He puts a faith in an international loan as the means of
solution which I am sure is not justified. We must be much more concrete
than that, and we must be prepared to say unpleasant things as well as
pleasant ones.
The right solution, the solution that we are bound to come to in the
end, is not complicated. We must abandon the claim for pensions and
bring to an end the occupation of the Rhinelands. The Reparation
Commission must be asked to divide their assessment into two parts--the
part that represents pensions and separation allowances and the rest.
And with the abandonment of the former the proportion due to France
would be correspondingly raised. If France would agree to this--which is
in her interest, anyhow--and would terminate the occupation it would be
right for us to forgive her (and our other Allies) all they owe us, and
to accord a priority on all receipts in favour of the devastated areas.
If we could secure a real settlement by these sacrifices, I think we
should make them completely regardless of what the United States may say
or do.
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