i&4 THE ECONOMIC CONSEQUENCES OF THE PEACE ch.

makes a serious attempt to secure the blast-furnacesand the steel trade also, (3) that Germany is notencouraged and assisted to undercut the iron andother trades of the Allies in overseas market, and(4) that a substantial preference is not given toGerman goods in the British Empire, it is evidentby examination of the specific items that not muchis practicable.

Let us run over the chief items again : (l) Irongoods. In view of Germany 's loss of resources, anincreased net export seems impossible and a largedecrease probable. (2) Machinery. Some increaseis possible. (3) Coal and coke. The value of Ger-many 's net export before the war was £22,000,000 ;the Allies have agreed that for the time being20,000,000 tons is the maximum possible exportwith a problematic (and in fact) impossible increaseto 40,000,000 tons at some future time; even on thebasis of 20,000,000 tons we have virtually no increaseof value, measured in pre-war prices ; 1 whilst, if thisamount is exacted, there must be a decrease of fargreater value in the export of manufactured articlesrequiring coal for their production. (4) Woollen goods. An increase is impossible without the rawwool, and, having regard to the other claims onsupplies of raw wool, a decrease is likely. (5) Cottongoods. The same considerations apply as to wool.

1 The necessary price adjustment, -which is required, on both sides ofthis account, will be made en bloc later.