78 A REVISION OF THE TREATY chap.

If the German Budget for 1922-23 manages tobalance, apart from any provision for Reparation, thiswill represent a great effort and a considerable achieve-ment. Apart, however, from the technical financialdifficulties, there is a political and social aspect ofthe question which deserves attention here. TheAllies deal with the established German Government,make bargains with them, and look to them forfulfilment. The Allies do not extract payment out ofindividual Germans direct; they put pressure on thetransitory abstraction called Government, and leaveit to this to determine and to enforce which individualsare to pay, and how much. Since at the present timethe German Budget is far from balancing even ifthere were no Reparation payments at all, it is fairto say that not even a beginning has yet been madetowards settling the problem of how the burden is tobe distributed between different classes and differentinterests.

Yet this problem is fundamental. Payment takes

But I am doubtful whether the Allies intend in fact to demand this.Hitherto the expense of the Armies has been so great as to absorb virtuallythe whole of the receipts (see Excursus V. below), having amounted by themiddle of 1921 to about £200,000,000. In any case, it is now time that theagreement, signed at Paris in 1919 by Clemenceau, Lloyd George, andWilson, should be brought into force, to the effect that the sum payableannually by Germany to cover the cost of occupation shall be limited to240 million gold marks as soon as the Allies " are convinced that theconditions of disarmament by Germany are being satisfactorily fulfilled."If we assume that this reduced figure is brought into force, as it ought tobe, the total burden on Germany for Reparation and Occupation comes,on the assumption of the lower figure for exports, to 3 - 8 milliard goldmarks, that is, to 76 milliard paper marks.