vu THE SETTLEMENT OF EUROPE 173

Treaty claims (p. 122 above) is 110 milliards, ofwhich. 74 milliards are for pensions and allowances, 30milliards for damage, and 6 milliards for Belgian debt.

The arguments of Chapter VI. make it incumbenton those who are convinced by them to abandon asdishonourable the claims to pensions and allowances.This reduces the claims to 36 milliards, a sum which itmay not be in our interest to exact in full, but which isprobably within Germany 's theoretical capacity to pay.

Apart from clearing out of the way various clauseswhich are no longer operative or useful, and fromterminating the occupation on conditions set forthbelow, I should limit my Revision of the Treaty tothis simple stroke of the pen. Let the present assess-ment of 138 milliard gold marks be replaced by 36milliard gold marks.

We are strictly entitled under the Armistice Termsto these 36 milliards ; and if prudence recommendsan abatement below that figure, such abatement canproperly be made, on terms, by those and those onlywho are entitled to the claims. I estimate withsome confidence that this sum of 36 milliards isdivisible between the Allies about in the proportionsshown in the table on the following page.

The payment by Germany of 5 per cent interestand 1 per cent sinking fund on this total sum isnot, in my judgement, theoretically impossible. Butit could only be done by stimulating her exportindustries in a manner injurious and irritating to