settlement which was of great and obvious advantage to Germany. A loan
to Germany, on Germany's own credit, yielding, say, 8 to 10 per cent.,
would not in my opinion be an investor's proposition in any part of the
world, except on a most trifling scale. I do not mean that a larger
anticipatory loan of a different character--issued, for example, in
Allied countries with the guarantees of the Allied Government, the
proceeds in each such country being handed over to the guaranteeing
Government, so that no new money would pass--might not be possible. But
a loan of this kind is not at present in question.

Yet a loan of from £50,000,000 to £100,000,000--and I repeat that even
this figure is very optimistic except as the result of a settlement of a
kind which engaged the active goodwill of individual Germans with
foreign resources and of foreigners of German origin and
sympathies--would only cover Germany's liabilities under the London
Schedule for four to six months, and the temporarily reduced payments of
last March for little more than a year. And from such a loan, after
meeting Belgian priorities and Army of Occupation costs, there would not
be left any important sum for France.

I see no possibility, therefore, of any final settlement with M.
Poincaré in the immediate future. He has now reached the point of saying
that he is prepared to talk sense in return for an enormous bribe, and
that is some progress. But as no one is in a position to offer him the
bribe, it is not much progress, and as the force of events will compel
him to talk sense sooner or later, even without a bribe, his bargaining
position is not strong. In the meantime he may make trouble. If so, it
can't be helped. But it will do him no good, and may even help to bring
nearer the inevitable day of disillusion. I may add that for France to
agree to a short moratorium is not a great sacrifice since, on account