The holders
of loan stock in every country are creditors for vast sums towards
the State, and the State, in its turn, is creditor for enormous sums
towards the taxpayers. The whole situation is highly artificial and
irritating. We shall be unable to move unless we succeed in freeing
ourselves from this chain of paper.
The work of reconstruction can begin by annulling the inter-allied
debts.
If it is not thought desirable to proceed at once to annulment, there
remains only the solution of including them in the indemnity which
Germany must pay in the measure of 20 per cent., allocating a certain
proportion to each country which has made loans to allied and
associated governments on account of the War. In round figures the
inter-allied loans come to 100 milliards. They can be reduced to 20,
and then each creditor can renounce his respective credit towards
allies or associates and participate proportionately in the new credit
towards Germany. Such a credit, bearing no interest, could only be
demanded after the payment of all the other indemnities, and would be
considered in the complete total of the indemnities.
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