6o THE ECONOMIC CONSEQUENCES OF THE PEACE ch.

not with the justice of the Treaty, —neither with thedemand for penal justice against the enemy, nor withthe obligation of contractual justice on the victor,—but with its wisdom and with its consequences.

I propose, therefore, in this chapter to set forthbaldly the principal economic provisions of the Treaty ,reserving, however, for the next my comments on theEeparation Chapter and on Germany 's capacity tomeet the payments there demanded from her.

The German economic system as it existed beforethe war depended on three main factors : I. Over-seas commerce as represented by her mercantilemarine, her colonies, her foreign investments, herexports, and the overseas connections of her mer-chants ; II. The exploitation of her coal and iron andthe industries built upon them; III. Her transportand tariff system. Of these the first, while not theleast important, was certainly the most vulnerable.The Treaty aims at the systematic destruction of allthree, but principally of the first two.

I

(l) Germany has ceded to the Allies all the vesselsof her mercantile marine exceeding 1600 tons gross,half the vessels between 1000 tons and 1600 tons,and one quarter of her trawlers and other fishingboats. 1 The cession is comprehensive, including not

1 Part VIII. Annex III. (1).