2. Property in ceded territory
or surrendered under the armistace
As the treaty has been drafted Germany will not receive
important credits available towards meeting reparation in respect
of her property in ceded territory.
Private property in most of the ceded territory is utilised
towards discharging private German debts to Allied nationals, and
only the surplus, if any, is available towards reparation. The
value of such property in Poland and the other new states is
payable direct to the owners.
Government property in Alsace-Lorraine, in territory ceded to
Belgium, and in Germany's former colonies transferred to a
mandatory, is to be forfeited without credit given. Buildings,
forests, and other state property which belonged to the former
kingdom of Poland are also to be surrendered without credit.
There remain, therefore, government properties, other than the
above, surrendered to Poland, government properties in Schleswig
surrendered to Denmark,[48] the value of the Saar coalfields,
the value of certain river craft, etc., to be surrendered under
the ports, waterways, and railways chapter, and the value of the
German submarine cables transferred under annex VII of the
reparation chapter.
Whatever the treaty may say, the reparation commission will
not secure any cash payments from Poland. I believe that the Saar
coalfields have been valued at from £15 million to £20 million. A
round figure of £30 million for all the above items, excluding
any surplus available in respect of private property, is probably
a liberal estimate.
There remains the value of material surrendered under the
armistice. Article 250 provides that a credit shall be assessed
by the reparation commission for rolling-stock surrendered under
the armistice as well as for certain other specified items, and
generally for any material so surrendered for which the
reparation commission think that credit should be given, 'as
having non-military value'. The rolling-stock (150,000 wagons and
5,000 locomotives) is the only very valuable item. A round figure
of £50 million, for all the armistice surrenders, is probably
again a liberal estimate.
We have, therefore, £80 million to add in respect of this
heading to our figure of £250-350 million under the previous
heading. This figure differs from the preceding in that it does
not represent cash capable of benefiting the financial situation
of the Allies, but is only a book credit between themselves or
between them and Germany.
The total of £330 million to £430 million now reached is not,
however, available for reparation. The first charge upon it,
under article 251 of the treaty, is the cost of the armies of
occupation both during the armistice and after the conclusion of
peace. The aggregate of this figure up to May 1921 cannot be
calculated until the rate of withdrawal is known which is to
reduce the monthly cost from the figure exceeding £20 million
which prevailed during the first part of 1919, to that of £1
million, which is to be the normal figure eventually. I estimate,
however, that this aggregate may be about £200 million. This
leaves us with from £100 million to £200 million still in hand.
Out of this, and out of exports of goods, and payments in
kind under the treaty prior to May 1921 (for which I have not as
yet made any allowance), the Allies have held out the hope that
they will allow Germany to receive back such sums for the
purchase of necessary food and raw materials as the former deem
it essential for her to have. It is not possible at the present
time to form an accurate judgment either as to the money-value of
the goods which Germany will require to purchase from abroad in
order to re-establish her economic life, or as to the degree of
liberality with which the Allies will exercise their discretion.
If her stocks of raw materials and food were to be restored to
anything approaching their normal level by May 1921, Germany
would probably require foreign purchasing power of from £100 to
£200 million at least, in addition to the value of her current
exports. While this is not likely to be permitted, I venture to
assert as a matter beyond reasonable dispute that the social and
economic condition of Germany cannot possibly permit a surplus of
exports over imports during the period prior to May 1921, and
that the value of any payments in kind with which she may be able
to furnish the Allies under the treaty in the form of coal, dyes,
timber, or other materials will have to be returned to her to
enable her to pay for imports essential to her existence.[49]
The reparation commission can, therefore, expect no addition
from other sources to the sum of from £100 million to £200
million with which we have hypothetically credited it after the
realisation of Germany's immediately transferable wealth, the
calculation of the credits due to Germany under the treaty, and
the discharge of the cost of the armies of occupation. As Belgium
has secured a private agreement with France, the United States,
and Great Britain, outside the treaty, by which she is to
receive, towards satisfaction of her claims, the first £100
million available for reparation, the upshot of the whole matter
is that Belgium may possibly get her £100 million by May 1921,
but none of the other Allies are likely to secure by that date
any contribution worth speaking of. At any rate, it would be very
imprudent for finance ministers to lay their plans on any other
hypothesis.
