The Committee draws a sharp distinction between Germany's tax-paying power
and her capacity to make external payments, and remarks that failure to recognize this distinction has been " the most fruitful source of difficulty." It is recommended that the schedule of German reparation payments should provide for 50 million pounds in 1924-25, rising to 125 millions in the year 1928-29. Afterwards 125 millions will be the normal annual payment. It is satisfactory that a definite annual amount has been decided upon, which will enable the German nation to know where it stands. We are sorry, however, that the Committee recom- mends further that when the normal annual payment of 125 millions has been reached, an additional sum should be paid computed upon the index of prosperity. The principle of " the harder you work, the more you shall pay " is bad in itself, though we gladly admit that in this case it applies not to the main payment but only to a kind of super-tax. It is to be noted throughout, however, that the Committee has not regarded the total amount of reparation to be paid by Germany or the time within which it is to be paid as coming within the terms of reference to the Committee. Thus the last figure fixed for reparations by the Allies—i6,600,000—presumably stands. It will be for the Allies to exercise wisdom in giving Germany inducements to pay willingly and quickly.
