The United States would doubtless have to bear the largest burden.  But when one thinks of the small sacrifice which the United States has made in comparison with the efforts of France and Italy (and Italy was not obliged to enter the War), the new sacrifice demanded does not seem excessive.

During the War the United States of America, who for three years furnished food, provisions and arms to the countries of the Entente, have absorbed the greater part of their available resources.  Not only are the States of Europe debtors, but so are especially the private citizens who have contracted debts during or after the War.  Great Britain during the War had to sell at least 25 milliards of her foreign values.  The United States of America, on the contrary, have immensely increased their reserves.

But this very increase is harmful to them, inasmuch as the capacity for exchange of the States of Europe has been much reduced.  The United States now risk seeing still further reduced, if not destroyed, this purchasing capacity of their best clients; and this finally constitutes for the U.S.A. infinitely greater damage than the renouncing of all their credits.

To reconstruct Germany, to intensify exchange of goods with the old countries of Austria-Hungary and Russia, to settle the situation of the exchange of goods with Italy and the Balkan countries is much more important for the United States and the prosperity of its people than to demand payment or not demand payment of those debts made for the common cause.

I will speak of the absurd situation which has come about.  Czeko-Slovakia and Poland unwillingly indeed fought against the Entente, which has raised them to free and autonomous States; and not only have they no debts to pay, being now in the position of conquerors, or at least allies of the conquerors, but they have, in fact, scarcely any foreign debts.

The existence of enormous War debts is, then, everywhere a menace to financial stability.  No one is anxious to repudiate his debts in order not to suffer in loss of dignity, but almost all know that they cannot pay.  The end of the War, as Keynes has justly written, has brought about that all owe immense sums of money to one another.  The holders of loan stock in every country are creditors for vast sums towards the State, and the State, in its turn, is creditor for enormous sums towards the taxpayers.  The whole situation is highly artificial and irritating.  We shall be unable to move unless we succeed in freeing ourselves from this chain of paper.

The work of reconstruction can begin by annulling the inter-allied debts.

If it is not thought desirable to proceed at once to annulment, there remains only the solution of including them in the indemnity which Germany must pay in the measure of 20 per cent., allocating a certain proportion to each country which has made loans to allied and associated governments on account of the War.  In round figures the inter-allied loans come to 100 milliards.  They can be reduced to 20, and then each creditor can renounce his respective credit towards allies or associates and participate proportionately in the new credit towards Germany.  Such a credit, bearing no interest, could only be demanded after the payment of all the other indemnities, and would be considered in the complete total of the indemnities.