2. The Capacity of Germany to payReparations (1919)

It is evident that Germany ’s pre-war capacityto pay an annual foreign tribute has not beenunaffected by the almost total loss of hercolonies, her overseas connections, her mercan-tile marine, and her foreign properties, by thecession of ten per cent of her territory andpopulation, of one-third of her coal and ofthree-quarters of her iron ore, by two millioncasualties amongst men in the prime of life, bythe starvation of her people for four years, bythe burden of a vast war debt, by the deprecia-tion of her currency to less than one-seventhits former value, by the disruption of her alliesand their territories, by Revolution at homeand Bolshevism on her borders, and by all theunmeasured ruin in strength and hope of fouryears of all-swallowing war and final defeat.

All this, one would have supposed, is evident.Yet most estimates of a great indemnity fromGermany depend on the assumption that she isin a position to conduct in the future a vastlygreater trade than ever she has had in the past.

For the purpose of arriving at a figure it isof no great consequence whether payment takes

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