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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

use of armed force. Moreover, the depreciation of the powers of the Commission attempted in the Allied reply largely proceeds from the assumption that it is quite open to Germany to "raise the money required in her own way," in which case it is true that many of the powers of the Reparation Commission would not come into practical effect; whereas in truth one of the main reasons for setting up the Commission at all is the expectation that Germany will not be able to carry the burden nominally laid upon her.

It is reported that the people of Vienna, hearing that a section of the Reparation Commission is about to visit them, have decided characteristically to pin their hopes on it. A financial body can obviously take nothing from them, for they have nothing; therefore this body must be for the purpose of assisting and relieving them. Thus do the Viennese argue, still light-headed in adversity. But perhaps they are right. The Reparation Commission will come into very close contact with the problems of Europe; and it will bear a responsibility proportionate to its powers. It may thus come to fulfil a very different rôle from that which some of its authors intended for it. Transferred to the League of Nations, an appanage of justice and no longer of interest, who knows that by a change of heart and object the Reparation Commission may not yet be transformed from an instrument of oppression and rapine into an economic council of Europe, whose object is the restoration of life and of happiness, even in the enemy countries?

V . The German Counter-Proposals

The German counter-proposals were somewhat obscure, and also rather disingenuous. It will be remembered that those clauses of the Reparation Chapter which dealt with the issue of bonds by Germany produced on the public mind the impression that the Indemnity had been fixed at $25,000,000,000, or at any rate at

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