danger into account, the object is, on the contrary, to subject Germany to pressure and surveillance financially, economically, and politically in a manner unexampled in the history of the civilized world. The instrument for this purpose is the "Reparation Commission" and the extraordinary plenitude of power which the draft of the peace treaty provides for it.

For the payment of the reparations and for all money requisitions arising from the peace treaty and the treaties supplementary thereto, as well as from the obligations of the armistice, a first charge is established, according to Article 248, upon all assets and revenues of the Empire and its constituent States. According to Section 12, Annex II, [Article 233], the Commission shall have the most extensive power to control and regulate the German system of taxation in order to make sure that, first, all Germany's assets, including the amounts set aside for the service or the redemption of any domestic loan, are applied preferentially to the sums to be paid by Germany to the account of reparation; and that, secondly, the German system of taxation, as regards charges upon individuals, shall be just as heavy as that of any one of the Powers represented upon the Commission. These provisions would mean absolute financial control of Germany by the Allies and complete mastery on their part over the budget of the Empire. They are impossible of execution even technically. For the granting of a priority of the first rank for the total capital of the debt upon all assets and revenues of the Empire and the constituent States is impossible, because thereby the credit of the Empire and the States would be so undermined, that a further independent financial management of these States would no longer be conceivable. How could Germany float new loans at home or abroad (except through the Reparation Commission), when the service of such a loan would be jeopardized by the previous charge, of an actually unlimited sum, upon all possible means of payment? Even the service of loans contracted up to this time by the German Empire or its constituent States is made completely dependent upon the judgment of the Commission, and yet the preservation of the economic life of Germany depends entirely upon the maintenance of this service. People who save both on a large scale and on a small, the industrial enterprises, the banks, the savings banks, the insurance companies and all other enterprises for the manage

ment of the capital of others, have invested great parts of their holdings in imperial and state loans, especially in war loans. If these should become even partially worthless, it would cause a new and final collapse of the economic life of Germany, even more fatal in its results than all the economic effects of the war and the provisions of the armistice. From such a collapse Germany would not be able, for an incalculable period of time, to recover sufficiently to meet any of her financial obligations, not even the reparation.

It follows from our very situation that Germany will have to bear a burden of taxation no less than the States represented upon the Commission. This burden of taxation will probably be considerably greater than anywhere else.

The Reparation Commission, as is planned at present, would actually be the absolute master of Germany. It would order Germany's economic affairs at home and abroad. According to Article 260, the Commission may demand that all German nationals cede their rights and interests in all enterprises of public interest (a very comprehensive and not clearly definable concept) and in all concessions in Russia, China, Austria, Hungary, Bulgaria and Turkey, as well as in the possessions and colonies of these countries or in territories which, according to the demands of the Allied and Associated Powers, are to be separated from Germany. The German Government itself must aid in the execution of this clause; it must prepare and submit a list of all these concessions and rights; must undertake the exp opriation; must compensate those dispossessed, and then deliver all the property thus expropriated to the Commission. Thus the Commission obtains an unheard-of power. It can expropriate almost all German property in the countries mentioned, while the expropriation of German possessions in the enemy countries themselves can take place, according to the draft of the peace treaty, at any time until further notice by continued liquidations and sequestrations. But how can Germany continue to work and discharge her financial obligations, especially payments to foreign creditors, for instance to the Allied and Associated Governments themselves, if every foreign possession is taken away from her beforehand and if she forfeits all sources of income of this kind? This expropriation would cause all the more serious injury to those affected by it, since the Empire could undertake to compensate those dispossessed in no other way than by titles to new domestic loans, the

value of which would be prejudiced in the highest degree by the peace treaty. The expropriation would almost amount to a confiscation.

The peace proposal speaks very frequently of the obligation of the Empire to make compensation for the private property which is to be expropriated for the benefit of the Allied and Associated Powers, without considering that this method can be applied only within certain limits for reasons having to do with the money market. In the immediate future it will be impossible to place German state loans in large amounts either at home or abroad, so that compensation could be made only by means of large issues of notes. The inflation, already excessive, would increase constantly if the peace conditions as proposed should be carried out. Moreover, great deliveries of natural products can take place only if the state reimburses the producers for their value; this means further issues of notes. As long as these deliveries last, there could be no question of the stabilizing of German currency even upon the present level. The depreciation of the mark would continue. The instability of the currency would affect not only Germany, however, but all the countries engaged in export, for Germany, with her currency constantly depreciating, would be a disturbing element and would be forced to flood the world market with goods at ridiculously low prices. Therefore, quite apart from all the other reasons mentioned, we must reject the proposals for expropriations and excessive deliveries of natural products set forth in the peace conditions by reason of this consideration for the state of the money market.

In the draft of the peace conditions all the countries at war with Germany have mechanically added their manifold wishes; there is no unified fundamental conception; contradictions multiply from chapter to chapter. A revision is necessary in order to prevent the breakdown, because of this mechanical addition, of the economic organization upon which these demands are made. A fundamental solution could be found only in connection with all related questions and through the cooperation of all the parties interested.

According to Article 251, the Commission is also to have power to decide how much should be spent for the food supply and for the purchase of raw materials from abroad; that actually gives the Commission the power to decide whether and to what degree the German people is to be supplied with food, and to what extent industry may be carried on, so

that there can no longer be any question of economic self-determination and initiative.

According to Article 241, Germany would be under obligation to promulgate all the laws necessary to assure the complete execution of the agreements. Is this to be taken to mean, in conjunction with Article 234 and section 12 of Annex II, that Germany would have to promulgate, by regulation of the Commission, all laws concerning taxation which the Commission should demand? This matters little, when the Commissior is to decide, first, how the revenues of the German State are to be spent; when, moreover, at their behest, expenditures for the payment of interest on the war loans, for the allotments of the disabled German soldiers and for the pensions of the dependents of fallen soldiers, must cease or be cut down, as well as the expenditures for cultural purposes, schools, higher education, etc.; then indeed is German democracy destroyed at the very moment when the German people, after mighty efforts, was on the point of establishing it; destroyed by the very ones who during the whole war never grew weary of insisting that they wanted to bring democracy to us! When the right to dispose of the income of the state is taken away, parliamentary government disappears, and the right of the Reichstag to vote upon the budget becomes a hoax. Popular representation and governments in Germany would have only one task left, namely, to render to the Commission the services of a bailiff in the collection of the debts. Germany is no longer a nation and a state, but it becomes a commercial firm, forced into bankruptcy by its creditors, without being given the chance to prove whether it be willing to fulfill its obligations voluntarily. The Commission, which is to have its permanent seat outside Germany, will possess incomparably greater rights in Germany than a German emperor has ever had; under its régime the German people would be for many decades without rights, deprived of all independence and of all initiative in commerce and industry and even in popular education, to a greater extent than ever a nation was in the time of absolutism.

V.

All these important questions, which are subject to the decision of the Reparation Commission, may be decided by this Commission entirely at its own good pleasure. Whether it is a question of the valuation of the Saar mines, or of the fixing of the amount of the

indemnity to be imposed on Germany, or of the reduction and alteration of the schemes for the payments and the valuation of material to be returned by Germany, or of the fixing of the price of the goods and the foreign assets to be delivered by Germany, or of the calculation of the share of the imperial and state debts to be assumed by the territories ceded by Germany, or of the fixing of the value of the property in the ceded territories formerly belonging to the Empire or to the single States and now devolving upon foreign States-all this and much more, which cannot be enumerated in detail, the Commission is to have full power to decide. Even Annex II, according to whose provisions the problems here discussed are to be settled, may be modified, consonant with the provisions of the treaty, by a unanimous decision of the Governments represented upon the Commission, without even any right of consultation on the part of Germany. Germany has the right to a hearing in many questions, not in all, but she is to have no voice in the decisions made by the Commission in secret sessions. We are to be denied the right granted as a matter of course in all civilized countries to every person, in the simplest kind of private dispute, namely, that both parties state each their own view of the case and defend their case before the other party, and that in case of failure to agree, a third person, who is not a party to the dispute, decides. The Commission is, at the same time, party to the dispute and judge.

In other ways, too, Germany is deprived of her rights. The Allied and Associated Governments reserve the right to retain and to liquidate German property of every kind, even after the armistice, or to subject it to other war measures, either already in force or to be introduced in the future (Article 297, Annex, section 9), while they, on the contrary, demand the most extensive protection for the property of their nationals in Germany. In Article 252, they demand for themselves the right to dispose of all property of enemy subjects in their countries, while they immediately thereupon, in Article 253, take the position that the charges and mortgages effected in favor of the enemy Powers or their nationals before the war must not be affected by the provisions of the peace treaty. Thus there are formulated different conceptions of private property for the conqueror and for the conquered; what is demanded on behalf of the one is expressly denied to the other.

We must lodge an equally decisive protest against Article 258, according to which Germany is to renounce all representation upon, or