I

THE TREATY OF PEACE

ii

as we have already seen, many large items areincapable of reduction without reacting on thevolume of exports.

Let us put our guess as high as we canwithout being foolish, and suppose that aftera time Germany will be able, in spite of thereduction of her resources, her facilities, hermarkets, and her productive power, to in-crease her exports and diminish her importsso as to improve her trade balance altogetherby £100,000,000 annually, measured in pre-war prices. This adjustment is first requiredto liquidate the adverse trade balance, whichin the five years before the war averaged£74,000,000; but we will assume that afterallowing for this, she is left with a favourabletrade balance of £50,000,000 a year. Doublingthis to allow for the rise in post-war prices,we have a figure of £100,000,000. Havingregard to the political, social, and humanfactors, as well as to the purely economic,I doubt if Germany could be made to pay thissum annually over a period of 30 years; butit would not be foolish to assert or to hope thatshe could.

Such a figure, allowing 5 per cent forinterest, and 1 per cent for repayment ofcapital, represents a capital sum having apresent value of about £1700 million.

I reach, therefore, the final conclusion that,including all methods of payment—immedi-ately transferable wealth, ceded property, andan annual tribute—£2,000,000,000 is a safe