V

REPARATION

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situation of the Allies , but is only a book creditbetween themselves or between them and Germany .

The total of £330,000,000 to £430,000,000 nowreached is not, however, available for Reparation.The first charge upon it, under Article 251 of theTreaty , is the cost of the Armies of Occupation bothduring the Armistice and after the conclusion ofPeace. The aggregate of this figure up to May 1921cannot be calculated until the rate of withdrawal isknown which is to reduce the monthly cost from thefigure exceeding £20,000,000, which prevailed duringthe first part of 1919, to that of £1,000,000, which isto be the normal figure eventually. I estimate, how-ever, that this aggregate may be about £200,000,000.This leaves uswithfrom£100,000,000 to£200,000,000still in hand.

Out of this, and out of exports of goods, andpayments in kind under the Treaty prior to May1921 (for which I have not as yet made any allow-ance), the Allies have held out the hope that theywill allow Germany to receive back such sums for thepurchase of necessary food and raw materials as theformer deem it essential for her to have. It is notpossible at the present time to form an accuratejudgment either as to the money-value of the goodswhich Germany will require to purchase from abroadin order to re-establish her economic life, or asto the degree of liberality with which the Allies will exercise their discretion. If her stocks of raw