Paris was not thinking about how Europe would live. Frontiers, nationalities, the balance of power, imperial gain, the enfeeblement of a dangerous enemy, revenge, and the wish to shift unbearable financial burdens onto the defeated filled the room. Two schemes took the field: Wilson's Fourteen Points and Clemenceau's Carthaginian peace. Only one was entitled to do so. Germany had not surrendered unconditionally. From the German Note of 5 October 1918 through Wilson's Note of 5 November, Berlin accepted the Fourteen Points and the President's later Addresses as the basis of peace, then laid down its arms under Armistice terms designed to leave it helpless. The Allies qualified only Freedom of the Seas and the meaning of restoration: compensation for civilian damage by land, sea, and air. Wilson's speech of 11 February, part of that contract, said there shall be no annexations, no contributions, no punitive damages. Honour was peculiarly involved because Germany had made itself helpless in reliance on the bargain. Keynes is not here to retry the justice of the Treaty. He is here to set out, baldly, what it does to the three props of the German economic system: overseas commerce, coal and iron, and transport and tariffs.
The first prop is cut away in a few pages of print. Germany cedes all mercantile vessels over 1,600 tons gross, half those between 1,000 and 1,600, a quarter of her fishing boats, and, if required, up to 200,000 tons of new building a year for five years. Hamburg will have no lines except those foreigners choose to run from surplus tonnage. Overseas possessions go without payment for government property, while the German government remains liable for colonial debt. Private German property in the colonies, in Alsace-Lorraine, and throughout Allied territory may be retained and liquidated; the proceeds need not even go to the Reparation account. Article 260 lets the Reparation Commission, within a year, demand expropriation of German rights in public utilities and concessions across Russia, China, Turkey, Austria, Hungary, Bulgaria, and the new successor states. More sweeping still, until 1 May 1921 the Commission may demand payment of up to $5,000,000,000 in gold, commodities, ships, securities, or otherwise, and may point to any specific enterprise, inside Germany or out, and take it. For eighteen months it can seize property not yet created. The payees do not merely name a sum. They name the asset. Overseas connections, neighbouring outlets, and the remaining machine at home are placed at the Allies' will.
Coal and iron are the second prop, and here the figures become a European problem rather than a German one. The German Empire was built more truly on coal and iron than on blood and iron. One-third of its people live in towns of more than 20,000, an industrial concentration possible only on that foundation. The Treaty strikes the coal supply four ways. Saar mines pass to France in absolute ownership, though the district of more than 650,000 inhabitants contained fewer than 100 French in 1918. Upper Silesia, about 23 per cent of German hard-coal output, is to go to Poland subject to a plebiscite, though it was never part of historic Poland and Eastern German industry depends on it. Out of what remains, Germany must make good French mine destruction, up to 20,000,000 tons a year for five years and 8,000,000 thereafter, and must also deliver to France, Belgium, Italy, and Luxemburg an annual average of about 25,000,000 tons. Keynes's hypothetical arithmetic, which he warns is not to be treated as precise, still presents an irresistible outline. After lost territory, a shortened shift, worn plant, and malnutrition, net output may not exceed 100,000,000 tons, of which 40,000,000 are mortgaged to the Allies, while domestic need on a pre-war industrial basis is about 110,000,000. Allied ministers who have told their peoples that the 40,000,000 can be furnished have deceived them. If France and Italy take their Treaty coal first, German-Austria, Switzerland, and the northern neutrals, who once drew on Germany's export surplus, are starved. Hoover's estimate that Europe's coal output has fallen by one-third makes a scramble into a recipe for revolution. Iron follows the same cut. Almost exactly 75 per cent of German iron-ore in 1913 came from Alsace-Lorraine. Those fields must return to France; the only open question is whether Germany may buy the minette. Political frontiers now run between ore and furnaces, and Europe's effective iron output will fall because nationalism prefers collective animosities to individual happiness.
What remains looks smaller and is meant to look complete. For five years Germany must give most-favoured-nation treatment and receive none. Alsace-Lorraine, Poland, and Luxemburg may send goods into Germany free of duty up to old averages; German goods going the other way may not. For months and then years she is forbidden to raise duties even on champagne, silk, oils, and wool, so that a deluge of luxuries can exhaust the foreign exchange needed for food and for Reparation. The Armistice already took 5,000 locomotives and 150,000 wagons; the Treaty confirms the title and requires ceded railways to be handed over with a full complement as if they had not shared the general wear. The Elbe, Oder, Rhine, and Danube pass to international commissions on which Germany is a minority: four votes out of ten on the Elbe, three out of nine on the Oder, four out of nineteen on the Rhine. Up to 20 per cent of inland navigation tonnage goes as well, plus selected new craft. Where the Rhine runs between France and Germany, France takes the water rights and the bridges; the German port of Kehl is to be run with Strassburg by a French nominee. Little has been overlooked that might impoverish Germany now or obstruct her later. So situated, she is still required to pay.
