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By Root 902 0

Treaty.” Shortly after the opening of the conference the Supreme Council had set up a Commission on the Reparation of Damage, which was to look at the related questions of how much the enemy countries (which mainly meant Germany) should pay, how much they could pay, and how payment should be made. The subcommittee for the last point rarely met, but the other two subcommittees were in session day and night, producing little beyond mounds of paper. By the time Wilson left for the United States on February 14, the commission was deadlocked, with the Americans holding out for a relatively moderate figure and the British and the French demanding more. “They play with billions as children play with wooden blocks,” said a journalist cynically, “but whatever we agree to will largely be a figure of speech, for the Germans will never be able to pay such a vast sum.” The British were asking for £24 billion ($120 billion), the French for £44 billion ($220 billion); the American experts recommended £4.4 billion ($22 billion). 11

The Americans also wanted to include a fixed amount in the treaty. This, their experts argued, would help to end the financial uncertainty that was holding back Europe’s recovery. The Europeans disagreed. As Montagu, one of the British cabinet ministers involved in the discussions, said: “If too low a figure were given Germany would pay out cheerfully and the Allies would get too little, while, on the other hand, if too high a figure were given, she would throw up the sponge and the Allies would get nothing.12

It is easy with hindsight to say that the victors should have been less concerned with making Germany pay and should have concentrated more on getting Europe going again. But after a war that had brought destruction on such a scale and shaken European society so deeply, how could political leaders speak of forgetting? In any case, public opinion would simply not allow them to do so. “Make the Hun pay,” said the British. “Let Germany Pay First,” said the posters covering the walls of Paris. 13

The European leaders saw danger even in assessing Germany’s capacity to pay, because the figure was bound to be lower than the public expected. The British and the French pointed out that it was very difficult to judge how much Germany—or whatever was to be left of it—would be able to pay. The country was in a bad way, its economy and its government equally shaky. The Germans could not provide reliable statistics, even if they had wanted to. Foreign trade had evaporated, and with it an important source of revenue. Government finances were in a mess. Taxes had been kept low for political reasons and the war costs had been paid for largely through the issue of huge amounts of war bonds and special notes. The plan had always been for Germany to settle accounts for the war when it had won and could transfer its costs to the defeated enemy. In the last year of the war this had in fact started to happen; the treaties of Brest-Litovsk with Russia and of Bucharest with Rumania had transferred control of huge resources to Germany. The Bolsheviks had also been obliged to start payments on an indemnity of $600 million. In the defeated Germany of 1919, conservatives protested loudly against any attempts to raise taxes or to default on government bonds, while the left pushed for benefits for veterans and widows and orphans, subsidized food and increased wages. The government meekly acquiesced to both, and Germany’s deficit climbed until, by 1921, it amounted to two thirds of the budget. There was little incentive to cut expenditures or raise taxes merely to pay reparations.14

Nor was it easy to determine the Allied bill. “In my poor country France,” said the French minister of the liberated regions, “there are hundreds of villages into which no one has yet been able to return. Please understand: it is a desert, it is desolation, it is death.” The American army engineer and his team of assistants who made what was probably the most detailed study of the war-torn parts of France and Belgium estimated in January 1919 that it would