Commission's total, probably to not much more than a half.


THE BREAKDOWN OF GERMANY

But that is not the end of the story. While both the above settlements
remain in force, the temporary régime under which Germany has been
paying is different from, and much less than, either of them. By a
decision of last March Germany was to pay during 1922 £36,000,000 (gold)
in cash, _plus_ deliveries in kind. The value of the latter cannot be
exactly calculated, but, apart from coal, they do not amount to much,
with the result that the 1922 demands are probably between a third and a
quarter of the London Settlement, and less than one-sixth of the
Reparation Commission's original total. It is under the weight of this
reduced burden that Germany has now broken down, and the present crisis
is due to her inability to continue these reduced instalments beyond the
payment of July, 1922. In the long run the payments due during 1922
should be within Germany's capacity. But the insensate policy pursued by
the Allies for the last four years has so completely ruined her
finances, that for the time being she can pay nothing at all; and for a
shorter or longer period it is certain that there is now no alternative
to a moratorium.

What, in these circumstances, does M. Poincaré propose? To judge from
the semi-official forecasts, he is prepared to cancel what are known as
the "C" Bonds, provided Great Britain lets France off the whole of her
debt and forgoes her own claims to Reparation. What are these "C" Bonds?
They are a part of the London Settlement of May, 1921, and, roughly
speaking, they may be said to represent the excess of the Reparation
Commission's assessment over the capitalised value of the London