The first point is not hard to understand. Payments abroad are made by favorable trade-balances. Gold marks are to be found by selling goods. How many gold marks Germany could pay into the coffers of other countries would depend upon her surplus over what she had to pay for imported raw materials and food-stuffs. Consequently Germany’s good faith alone was not sufficient to enable her to live up to the obligations she assumed. Faced with an impossible financial task, she had to default. The second point is more subtle. If we had no internal revenue inspectors, and no laws to compel individual men and corporations to show their books for inspection, American national honesty would not stand the strain put upon it. In France, on the same day the Ruhr invasion was approved on the ground of Germany’s bad faith and voluntary default, the reporter of the budget declared that the Government had failed to obtain income tax returns on 85 per cent of the earnings of the year 1922! To get the sixty million inhabitants of the German Empire working for a generation to pay their conquerors sums the amount of which depended upon their prosperity would require rigid control of public and private budgets down from Berlin to the smallest commune and corporation. For if we did not govern the Germans and tell them what they should and should not put into their budget for expenses, in a very short time we should find that they had no surplus. Operating expenses and “indispensable” public works would take all the money the Government could raise in taxes. Private enterprises know how to find ways of spending money and improving their plants up to the point where nothing is left beyond the bare margin necessary for cost of production to meet competition. The British have well grasped these two points. Not needing the indemnities as the French need them, not having that internal and political economic problem to face, the British have come to feel that reparations are not, after all, of prime importance. Insisting upon them, and furnishing practical means for their collection, would involve unwelcome German competition in world markets and the maintenance of a standing army in Germany. The game would not be worth the candle. And it meant more than indemnities for British prosperity to have Germany restored rapidly to economic health. The tone of the British press is unmistakable: Germany must pay, of course, but do not count upon our help in making her pay, and, above all, we must not pay for her! If American public opinion, now at ease because we are outside the European muddle, had any conception of what helping to collect the indemnity meant, our reactions would be the same as those of the British.