The Economic Consequences of the Peace — John Shaqi
The Economic Consequences of the PeaceKeynes, John Maynard
History
The Economic Consequences of the Peace
Keynes, John Maynard
Economic history -- 1918-1945; Treaty of Versailles (1919 June 28); World War, 1914-1918 -- Economic aspects
For six months after the Treaty has come into force Germany may not
impose duties on imports from the Allied and Associated States higher
than the most favorable duties prevalent before the war and for a
further two years and a half (making three years in all) this
prohibition continues to apply to certain commodities, notably to some
of those as to which special agreements existed before the war, and also
to wine, to vegetable oils, to artificial silk, and to washed or scoured
wool.[59] This is a ridiculous and injurious provision, by which Germany
is prevented from taking those steps necessary to conserve her limited
resources for the purchase 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 RÈgime 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 rÈgime 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 their occupation. The project of establishing an
independent Republic under French clerical auspices, which would act as
a buffer state and realize the French ambition of driving Germany proper
beyond the Rhine, has not yet been abandoned. Some believe that much may
be accomplished by a rÈgime of threats, bribes, and cajolery extended
over a period of fifteen years or longer.[61] If this Article is acted
upon, and the economic system of the left bank of the Rhine is
effectively severed from the rest of Germany, the effect would be
far-reaching. But the dreams of designing diplomats do not always
prosper, and we must trust the future.
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