Personally, I do not think that at this juncture there is anything whatever to be done except to grant a moratorium.  It is out of the question that any figure, low enough to do Germany’s credit any good now, could be acceptable to M. Poincare, in however moderate a mood he may visit London next week.  Apart from which, it is really impossible at the present moment for any one to say how much Germany will be able to pay in the long run.  Let us content ourselves, therefore, with a moratorium for the moment, and put off till next year the discussion of a final settlement, when, with proper preparations beforehand, there ought to be a grand Conference on the whole connected problem of inter-Governmental debt, with representatives of the United States present, and possibly at Washington.

THE ILLUSION OF A LOAN

The difficulties in the way of any immediate settlement now are so obvious that one might wonder why any one should be in favour of the attempt.  The explanation lies in that popular illusion, with which it now pleases the world to deceive itself—­the International Loan.  It is thought that if Germany’s liability can now be settled once and for all, the “bankers” will then lend her a huge sum of money by which she can anticipate her liabilities and satisfy the requirements of France.

In my opinion the International Loan on a great scale is just as big an illusion as Reparations on a great scale.  It will not happen.  It cannot happen.  And it would make a most disastrous disturbance if it did happen.  The idea that the rest of the world is going to lend to Germany, for her to hand over to France, about 100 per cent. of their liquid savings—­for that is what it amounts to—­is utterly preposterous.  And the sooner we get that into our heads the better.  I am not quite clear for what sort of an amount the public imagine that the loan would be, but I think the sums generally mentioned vary from L250,000,000 up to L500,000,000.  The idea that any Government in the world, or all of the Governments in the world in combination, let alone bankrupt Germany, could at the present time raise this amount of new money (that is to say, for other purposes than the funding or redemption of existing obligations) from investors in the world’s Stock Exchanges is ridiculous.

The highest figure which I have heard mentioned by a reliable authority is L100,000,000.  Personally, I think even this much too high.  It could only be realised if subscriptions from special quarters, as, for example, German hoards abroad, and German-Americans, were to provide the greater part of it, which would only be the case if it were part of a settlement which was of great and obvious advantage to Germany.  A loan to Germany, on Germany’s own credit, yielding, say, 8 to 10 per cent., would not in my opinion be an investor’s proposition in any part of the world, except on a most trifling scale.  I do not mean that a larger anticipatory loan of a different character—­issued, for example, in Allied countries with the guarantees of the Allied Government, the proceeds in each such country being handed over to the guaranteeing Government, so that no new money would pass—­might not be possible.  But a loan of this kind is not at present in question.