THE COMMISSION ON REPARATIONS
No sketch of the Peace Conference, even one as cursory and superficial as this, could give any idea of the picture without a more detailed reference to the workings of some particular Commission that played an important part in the building up of the Peace Treaty. Hence I may be permitted to mention the Commission on Reparations. All things considered, this was perhaps the most important Commission at work.
The original Commission on Reparations was divided into three sub-commissions. Commission Number One was to determine upon what principles reparation should be demanded from Germany, that is to say, what items of damage should be included. In addition to physical damage inflicted by Germany upon the Allies, by reason of her aggression on land or sea, and from the air, should the cost of pensions for dead French soldiers be claimed? Was the entire cost of the war as waged by England, for instance, to be included as a charge against Germany? In other words, just what categories should be adopted in order to define Germany's liability?
This Commission Number One sat for weeks, and it was only towards the very end that it succeeded in establishing the categories. At the start there was a sharp divergence of opinion among the various delegations. The American delegation pointed out that under President Wilson's Fourteen Points costs of war would have to be excluded. The British delegation maintained otherwise. The French thought the costs of war ought to be included, but deemed the matter academic, inasmuch as Germany could never pay the total war costs. And so the argument ran.
Sub-commission Number Two on reparations had for its object to determine what Germany's capacity to pay was, and what the proper method of payment should be. Sub-commission Number Three was to devise sanctions or guarantees by which the Allies should be assured of receiving the payments finally determined upon.
For weeks I was active upon Sub-commission Number Two, and in fact was charged with the duty of drawing up the initial report covering the question of Germany's capacity to pay. Early in the deliberations of this Sub-commission it became apparent that its work was of momentous import, for whatever the Sub-commission determined as Germany's capacity to pay, undoubtedly that sum would be fixed as what Germany should be obligated to pay. Theoretically, as the French had pointed out, it did not make a great difference what categories of damage were included, because Germany would probably be unable to pay even the extent of material damage she had wrought. It was equally evident that she would be compelled by the Allies to pay to the utmost extent of her capacity. Therefore Sub-commission Number Two was in effect, naming the amount of the German "indemnity."
AN ESTIMATE OF GERMANY'S CAPACITY TO PAY
This knowledge rendered the work of the delegates on Sub-commission Number Two considerably more difficult. To estimate Germany's capacity to pay over a series of years was by no means a purely scientific matter. No banker, or economist, or financier, whatever his experience, could look far enough into the future to be able to say what Germany could or could not pay, in ten, twenty, or thirty years. The initial estimate made by one of the delegations, as representing Germany's capacity to pay, was one thousand million of francs. Another estimate was twenty-four billion sterling, about one hundred twenty billion of dollars. Now Germany's entire wealth was estimated at not over eighty billion dollars, so it was inconceivable how it could be possible, even over a series of years, for Germany to pick up her entire commonwealth and transfer it to the Allies. Most of Germany's property consists of the soil, railroads, factories, dwellings, and none of those things can be transported, none can be made available for the payment of reparation. Hence the question arose as to how much liquid wealth Germany could export year after year and still maintain her own economic life. This was the estimate upon which the British, French and American delegations wrangled pleasantly for weeks. Whenever we reached too tense a point, tea and toast was served, with jam to sweeten the atmosphere a bit, and then we would start afresh.
As a matter of fact, as we encouraged newspaper reporters to surmise, we had nearly arrived upon a basis of agreement for demanding a fixed sum from Germany. That sum would not have exceeded forty or forty-five billion dollars, with interest added. The American delegation believed it to be far sounder economically to name a fixed sum and thus limit Germany's liability, so that all nations could address themselves to a definite end and arrange their fiscal and taxation policies accordingly. But both Mr. Lloyd George and M. Clemenceau urged that public opinion in both their countries would not acquiesce in any sum that fell far below previous expectations; that, therefore, inasmuch as it was difficult anyway to arrive at once upon the exact amount of damage caused, it would be wiser to leave the amount of reparation open, to be determined by a commission which should examine into the damage sustained, and fix the total amount within two years. America's material interest in the question was so limited that President Wilson finally did not oppose Mr. Lloyd George's and M. Clemenceau's judgment. This, in brief, is the history of the Reparation clauses in the Treaty. As I have already said, if we realize that in almost every one of the other chapters similar complex courses of procedure had to be followed, we shall not be surprised at the time which the Treaty took for drafting.