Government in the mote
sesesly, the requoloR for un examivation by an is

Oemempro present capaoM for gepuint.

2ho allie4 Ooleessesmts, rhilo unable to &se
In the fora he 4iich it was pregeeed, are far fret think lag th
be assisted Sa the task devolved upon them by the trebty by the
impart14,1 experts; und provilhod th &t nothing is done In
is Ineeeslehent with the treaty stipulations, thry MV disposed
positive edvautagoidgit result from soak as fitzsolaatioa.
it wo
dinisialhed capacity to the test of fast; it would
sal tool position at the prescrt moment; and It add remove all ex


onateatioss d

is Alf.ieu

..iovernmento take note of the sta



1. mind 'elegies odah an inquiry, and of their
Gorrom .Avorivout
pledge to abide by the result.

If a binding arrssugeacut wore autos:: Lute, ooneerning
the aisehorge of the ntire liability, as thus detersinest, sod as to the
gvansoteee or stuotles to be team for the reviler sat eammlete mann* of
the total debt, the whale problesi viould s.seras a different napeet.
As to the gluirORSooa or OUVOIlloO thOIMPO/101, the Allket

aesavmemets, while appreciative She effect of the Sem& Iksterreat to Moans*
*gnat the vague Indications of the earlier note of the het nen must guest
themselves team aseepting these sew pespeals as edegeately, er to the beet
'fir emessmie
possible yew, ueetinc thai :Actual requiremests of the nit tics,
value most large/4 depend miles tasters of which se emetics is made to the Germs
mole, sueb as the stabilisation at the earn and the balancing of the Uermma
A sayers' esamisation of these, or other, sepplemeutar, gmerwateee will
be on lasapasabit fe=ature of the Ilya* nliich the Allied Gestrammate are preys..
rod within the limits of the treaty to titillate.
that so guarantees for the ymmetual
It oust be clear, ha. ire
discharge of aseepte4 liabilities rill outlive, ulese provistat is at the same
time reads for ease tors of in ernationol oentrol of Geri n financial ettlinietratiee,

Ihle is cue of the sobjaate to *,10.41 it will be neeerm,.17,1; to invite the serbous
OMNI Govormomatemet Imitheut r, settlers/1A of vhish no final
@ slattern eta be abletsed.

ahlestisa 4 the

Meek the ilesses Goverenuese ask for oral diesasoloa of all
these setters. it Roy be reumbered that. Inter lee treLty the laparution
Otmedestaaloallo ,:titheriseet tram time to thee to esmstler the raaWaaa8O eat
espeelty at GernAmy, is ale-) u der me elellitatien *to ilve to the German Oeveraseat en Opyartuaiq to he hoard''. Ale will fillet for free consultation with
the lettere and, will enable it so mahe a full presentz,Aine of the dorms* ease,

-Junk is the reply of the Allied deverements to the meta
propositions of the dernosnete, Sere remains, herafeere ewe important coast,&wallet which is the aetessdeat sesdition to a ellikegnese en the pbrt of the
he oeempaiism
Allies to reaps the gOestiens to Adak reformat hes beat made.
of the Aar valley kg the aisles tense et serials of the Allies has bees follows&
by measures deliberetsky takma by the Germs livermemet to taped, this pollee meld
to delay the moot of reparations. Ikea, measures may be cured nil ha the
familiar phrase "pole:doss resietamsew. If the Serum dewememest mew desire a
resumption of inquiry, they sill, Is the alpinism,* the Allied Gewerameets, be
eau envtane heleitbdrwo without turd r delay the erdtmeases eat teepees widen
lows einpaleet eat fomented this tom of resistance, &a* Spooky mad ImeouivoSally to disavow the sets of 'Jolene* and sabotage which have in some eases
rise epegted Ito

Were thins ratios to he tukenvithout delay, alt 00, 'Dula it
be regarded as ea coldease of that geed faith Idc1 the Gomm Oevemiseat burs
are agate evened, bat It ;mall Involve a reomeiteretioe iv the ettelorks Posers
e t the seatitioas et their oesegatioe and a, gradual rvtura to the noseal features

Such a xereension omit pewees the adtitlemst
ademe0Mee th6t, by le-setabliehtit the 'retentive activity of alat resit, It
et Aral retrial lilt he the Alders





OW thei. ties.

The 3ritish Aosruatnt *tits for Inter-...11W Cieousaloos ter the la_onitiOn

ANK3X gr

and Indus trl: I I lie o f tits re loll.


,,71. r 4 :!7


Tow Lovechip awe yet ewaqh et the 10)* ill/ laa . to swats*
se vi* the visa of tas *Mak OFINWINSIMIS es Ow dieett MO* reply * be
tile imam este of the 7* Jaw, eat goo emplabee le se the emoehiseemot

etemodease Vigil Mt seat the Mita SiNereleit Se the dm** le et this

npara ommiare W
Walk Amin for is
meamstamther SAO anesetie the WM* hereemsts iteteemea, Ow are this-

atm essifinisi Vat it is massiir assossill. is same


eel eley eseerhy imam is eat Oh* sigulas Is sessouse vim ths 1.1.1111

it to tor thle mew thee VW
it W animeset 41#
ommider 51. eamelemeettema *d hen wham
ssielsislat rat
ea* et at enwhavehes et pat Sustaases Imo ott go lea Jay*
Ils hattialk chweeemest
UM* rewash is asedee tosilst*
thip OM* prosessla of Ow 7th t_ Usk es Mot Govonlist aiataim
Oft Oasis yeepewale ha eot Is ea, sip Is gdos ftwolle et haw" reatise
is So NM
sioaldas of the
Smiessia Us WU Is alma So
sew Ow Mehl Owe Ome de net este% the mateelOONI is gat at eel he the
INA the MO hes for slat waft siesstd tat elloatiaa
ae this sob* Os kith* awessest eseettar
Os seellit
sasugaillis et lie
1Imwee les wale is
easesthre Of yearave issisemse Ws wit
Sao meld lobe atter
Ilttmt Om yeti of savartelehr to Weak the ottaelles is still
S 711m* Oweemeat
Os lost W Wisir
to the vostame *methane AMR bons ins pot to lbws is *is sollys*
MU* iseemmasett it the Math hieneameet tare ether gewettoam to eihmse
ea the% is seeir to seams teeth Nibs, bet Ve
Sammerwelk harm
Is ts areeeil etvekhleeeir *s seletikple of Wok
ben mem twee the heetedlit fkg oz semeallaeo. lip so* OM Mow Sad Melo
eill eat etiensie the Plallt WM. he properties IS empwete mei Vir IS
of velum It emberewe mow Sr& Of
Sowsommt. ether am

** of oanithemoe praperet te the lartileh eap.
dhelnebew set tollemat
et mresollie iesette
eilawbe the easelnetame et Wath here ea hese

tam ipasesit is essamr. Os Moak

Mato a. tan amilms. et Um

oxisliellso *5115 gesseimmo is ailik *mum kW newel, Is Mt Met shaft

Is MOMS howeeletehs we lath aft eheetee the AN. *et au bola isessuradisilp




Ili Itilig! PM


li n if, it. I I virt
itil Ili l 4 4 14; aim ivrei

ill 01 HO Owl 11:141di
in ;Pitill
:air iv 1 et: 41;iii;1.411:115,
halo ipir i

ifir61 id



14.!ii ill





ale 1
ill ill

MI 11/11/1111%it


ralqiilf l
10 011ij 11111 i1)11111
14/ ;"iiii
lal Mai iiittli !ithilillid




OMB ;4' AI01$1

la mow to isms, sots Si
Int Jity. ta *Mak wItla Woodall
of the otos et lb* Sri flovorames$ the tie terstos or ,`,4ar-as ropsasitomp
lea Iwo dal was isawadage wo Oa* Sawolia weir Om this
Ihamomests M Ow onwillialle Nab
ee She V* left lea. 1
toes SW loam Oa Was Ow allerlas
M 747-le 1411.1.0 M ettellettal,
oath the liastraestow I tam *et owastroa ttlrs as Orfoorn lost.

Oho MU** datasmapat
Owsw 1f1Mb aamilaty eg
WNW" Ow oftwomaddias at .031101 raw. the MAIM OPPawsois amok
"Mb 'raft astalisa it Ow watts aisamatlawa set at
Ws shottleet srMflMi
ttootoster Stio OW at
alabiala et lb, tilsliell IMO to Ott itioltalt alMire tip Ow bitioso 4ottee
Marys aaarti arts sa w tee iFamewt Si IWO awampansa thar awe Ows hoe
abysm *51 the orgroalo Maw*
4111111111. W WON lin%

Wit Iv Wok stwodall, asuwarakitt flatitats
asi eaveNes, prow se Ste
mass* rowel to tso tali mat Meek 10 aleowww slat as
Ow roma tioncoattoe.
ers 11112 famoomit awe asitstot
to *5 soot Asiostaitsvp maw loords WOW i fir Ow f$ toose to emitionste
s sallbassi Si
wagon ow* awl aittlattre foraial ualarestwilia. is waythe NOM amellsolle
2aftwaftwlift isr tit sawbai. tN Wiwi ilaissammall tra *sty asiths
Ow in OM

11.=1 tarroms=
isdase Oatr amileassa is or

at es
asse as ea Ike VON*
wawa sell smagaMOsio

wit :saw that or wow satensto

Mallet Oreespeass

is ampattile esaiblimesi
sale la two ismodoei *Ma koweisio$001. yIr jeasias Uwe Oa Sail
Ilawaainao eat Waft tabu. ocyozmik the sttiPtiolteme at tin Of Ow =we
to Oho Mon opoolkst wiswts WI*
tie hilted ensomollie arri *. eophosttle esartistosis wheel at tomer
*OW sisow.bit
Ms amp ot posmost. east
Isstral. Mk

As posimeess sad sonliiis is Is ssit

war assaSsis eslossms* es
egos UM
AO* Sim ami at *5 *MOO, amwan at NM lrrr *5 the MU* psomilltall
aswie a aeiiL tam Illoweemafas
lattlasier et oak a walk, aroarially
patalai elbtatowesswp
11111 ON
AM* *5tallow IMO at errOdleas mown* awe es falisiftwo aq
sat Wake et Ow awneasias w eaweamteaseetworailew Ow
at a
3,211Wir Ind
so ion as
giostathstal ram Ser.teso esiottostsi at
the sew.

a Mat I is
maks Is sots at hilt Metroyour lasitdeo wee if Mr.11611111041 Imam
of Vs Reitteh deforsilliS to Sib shall
Awe et a worwial
Sett 4070 4.


HAWAII .11011Valme







-,.s to tie ?is ;,nriowitellan point el vies.


beivailarip *I halt b00111 seeeLlrdet to ;here prepeir4la 87 t


faint* moo Soligias 34tverameats is their reapestl as motes at the S
July leave
no Majesty's iloverissmat aolmitlieliemliag :km tear t emerteey esploped mass ta

psi real ispressios teat
tiler are their segi,estimee "released by *sir altioes
nor is War offered eseperattea hf.s14 to seri I oessideratlaa exempt es agouti tIO
that ao depastaS0 b.. trite 1* say gas partlosist trim Whatever trona* aid hail
t.elare to be, theft ovorrI4LOK 'JMS a* dos4alvss.

S. It Is tree teat Ste beagles s4rply Appears at UNA% sight is be lose se
slarresisiset tits rac- eyelash Mite.
ea 'laser 0.%ekai0*ilos It is semi that d
atti4sie of the two :,overameata is fir all praitIcal passel** 14k *ilea bad tha
this* the guess ...overawe% smear to be espesiliy *salami for Ohs emetins.set
of firt.easily *was *SLOW it is Oily *pea cavities that tics substoallo al the k

elm olaime is tutees La iminaelte


leave to deal Ash Ow tee eirsaliNi 1a

atm nest past that


ing 14 sits iaLjssies Geminates% ash

siwir Anvers

screen lila '..Lojestise dices es ass is WA is sid

time is there ail allealoa whatsoever ts kis terns at Lev draft reply tie the J
Xmjestes ,OV4titateat bas .prop00.44, Vhe tea slaasm iiesem
as ammariet.ima
Isiaod still rissals is tailor of the prissipie et as joint reply, bat ale Vitoria
Cleveastasst pass aims plOpitOal wets is (MOOS* eile,1111 Aril yet cltis wee the m
ebjee$ is whir* is their desire or fits *optimise nairakiseaso .sit Allist staff &y,

His Iliejestre 4evorteeent
Jvesst their efforts. 'Ae assiostags is hardly ev
piseate by 4s aeries ot ar.,eneAststive passages, trequiriall M plat1111 01 his taxi 1,
offers of neither alimutoilltio 304 osaversatioss, holding teat a prospect of Mt is
spaa-oiet eoetroverep oblbot testetat. retail pstasiples are only arentlearm

in zr ter k a doolar? tiwt they dit sot slat of taltratestint.

14. IS !may peships be sale that the lieleita reply sea Kat Itt*Ast. as **La
gtiriCally a5 does tAir illsiesho the pre of 1 or a fresh investigatlea et ileravis

CU.V.VCI. bar is "re -Ma Zit* 0111.111$ .1 iM ;/./Esiast Airsvoramest 4, sate sa taaagdasy
to smit C ea' *Owl vela ebtabilito for Se1r.leit eat far _ ranee p avairary at.orosta

of a tar.roaeatag kits,-, at the t..soi,,eas it their t flies, out apishly et zrout
as oacestiis aylears se Rio Moose* a wooresseut to reveal a Be
"sale stets = -sra0- ptios 01 the a t. silos.

it will not lets coutastwi that there ear be sae sae is deistattlig free 4

shy noes Qom she criai pay. Oats 1...1 Is the 111114111111 she cset pays Is * lavotioa

of impress laportAtse ce all tier r suitors. It is gasesioe of elli.abilahlag
taste ea the *seer tallmerat of l.h saw pstotpleal arrangese:nte or comilaasialie
elitaials ppereat to the Idlest *stoat pastel, most be balli044 gWit isirrish Ae
optaealt asio. glumly r epeeist to WS steps to 4iaeortalit this *persist Set. b
gt,a replies that she trill sot 0011011t eatoes as earrespiselag riatrastage is obta
ad by herself Una by runes* Ms lialestes Govermamt °sale set .1.11,agiy eat

in;* way *soh raranowsticia.

lit. whiffle the liel.Jan note :loos sot in.,ieate

-premise slats* oftioial

0414 saulapof natal prIlakiiszooaeato by arid es lsektalt of _; rasa eitA


have artile it *leer that ch. itonsik CioVositwaiat au* 1i Iambi sa a IOWANS Pea
to thlis of 46 seillia cola sparks ever As w eve the 111111/11114 sasaiaatileat to met

ditto wing

ibis eseetry aim& to the Jutted 4tates, sin the Selstaa awassema
mi a = 313111e1111 payaeat of rs ailliare 014 *irks for whit* or tare part of 11 Mat th

now ask tor farther prios.lty.





Wiese act raj(


RI* i

for revising

affected by a
:isogamete= *an
free lb. seamy
are nee bivalv
have tom hompel
4aeng the hall
caseating a cap
the pitapat Pa
est of foredo
seald otarwtan




Paris i>safarslos

her elm,* at am
*At* to
to he
hritieh imerwer

Aliles. vo a ks
fit of _ranee :



ti on ty loparti

sack sosaeat o
rind appear to
lead to ea bato
of ass atial lay
avowal potato


Aoparatios Gi
ollltards of

AU estimate, n
6.11 a a

that mad

is midi. aio S

a staple oStbse




to per them.



parrot sin

tut to


rat that bad tie
last parts. is
se, glen la the
ties by r4pkrox

were appraw4 fl
(ooboolsehtly 0

Static* that th


If saitillag that c

to pi".


aie ?m

Jolting tho tchuola of Popomats 40 Ok4tii

of tic treaty 14 athe whisk still rearraus


oapnalty In n040f4MMOO with ,rtisio 2.14
Lip be .i.litetinrststa


agsvosant by whim& the seirepa1 covorameats mold Clad
ly villiag tomato, into
aration commission the saemptaneo of
Wmaelvos in aotasee to rofeenaelei to the
of ovairts* theywoull* it thr ,ronch ;tad tolgisa ,os.
tie, nadirss of tht be
"Mot* ote net Peolorod to 0 Imt taro We cantent that J31 tuastiess of the apart* *holds lat advisory only.

P. Boa the Prsash sad Bolgisai autos ohalUage the Minsk caatftatiem that
it Is is tat boat iatoraat of the Allies that **toyer tif b finally deeldmi
*pen as repras*abiag Gornisayes botal liabilities* it shawl be aese.ptAi by the
Gamma Gavoresstat as Nat aaad 91whoholahe 2O41 Petit II the# tact Utat be Comma
Government have in tit- p,st ropsatadly failed to sot op to their twortahlump.
20. Xis .bijos;yos .;ovierawat remain of dpvinloa tbell ma aniortariag freely
entorsd into Wa wa. a.etnewtedgard to be just an4 roassaatlfo* st;2rmts to praotico

an as afforest footing sad offers bettor prOspeees of faithful emeoutlem Goa im
eni;Agemat subsc:.1b04 44:At: the canialsion at an ultimatum :mst protesteA ag.lust

OA the miry ammeat of signatuas as bound tho sigaateres oapmaiby. to *Lae good.
Tho IleVaratien tAimaieJien Itacilf 28 011 us the principal &Mod Goodortmeats leas
hat as oosaslon to rec-4;aise that the Goanna fi0Yern70enS was not la 6 patios to
tom compelled to underling*.
curry out particular c'tItgatioas whisk it
ik will b. ifoosinered *at the suggest's% of as inquiry by exports of
Wilk the n1141440 origlasted with th Ageriema 34porotary of ;Stag* insluaod a

Irsattataurjr gagarrmat by the Go ma= 4everament
sports might arrive, at.
wow coaclaalass the
e onyluted that tiuch


sari girt 042eot


his liajostes 4overawat moo mot
ogherorat :.buts to 1. toratod

ths subject of the Oeenpatkan of the dobr gives rims to a amber of riloopm.
wattage is the .`untie' note to wh;ck it is lAmoodary to reply. uhilot Sis Usjstea halm indicated their midi:1m to Jain in advising rho German Goo.
ormamot to withdraw Is trout delay that or,n1noss am4 Agorae* -Ai' hove orpaisod
414 promotod poste. rosistaas * they call not subsoribe to the thesis that paw.

sire resistamaa moot memo mason3itiosally banAane it is castmry is *t 2reate
of Varealliole.

;:=10t4a0a And 941gisa hold that the oseopstion
of the & thority comforrea by pat* 14 of Anne.i.
Tho Gorman Coveramrst have oeusisteetkr ostoadht litat
to a prow intsroretation of that paragraph fall within
ale unit flaamatal '':-Ihititiost mad reapria,kla lad i5

LaS boon offeetva la virtue

part VW of tito Tosety.
rook eta esorstioo woos net
the osittg4r0 Of 4spooreogratr-1 sack *thee meAstres as

the respective Jovermosats toy dot:wadi* VA be asnoWary in Ike oirumstaassa.4
2a0 hiehest legal aathoritios la re31 arlitaim have adviso4
;:ovor twat that the ntentlam of the 40iaa ,Jovosamont is 4011 tommic and Sis

Yijeotea It+volmosat hey- novas toacoalod their via, that the Fraasimbeless mob
tion in ocon141Mg iks 'Mar guile apart from Oa oration of,Iousy vas sot a
sinotlaa .cent *rimed by the ItrAtiy Itself.

Lail vloy, woad be gnat .e milli 's that

this or say other diffotwoo rfOrosting the legal iatarprotatisa of vital provisions el liar VanArrimikbe sofas as they amino' be rc-solvied hy ausaimous dosislos
at the Reparation CdosisaiitO MAW par. 12 A' AU/NkA 11.0mAsarthar analog ir-tmoom
he Allis. _ovoriama$4 as* the Gamma Govoramont* or bobisrma sifforent Allied
Coovstussents, sh,Jaid autoottaaliy to rofrred to the Matsraational ourt of Jigs.
tie* at be hm.:a or other dositatle arbitration.


lho rfooset degoOmemat have ONAOsiforoc is eonTiot his Ualfoitee Govern,
moat et inesaststessy ta nor refusing to ac.:sogiedge the legality of eaters oecupa.
0 ties of the Atest soder par, 141 of Aspen ii, Adoa e 11-Al termer ooctoloon MOW
joined Is the preds-statloa of ultLeta threteniag molt osetwatloas and whoa la
1,20 t dy aetually partielvAPC is toes coorgatlas of Aisseldert, rmisiburg mud

!ors Is as lactom1A-oey

lbw *Attlee Java V4.kost Jr tartrate*** was

mover olaimed to be is vtremee If the tOperaSioa Clauses of the heat,. "to
Aliso joint', 44stded is thesetem defter, itl the soospat ma of farther terrl.
tor, .!mot kto thilltlitsht Ammo

throatoced liar with a reatenal of

*41,41 tort hoe fail-

u re to retie:shop Treat, obligations. ewe at Thlob bed no eanateltAs whatever
-?Lth ...garottes*.

Sts la the vlow "4 His kolostea Government it cannot leditinatel7
et that the rowatrea -took the killetta's UD4Or pars 1 of Asses II auteerised to
lads& tile selitarf 0400 ratios of **setoff. gaol&
tube is **Aida
altelpottOst fortis the oubJ-ot of the special p.ovisions of :;ort 1.1Y. of the ?peaty,
Awayair vitt mkArlAteea, It is the right to Navy he left Via* of the Ihime
ami tare brIdae.pheado Adak has been glove t.; sb,! Ono* "ItS a noura***e ter the
mossullien of the 2reatym* noreaver, artlele 460 particularly supalatoe tkoll It
tho ftspasst tsar daislosioa Made

twat Gomm/ rIf uses to observe ti. *elm or part

*f ha, obligations voider the Stoat, 'ilk r Gard Of reparAisOO. tie ,del far Pas*
of the oet,spiee teeritories 4hisitsay alreOAr hail bow* amaesatod, *will be haw,
alatoly reesespled*. 'tread hose bean idle to ettpulatv osciresel/ 'zeir awls re
Illee hoe already.* eiltmit
OficipotiOft fa ease Of default ea repteatioas if the
od right to swoop, soy Serum torriSorr manor another obtuse of the Treaty.
$b. It his Majesty's Comesaseas hoe hilliest* abstalaod tram formally seam
sestina the legality of tie rxmaeoMollgias essapaties es um ass aatkoriss 1y SW
:sooty, they have Ame so solely is todateraily with Shm spirit of she deolaratiss
w ade by L2re beau Lev at tlas Paris Conforeaso Is Jo usury last, that MU Usiestee
tioveratalit desiwed to smelt; satiates' amy ;Aetna,* catbspraswomat to 16.1r Allis*.
Sts kalestwie 5 euerseeat Weald sot
Thin :=Iteald net be wide a repramdh is theft
even see have labels op ibis smestism ar legalituhad Cloy *et lie-sehallf,aged tie

do so.

Tbo Masa smd **Ws Govortemals argue that if only ,riot trilain had
pqmpli is the wigs ties fterestaold hem bees no paselvf, rorilS000* osi ea atRUZWIL flOR of reparatism papeeste weld hove Iowa aseurede II*1411e: toe 'WM
liklah they did both as to she legality mad tip youstioal value of the speratiest,
it was set pistols foe his lejostes Otratomarots to tam part is it. Bat ~tie
tn., alatsbeaaaaabersassbegsklagi had ems slt and ofta if passive sestatAsoe ham
sever bees started arum Solvemibmg ze an emd it is net elan, how tais vomld
bring the problems of roporatiOlor appreciably nearer tea solution*
is rim& iloverameat have now doolaree that the objeot ii ti whisk they
eaterei the hair was mot the prompt or Oftiplot- papomet of ropasationse tout the
Wreaking of Gersenes 'es/stases sad the aratios of the will enter part to per.
Bus the will to rmr is useless without rho poser, otel Gerasaysa lover to re, Is
in the opiates of Als *Jemmy' s Gevermarat Uks xtr Lobe maps sly ulsiniebe4. and
In the era 41.AI:toddled altivethere by s mot; Inaction of the emtvga-ti oa with its
atraglOmtld On 16,41000% lapertertt desire Of the meet proilootloo or& the meet
bt00.7 taa Jeltestoly Orgualsed of dermas teftotrlos.


a paralle1 aback Who iressidouorliseat wit to draw

alt).. tier aes &sties


ASIA- "1°



it It true that Garmagy refuse to quit the rveasi-4
bit suataised.
in 1411 sist has
impartnnats sirislm ohs memetiot with her reroes until the tote
icy of tl milliards
hat boos paid.
Act this osoopation was expressly provide& far by the
at poses at 1171. La oliallar aaisority tan b cited in the ease of the abro aal

the real a* lest' is the primula ease is the ommaties at the lett bask of the
;Una as providod for by the treaty, ant from this as ems h,411 JaVOOdott to aorarto
Further, Italy be polutat oat that the avower, attar the abort *NOT:1:M
Of 18/0441 of maindamniqr equivaleat t* 4 malliasts of Iola marktasis rtmeidor_Als
personalise it *Leh stttic= lo imsetiatitly *memo in gold sat a:ninon -AMA erwLit
sus 41OA far the ague of proportt la sate* torrliarieso lawslwihR as venal Ox

pewlture by r; tweed iatonnal popeete is oomponaation for the Intersots of
ram& aationabi distessommOis net roall, eimparoble to the oa.s-ellsomoat Of a
thirtyathierfold *left against a sonata fiimnoially eAltiastied by few oars of
l',0***** ttrir**0 m Modal%
he ease wit altiob the indemnity imposed is lafl
mAs Paid wAl lark,Mal the rilsult at the avail% tasilities *Mott amain was able to
(*tale. Gamow has as the -Aber has& suffered from mn oompIet
asbility to obtain
feral& lotus arisist tit a largo *utast from the long period which olapart bolero
her reparation' llabliities woos 4oftsoo4 sad the world aids vamertalaty as to her
ability t41 disolt,.rio then.
tel in spite at this it is tskr to state thew* kis

2-1Jost7os 5overnment we by mammas satisfied with
yerfornmase that Sorrow
has is tact paid ta respest of reparation Sad the soot it the armies of 0001pow
him mars thAs tidos the maivat eximiced from VMS** in lei, as oar %, arm' imam
abli. sums is ram:mottos mite th. ,leariag artless sad mimpellsommat sweaty obli.
44. ite Mash 4utemaacat axe is 4wor is ahtrisatisi is it 4este
arnsmat Who sv.testios that simultaneously Alit tho advice :a bq wins te tiore,ny
to absiAint passivir reeiataimos the tenor mast boasts to rotors to boreal e404.0
tisna se produstioas The mutilation mai* ta Who BMW' not. at the it nth July was
that prop0Swis *sold 11- owdo for the liftetOtatida of the ttahr OD tart ematiee
*high will *Kohl, it is b,-oomo AB 42*o of fmtittul prOattOtiOR rOtOO, 0111 one of
iaternatiou,4 strife. his Najostes 4OOOMMOwitt *Wass 'io a *rasa of sarrise mai
stssipoistapaus at .,h;.
ti1otslties 4ppareatly felt by the kreaoh and liultian Gat.
or waste to a, peeing to so reaessmblo as,1 so immulateella a paws*, tataise


Although is wards of some va4oeimas it is latimatot that Oer4stt tM Ma

pirim may ahem eatieffot that passive resiataate has sease4 oeusalt tookter as is

hoe far they my tied at paathif, to lightest the bait a -.-thich .he military osewpa
tie* of the gobs lays an Om yogis*. mot ins t:
ibis i s 1444eStudi whichodnad hat
out may hope of the osoaratiom
twit h:. to mama* irea'ramme the avowed obiost
of brealduk,-aimmsaaes will to resist hms beset attained.


_Jes; J ,::ioviernailatbellatiod Shot 4o-r some Whwelag the tallest sam

sidoratioa tor 4a position at nano) and lelowis as w01

nearing the Mae fa.

teeny(' ,-m,rantse of continued aim steady ommieuts whoa they stegasted that tie era o


aald ntara14 Wombats from the amtwat that doarsatimis or pledges its*

osoatimisallylianaul mod mar* off etively procreative than the sesupatioa of the
Ruhr shank him been sot seemly =ouriamoi earn elktsibiet iat arena SO to marital senor-


43. ma this okswitiOn Le met by 4. *Matta say iiiisla Seth the

el*MOO and the

11,151aa .;aversat,als aailtatioals dasissie IWO here eel be as
din isampt ta rrapartiaa as paraaalle awe sada by the Samos 4weasorsiasf,




Mina fisim

reparatiaa lla..
esaessatioa is ipparoatly not eenteapiated anti& ins total
as reiterated anneasseseseats to tais effeste
billty is iti',13.7 diathatoesta

ar lisaistag andlisialehed the tot 31
coapled +vita that Lasieteneethe heal W estparaShIMIN eta Only beee !Mt allillards of
illorasus iswebtednees *haler
interpreted las as Lib

tentless to renal* La osoupetith of lb Ram is! a Meer of ywkre wh,dh at


eonast be lees the* 811 (this 11,bag the Mainles pegged ever 'ALA the disallow, Of
the debt is spread lacier the achsituite of Wijara;s) saapt Alai. la -view of $ goner.

ally a4nitted Lelretasbilihy if the semis* mossulllatolf




lostellatttly, if set la per.

praotioallle =Jar tuay eireasestannee, nay be

',lush a altuatiost of witieb the jr4itittat 1 quite apart Even SR 08411411114


ty Put
sseterates dead only be dart's.* as ditrostroses cannot but ho
jested adweresrat Toth WI &relates; aoataerst it. scald vividly osmium ay tiers
eer of lateraatten=1 'fatties!. being Affected is a stonner ihreateniskwato use Um
swat Of tit 111k artiolo, of tat t-ortnadit el tat lima* at
thqs tmea motratantlatt betels* Sadism apes sktelt pease di.
**reactant pee
pea: s. iii Y...24Estyws Carteaseeht C4Aftet believe that the fillNids sad 11-.141/aa G.

oratseate vill 'bo able is reeesells the o-,:inies of the werld to the faiiefinite Mania
t zt :13(la of so per] loci t.. eitvostleas
dio. Ave it lob the t -option of the haltr is oilseed: haring direetly and is.
.sit oily a &rive effect *a int ,rinse ie aad issauetrial 0as:tom>, act oily la aeri-

al/gay, ,douse earaility 40 psi, 'op.:140A ins is rematere4 store sand wore presarleast bob

tivi *est of Luray., if nett site world* and net least to this- country.

.4. La ;4. it sate of the 110th July his liajestygs iioverealut feather popeyed
art rise at a ems,4.0teualre piss L,er general :.asse 7:iwal Clausal/4
that in ar4er
eettionent, tatorwallidel dioeuesioas *koala be epuned d15 at little twisty as pee.
title* Ma aolers_itereamarat reply that slaty -ill be glee is eiecues Mita a plea
if It be of the 'hamster that they kayo tire) leased is their note.

Gereoineatt v hiss amestionisid the piepriety sae appartably slue leipailty of she saw.
cvstiess, asks What fatato t17 it somas nit whether it till tailladp the question of la.
plat XAjostrod .aaly Cued timmeolles Of 1140 sayer
tats'; Sy to gaga** their 4%11 telt OS tbls whitey,. 1 kt-lre gire ors: Lug Ig :113 boner to
*molest! a separate mossorajele IWO it. 'else nails prineiple of taw Lrt-iiish whim

tog...41110d doh**.

is that Groat tri Val* to may. ashjoot to the Jut alai= of other ate of the

for means by the allies *soh ty ..nsway tadstaar to
tsar i sow so lists her den
a set atm approzlowilia; 11.3 sillIarite of 0:01,.1 %mirky. this sus rivremoattasp tat
yomscott value Of 'ihA, r,i4vittly fusaset Drifts& debt so the gaited states estartnaket.
eaesesalese slush 11is ,tlejeeies 3marroment soy to able to oft*: is rowel. at
attordlatply Mistral largely la the porsoutego of this eta
sees *sly be ffsshIsli
et lob a/ Wards vatoh they aim sleoover teat ilerliesigo
Is a ruts tzart! 74, ftira %Los the atueral reyeratint Mottle*, at ter salsa lust italea.
tyis Joverank,nt aro prearin; h.41 bee* agree° ayes. end it oath that RIO Obijoetes

intortiliott assets

Jew isewat ona ro&41,-,: their share of the
a h ac al aelso.


oats as *ti asset to real

4% To We sw the first stop met be is S iz the ate issues ins which the Stalls* eta resethably hope se resew*" tram Jecomay to be filleted or accompanist by
aropmgemeats valsbielll mare She oft stile vo.establlebleegb Of depsemee fl** sea


MIMI basis, aced trill ;filaments, Ma pate tusk% 1111,111001 ilte the aone2a

debt by 0 of seatifth 000 Om the faeonsnieally *400

Voupottlea of the ;iet;r
in the Ittlit
la the last paragraph of ;ear letter, ails

UMpedtmosie ink:trent

a a ty itooraatat offered


_imams eyaspathetisally the vanities at fates* stant.ity with their Allies.
loom was intim they will stas however s bait
bee WO** -;oversteat warmly
tailed to seams the Pilesimit of the YrosehOovereaseali that the 410Jost 71ee withist
postysmassat of the dittossalea

will reeelleot from the
A te As cith theMato is oat the twase4mtat fa-ther Gemarammat prepased teenier Late
to at Imams*
tho *Stars. 'art Belgium

dissatOlOtes of 1912 that MiaUujestyse Goitecimeat are
say ashasssarnt respecting the territorial soavrity of Solgimm aport trees a elailar
aossegsmat is x.gurd to items*. Lavias regard to rho /Om deola-ree indiffareaft
of the ?Venal 4Jvottameat oe ;asetul purpose GAS bc served by persaiae lho salter.


Are usommat Ihish has beau pat forward La this as may be matmarised

as follows: *.

bOe xi! istiestes GOwesemsat brave at ma time ollialrlated sad o sob saw emir
template that tA.Ausay 'ball be se /lewd from all impale" acct payments. ;key awe

ietermisted that germs*, ehAll pays mp to the maims of her eapaeity. awe Vows..
Lisa to whisk lavas& tribe1.y aqualiy with Whft, ethes Allied icwors. is oattlAnt.
wad lhisth is seeded tomato sew the losses sastaineo by tale 'water in sem*
with her

ala &kat OtirtaaS"aeapaetty kar paysmat hey be is a ratter wh_eh shield be
4eteasised by impartial Inquiry lace the fasts. it eammet be escIrtalaed %y east..
Lap se the sommots shish Gemmaay's areditore weld like to regoivoe 'at ask for
wore Matt Sormases mast's,' capacity canon assist is the neural reaseery eel rrip.tsttosee Lt oaa amly oestroy the assets z,biehl Gainsay cAlik otter a uhf, Aiitea.
to force 111aidatita is set As mos ksorttaale way ti.t saki* 4ecotea, ftsa * itebte

Sr Atm resoorooe.
It is simittea that Seesaw eau only ALAI* sallstaatial p_swests if %, the
reoltoratisa of or publie ammo Kau a stabilisation *1 Per etcetera'', ^ /ionise
is smoke available for reparatios and hot swage t. Jaws's?, this 4.arplas *test bs Ls
fats la **lea it OA* be mods available tor eat: rnal paywmats ever the foreiga
or the eelleetlts st depreeiatlhe riper
exchaages. I_Aaraal aellts 112111114 be laid
marks. la the Woo 4 its aaJ.esy's Ormateasat forcible lateeferenos vith the
troaf-mmic life of desmsay await it be eameistes$ with the:- teems at the Treaty of
aereAllos commas assist is the &seesaw peoteratits. Net eel, will be Isom rat
the roatisatles of say surplus for repasatioi. lost by latessiallas the .isordor
at acres* fiavaeo mad ouvrattays it will home the gravest mistier et timbal,'

Uis Majoates Ariresserst, therafaros poloist r.s avow,* te /allure the netved pare nad by the Ararat oat alisiaatOolerseents to ~are separations. La spite
or Wheleeele oeiseree the seempatica at the Ac hr by PAPAW* AlLi 2/1gIMM lime ire eta.
414 at great *set lees scoelyee ter the allies. notably of coal wad mitre trees tares

fortheemiag La the proirios soar. Uoreaver. his lojestes Goversomat Seel that the
resultlig ottontioa lavallse great tt.i ur4witt C.scpes to the plassesl trees et the
N400,10$ a0v0VMMOItt filipad £ 0111044M1209
xhli cosec.
world set set lees -at
sad paliof the pelt lea position 7 4 treadht with the oravost eiske both allseosla
liabilitj at a Ii ;'sae
tleul 2k.; otositor the impartial fixation of aseamay's
at incemolstoat with her praatisal ;sear Of aahlas, IVilempt salastes st Vout tar goaeelrt aid VOss Muse sasostodadmat levers mit them to be on eppropriste woes

this *W.
hes steps have this bees Sakes t4 ,,scert-ist the real 'else at the smelt
represimited by ,Avlesti reparatiosa. sea to swears it* roans/AA!** with** farther
Aspreei4.tioso xis .thiajesty's acworest will be reo.w is tarsi .s gelastooSly sea wir


41,4staim U0 me sit the
stemattaites permit. Awl is the It t of their ryspeotIve/Lad*/ Poet::. to UM 'Weir
4rtot gorillas tqf her Altos. Jug amain
*this .tAtte
Id IA lam fetare

Skate:Ma loose* of this meta* hotkl dwisti est Siacc .the var. MI is Claiming that
tax tardtas as Ito tSivie. ailait that other iteattries are .;te.,,t We no,:ixled or
lot farteor
tits e.,reed pereeatages of reperatitila peolevata ahould sew to tam IQ, at sew la roe
Ott they main vireprered
ehear,ett is order
rase dal q their i hies lama will* together eith rePare*
wet A' Ur,. eery
kw ,.;Irsettatteale
tie* payments by iithisespip ate i tire .WrWai was *At to the eissumi
irepos4 114.E 07 are Later
atotir palter Uhl Is tide leattite is elated to the Itri &tett
1% MOW
etegOote We**
c0 maw' LA OA La4araillt et s

litlfaite the its 00MblOPOO4 in Joarialry last. 010




to et Agili:16*

Us prepas+o

has mut A1 ,4404.

*tad settitietct. s wiry 1;.,rge part of the eatraast ter tr.13,At tale


NlitiK: ACirtrra-siouts.


Altra matL that the 0 Or* ei.j4,aadiatiiiMi
a the irav 4.t Ala .jes
the relteeeltialtarea
hem* is hs1gibat .ieveratteats etaeesptaikaa. They Jaw et the
wilt otertate
eds th-is icaSAftt t,r It.
stiiflkir pctlei tip eat Stu
Stetalrett la eras.: te
psesibiUti Wit stparatie tett.* sew

to ceatemp3,att
agouti, sk grAv at 4011
helium a ett,tlea, at whtalt teatet be awash Uiliger taloa/0i irarlis.
84,41111111111911 to the reetttry et treat end the pima. Of

ICtiol.lana *AMMO 13 LI AMA


ILI A3 iiv0-404t


Theo liesarawhas as latoleAL1141 Dobto afilmrrot to in the shore mr,t is

as followslo

It is La tic ninlos of _Lin Imajmetgeo 30111071/1022t


to Soal

atiefaitriky .olth the -motion of intor.allisi debts until a better mittmate is reds of t41 it' ot44%,4 shish Iron% gyissie, On tne G* msg. am her

Mlles, as Us siker, tea's 2itaa ly is fast So be obis to reoover fret clonally
r to. Aransas.

its AOSs1008 34WOMMItt Mss r, to Cm pansy, width Voir Toredoo,i...
irs kiwi tageglaAV Stubasmeed, of Uniting 4reat Britain's total claim acainst
630411101 &Motors ad, aosmake tejother to iris saint nbseseery to eons too
3iitleh *At to the Oltifti hates Owstrament, whisk, as absently float*,
op be tab's to be praresates4, on e 0 per goat, basis, by a sun of 141.2

illiarte of geld mots, plume rail,. %is basis is alrosty Inmooddiugli

fiwomplide to Ito James as oho goitiab, debt to tie Attila Mato. Gollsiorest
sage* be sideotiod on soft faMSIPSW 10111114

1. Oita offer, is *frost, mats that Gloat !Vitals (Moos material uvar
hattgrit warts a3t less the* otamthlisi at thus astforoll
Planse) is sealant
o Mils hot right* to reparatioa tuelot all heals, sa to limas toms ass shale

f t h e ''411111W1 Ptillsoalvi as if it wars seininwearest by how

Uobts to Ikea


of Voir

too total as sama for vials& oho MS* Igo tier Anion s 2aransw
is, lafaot, leas titan the marreat of the ;111ed do>t
Iseiag list tea
o tha total f tee aritialh debt to the ;Miami .3tatos aovertaast, without
ocs** oithiter to lows raise& by Groat 3ritain in toe ren Allesisaa gasket
r to to. value of the osetteela alieuritios Cestlasts4 at 4000,004003 to
Ot0i3,000,0001 used to Mame BAs Allied same is ,inovitea bete* the wary
of tie Jolted States late the ware too loos of 11%1449 from tfo *amnesia
pellet of view, is Oa kiivelent of the oeutrastinr, of fat *qua/ insist at
o alga told,



tit tii sun of Loa silliarit gold masks, Griot .ira trLia i t analatto to

ormer es largo 4% r-4.04:41,41e as pessiblo five Gomm, is patios to be


o offer tae
remit& is moon to LatePallta:i labts.
3ut it is amt pooffibio for for to great sack sonseseilas is a substantive
oot unless at
sash a sopa:lotion fiettlessaat Dkrif WPM arrival at as
will viable at to vowed her share of the Goalan Taranto as as moot of
eal fiaateiaL vat". xis .:4,fajAstty to Goreroast peatly fear that a ',minis111174111i5t

% IR1011 iS Oa volley ledisatod in the Pleas* who will nano tie prospeots

f sash a oittlenont 'sae to.
4. 7111I slaty praetiosi wow in whioa, in is viMIOU of Dia .5atiosty's

owermost, Ike imostion of latesieAllist Wats ass sow be

arras rod, is

or to AlliiNs to ago* in tfo first lattaneis atom tits sasimase 01a *la tiff
n Ireassailay hop to ateover trot airway. .sea meek as egroarsot bps

oot artiehi at, tis ilajosty's nomemseat 4 i1 1N lowymat (pmeowidiadt that

the lialtiowoot to mush as to sane the ammaa oblication * r0000loghlr good

meet) to write dem. with disc mewl to tin different oirienstaaies of tee

vesseativo debtors. the Wiled debts IlitlaS to the, to ea alinat INVISSOMITe3
CND different* betimes* tie Se Mak IOW, 0f the rewisoi

end Cio

,ritish debt of 144 isillierie to tie Ailed Amite. illowermisat. sat

von to acialliagir ampoptiratpatmeat et the rallied debt. so rotoomil to tie fora
of tae mow aermea tolisatious is Sim
deka ia %WWI presented
by Min EMS! &or at the Paris Cooleasets tie itimeorr b et.
To limy la:not, howeiors, entamil frogs the reinek 4oromasett the fast rased:
at. later 11114;Cftletion is loom attrraotivo to then thin it wits thou, shwa the
deterioroties tat
prey -4eta of Oesmeay. arassaltinit, as tb*,
fan tan remise pains pageant tir tin ma* Sail Se ta
Oolsintents, bar
as SW Wand, 10p100104414 tv Gerson royaratios beads nosh nose psisarlems
fovea it Vs total 011941one should be radioed bolas the fiesta eesteeplated

by Nis MOB eV to Gewormseat SS

menthol ego).

a. nim sits jostles aoie sermali fool bem/ to obeervo is this some -ton that
%As trillihrh000 wkisk they est t2Air prideseseoro have swim to diermso with
the ism* 40111111INIMit arrnagemoute are lor whisk t

trartaa of tie mak um

be Great 'Artists might be mitigated mot mat be ieternmetet as a mires oa
ihoir pleat of their tickle at *seal tom, whist are rreasast dole)" hot Vie

OiMetreete ander whisk tie amp' was edverared eat the somaritiee whisk tiny


That a Omuta levelly:moat Tristan', bill elven tl the arltIsk
moat fir value preetved La a lose Windbag all ati Ai than * si dl r bill
civan to a privet,. I/rotator suit doetrine isathelosiblo both to itself ma
1p, espeniseAf in rare of the eirONWOMMOOO is Wail Ittuilso pi/Atolls, looms

`:ix se haat roe ted


reho aerial *mans would bora bee* for the Aintolik aeventiosit is

appal itirilatkv to *a, ..rItish to wt,tor for 41, ormsooKetatioo it roquIrete
ad that pr000toolo was to feet clepled or a abort perked at Um seameatieranat

of Ur we" it soon bosom apparent. hemmer. VW. Ike From:0z ioverament
Haiti be unable to role* es its ova ss.*it mmotutto eatiloiont to sot its
sterlinT veyInt moieties ad the a ti ask esiontommt oterivd in sad gotro Its
ova soeuriulara to tee /enter ter the anernte raised to *en, irons* reletetmat as well Ao .eltisok. sr this nem the immesh eolorcrona wort able to
torrar irwltrootir feta ;:rttleil 111141,10 both as loos memo tome eat to

1-oresr soma tiles veal. hgal been T:qvietlia if Us anneal prosedium had bees
followed. Se popeouto des on the rasnek nreasary bilis Slim as soarer
oftlauto wbieh Hasa Arltioh Tioamuy is In fast pipinE tb tko Woken of vie;-it ies Ursa on behalf of Is Ifsotaok Tvoimantr of which Um Mu* frosavey
Aviosivod. too

06 if


leers won ads that the mapaumat
ekeele be eeleeeellt am leseveries tree *maw. Weed. darimg Us greater
part of tie period *geoid tip to advances. tee proopeste et air auk
seeeverlos wen kighly problematical. be bills wore nate otbjeot to Naomi
for a limited peiriod outy snow the ors: of tv user, With the aiear intent:10a
that he soon as Saw* mouth ors ouffletantly re-oetibliahed. Edam should be
110 Mon taw a6 oscogootiari weirs


asst of irg011411 -.,-ovovamomt loam to be slash oa the :.fin sante%

the sudeoptloa mom beim milled to ti* ea:sonatina of tie t4,,,itisit

oeourttlen lama 0* Jhreeoto asoomets

aostiodar to 2010111 SAO
mommined th4t t
lag street to this iatentioa. it ?mist be slowly

While fibs najostr es Severson* beset
tie* period a too ostrate

bills trgarA

t yet arrtred f r

usierstood the,. la Me obooaeo of a nee ogroorkeroto the carrying out of it
remiss iota Glyitt,Ati :Te of to /mot loverment va04 eitui,4A besouran7 bs
lAmilia40 of add1a4
repudiated, 41 that, is tAD saaatioo, tam

interest to shpital. Mast b indefinite* osacisavo,:y zA*I that a ooasonow.

Neat of persona of at orif rats a pert of the interest should be aids as

moon sa tie starilny.rocaso oxesanre looenoe riastombir stable,


Die a sr. n:tvront of oat I >ns is fre. ently retprded tus the

itavAliate am) fusential oortiittrt of rior1,-wide ones.

This is an errors

inlivtiunl safety is znt assured b;

.:..misibiting tie Ttex-rafNItulk) or solo of revolvf.Irs, end neither

will mai peace bo ostrIslished arlong nations by ro,Osoing the

mans of rutual destruction, on!enially in

snail reduotion Is

tnooretioal rather than prac Lima. :.isartsestrelst must be tiro

resultant of various braes, sag not an abject to be 4..e ctly
In .temoar!:tia states $:OreslIed by the will of tin majority,
tba fear' of e::o1109110 taratilin

siss szp.orn lovuntl.cs have

rondorsd ruunitione Ismsasursbly Mom airipsurivo - au' tie rol.sotornS of the yoasents, tiro Isusicraart, and von the middle-

oirt000e to perform military service,

raise oveluitio noising

obit :ales to arrv.ront
iss zioition to tho horror inspired by the craoloaale

slaughter, tin .orld .ar hail e further important roisuit in that
it roved twat ruin Is inevitable (:von for tn: v,otor eel that
the Wit prefolre6 azii. bast equipred arry is novor asatirud of

ultimate ocoe

7nese are valuable lar.ons onlculated to 000l

the coral of nritions for future wars.

oo nt upheaval In .123,one has fro) rouver 4(,)ittmyed flu

absolute autooracy of t

;5 art find WV ',Jar autocracy of um)

ani .4.ustrian oltherors nal of th.) rulers or aortain etatne
Of Woolens


"oese ar3 Invortant : :actors in estimating the

darter of future rare It is trIP tuat the doscerato hotrods lot

loses in tat last wr hrivo 111t;'OrOhiee Vti

r,it it C /Istituto dasisrous hotbeds, wow it nit text their
Inflow:los is domod to dissi=!ear before ti"r Tina of tots ,,;asses
'A* n) :1St

rfal mans of 1* q, 39 .4112141 tie txiptilfee ard of

giving the doattsmbler to nilitaristic tonleoelos would be an eac..
suat assumed by tie (lovers cal, to aid ().-Aut other in case of







reality be worth lee, cut he matee0 haste to portholes gold
iGe roal 1JrciorV" or irviustrial uniertaisinas, at

Vallr 69 taint

:rioota that hove u rslation to the nAreal return, or also he

solkis his o:ipital abroad to 1:tarchase foreign ourrenoy or
300141'1 tins.

hca depreciation of the o:,:chainee, and espeoiall,y ite

fluctuation, many livim moss exnene Ivey because produsors.

and room 7'srtioularly mrohante, nnturalky try to mico tha

ooneumor bear the risk of the fluctuation, :Mile


biow;ht to oolloct all the pro?its.
rottuoo re irx iv idually oan adjust t(oir affaire to a
rise in the exchange, einoe U

offoot on :fate Rai fire

unti.yual ammo, is not in ed into; their cost price IS IMO kept
down, and they sae emosenfuliy cos.sete in the world masto


whose sotabsso3

Is normal.

Svevons IMMO t frat tin ir7Adiatte vio tiro of the oriel°
of tie exohtiMo are not the oroporty-omore nor the nro,:ioissre
nor toe ooraoonts, nor oven the worm), n anci tenants, who have

,o en able to take aollootive measlaros to (lefonti ttensetree.

but reopla of inioiont:ont no ale and ozvaitors in or hoklers
of Vs nett:Val our- mows

Asus the pd. :Yip's of motel soli -

ion be. -,ses on ti community t:so duty of 11001ixinaating

Ikillykball0 for danafse inourrod until tte oonquered nati
hove wad* thoir mieration pvnionts, throws; tie bury on not (is toe
pros>orti-ortlere sal the atinufaotuters, vaho ril0 the is zl.rinival

parties eoncerned, but on the poop)* of intion;ent tneton.

latter, in so far us tray unilarstaal the eituati,ns tolerate
it only on ti1k3 rapaated awurenee toot tts oriois is terrporsri
and that C.ovanty Will maw re_ oration in full, which will nett
an on to ths proso:A situ:Alone

';owovor this rasp/ be, it is it:); oseible to ostirr.te the

No. 6

oonomle and liocial efleots


rich may ensue even for states not

direct', concerned.

medie s.
In order to emerge from this crisis the solution to each
problem must be sought by the means dictated by truth and justice

without being diverted by even leritiwte passions, beouse in
the long rim the path of truth and justice is that of the general

As soon as the Germans understand their duty, which

arises both from their responsibility for the war and from their
defeat, and especially 'Mien the


anifested this sentiment

by a sincere will to pay, a liberal agreement may be sought with
them in regard to the means of freeing themselves and of restoring
their Currency and reviving their public finance.

ka soon as the

sincerity of this 'ill to liberate themselves is proved by deeds,
the compulsory measures necessitated by the absence of this
sentiment will automatically disappear.

In order to do this

iiermany cm and Est pay her debt by oa,1V1 operations.

She can

entrust to international oangsnies, or even to national companies

against certain guaruntees the operation of the railww,a, forests and
mines belonging to the deich or .hates, as long as may be necessary for her liberation; she can concede to similar companies
the administration of certain monopolies, and finally she can
issue loans secured by her customs and by certain taxes.


has alreak been shown, ;:rd it might be proved again, that
none of tasse measures would be incompatible with a budget balance
realised by a system of taxation less onerous than that of her
great neighbours, and currency reform would ensue, since the metal
reserve of the

.eichabank, though reduced Laving recent months, is

still worth more, at the current rate of exchL.nce, than the innumerable notes istAted.


Bo. 7.

The German nation has not yet the will to make such
a sacrifice, being still preoecupied with means of wearing out its
oreditors :nd evading its obligations.

It must be profoundly

convinced that the necessary sacrifices are obligations compatible
1:ith truth and justice, since they are still less than the

aterial damage sufferea by the sinistre's of the victorious

.-hen this conviction has taken hold of the German

people, the :airopean countries must reform their finances, of tr-

wise 'motel and economic upheaval will ensue,

;he first duty of

a state is to !aintain its credit at home end abroad,
In order to a000mplish a lasting currency reform Ald to
balance their budgets the states must reduce their foreign debt
to normal proportions, .nd must to that end make their tokens of
wealth or credit correspond to real velues.

It is now impossible,

in social and financial dealings, to pretend to believe in the face
value of a banknote ur a security, when everyone kn:as that the

real 'aka is only one-third or one-fourth of its face value.

:he very feet that everyone is mar

of the difference between

the face value and the real Value is sufficiert to cause ex,
oessive depreciation.

tierne,ny'u case is a proof of this phenomenon,

since the permanent and increasing difference between the face
value and the real value of the ;:eichsbank notes has caused such

a depreciation that the enormous issue of banknotes is quoted on
the various exchanges at a sum less than the metal reserve of
the Aciahsbank.

Uoreover, if the Auto and the public administrations

were called upon to redeem at par the notes issued during the war
or immediately efterrard they would either find it impossible
or would lay a crushing burden on several generations to cume.
Therefore eith r the face value of the paper must be reduced or the
number of bills issued must be limited, in order to make the face
value cor,spond With the aottrIl value.


the only fair one,


he a latter proceuure

ill be neces,atry

r 0.


sooner or later, but it is not v,ithin the province of this piper
to discuss the relative merits of the tv.o methods,

As to foreign debts contracted during the Tar, they must
absolutely be redeemed, oonsolidated or remitted.

A permanent

state of uncertainty in regard to these debts is destructive of
credit and obviates any thoroughgoing financial reform.

It is

obviously impossible to open discussion an Lho loans contracted
with private individuals, since these are purely commerolal
affairs and must, under penalty of destroying all credit, be
liquidated at any cost, even by alienating, if necessary, a portion
of the national capital,

Hoverer, in regard to international credit

operations, undertaken to bring the war to a victorious close,
and to save humanity from a formidable bondage, acoount must be
taken, in their liquidation, of the financial capacity of the

nations and of the reasons ehich undo ..lay Wm operations.


treatment accorded to a conquered nation that deliberately destroyed mines and factories in order to overcome legitimate
economic competition, canrot be Recorded to uz

i.11iod nation

that has incurred debt for the purchase of ems to stop the ad-

vance of the oomon enemy,

h such circumstances the debt of the

friendly nation must be paid out of the surplus of the balance of

Her MOSES of produotion cannot be t.iken from her, nor

can she be forbidden to import the oommodities necessary for the
normal existence of her people,

Intervention of the United `tat e.
In conclusion, the finanoial revival of continental
i:urope has not S eat coneeneed, and the ground is sourcely cleared

for the erection of a new structure.

The states siiose finances

are still sound are undergoinc eta economic crisis all the more

serious since the cost price of their roduota is too high as

No, 9,

somparmi with that of countries with depreciated exchange, and in
particular because buyers are lacking, the latter countries
having beccre more and more :noapable of asking purchases,

America bee alreada intervened to save Lurope from
military bondage - aill she not intervene again to avert a
financial, ec-nomic, and perhaps social catastrophO?

he will be

driven to take this atop nut only by her humanitarian ideals, but
by her interest,

hen she has a full understanding of the

efficacy of her assistance,

It is to her intereet to save all that

oft reasonably be recovered out of liar avropean credits bad to

maintain her right to look for the support of Lurope in case of
attack from the other side of the ocean, and in particular to be
able to coult on collaboration ahich under certain circumstances
aaea be necessary and valuable.

American assistance in aurope might take t!o forms; on the
one hand private American capital might be offered to aid Cermara
to create securities %Allah she might assign to the payment of her

debt, aad on the other this capital might be offered to the


countries in order to enable them to consolidate and pay the debts
taey contracted during the war and immetiatela aftergard,

Zhi assistance from private establishments should be
preceded b:

an examination by amerioan experts, free from all

pelitioal prajudice, of the ba,Ance of accounts of each of the
debtor states, their resources and their potertt,1 factors of

Such a labour would be free from all suspicion and

prejudice, and miaht have

determining influence on the liquida-

tion of international interests.

b other words, the financial

revival of Europe on take place only by the immealate mobilisation of Germany's reparation debt by means of concessions on her
railways and private domains, and of consolidated loans
oecured ba her customs duties and certain monopolies; the li

of the war debts of all the debtor states


No, 10,

should ensue, after an enquiry by experts in which the United
Jtatsa, a

principal oreditor, should t.. o the initiative.




Lialaiaa Balila.Ib lb aa1/

(di. JULY 12th, 1922e

It cannot be made too clear In the intereete alike of the
conoorned e;a of any 0:0 may hope to profit
A.fferenoes :Jetween them, Vat the sole groun- of possi.(de divergence is as to the acat effi7vtive means of reachiag the ends which
ere vital to all, and apon mieh all are in agreement.
ends are, ae they hove reained throu6bout, the paymant of reparations anti the reeovared security of aurope.
";o eneure them
the allies have grae:ed aothiTg in the past, aor will they crudge
anything in t'-e future.
responsibility is aokaoaledged,
and le &area in eeual miasmre by ranoe, by Italy, by aelgium,
and by ournelves.
(.,rhaps it may be held to revolve in a nor
speoial measure upon ho maarioh and :alltish slat ions by virtue of
gr at sacrificee which the:, made side by side ia the years
of trial, by, the intimaey of
set and memory uhich unitee them
of least by the experienoe which these two alicient
eivillatationa have ehared throughout the oentualbe.
siailar co

unit;; of tlou3ht aad action binds us in
our other allies, whose iatereste are

in no rawest -iveraent from our O. In the common desire for
eettlement and !Jacification, une et ill more for no :urthLr or
ae can pleat together franaly eacl with the
full comerehension of partncrs bOund by an drivel destiny to the
same task.
:he whispere of interested cartice oannot be allowed on either side of ti
cannel or in any 1art n auroee to
deflect us from that uty by any resrvutions, or by carefully
fostered misunderstandings.
:n al
that we are about to say or to do hie aajesty's
a3vernment are moved, as we know the heart o -ranee to be moved -nd thc awmo applies equalL. to our other .111es -- by th eindle
desire t? at good will between the nation who h e endured toether shall be maintained, amd that each eh 11 ootain What is
her due.

CaPAGI7Y 70 1AT.

.0 are ao eetermined as any
c-r -11is that :01-:lny
uhell make reparation for the damagee Lioae in the .;reat
r up
to the nulleet extent of her capaolty.
e have never vLvcrea
On this point;
I do not believe t .t our people ever eill.
indeed, ae ao 'urther, and we are reaq, ae we la ve said on
man :7 ocoaeions
ae was repeated in .-arie in January last,
to USG evnrw mnaoure to compol
to p,37 up to the amount
of ler oapacity.
,e are sonsoious, ho ever, L:e; a businece au*ion that if we ask aermany to ray la exoese of her ou:acity ae
shall not suoosed.
-o an: our aliico rill the main auffere
ere, and we are firmly oOnvinced that not;dodo which can only remit in
ruin Of fern zlny will
fatel to thie country, to our



to tlo whole of

:roe the beginnine tie have meUe it olear that, in our
qk opinion, the aocupation of the euhr was ot oaleuleted to prouce
in Jenthe eeedmum amount of reparat ion enyment for the tellies.
uare ee made in jaris an offer ehleh ee reeerded us a very den-

Morons settlement iv ord r to avoid what seemed to us to be an offer w s re:eoted by our -11ies, and
economic disaster.
eine(' then we hove stood aside animated by a spirit of eineere
loyalty to t' e allianoe which hac been, e)A': continues to be, in
-unw o the
our opinioe, te..e main eeourity for ,uropeun peace.
Jouree of fulconsequences 'Ale& were then enticipated 4re IL
.'ee ."elites are obtaining leee reeeration teian thew aid
',hut reearation they ere receiving is
before the 000u ation.
beine exaoted 'it the price of the growin: dislocation of the Gerean economic eystem ,led, as seems erobable, of the future total
oollupue of that ewstem itself.


7 leb

ronoh end eclei :n .overnmente eeeure up thet their
sole objeot in occupying the euhr is to ceourc the puement of reif that be so the difference between us is one o f
method rather than of airs, but eo are convinced that an indefinite continuation of tUs state of affaire is fraught with rave
3ereany herself eppearp to be mooing fact to eerie coonperil.
omio crave, ehloh may itself be zucicseeded be social end inedietr el
suffering ueThe local eopulat lone are, in :any casee,
re genuine apprehensions of a shortege of -eot
vorele, and there
in i npeoror is this a situation that ocncerns :crnerly alone.
Lion eta the prouotive rower of thet country Ic exheucted, so does
the reoovery of her credit and the peement of hLr debts recede into
.very country in earoee is payiee the price
a dimmer dietanoe.
enc ooantry pa s it in a steadily
for this oeedition of affairs.
falline exchanc, _eother in dieinishod trade, e third in increasstate or to defend
if we were oelled neon
ine unemployment.
our own country elone, we ooula, eiteout difficultw,
the tease of
demoestrete the serious (offset that hee alreeee been eroduced upon British trade.

n opite of very ereet expenditure by the .tute (the fiowe 1400,000,000 eterline sl. co the ermietioe), we still
eot only
lava unempleymont on a large eoale in tie countre.
doee our devastation oontinee instead of twine repaired, but it
continues 9 nurt?asing1:7 as te e eoral effects eiread cord our peoublio oeinion throughout europe, eed not least in :rent
3ritein, is becoming. more and e:ore sensitive to th so conditions
it ie sot too much to eew that
and alermed at the it oontinuanoe.
the rcoovcry of the world is in daneer, eee thet pc race, for
so mny saerifices were eorne, is at stake.
eare is


acIt is in these circumstances thet the necessity
hie eajestele eoverntion hes been inereasinely impressed upon
:riendly eonversetiont, n8E/fel use they
to exchange o
positive resultee
are, eoes not apear to lead in ell cases to the principal perthat the attitude of
It is becoming evidenoe
If the situation
ties concerned nest be more olearle defined.
hes been at tll oorreotly deecribed In the preceding
it oennot bo left to right itself.
will, 1 belicve, be generel agreement to these
Boon as
eroeesitione -- that the period of oonfliot Should an
000upation by one
ecesible be tereieuted; thet the indefinite of peace ie a phetime
oountry of the territory of another in
which an honourable
nomenon, rare end roerettable le it:elf, to
tint the debtor shonid
end shoeld as soon an possible be found;
should be plaoed
not merely be called upon to pay hie debts=, out
that hie era;._ city, where it
in a position ehere he can do so;
end that united
le in eoubt, nhould be tested end detereined;
efforts should be made to aocomplish thoee ends.

eaoe will not finully be obtained and recovery will
to three greet
not co enenred until a solution hes been foun:
peymont of reparations;
They are -- (1) the
and (3) the security of a
eettlement of inter-ellied debt:.';
It is to three questions that the attention
pacified uroeo.
the world shoeld be turned.
In the pursuit of these aims Lis ,ajestw's eovernment
iranos and eelgium of their
are .o far from desirine to deprive
their realization.
legal oleime that :hoe wish to assist them in end for finelity,
Our desire is for advance, if it can be
:.sue in these aspirations, as well as
if It can be attained.
hopeful of obtainin our view of the eerrrel situation, wo ere less than that of
lee the ooncurrenoe of ranee and Leleium, no
indeed ee have every reason to belive that the
ial egreement ei th our
of the itellen ,;ov.rnment are in substan

to be
eleat then, are the steps which we think ought
definite sugThe per en :e)te of June 7, in reply to a
;erman uovernmerit, proeeption ehioh had been ai7.dressed to the
to paw be an imparosed an investigation or ,Iermene'e ceeeeity
engagement to eey the mounts detertial body, coupled eith an
it furtLer containmined in the menner that might be erolos ed.
e do not think
ed the olYer of r series of concrete guarantees.
not, should
that these eaggeetions, whether they be adeeuate cr
ere unable to aeree that e eo,respondenoe of
be lenored.
the interests of all should
tile nature upon mutters effeotin
ehiohmae be found to
be wholly One-sided, or that propose n,
ens of a possible uettlement, should be
contein in them the

treated pith indifference.



thrit they ehould be examined and e..,plgred in

OW order 11::t vie ;':w Cieeo:er whether there lies within them the
p eeibiltty of pro roe..
42deratandin6 th t the :frenoh and halgiLn 1overnments are not disposed to take the initiative in puggcstie4 a relay -- although %Al would ,laely have weloomod any
suoh action on !Ileir art -- we have informed those Ciovernmente
as else the Italian overnment, that e are eillin7 to assume
the r..sponsibility of reparin:; adraft reply onrcelves.
-=.dherin.:,, however, as we do to the view Whioh we ex:ressed on the last
°coat:lion that united action it better then .e:arate or is :anted
1-:e shall enbmit the re-i:ly ith the least possible delaw,
to our _flies, for their consideration L.ed remarks, end we indel ;e in the hope thr.t. we
50 able to arrive at an tlareement them as to the terms.
hat the era.; nature 07 the reilw
shoeld be it will b,
r.reiterc to diecaes at tLe present etas e.
In fermulatinz there vicwe, his 1:Elesty'e ;ovornment
are not 1:ithout hor,c that the;, me,v be expressie -flied eentiments as well as their cell.
,e do not believe that in princi-

ple we are Tidely ee:.arated, if at all, from .hem.

of method should not Le inoabl of resolution.


,o far as
united action is possible, ye shall ()continue to pursue it, is we
have endeavoured to 60 all z...long, and we shall eonfidently invite the symputhetio considen..tiOn o' to e wLole of our -Mee
and of all interested ,tates to proposals eiich sill have 110
other aim than the paeifioation of L.urope axz the re::overy of
ern exhausted world.

Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102