The right solution, the solution that we are bound to come to in the end, is not complicated.  We must abandon the claim for pensions and bring to an end the occupation of the Rhinelands.  The Reparation Commission must be asked to divide their assessment into two parts—­the part that represents pensions and separation allowances and the rest.  And with the abandonment of the former the proportion due to France would be correspondingly raised.  If France would agree to this—­which is in her interest, anyhow—­and would terminate the occupation it would be right for us to forgive her (and our other Allies) all they owe us, and to accord a priority on all receipts in favour of the devastated areas.  If we could secure a real settlement by these sacrifices, I think we should make them completely regardless of what the United States may say or do.

In declaring for this policy in the House of Commons yesterday, Mr. Asquith has given the Liberal Party a clear lead.  I hope that they will make it a principal plank in their platform.  This is a just and honourable settlement, satisfactory to sentiment and to expediency.  Those who adopt it unequivocally will find that they have with them the tide and a favouring wind.  But no one must suppose that, even with such a settlement, any important part of Germany’s payments can be anticipated by a loan.  Any small loan that can be raised will be required for Germany herself, to put her on her legs again, and enable her to make the necessary annual payments.

THE OUTLOOK FOR NATIONAL FINANCE

BY SIR JOSIAH STAMP, K.B.E., D.SC.

Assistant Secretary Board of Inland Revenue, 1916-19.  Member of Royal Commission on Income Tax, 1919.

Sir Josiah Stamp said:—­In discussing the problem of National Finance we have to decide which problem we mean, viz., the “short period” or the “long period,” for there are distinctly two issues.  I can, perhaps, illustrate it best by the analogy of the household in which the chief earner or the head of the family has been stricken down by illness.  It may be that a heavy doctor’s bill or surgeon’s fee has to be met, and that this represents a serious burden and involves the strictest economy for a year or two; that all members of the household forgo some luxuries, and that there is a cessation of saving and perhaps a “cut” into some past accumulations.  But once these heroic measures have been taken and the burden lifted, and the chief earner resumes his occupation, things proceed on the same scale and plan as before.  It may be, however, that the illness or operation permanently impairs his earning power, and that the changes which have to be made must be more drastic and permanent.  Then perhaps would come an alteration of the whole ground plan of the life of that family, the removal to a smaller house with lower standing charges and a changed standard of living.  What I call the “short period” problem involves a view only of the current year and the immediate future for the purpose of ascertaining whether we can make ends meet by temporary self-denial.  What I term the “long distance” problem involves an examination of the whole scale upon which our future outlay is conditioned for us.