84 A REVISION OF THE TREATY chap.

government, central and local. By the most extremeeconomies, short of repudiation of war loans andwar pensions, this burden could hardly be broughtbelow 1000 paper marks per head (at 20 papermarks = 1 gold mark), i.e. 60 milliards altogether, afigure greatly below the present expenditure. In theaggregate, therefore, 2170 marks out of the averageincome of 5000 marks, or 43 per cent, would go intaxation. If exports rise to 10 milliards (gold) andthe average income to 6000 paper marks, the corre-sponding figures are 2500 marks and 42 per cent.

There are circumstances in which a wealthy nation,impelled by overwhelming motives of self-interest,might support this burden. But the annual incomeof 5000 paper marks per head is equivalent in exchangevalue (at an exchange of 20 paper marks to 1 gold mark)to £12|- (gold), and after deduction of taxation toabout £7 (gold), that is to say to less than 6d. a day,which in August 1921 was the equivalent in purchas-ing power in Germany of something between 9d. and Is.in England. 1 If Germany was given a respite, herincome and with it her capacity would increase ;but under her present burdens, which render savingimpossible, a degradation of standards is more likely.Would the whips and scorpions of any Governmentrecorded in history have been efficient to extractnearly half their income from a people so situated %

1 For a full examination of the purchasing power of the paper markinside Germany, see an article by M. Elsas in the Economic Journal,Sept. 1921.