BEING A SEQUEL TO THE ECONOMIC CONSEQUENCES OF THE PEACE BY JOHN MAYNARD KEYNES, C.B. FELLOW OF KINGʼS COLLEGE, CAMBRIDGE NEW YORK HARCOURT, BRACE AND COMPANY 1922 COPYRIGHT, 1922, BY HARCOURT, BRACE AND COMPANY, INC. PRINTED IN THE U. S. A. BY THE QUINN BODEN & COMPANY RAHWAY, N. J....

The Economic Consequences of the Peace , which I published in December 1919, has been reprinted from time to time without revision or correction. So much has come to our knowledge since then, that a revised edition of that book would be out of place. I have thought it better, therefore, to leave it unaltered, and to collect together in this Sequel the corrections and additions which the flow of events makes necessary, together with my reflections on the present facts. But this book is strictly w

COAL The question of coal has always considerable importance for Reparation, both because (in spite of the exaggerations of the Treaty) it is a form in which Germany can make important payments, and also because of the reaction of coal deliveries on Germanyʼs internal economy. Up to the middle of 1921 Germanyʼs payments for Reparation were almost entirely in the form of coal. And coal was the main topic of the Spa Conference, where for the first time the Governments of the Allies and of Germany

THE LEGALITY OF OCCUPYING GERMANY EAST OF THE RHINE The years 1920 and 1921 have been filled with excursions and with threats of excursions by the French Army into Germany east of the Rhine. In March 1920 France, without the approval of her Allies, occupied Frankfort and Darmstadt. In July 1920 a threat to invade Germany by the Allies as a whole was successful in enforcing the Spa Agreement. In March 1921 a similar threat was unsuccessful in securing assent to the Paris Decisions, and Duisberg,

THE WIESBADEN AGREEMENT In the summer of 1921 much interest was excited by reports of confidential interviews between M. Loucheur and Herr Rathenau, the Ministers of Reconstruction in France and Germany respectively. An agreement was provisionally reached in August 1921 and was finally signed at Wiesbaden on October 6, 1921 [53] ; but it does not come into force until it has received the approval of the Reparation Commission. This Commission, whilst approving the general principles underlying it

THE MARK EXCHANGE The gold value of a countryʼs inconvertible paper money may fall, either because the Government is spending more than it is raising by loans and taxes and is meeting the balance by issuing paper money, or because the country is under the obligation of paying increased sums to foreigners for the purchase of investments or in discharge of debts. Temporarily it may be affected by speculation, that is to say by anticipation , whether well or ill founded, that one or other of the ab

RECEIPTS AND EXPENSES PRIOR TO MAY 1, 1921 The provision in the Treaty of Versailles that Germany, subject to certain deductions, was to pay $5000 millions (gold) before May 1, 1921, was so remarkably wide of facts and possibilities, that for some time past no one has said much about this offspring of the unimaginative imaginations of Paris. As it was totally abandoned by the London Agreement of May 5, 1921, there is no need to return to what is an obsolete controversy. But it is interesting to

THE DIVISION OF RECEIPTS AMONGST THE ALLIES The Allied Governments took advantage of the Spa meeting (July 1920) to settle amongst themselves a Reparation question which had given much trouble in Paris and had been left unsolved [85] —namely, the proportions in which the Reparation receipts are to be divided between the various Allied claimants. [86] The Treaty provides that the receipts from Germany will be divided by the Allies “in proportions which have been determined upon by them in advance