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This eBook from the Gutenberg Project consists of approximately 207 pages of information about The Economic Consequences of the Peace.

The categories of damage in respect of which the Allies were entitled to ask for Reparation are governed by the relevant passages in President Wilson’s Fourteen Points of January 8, 1918, as modified by the Allied Governments in their qualifying Note, the text of which the President formally communicated to the German Government as the basis of peace on November 5, 1918.  These passages have been quoted in full at the beginning of Chapter IV.  That is to say, “compensation will be made by Germany for all damage done to the civilian population of the Allies and to their property by the aggression of Germany by land, by sea, and from the air.”  The limiting quality of this sentence is reinforced by the passage in the President’s speech before Congress on February 11, 1918 (the terms of this speech being an express part of the contract with the enemy), that there shall be “no contributions” and “no punitive damages.”

It has sometimes been argued that the preamble to paragraph 19[76] of the Armistice Terms, to the effect “that any future claims and demands of the Allies and the United States of America remain unaffected,” wiped out all precedent conditions, and left the Allies free to make whatever demands they chose.  But it is not possible to maintain that this casual protective phrase, to which no one at the time attached any particular importance, did away with all the formal communications which passed between the President and the German Government as to the basis of the Terms of Peace during the days preceding the Armistice, abolished the Fourteen Points, and converted the German acceptance of the Armistice Terms into unconditional surrender, so far as it affects the Financial Clauses.  It is merely the usual phrase of the draftsman, who, about to rehearse a list of certain claims, wishes to guard himself from the implication that such list is exhaustive.  In any case, this contention is disposed of by the Allied reply to the German observations on the first draft of the Treaty, where it is admitted that the terms of the Reparation Chapter must be governed by the President’s Note of November 5.

Assuming then that the terms of this Note are binding, we are left to elucidate the precise force of the phrase—­“all damage done to the civilian population of the Allies and to their property by the aggression of Germany by land, by sea, and from the air.”  Few sentences in history have given so much work to the sophists and the lawyers, as we shall see in the next section of this chapter, as this apparently simple and unambiguous statement.  Some have not scrupled to argue that it covers the entire cost of the war; for, they point out, the entire cost of the war has to be met by taxation, and such taxation is “damaging to the civilian population.”  They admit that the phrase is cumbrous, and that it would have been simpler to have said “all loss and expenditure of whatever description”; and they allow that the apparent emphasis of damage to the persons and property of civilians is unfortunate; but errors of draftsmanship should not, in their opinion, shut off the Allies from the rights inherent in victors.

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