No tariff, however nimble, can keep pace with the runaway mark. It would baffle the most resourceful finance minister to adapt his budget to a currency which disappears beyond the horizon while he is sitting at his desk to pen his proposals.
If the mere threat of force has produced such a panic, what will be the effect of the actual measures? It is safe to predict that the advance of French troops into Germany will not restore the composure of the frightened mark and arrest its flight.
What, then, becomes of the hope of renewed payments of the annuity? At best Germany could only be expected to pay when her foreign trade was so improved that she could provide a margin out of her exports with which to pay her annuities. Her foreign trade is largely dependent upon her foreign exchanges. These are now destroyed beyond prospect of recovery for years.
Britain proposed a voluntary moratorium for a short term of years in order to place Germany in a position where she could at the end of that term pay a reasonable annuity. The French government have in effect substituted a compulsory moratorium for an indefinite period with no prospect of payment in sight.
The only chance of securing an early instalment of reparation payments was by pressing Germany to put her finances in order and giving her fair time in which to do so. The only chance of negotiating a loan on German security to assist France to pay for the repair of her devastated provinces, and to enable her to put her own finances in order, was by restoring the stability of German currency.
French statesmen have deliberately thrown both these chances away. The effect on the value of their own currency must be grave, and Frenchmen will have to pay in increased cost of living for a venture dictated by short-sighted and short-tempered statesmanship.
When one thinks of the consequences one is driven to ask whether French politicians are really seeking reparations or are pursuing another purpose quite incompatible with the recovery of money payments under the treaty.
This is the wrong road to reparations. It leads in exactly the opposite direction.
Whither, then, does it lead? There is no doubt that its effect will be ruinous as far as German industry is concerned. I have already dealt with its disastrous influence upon German currency, and with the indirect effect of a rapidly depreciating currency upon German foreign trade. The seizure of the Ruhr mines will have another serious effect.
Even now the result of the compulsory alienation of so much of Germany's coal supply in the Ruhr, in Silesia, and the Saar, from German industry, has diminished German productiveness. The fuel deficiency thereby created inside Germany has been partially supplied by purchases of coal from outside sources. The necessity for providing gold to pay for foreign coal has added considerably to Germany's financial difficulties.