The Washington herald., 1922-07-23
By SIR PHILIP GIBBS.

LONDON. July 22.-It II perhaps
little cruel and insolent to say we
are dismayed and surprised at the
downfall Of German money. and her
inability to make further reparation
payments. merely because It reveals
the stupendous folly of European
politicians and peoples.
There Is no justification to that
surprise: for years IL has been clear
to minds which regarded economic
laws Of life without illusion that the
scale and system of payments imposed
on Germany by the Versailles treaty
were impossible of fuilfillment, and
that an attempt at fullfllment would
not only drag Germany to ruin but
would prevent the recovery of Eu-
rope as a whole.
Those who proclaimed this simple.
self-evident truth were denounced as
pro-Germans. crawling pacifists.
enemies Of France. when they were
merely students of elementary arith-
metic All efforts to tranquillze the
European situation, to restore the
normal laws of supply and demand
between nations by stabilizing ex-
change. were frustrated by the fury
of political passion. the fantastic
illusions OF the popular mind.
All Europe Blind.
II was not only France that in
sisted on the inviolability of the
Versailles treaty upon the false as
sertion that Germany could and
should pay for all war costs. all
oll - IL "a
nations engaged in the great war
against her. That view was sup
ported for a long time by the pub
lie opinion of Great Britain and the
British dominions. and of many
people in the United States. Lloyd
George came into power by the pas
sionate proclamauons of that gos-
pei, though very soon afterward he
endeavored to modify it's severity
to Germany, thereby incurring the
enmity of France and of many pow
erful groups In his own country.
In France there was not ons
statesman or publicist of any note
who dared to tell the French people
they were living in a FOOLS para
disc and that the money being paid
by Germany was only SUFFICIENT to
maintain the army of occupation,
that not all the strength of the
French army. nor any invasion of
the Ruhr nor shaking of German
pockets under threats of violence,
could produce real money from an
enemy painting under the strain of
defeat, without forcing them into
bankruptcy. which would also mean
bankruptcy to France.
French Attitude Changing.
BRAND saw the truth, and thus
lost his premiership by even the
timidest advance to more reason
able adjustments of the German In
demnity. Poincare came into power
by violent professions of faith in
the old falsities of making Germany
pay the full pound of flesh; many
newspapers in many countries share
the blame of bolstering up popular
Ignorance and passion by asserting
constantly that Germany was i'm
mensely rich. lightly taxed. and well
able to fulfill the treaty obligations
In money payments to all her for
mer enemies.
Now France and the rest of the
world see by the devastating COL
lapse of the German mark. by the
actual bankruptcy of Germany, that
all those hopes and arguments
were based on sheer economic nom
snse. The reparations commits
sion no longer hides its definite
conviction that Germany has come
to the end of her resources ana
that a moratorium or suspension of
payments must be granted under
certain drastic conditions. France
is utterly disillusioned and exceed
ingly alarmed: she admits at last
that her calculations are unsound,
that her financial state is desperate,
because 1t Is based on German gold
which did not exist
No Use Dodging Facts.
1t is no use lodging any longer
the plain. unpopular facts about
Germany and the rest of Europe.
In self-defense I must claim that
have never lodged them. In spite
of the theoretical justice that Ger
many should pay for the enormous
damage and costs of the war. it be-
came clear to me in Germany itself
that the penalties imposed on her
were beyond the possibilities of any
people.
Not even Great Britain or the
United States could stagger on
under such colossal debts. Inn
mediately after the war they re-
organized their industrial life and
worked with feverish energy
which was almost miraculous. For
a time the falling exchange value
of the mark enabled Germany to
undercut prices of goods in all the
markets of the world, thereby in
fuencing and doing severe damage
to the British and American export
trade: but it was an industry based
on shifting sands.
Every time the German govern
ment paid an installment of the
indemnities, by the purchase of for
eign money. their own credit. which
was based on real wealth, was under
mined, their own money lost more of
its purchasing power. That neces-
STATED the use of the printing press.
and every new issue of marks depre-
ciated the mark still further. Ger
many could sell cheap but had to buy
dear. That Is bad business and carry
ing out the process to its logical con-
clusion means that inevitable default
which has now happened.
Threatens Revolution.
It is of course true that great in
dustrialists have invested considerable
amounts in foreign securities and
a lrI - h<r- iii A.