144 THE ECONOMIC CONSEQUENCES OF THE PEACE ch.

pension whether the State which pays them receivescompensation on this or on another head, and arecovery by the State out of indemnity receiptsis just as much in relief of the general taxpayer asa contribution towards the general costs of the warwould have been. But the main consideration isthat it was too late to consider whether the pre-Armistice conditions were perfectly judicious andlogical or to amend them; the only question atissue was whether these conditions were not in factlimited to such classes of direct damage to civiliansand their property as are set forth in Paragraphs1, 2, 3, 8, 9, and 10 of Annex I. If words have anymeaning, or engagements any force, we had no moreright to claim for those war expenses of the State,which arose out of Pensions and Separation Allow-ances, than for any other of the general costs of thewar. And who is prepared to argue in detail thatwe were entitled to demand the latter ?

What had really happened was a compromisebetween the Prime Minister s pledge to the British electorate to claim the entire costs of the war andthe pledge to the contrary which the Allies had givento Germany at the Armistice. The Prime Ministercould claim that although he had not secured theentire costs of the war, he had nevertheless securedan important contribution towards them, that hehad always qualified his promises by the limitingcondition of Germany 's capacity to pay, and that the