I

THE TREATY OF PEACE

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which we arrived on other grounds as the maxi-mum of her annual payments. But even if therejoinder be made, that we have not yet allowedfor the lowering of the standard of life and com-fort in Germany which may reasonably be im-posed on a defeated enemy, there is still afundamental fallacy in the method of calcula-tion. An annual surplus available for homeinvestment can only be converted into a surplusavailable for export abroad by a radical changein the kind of work performed. Labour, whileit may be available and efficient for domesticservices in Germany , may yet be able to find nooutlet in foreign trade. We are back on thesame question which faced us in our examina-tion of the export trade—in what export tradeis German labour going to find a greatly in-creased outlet? Labour can only be divertedinto new channels with loss of efficiency, and alarge expenditure of capital. The annual sur-plus which German labour can produce forcapital improvements at home is no measure,either theoretically or practically, of the annualtribute which she can pay abroad.

I cannot leave this subject as though its justtreatment wholly depended either on our ownpledges or on economic facts. The policy ofreducing Germany to servitude for a genera-tion, of degrading the lives of millions of humanbeings, and of depriving a whole nation ofhappiness should be abhorrent and detestable,—abhorrent and detestable, even if it were