8

ESSAYS IN PERSUASION

PART

the form of cash (or rather of foreign exchange)or is partly effected in kind (coal, dyes, timber,etc.), as contemplated by the Treaty . In anyevent, it is only by the export of specific com-modities that Germany can pay, and the methodof turning the value of these exports to accountfor Reparation purposes is, comparatively, amatter of detail.

We shall lose ourselves in mere hypothesisunless we return in some degree to first prin-ciples, and, whenever we can, to such statisticsas there are. It is certain that an annual pay-ment can only be made by Germany over aseries of years by diminishing her imports andincreasing her exports, thus enlarging thebalance in her favour which is available foreffecting payments abroad. Germany can payin the long run in goods, and in goods only,whether these goods are furnished direct to theAllies , or whether they are sold to neutrals andthe neutral credits so arising are then made overto the Allies . The most solid basis for esti-mating the extent to which this process can becarried is to be found, therefore, in an analysisof her trade returns before the war. Only onthe basis of such an analysis, supplemented bysome general data as to the aggregate wealth-producing capacity of the country, can a rationalguess be made as to the maximum degree towhich the exports of Germany could be broughtto exceed her imports.

In the year 1913 Germany ’s importsamounted to £538,000,000 and her exports to