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nydus/The Economic Consequences of the PeacePublic

John Maynard Keynes, a former British Treasury representative at the Paris Peace Conference, outlines his objections to the economic policies established by the Treaty of Versailles. He argues that the terms of the peace agreement threaten the stability of the European economic organization and risk further damaging a system already weakened by war.

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Table of Contents

Reparation

of:—

  1. Iron Goods, including tin plates (13.2 per cent),
  2. Machinery, etc. (7.5 per cent),
  3. Coal, coke, and briquettes (7 per cent),
  4. Woolen goods, including raw and combed wool (5.9 per cent), and
  5. Cotton goods, including cotton yarn and thread and raw cotton (5.6 per cent),

these five classes between them accounting for 39.2 per cent. of the total exports. It will be observed that all these goods are of a kind in which before the war competition between Germany and the United Kingdom was very severe. If, therefore, the volume of such exports to overseas or European destinations is very largely increased the effect upon British export trade must be correspondingly serious. As regards two of the categories, namely, cotton and woolen goods, the increase of an export trade is dependent upon an increase of the import of the raw material, since Germany produces no cotton and practically no wool. These trades are therefore incapable of expansion unless Germany is given facilities for securing these raw materials (which can only be at the expense of the Allies) in excess of the pre-war standard of consumption, and even then the effective increase is not the gross value of the exports,

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