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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

The Treaty

of necessaries and the discharge of Reparation. As a result of the existing distribution of wealth in Germany, and of financial wantonness amongst individuals, the offspring of uncertainty, Germany is threatened with a deluge of luxuries and semi-luxuries from abroad, of which she has been starved for years, which would exhaust or diminish her small supplies of foreign exchange. These provisions strike at the authority of the German Government to ensure economy in such consumption, or to raise taxation during a critical period. What an example of senseless greed overreaching itself, to introduce, after taking from Germany what liquid wealth she has and demanding impossible payments for the future, a special and particularized injunction that she must allow as readily as in the days of her prosperity the import of champagne and of silk!

One other Article affects the Customs Régime of Germany which, if it was applied, would be serious and extensive in its consequences. The Allies have reserved the right to apply a special customs régime to the occupied area on the bank of the Rhine, "in the event of such a measure being necessary in their opinion in order to safeguard the economic interests of the population of these territories."60 This provision was probably introduced as a possibly useful adjunct to the French policy of somehow detaching the left bank provinces from Germany during the years of

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