No financier seriously believes that the issue of bonds authorized by the treaty for the credit of the Reparations Commission has now any probability of success.  Germany’s monetary circulation system is falling to the stage of assignats, and the time is not distant when, if intelligent provision is not made, Germany will not be in a position to pay any indemnity.

Obliged to pay only one milliard of gold marks, Germany has not been able to find this modest sum (modest, that is, in comparison with all the dreams about the indemnity) without contracting new foreign debts and increasing her already enormous paper circulation.  Each new indemnity payment, each new debt incurred, will only place Germany in the position of being unable to make payments abroad.

Many capitalists, even in Italy, inspire their Press to state that Germany derives an advantage from the depreciation of her mark, or, in other words, is content with its low level.  But the high exchanges (and in the case of Germany it amounts to ruin) render almost impossible the purchase of raw materials, of which Germany has need.  With what means must she carry out her payments if she is obliged to cede a large part of her customs receipts, that is of her best form of monetary value, and if she has no longer either credits or freights abroad?

If what is happening injured Germany only, it would be more possible to explain it, if not to justify it.  But, on the contrary, Germany’s fall, which is also the decadence of Europe, profoundly disturbs not only the European continent, but many other producing countries.  Though the United States and Great Britain partially escape the effect, they too feel the influence of it, not only in their political serenity, but in the market of goods and values.  Germany’s position is bound up with that of Europe; her conquerors cannot escape dire consequences if the erstwhile enemy collapses.

We must not forget that before the War, in the years 1912 and 1913, the larger part of Germany’s commerce was with the United States, with Great Britain, with Russia and with Austria-Hungary.  In 1913 her commerce with the United States represented alone little less than two milliards and a half of marks according to the statistics of the German Empire, and 520 millions of dollars according to the figures of America.  If we except Canada, which we may consider a territorial continuation, the two best customers of the United States were Great Britain and Germany.  They were, moreover, the two customers whose imports largely exceeded the exports.  The downfall of Germany will bring about inevitably a formidable crisis in the Anglo-Saxon countries and consequent ruin in other countries.

Up to now Germany has given all she could; any further payment will cause a downfall without changing the actual monetary position.  Germany, after a certain point, will not pay, but will drag down in her fall the economic edifices of the victorious countries of the Continent.