252 THE ECONOMIC CONSEQUENCES OF THE PEACE ch.

and the Allies amongst themselves; and second, forthe provision of sufficient credit to enable Europe to re-create her stock of circulating capital.

2. The Settlement of Inter-Ally Indebtedness.

In proposing a modification of the Separationterms, I have considered them so far only in relationto Germany . But fairness requires that so great areduction in the amount should be accompanied bya readjustment of its apportionment between theAllies themselves. The professions which our states-men made on every platform during the war, aswell as other considerations, surely require thatthe areas damaged by the enemy's invasion shouldreceive a priority of compensation. While this wasone of the ultimate objects for which we said wewere fighting, we never included the recovery ofseparation allowances amongst our war aims. Isuggest, therefore, that we should by our acts proveourselves sincere and trustworthy, and that accord-ingly Great Britain should waive altogether herclaims for cash payment, in favour of Belgium, Serbia ,and France . The whole of the payments made byGermany would then be subject to the prior charge ofrepairing the material injury done to those countriesand provinces which suffered actual invasion by theenemy ; and I believe that the sum of £1,500,000,000thus available would be adequate to cover entirelythe actual costs of restoration. Further, it is only by