gold. The failure of the Reichsbank to meet its liabilities would have caused a depreciation of the exchange so injurious to Germany's credit as to react on the future prospects of Reparation. In some cases, therefore, permission to export gold was accorded to the Reichsbank by the Supreme Economic Council of the Allies.
The net result of these various measures was to reduce the gold reserve of the Reichsbank by more than half, the figures falling from $575,000,000 to $275,000,000 in September, 1919.
It would be possible under the Treaty to take the whole of this latter sum for Reparation purposes. It amounts, however, as it is, to less than 4 per cent of the Reichsbank's Note Issue, and the psychological effect of its total confiscation might be expected (having regard to the very large volume of mark notes held abroad) to destroy the exchange value of the mark almost entirely. A sum of $25,000,000, $50,000,000, or even $100,000,000 might be taken for a special purpose. But we may assume that the Reparation Commission will judge it imprudent, having regard to the reaction on their future prospects of securing payment, to ruin the German currency system altogether, more particularly because the French and Belgian Governments, being holders of a very large volume of mark notes formerly circulating in the occupied or ceded territory, have a great interest in maintaining some exchange value for the mark, quite apart from Reparation prospects.
It follows, therefore, that no sum worth speaking of can be expected in the form of gold or silver towards the initial payment of $5,000,000,000 due by 1921.
(b) Shipping.—Germany has engaged, as we have seen above, to surrender to the Allies virtually the whole of her merchant shipping. A considerable part of it, indeed, was already in the hands of the Allies prior to the conclusion of Peace, either by detention in their ports or by the