150 7 HE ECONOMIC CONSEQUENCES OF THE PEACE ch.

further, " such supplies of food and raw materialsas may be judged by the Governments of the Prin-cipal Allied and Associated Powers to be essentialto enable Germany to meet her obligations forEeparation may also, with the approval of the saidGovernments, be paid for out of the above sum." 1This is a qualification of high importance. Theclause, as it is drafted, allows the Finance Ministersof the Allied countries to hold out to their elec-torates the hope of substantial payments at anearly date, while at the same time it gives to theReparation Commission a discretion, which the forceof facts will compel them to exercise, to give backto Germany what is required for the maintenanceof her economic existence. This discretionary powerrenders the demand for an immediate payment of£1,000,000,000 less injurious than it would other-wise be, but nevertheless it does not render it in-nocuous. In the first place, my conclusions in thenext section of this chapter indicate that this sumcannot be found within the period indicated, evenif a large proportion is in practice returned toGermany for the purpose of enabling her to pay forimports. In the second place, the Eeparation Com-mission can only exercise its discretionary powereffectively by taking charge of the entire foreigntrade of Germany , together with the foreign exchange

1 Art. [235. The force of this Article is somewhat strengthened byArticle 251, by virtue of which dispensations may also be granted for:( other payments " as well as for food and raw material.