Commission's total, probably to not much more than a half.

THE BREAKDOWN OF GERMANY

But that is not the end of the story. While both the above settlements
remain in force, the temporary regime under which Germany has been
paying is different from, and much less than, either of them. By a
decision of last March Germany was to pay during 1922 L36,000,000 (gold)
in cash, _plus_ deliveries in kind. The value of the latter cannot be
exactly calculated, but, apart from coal, they do not amount to much,
with the result that the 1922 demands are probably between a third and a
quarter of the London Settlement, and less than one-sixth of the
Reparation Commission's original total. It is under the weight of this
reduced burden that Germany has now broken down, and the present crisis
is due to her inability to continue these reduced instalments beyond the
payment of July, 1922. In the long run the payments due during 1922
should be within Germany's capacity. But the insensate policy pursued by
the Allies for the last four years has so completely ruined her
finances, that for the time being she can pay nothing at all; and for a
shorter or longer period it is certain that there is now no alternative
to a moratorium.

What, in these circumstances, does M. Poincare propose? To judge from
the semi-official forecasts, he is prepared to cancel what are known as
the "C" Bonds, provided Great Britain lets France off the whole of her
debt and forgoes her own claims to Reparation. What are these "C" Bonds?
They are a part of the London Settlement of May, 1921, and, roughly
speaking, they may be said to represent the excess of the Reparation
Commission's assessment over the capitalised value of the London
Schedule of Payments, and a bit more. That is to say, they are pure
water. They mainly represent that part of the Reparation Commission's
total assessment which will not be covered, even though the London
Schedule of Payments is paid in full.

In offering the cancellation of these Bonds, therefore, M. Poincare is
offering exactly nothing. If Great Britain gave up her own claims to
Reparations, and the "C" Bonds were cancelled to the extent of France's
indebtedness to us, France's claims against Germany would be actually
greater, even on paper, than they are now. For the demands under the
London Settlement would be unabated, and France would be entitled to a
larger proportion of them. The offer is, therefore, derisory. And it
seems to