‘We must not lose sight of the fact that in order to pay us Germany must every year create wealth abroad for herself by developing her exports and reducing her imports to strictly necessary things. She can only do that to the detriment of the commerce and industry of the Allies. That is a strange and regrettable consequence of facts. The placing of an annuity on her exports, payable in foreign values, will, however, correct as much as possible this paradoxical situation.’
[129] Version appearing in the Times of January 28th, 1921.
[130] The Manchester Guardian, Jan 31st, 1921.
[131] Mr John Foster Dulles, who was a member of the American delegation at the Peace Conference, has, in an article in The New Republic for March 30th, 1921, outlined the facts concerning the problem of payment more completely than I have yet seen it done. The facts he reveals constitute a complete and overwhelming vindication of the case as stated in the first edition of The Great Illusion.
[132] As the Lorraine ores are of a kind that demand much less than their own weight of coal for smelting, it is more economic to bring the coal to the ore than vice versa. It was for political and military reasons that the German State encouraged the placing of some of the great furnaces on the right instead of the left bank of the Rhine.
[133] It is worth while to recall here a passage from The Economic Consequences of the Peace, by Mr J. M. Keynes, quoted in Chapter I. of this book.
[134] There is one aspect of the possible success of France which is certainly worth consideration. France has now in her possession the greatest iron ore fields in Europe. Assume that she is so far successful in her policy of military coercion that she succeeds in securing vast quantities of coal and coke for nothing. French industry then secures a very marked advantage—and an artificial and ‘uneconomic’ one—over British industry, in the conversion of raw materials into finished products. The present export by France of coal which she gets for nothing to Dutch and other markets heretofore supplied by Britain might be followed by the ‘dumping’ of steel and iron products on terms which British industry could not meet. This, of course, is on the hypothesis of success in obtaining ‘coal for nothing,’ which the present writer regards as extremely unlikely for the reasons here given. But it should be noted that the failure of French effort in this matter will be from causes just as disastrous for British prosperity as French success would be.
[135] See Part I, Chapter I.
[136] English Review, January 1913.
Lord Roberts, in his ‘Message to the Nation,’ declared that Germany’s refusal to accept the world’s status quo was ‘as statesmanlike as it is unanswerable.’ He said further:—