Great Britain and the United States have no budget deficits to face. We explain this by our willingness to tax ourselves and by drastic reduction of military and naval expenses. “An admirable example the British set us, and we are following it,” said a treasury official to me in Washington. “And an admirable example the British have set the other Allies in funding their debt to us. Now, if the French would tax themselves, if they would pay their debts, and if they would put their army back on a peace footing, they wouldn’t be in such a hole.” The same evening I read in Washington’s most influential newspaper, “If the French stop bothering the world about a debt they will never collect, and realize that prosperity comes from working, as we Americans do, we shall have peace.” Although it has been impressed upon them over and over again, British and Americans do not seem to understand that northern and northeastern France were industrial and mining regions, from which France derived most of her wealth; that these regions were ruined by fighting over them and by the German occupation; and that France still suffers not only from the loss of their normal revenue but also from the necessity of incorporating in the national budget enormous sums for reconstruction. Up to the end of 1922 the French Government had advanced from the Treasury, or guaranteed in principal and interest on bonds floated, the huge sum of 85,000,000,000 francs for reconstruction. Neither the British nor we face this unique problem. Yet, when we speak of the French taxing themselves and cutting down expenses to avoid budget deficits, we give smugly the illustration of ourselves and how nobly we are solving financial problems, as if there were a similarity between our situation and that of France. We can get along without the German indemnity because the Germans did not kill millions of us and cripple our industries in Pittsburg and Chicago. We can tax ourselves and not break under the load, although we groan because the war, taken for its entire period, made us wealthy. The British were hard hit, but, as Mr. Austen Chamberlain complacently explained to the House of Commons, the map of the world showed why the British Empire need not worry about meeting its obligations. Economists agree on two points: that Germany cannot pay what is demanded of her, and what she was compelled to agree to pay by the May ultimatum of 1921; and that the plan of making Germany pay according to her prosperity (that is, the tax on exports) will be worked out only if the creditors of Germany take over the governing of the country.