The Economic Consequences of the Peace eBook

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of the body passes over into malady of the mind.  Economic privation proceeds by easy stages, and so long as men suffer it patiently the outside world cares little.  Physical efficiency and resistance to disease slowly diminish,[156] but life proceeds somehow, until the limit of human endurance is reached at last and counsels of despair and madness stir the sufferers from the lethargy which precedes the crisis.  Then man shakes himself, and the bonds of custom are loosed.  The power of ideas is sovereign, and he listens to whatever instruction of hope, illusion, or revenge is carried to him on the air.  As I write, the flames of Russian Bolshevism seem, for the moment at least, to have burnt themselves out, and the peoples of Central and Eastern Europe are held in a dreadful torpor.  The lately gathered harvest keeps off the worst privations, and Peace has been declared at Paris.  But winter approaches.  Men will have nothing to look forward to or to nourish hopes on.  There will be little fuel to moderate the rigors of the season or to comfort the starved bodies of the town-dwellers.

But who can say how much is endurable, or in what direction men will seek at last to escape from their misfortunes?


[145] Professor Starling’s Report on Food Conditions in Germany. (Cmd. 280.)

[146] Including the Darlehenskassenscheine somewhat more.

[147] Similarly in Austria prices ought to be between twenty and thirty times their former level.

[148] One of the moat striking and symptomatic difficulties which faced the Allied authorities in their administration of the occupied areas of Germany during the Armistice arose out of the fact that even when they brought food into the country the inhabitants could not afford to pay its cost price.

[149] Theoretically an unduly low level of home prices should stimulate exports and so cure itself.  But in Germany, and still more in Poland and Austria, there is little or nothing to export.  There must be imports before there can be exports.

[150] Allowing for the diminished value of gold, the exchange value of the franc should be less than 40 per cent of its previous value, instead of the actual figure of about 60 per cent, if the fall were proportional to the increase in the volume of the currency.

[151] How very far from equilibrium France’s international exchange now is can be seen from the following table: 

Excess of
Monthly         Imports     Exports     Imports
Average          $1,000      $1,000      $1,000
1913     140,355     114,670      25,685
1914     106,705      81,145      25,560
1918     331,915      69,055     262,860
Jan.-Mar. 1919     387,140      66,670     320,470
Apr.-June 1919     421,410      83,895     337,515
July 1919     467,565     123,675     343,890

These figures have been converted, at approximately par rates, but this is roughly compensated by the fact that the trade of 1918 and 1919 has been valued at 1917 official rates.  French imports cannot possibly continue at anything approaching these figures, and the semblance of prosperity based on such a state of affairs is spurious.

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The Economic Consequences of the Peace from Project Gutenberg. Public domain.