i6o THE ECONOMIC CONSEQUENCES OF THE PEACE ch.

whole of this latter sum for Reparation purposes. Itamounts, however, as it is, to less than 4 per cent ofthe Reichsbank's Note Issue, and the psychologicaleffect of its total confiscation might be expected(having regard to the very large volume of marknotes held abroad) to destroy the exchange value ofthe mark almost entirely. A sum of £5,000,000,£10,000,000, or even £20,000,000 might be takenfor a special purpose. But we may assume that theReparation Commission will judge it imprudent, havingregard to the reaction on their future prospects ofsecuring payment, to ruin the German currencysystem altogether, more particularly because theFrench and Belgian Governments, being holders ofa very large volume of mark notes formerly circu-lating in the occupied or ceded territory, have agreat interest in maintaining some exchange valuefor the mark, quite apart from Reparation prospects.

It follows, therefore, that no sum worth speakingof can be expected in the form of gold or silvertowards the initial payment of £1,000,000,000 dueby 1921.

(b) Shipping. —Germany has engaged, as we haveseen above, to surrender to the Allies virtually thewhole of her merchant shipping. A considerable partof it, indeed, was already in the hands of the Allies prior to the conclusion of Peace, either by detention intheir ports or by the provisional transfer of tonnageunder the Brussels Agreement in connection with the