CHAPTER VI

REPARATION, INTER-ALLY DEBT, ANDINTERNATIONAL TRADE

It is fashionable at the present time to urge a re-duction of the Allies' claims on Germany and ofAmerica's claims on the Allies , on the ground that,as such payments can only be made in goods, insist-ence on these claims will be positively injurious tothe claimants.

That it is in the self-interest of the Allies and ofAmerica to abate their respective demands, I holdto be true. But it is better not to use bad arguments,and the suggestion that it is necessarily injurious toreceive goods for nothing is not plausible or correct.I seek in this chapter to disentangle the true fromthe false in the now popular belief that there issomething harmful in compelling Germany to " flinggoods at us."

The argument is a little intricate and the readermust be patient.

1. It does not make very much difference whether

the debtor country pays by sending goods direct

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