It is uncertain yet whether the London Agreement embodying the Dawes Report will actually be fulfilled by Germany. In my belief it will not be fulfilled. It is impossible for me to believe that Germany is capable of paying a hundred and twenty-five million pounds sterling and more in a rising scale for an indefinite number of years. England could not do so, and England is richer than Germany. The American debt, which is being paid off at the rate of £35,000,000 a year, is a burden which makes Great Britain breathe hard. That is hardly more than one quarter of what the German people are expected to pay, and I do not think they can do so for more than a few years. They can only do so, as I have pointed out, in one way: by creating a trade balance in their favour which would enable them to transfer that sum to their creditors after paying for the essential services of their own nation. If they are able to get such a trade balance it will mean that they are overwhelming the world markets with German goods. Who is going to let them do so? The United States would surely put up barriers against their manufactured articles. Great Britain will not admit them in such an overpowering quantity, whatever her theoretical allegiance to Free Trade. In other markets these cheap German goods will oust British and American competitors. The factories of Great Britain will be producing articles at a price which other nations will refuse to pay when Germany is canvassing for contracts. Germany will default again, I am certain, unless by a miracle of industry her people, on slave wages, capture the world’s trade, which would be worse than default to British manufacturers and in a less degree to those in America. Whatever happens it is a serious outlook, because default would mean a new political crisis in Europe—all the old wounds open again—and success would ruin those who have imposed the Agreement. The horns of that dilemma were seen years ago by M. Loucheur, the greatest expert of economics in France. Speaking before the Senate he said: “Germany cannot pay these indemnities. If she were able to pay it would make her master of the world’s trade. Let us therefore insist on security rather than on reparations.”