(4) The remaining item of importance is for unbuilt–on land. The claim under this head is for 9850 million gold marks, or about $2,460,000,000. M. Tardieu (op. cit., p. 347) quotes Mr. Lloyd George as follows, in the course of a discussion during the Peace Conference in which he was pointing out the excessive character of the French claims: “If you had to spend the money which you ask for the reconstruction of the devastated regions of the North of France, I assert that you could not manage to spend it. Besides, the land is still there. Although it has been badly upheaved in parts, it has not disappeared. Even if you put the Chemin des Dames up to auction, you would find buyers.” Mr. Lloyd Georgeʼs view has been justified by events. In April 1921 the French Prime Minister was able to tell his Senate that 95 per cent of the cultivable land had been releveled and that 90 per cent had been plowed and was producing crops. Some go so far as to maintain that the fertility of the soil has been actually improved by the disturbance of its surface and by its lying fallow for several years. But apart from its having proved easier than was anticipated to make good this category of damage, the total cultivated area (excluding woodland) of the whole of the eleven Departments affected was about 6,650,000 acres, of which 270,000 acres were in the “zone of destruction,” 2,000,000 acres in the “zone of trenches and bombardment,” and 4,200,000 acres in the “zone of simple occupation.” The claim, therefore, averaged over the whole area, works out at about $370 per acre and, averaged over the first two categories above, at more than $1000 per acre. This claim, though it is described as being in respect of unbuilt–on land, probably includes farm buildings (other than houses), implements, live stock, and the growing crops of August 1914. As experience has proved that the permanent qualities of the land have only been seriously impaired over a small area, these latter items should probably constitute the major part of the claim. We have also to allow for destruction of woodlands. But even with high estimates for each of these items, I do not see how we could reach a total above a third of the amount actually claimed.

These arguments are not exact, but they are sufficiently so to demonstrate that the claim sent in to the Reparation Commission is untenable. I believe that it is at least four times the truth. But it is possible that I have overlooked some items of claim, and it is better in discussions of this kind to leave a wide margin for possible error. I assert, therefore, that on the average the claim is not less than two or three times the truth.

I have spent much time over the French claim, because it is the largest, and because more particulars are available about it than about the claims of the other Allies. On the face of it, the Belgian claim is open to the same criticism as the French. But in this claim a larger part is played by levies on the civilian population and personal injuries to civilians. The material damage, however, was on a very much smaller scale than in France. Belgian industry is already working at its pre–war efficiency, and the amount of reconstruction still to be made good is not on a great scale. The Belgian Minister for Home Affairs stated in Parliament in February 1920 that at the date of the Armistice 80,000 houses and 1100 public buildings had been destroyed. This suggests that the Belgian claim on this head ought to be about a quarter of the French claim; but in view of the greater wealth of the invaded districts of France, the Belgian loss is probably decidedly less than a quarter of the French loss. The claim, actually submitted by Belgium, for property, shipping, civilians and prisoners (that is to say, the aggregate claim apart from pensions and allowances) amounted to 34,254 million Belgian francs. Inasmuch as the Belgian Ministry of Finance, in an official survey published in 1913, estimate the entire wealth of the country at 29,525 million Belgian francs, it is evident that, even allowing for the diminished value of the Belgian franc, which is our measuring rod, this claim is very grossly excessive. I should guess that the degree of exaggeration is quite as great as in the case of France.

The British Empire claim is, apart from pensions and allowances, almost entirely in respect of shipping losses. The tonnage lost and damaged is definitely known. The value of the cargoes carried is a matter of difficult guesswork. On the basis of an average of $150 for the hull and $200 for the cargo per gross ton lost, I estimated the claim in The Economic Consequences of the Peace (p. 132) at $2,700,000,000. The actual claim lodged was for $3,835,000,000. Much depends on the date at which the cost of replacement is calculated. Most of the tonnage was in fact replaced out of vessels the building of which commenced before the end of the war or shortly afterwards, and thus cost a much higher price than prevailed in, e.g., 1921. But even so the claim lodged is very high. It seems to be based on an estimate of $500 per gross ton lost for hull and cargo together, any excess in this being set off against the fact that no separate allowance is made for vessels damaged or molested, but not sunk. This figure is the highest for which any sort of plausible argument could be adduced, rather than a judicial estimate. I adhere to the estimate which I gave in The Economic Consequences of the Peace.

I forbear to examine the claims of the other Allies. The details, so far as they have been published, are given in Appendix No. 3.

The observations made above relate to the claims for material damage and do not bear on those for pensions and allowances, which are, nevertheless, a very large item. These latter are to be calculated, according to the Treaty, in the case of pensions “as being the capitalized cost at the date of coming into force of the Treaty, on the basis of the scales in force in France at such date,” and in the case of allowances made during hostilities to the dependents of mobilized persons “on the basis of the average scale for such payments in force in France” during each year. That is to say, the French Army scale is to be applied all round; and the result, given the numbers affected, should be a calculable figure, in which there should be little room for serious error. The actual claims were as follows in milliard gold marks:[75]

Milliard marks (gold).
France 33
British Empire37
Italy17
Belgium1
Japan1
Roumania4
——
93

This does not include Serbia, for which a separate figure is not available, or the United States. The total would work out, therefore, at about 100 milliard gold marks.[76]

What does the aggregate of the claims work out at under all heads, and what relation does this total bear to the final assessment of the Reparation Commission? As the claims are stated in a variety of national currencies, it is not quite a simple matter to reach a total. In the following table French francs are converted into gold marks at 2.20 (the rate adopted by the Commission as explained above), sterling approximately at par (on the analogy of the rate for francs), Belgian francs at the same rate as French francs, Italian lire at twice this rate, Serbian dinars at four times this rate, and Japanese yen at par.

Milliard marks (gold).
France 99
British Empire54
Italy27
Belgium16½
Japan1½
Jugo–Slavia9½
Roumania14
Greece2
———
223½