The New York herald., 1921-01-23
INDEMNITY TOTAL
MAY NOT EXCEED
$25,OOO,OOO,OOO
French Political Crisis
Brings Forward Measure
of German Fulfilment.
NAVAL POWER is GONE
Army Strength Problemati-
cal, but Has No Semblance
of an Organization.
PREPARATIONS AN ISSUE
Large Share Of First install
ment on Indemnity Has
Been Paid.
PREPARATIONS AN ISSUE
Speofal Despatch to THE New York HERALD
New York Herald Bureau,
L q Inn

special Despatch to THE New York HERALD
New York Herald Bureau,
Washington, ID. c., Jan. 22.
II Premier Leygues failed to satisfy
French popular demands with regard
to the indemnity to be exacted from
Germany there Is little chance, In the
opinion of competent observers here,
that the new Cabinet that has just
been formed by Aristide BRAND will
be more successful. Tho critical po-
ltical situation in France at this time
serves to bring to the fore the whole
question Of how far Germany has car
ried out the terms Of the treaty OF
Versailles, which is Of the utmost In
terest to the United States as well
as to Europe, although without the
financial and political Importance that
it holds for France.
The final figure on the amount to be
paid by Germany, which must be set
before May l, 1921. probably will not
be in excess of $4,000, ,0OO,0 and may
be as low as s15,000.000, 5000. but even
If it should be placed as high as $780,
OOO. 900, 900, the French people would
still be disappointed
Lord CunIiHe's Estimate.
Intentionally or unintentionally Lloyd
George appears to have been RESPONSE
BILE for the optimism of the French con-
y cerning the indemnity they might ex-
meet from the Germans. Early in the
negotiations which followed the arms
tice Lord Cunliffe, governor or the BANK
of England, estimated that Germany
could pay at ueast $3.50, 600, 100000, and
Lloyd George is said to nave pro1nui-
gated that idea extensively.
The French, seiZing eagerly upon the
figures, saw in German indemnity
panacea for all the ills which war had
brought upon them. Their optimism
was shared to a considerable extent py
French diplomats, who In their en-
thusiasm forgot some of their pro-
verbal shrewdness and permitted Great
Britain TO gobble UP some OF the MINOR
plums, which, though small in compari-
son with the total indemnity expected,
were tangible.
Then came the rude awakening. Lord
Cunliffe's estimate it developed, had
been made without consultation with the
British Cabinet or with British eco
y,
men made their report IL was 10 the
effect that Germany would not be able
to pay more than $25,000,OOO,O0O or
$50. 600 000. 900.
American economic experts who went
thoroughly into the German internal
situation at the time the economic
clauses of the treaty were framed
doubted whether Germany could pay
more than Sl5. 1000, 100000. The French IN
tor faAa
more drastic steps for enforcing pay
ment. but they were met by consistent
opposition from Great Britain. The
British Labor party insisted upon easier
terms and made its insistence felt IN
the Government, and in botn Great
Britain and the United States there de-
veloped a pretty general feeling against
any further occupation OF German ter
ritory as a means OF wringing larger
payments.
France then made the blunder OF
sending negro troops into Germany, CIV
ing the Germans an opportunity Wnetn-
~ with iustifica ton or not. TO charge
outrages against the white population
and to increase the opposition among
The Allies to further French pressure
Measure of FuIhlment.
On f,e whole. the Germans appear TO
r,va carried out the more important
rboses of the Versailles treaty fairly
,tell albeit with a goodly amount OF
,..nostulation and complaining. Ineif
r,vai mower has been effectually de-
.sroved their military force has been
Z, reduced as to render them pracu-
callv impotent as n nation, tneir COLO
sag have been surrendered, their new
nr,,daries have for all practical pur-
,,osos -been accepted and at least n gooo
,a,.t ~ the 90 0OOO. 900, 900 gold marks Sup
,,latad 10 be paid before May "a, lszl'
has been produced. a.. =,
E,xcent for the sinking OF the heet al
Scapa Flow, the practical extinction "a
the German navy was accoIlpi'sIsu ~
s,.itho,,t ,intoward incident. That the
carmans surrendered their navy reluct-
ontly goes without saying, put' IN tne
very nature Of things, they were una pie
to resist the Allies demands effectively
Nvarshins could not be hidden, as were
ronsiderable quantities of rifles, cannon
ana airnIane parts, and the Allies had
suaiclent naval forces present to make
anv attempt at resistance out OF the
question. IL,
at the beginning OF the war was VIZ
third naval power of the world now
consists of six battleships, six light
cruisers. twelve destroyers and twelve
tornedo boats with regard TO subma-
rinas there have been conflicting re-
ports. Under the treaty Germany was
forbidden TO have submarines, and con-
siderable number OF these vessels were
surrendered Nevertheless. there nave
been tales from time TO time OF large
numbers Of the undersea craft being
built secretly, and at one time II was
reported, with some show OF authority
that Germany had rs many U-ooats az
when sine entered the war.
Rumors Prove Unfounded.
Most Of these reports have been proved
70 be without foundation. The inter
nilicd commissions have perfectly free
access to all sections Of Germany and
arl therefore I'm position 20 investigate
All rumors OF suspicious activity There
are known to be 500 submarine motors
in Germany but these were left will
the full knowledge and consent Of the
allied authorities. They are OF the Die
sci type, and are suitable for use IT
commercial shipping. At the earnes
request Of the German Government they
were allowed 20 be retained. and the
Germans were given until May / OF this
year TO convert them TO commercial
uses.
Naval personnel was limited by the
treaty to $4,000 officers and men, and
Whale this stipulation has ostensibly