must be determined by our whole moral and emotional reaction to the future of international relations and the Peace of the World.  If we take the view that for at least a generation to come Germany cannot be trusted with even a modicum of prosperity, that while all our recent Allies are angels of light, all our recent enemies, Germans, Austrians, Hungarians, and the rest, are children of the devil, that year by year Germany must be kept impoverished and her children starved and crippled, and that she must be ringed round by enemies; then we shall reject all the proposals of this chapter, and particularly those which may assist Germany to regain a part of her former material prosperity and find a means of livelihood for the industrial population of her towns.  But if this view of nations and of their relation to one another is adopted by the democracies of Western Europe, and is financed by the United States, heaven help us all.  If we aim deliberately at the impoverishment of Central Europe, vengeance, I dare predict, will not limp.  Nothing can then delay for very long that final civil war between the forces of Reaction and the despairing convulsions of Revolution, before which the horrors of the late German war will fade into nothing, and which will destroy, whoever is victor, the civilization and the progress of our generation.  Even though the result disappoint us, must we not base our actions on better expectations, and believe that the prosperity and happiness of one country promotes that of others, that the solidarity of man is not a fiction, and that nations can still afford to treat other nations as fellow-creatures?

Such changes as I have proposed above might do something appreciable to enable the industrial populations of Europe to continue to earn a livelihood.  But they would not be enough by themselves.  In particular, France would be a loser on paper (on paper only, for she will never secure the actual fulfilment of her present claims), and an escape from her embarrassments must be shown her in some other direction.  I proceed, therefore, to proposals, first, for the adjustment of the claims of America and the Allies amongst themselves; and second, for the provision of sufficient credit to enable Europe to re-create her stock of circulating capital.

2. The Settlement of Inter-Ally Indebtedness

In proposing a modification of the Reparation terms, I have considered them so far only in relation to Germany.  But fairness requires that so great a reduction in the amount should be accompanied by a readjustment of its apportionment between the Allies themselves, The professions which our statesmen made on every platform during the war, as well as other considerations, surely require that the areas damaged by the enemy’s invasion should receive a priority of compensation.  While this was one of the ultimate objects for which we said we were fighting, we never included the recovery of separation allowances amongst