I

THE TREATY OF PEACE

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sums of money. Germany owes a large sum tothe Allies; the Allies owe a large sum to GreatBritain; and Great Britain owes a large sum tothe United States . The holders of war loan inevery country are owed a large sum by theState; and the State in its turn is owed a largesum by these and other taxpayers. The wholeposition is in the highest degree artificial, mis-leading, and vexatious. We shall never be ableto move again, unless we can free our limbsfrom these paper shackles. A general bonfireis so great a necessity that unless we can makeof it an orderly and good-tempered affair inwhich no serious injustice is done to any one, itwill, when it comes at last, grow into a con-flagration that may destroy much else as well.As regards internal debt, I am one of those whobelieve that a capital levy for the extinction ofdebt is an absolute pre-requisite of sound financein every one of the European belligerentcountries. But the continuance on a hugescale of indebtedness between Governments hasspecial dangers of its own.

Before the middle of the nineteenth centuryno nation owed payments to a foreign nation onany considerable scale, except such tributes aswere exacted under the compulsion of actualoccupation in force and, at one time, by absenteeprinces under the sanctions of feudalism. It istrue that the need for European capitalism tofind an outlet in the New World has led duringthe past fifty years, though even now on arelatively modest scale, to such countries as