One was tempted to ask last summer, “Why does not Germany pay?” Mutilated and buffeted about as she has been since 1918, her people certainly seem to have kept their spirit, and very largely to have recovered from the starvation days following the World War. And yet, as is very clearly shown by the figures, her finances have become more and more involved until the Government faces bankruptcy. The first billion gold marks paid under the arrangement of 1921 caused a violent downward movement in German exchange. Each successive payment accentuated this movement until the paper mark became virtually worthless. Before the end of 1922 economists were of the opinion that Germany would never be able to pay the sums her own experts suggested in their counter-proposals at Versailles in 1919. As an economic problem, the reparations issue boils itself down to three questions: How much is Germany’s surplus per annum? How much of that surplus can be taken for reparations? How can the amount taken be transferred abroad? This is the practical side of the reparations question. To find the answers it was necessary to take into consideration basic economic laws and internal conditions in Germany. Only a healthy goose lays golden eggs. Only a strong government can tax adequately a nation that has representative institutions. Here the moral factors enter in. The people must have the willingness to make sacrifices, and must consent to the measures adopted by the Government. In the matter of reparations, for instance, nothing could be accomplished unless the German people had impressed upon them that their moral rehabilitation and the return of Germany to the family of nations on terms of equality depended upon making the tremendous sacrifices necessitated by adopting the policy of paying the piper for what they had done in the World War. But we all know that “the people” have to be shown the path of duty and honor and interest. Nations are run by men of large means, with the help of the bourgeois class. Public opinion is created by the press, pulpit, and platform.