Europe, if she is to survive her troubles, will need so much magnanimity from America, that she must herself practice it.  It is useless for the Allies, hot from stripping Germany and one another, to turn for help to the United States to put the States of Europe, including Germany, on to their feet again.  If the General Election of December, 1918, had been fought on lines of prudent generosity instead of imbecile greed, how much better the financial prospect of Europe might now be.  I still believe that before the main Conference, or very early in its proceedings, the representatives of Great Britain should have entered deeply, with those of the United States, into the economic and financial situation as a whole, and that the former should have been authorized to make concrete proposals on the general lines (1) that all inter-allied indebtedness be canceled outright; (2) that the sum to be paid by Germany be fixed at $10,000,000,000; (3) that Great Britain renounce all claim to participation in this sum and that any share to which she proves entitled be placed at the disposal of the Conference for the purpose of aiding the finances of the New States about to be established; (4) that in order to make some basis of credit immediately available an appropriate proportion of the German obligations representing the sum to be paid by her should be guaranteed by all parties to the Treaty; and (5) that the ex-enemy Powers should also be allowed, with a view to their economic restoration, to issue a moderate amount of bonds carrying a similar guarantee.  Such proposals involved an appeal to the generosity of the United States.  But that was inevitable; and, in view of her far less financial sacrifices, it was an appeal which could fairly have been made to her.  Such proposals would have been practicable.  There is nothing in them quixotic or Utopian.  And they would have opened up for Europe some prospect of financial stability and reconstruction.

The further elaboration of these ideas, however, must be left to Chapter VII., and we must return to Paris.  I have described the entanglements which Mr. Lloyd George took with him.  The position of the Finance Ministers of the other Allies was even worse.  We in Great Britain had not based our financial arrangements on any expectations of an indemnity.  Receipts from such a source would have been more or less in the nature of a windfall; and, in spite of subsequent developments, there was an expectation at that time of balancing our budget by normal methods.  But this was not the case with France or Italy.  Their peace budgets made no pretense of balancing and had no prospects of doing so, without some far-reaching revision of the existing policy.  Indeed, the position was and remains nearly hopeless.  These countries were heading for national bankruptcy.  This fact could only be concealed by holding out the expectation of vast receipts from the enemy.  As soon as it was admitted that it was in fact impossible to make Germany pay the expenses of both sides, and that the unloading of their liabilities upon the enemy was not practicable, the position of the Ministers of Finance of France and Italy became untenable.