vi REPARATION, INTER-ALLY DEBT, ETC. 157

some or all of the above-mentioned exports to agreater extent than she would do otherwise. Theonly way in which she can effect this expansion isby offering the goods at a lower price than that atwhich other countries care to offer them; puttingherself in a position to offer them cheap, partly bythe German working classes lowering their standardof life without reducing their efficiency in the samedegree, and partly by German export industries beingsubsidised, directly or indirectly, at the expense ofthe rest of the community.

These facts, formerly overlooked, are now, per-haps, exaggerated by popular opinion. For Prin-ciple (3), enunciated above, requires attention. Ourindustries will be subjected to strong competitionfrom Germany , just as they were before the war,whether we exact Reparation or not; and we mustnot ascribe to the Reparation policy inconvenienceswhich would exist in any case. The remedy lies notin the now popular nostrums for prescribing the formin which Germany shall pay, but in reducing theaggregate amount to a reasonable figure. For byprescribing the manner in which she shall pay uswe do not control the form of her export trade as awhole ; and by absorbing for reparation purposesthe whole of a particular type of export, we compelher to expand her other exports to pay for her importsand other international obligations. On the otherhand, we can secure from her moderate payments,