Lloyd George was dragged along by the necessity of not drawing away the mass of the electors from the candidates of his party. Thus he was obliged on December 11, in his final manifesto, to announce not only the Kaiser's trial and that of all those responsible for atrocities, but to promise the most extensive kind of indemnity from Germany and the compensation of all who had suffered by the War. Speaking the same evening at Bristol, he promised to uphold the principle of the indemnity, and asserted the absolute right to demand from Germany payment for the costs of the War.
In England, where the illusion soon passed away, in France, where it has not yet been dissipated, the public has been allowed to believe that Germany can pay the greater part, if not the entire cost, of the War, or at least make compensation for the damage.
For many years I have studied the figures in relation to private wealth and the wealth of nations, and I have written at length on the subject. I know how difficult it is to obtain by means of even approximate statistics results more or less near to the reality. Nothing pained me more than to hear the facility with which politicians of repute spoke of obtaining an indemnity of hundreds of milliards. When Germany expressed her desire to pay an indemnity in one agreed lump sum (à forfait) of one hundred milliards of gold marks (an indemnity she could never pay, so enormous is it), I saw statesmen, whom I imagined not deprived of intelligence, smile at the paltriness of the offer. An indemnity of fifty milliards of gold marks, such as that proposed by Keynes, appeared absurd in its smallness.
When the Peace Conference reassembled in Paris the situation concerning the indemnity was as follows. The Entente had never during the War spoken of indemnity as a condition of peace. Wilson, in his proposals, had spoken only of reconstruction of invaded territories. The request for réparation des dommages had been included in the terms of the armistice merely to afford a moral satisfaction to France. But the campaign waged in France and during the elections in England had exaggerated the demands so as to include not only reparation for damage but reimbursement of the cost of the War.
Only the United States maintained that the indemnity should be limited to the reparation of the damages: a reparation which in later phases included not only reconstruction of destroyed territories and damage done to private property, but even pensions to the families of those dead in the War and the sums in grant paid during it.
When Prussia beat France in 1870 she asked for an indemnity of five milliards. The Entente could have demanded from the vanquished an indemnity and then have reassumed relations with them provided it were an indemnity which they could pay in a brief period of time.
Instead, it being impossible to demand an enormous sum of 300 or 400 milliards, a difficult figure to fix definitely, recourse was had to another expedient.
From the moment that the phrase réparation des dommages was included in the armistice treaty as a claim that could be urged, it became impossible to ask for a fixed sum. What was to be asked for was neither more nor less than the amount of the damages. Hence a special commission was required, and the Reparations Commission appears on the scene to decide the sum to demand from Germany and to control its payment. Also even after Germany was disarmed a portion of her territory must remain in the Allies' hands as a guarantee for the execution of the treaty.
The reason why France has always been opposed to a rapid conclusion of the indemnity question is that she may continue to have the right, in view of the question remaining still open, to occupy the left bank of the Rhine and to keep the bridgeheads indicated in the treaty.
The thesis supported by Clemenceau at the Conference was a simple one: Germany must recognize the total amount of her debt; it is not enough to say that we recognize it.