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REPARATION

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in the street is now prepared to believe anythingwhich is told him with some show of authority, andthe larger the figure the more readily he swallows it.

But those who look into the matter more deeply aresometimes misled by a fallacy, much more plausibleto reasonable persons. Such a one might base his con-clusions on Germany 's total surplus of annual produc-tivity as distinct from her export surplus. Helfferich 'sestimate of Germany 's annual increment of wealth in1913 was £400,000,000 to £425,000,000 (exclusive ofincreased money value of existing land and property).Before the war, Germany spent between £50,000,000and £100,000,000 on armaments, with which she cannow dispense. Why, therefore, should she not payover to the Allies an annual sum of £500,000,000?This puts the crude argument in its strongest andmost plausible form.

But there are two errors in it. First of all,Germany 's annual savings, after what she has sufferedin the war and by the Peace, will fall far . short ofwhat they were before, and, if they are taken fromher year by year in future, they cannot again reachtheir previous level. The loss of Alsace-Lorraine,Poland, and Upper Silesia could not be assessed interms of surplus productivity at less than £50,000,000annually. Germany is supposed to have profitedabout £100,000,000 per annum from her ships,her foreign investments, and her foreign bankingand connections, all of which have now been taken