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The Economic Consequences of the Peace

John Maynard Keynes · 1919 (preface), composed 1919; published 1920

passage 86 of 129 · CHAPTER I > Chapter. In the first section of this chapter I have already guessed the claims other than those for Pensions and Separation Allowances at (22/22)

in brief
Continuing his critique, Keynes points to Treaty provisions allowing reoccupation if Germany defaults, notes Vienna’s hopes for the Commission, and argues it might someday become an economic council rather than an instrument of oppression.

some other way; if Germany offers payment in kind, the Commission may accept such payment, but, except as specified in the Treaty itself, the Commission cannot require such a payment."

This is not a candid statement of the scope and authority of the Reparation Commission, as will be seen by a comparison of its terms with the summary given above or with the Treaty itself. Is not, for example, the statement that the Commission "has no forces at its command" a little difficult to justify in view of Article 430 of the Treaty, which runs:--"In case, either during the occupation or after the expiration of the fifteen years referred to above, the Reparation Commission finds that Germany refuses to observe the whole or part of her obligations under the present Treaty with regard to Reparation, the whole or part of the areas specified in Article 429 will be reoccupied immediately by the Allied and Associated Powers"? The decision, as to whether Germany has kept her engagements and whether it is possible for her to keep them, is left, it should be observed, not to the League of Nations, but to the Reparation Commission itself; and an adverse ruling on the part of the Commission is to be followed "immediately" by the use of armed force. Moreover, the depreciation of the powers of the Commission attempted in the Allied reply largely proceeds from the assumption that it is quite open to Germany to "raise the money required in her own way," in which case it is true that many of the powers of the Reparation Commission would not come into practical effect; whereas in truth one of the main reasons for setting up the Commission at all is the expectation that Germany will not be able to carry the burden nominally laid upon her.


It is reported that the people of Vienna, hearing that a section of the Reparation Commission is about to visit them, have decided characteristically to pin their hopes on it. A financial body can obviously take nothing from them, for they have nothing; therefore this body must be for the purpose of assisting and relieving them. Thus do the Viennese argue, still light-headed in adversity. But perhaps they are right. The Reparation Commission will come into very close contact with the problems of Europe; and it will bear a responsibility proportionate to its powers. It may thus come to fulfil a very different rÙle from that which some of its authors intended for it. Transferred to the League of Nations, an appanage of justice and no longer of interest, who knows that by a change of heart and object the Reparation Commission may not yet be transformed from an instrument of oppression and rapine into an economic council of Europe, whose object is the restoration of life and of happiness, even in the enemy countries?

V. The German Counter-Proposals

The German counter-proposals were somewhat obscure, and also rather disingenuous. It will be remembered that those clauses of the Reparation

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topics: diplomacy and embassies · empire and the rule of provinces · revolution and the fall of states

The Economic Consequences of the Peace · John Maynard Keynes · 1919