io6 THE ECONOMIC CONSEQUENCES OF THE PEACE ch.

context of the term is in elucidation of the meaningof the term " restoration " in the President's FourteenPoints. The Fourteen Points provide for damagein invaded territory — Belgium, France, Roumania ,Serbia, and Montenegro (Italy being unaccountablyomitted)—but they do not cover losses at sea bysubmarine, bombardments from the sea (as at Scar-borough), or damage done by air raids. It was torepair these omissions, which involved losses to thelife and property of civilians not really distinguish-able in kind from those effected in occupied territory,that the Supreme Council of the Allies in Paris pro-posed to President Wilson their qualifications. Atthat time—the last days of October 1918—I do notbelieve that any responsible statesman had in mindthe exaction from Germany of an indemnity for thegeneral costs of the war. They sought only to makeit clear (a point of considerable importance to GreatBritain ) that reparation for damage done to non-combatants and their property was not limited toinvaded territory (as it would have been by theFourteen Points unqualified), but applied equally toall such damage, whether "by land, by sea, or fromthe air." It was only at a later stage that a generalpopular demand for an indemnity, covering the fullcosts of the war, made it politically desirable topractise dishonesty and to try to discover in thewritten word what was not there.

What damages, then, can be claimed from the